FX.co ★ Nickel Falls to Over 2-Month Low

Nickel futures have dipped below $15,000 per tonne, marking their lowest level in over two months. This decline is primarily due to the perception of an oversupplied market, despite output cuts from Indonesia. The Indonesian government slashed nickel mining quotas by 120 million tons, bringing the total to 150 million for this year, effectively reducing global supply by 35% from current levels. This reduction comes in the wake of a surge in Chinese smelting projects within Indonesia, following the country's 2020 ban on nickel ore exports. As of September, Indonesia hosted 44 nickel smelting operations, a significant increase from just four operations a decade ago. Concurrently, nickel warrants available at London Metal Exchange (LME) warehouses have climbed by 30,000 tonnes since the beginning of the year, reaching 180,450 by mid-June. Additionally, ongoing uncertainty regarding whether the White House will abstain from reimposing aggressive tariffs on trading partners by the looming July 9th deadline is contributing further pressure on base metals.