FX.co ★ Nickel Falls on Weak Demand, Elevated Stocks

Nickel prices fell below $16,750 per tonne, staying under pressure as high inventories and sluggish downstream demand continued to weigh on the market. LME warehouse stocks stood at about 271,000 tonnes in early September, while weak stainless steel demand further dampened nickel consumption.

On the supply side, Indonesia cut its 2026 nickel ore production quota to 260–270 million tonnes from 379 million tonnes in 2025. However, this tightening was partially offset by increased ore imports from the Philippines, which rose to 11.4 million tonnes in January–July from 6.82 million tonnes a year earlier, ensuring Indonesian smelters remained well supplied and moderating the impact of the lower Indonesian quota.

Macroeconomic factors also added pressure. Stronger-than-expected US employment data boosted the likelihood of a Federal Reserve rate hike in September, keeping bond yields elevated and the US dollar firmer—both headwinds for dollar-denominated commodities such as nickel.

At the same time, declining cobalt payables for Indonesian mixed hydroxide precipitate (MHP) are compressing margins for high-pressure acid leach (HPAL) projects. This could force higher-cost producers to scale back output, providing some medium-term support to nickel prices by curbing supply.