The global nickel market is currently shaped by two significant factors: Indonesia's sudden tightening of nickel ore supply and persistently high inventory levels at the London Metal Exchange (LME).
Overview of Today's Key Themes
The focus in today's nickel market centers on Indonesian mining policies, LME stockpiles, reductions in nickel pig iron (NPI) production, and strategic shifts by major producers.
Top Ten Market Developments
The Indonesian Ministry of Energy and Mineral Resources has temporarily suspended operations for mining companies that failed to submit their 2026 RKAB (Work Plan and Budget) documents. This has led to the suspension of permits for a large number of nickel mining firms, sharply increasing expectations for a near-term tightening of global nickel ore supply.
Data shows that the spot price for 1# nickel on the Yangtze River Nonferrous Metals Network was quoted at 141,100 yuan per ton today, with electrolytic nickel plate prices at 141,400 yuan per ton. Trading activity in the physical market was subdued.
LME nickel inventories have remained at a high level of 274,200 tonnes for several consecutive days, showing no signs of a drawdown. The low proportion of cancelled warrants continues, indicating weak structural support for the LME nickel contract.
Leading companies, including Tsingshan Holding Group, are proactively reducing their NPI production capacity. A specific RKEF project on a small Indonesian island plans to switch its high-nickel pig iron production line to nickel matte in June, further fueling expectations of a contraction in NPI supply.
A paradox has emerged in Indonesia's nickel pricing dynamics. Following the implementation of the ore export ban, a surge in domestic smelting capacity has increased the supply of processed material, ironically putting downward pressure on nickel prices and leading to lower-than-expected fiscal revenue for the Indonesian government.
Chinese enterprises are accelerating their global nickel resource investments to hedge against risks in Indonesia. Domestic secondary nickel recovery in China has reached an annual volume of 280,000 tonnes. Meanwhile, technological shifts in the power battery market are dampening demand growth expectations for nickel.
High-nickel pig iron port inventories are being drawn down at an accelerated pace, supporting prices at elevated levels amid supply tightness. However, weak chromium ore prices are trending lower, and rising chromium iron production in May is expected to have a limited impact on overall nickel-related costs.
Analysis suggests that the short-term supply-demand imbalance for nickel is not particularly pronounced, with solid support expected around 140,000 yuan per ton. Nickel prices on the Shanghai Futures Exchange are forecast to fluctuate weakly within a range of 140,000 to 160,000 yuan per ton.
A nickel-cobalt forum is being held in Indonesia from June 4-5, bringing together participants from global mining, smelting, trading, downstream industries, and investment institutions to discuss supply and demand trends in the nickel and cobalt markets.
Market Perspective
Analysts note that while the suspension of RKAB permits in Indonesia has provided a short-term boost to market sentiment for nickel, the persistently high LME inventory level of 274,000 tonnes, with no clear timeline for a drawdown, remains the most significant factor suppressing nickel prices.
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