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(Bloomberg) — Nickel advanced for a third day, extending its rebound from an eight-month low on the prospect of reduced supply from top producer Indonesia.
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The metal rose as much as 1.5% on Friday, two days after Indonesia proposed cutting nickel ore production in 2026. The government’s work plan budget for next year envisages output of about 250 million tons, down from this year’s goal of 379 million tons.
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The planned reduction is a response to a slump in nickel prices. The metal, used in stainless steel and electric vehicle batteries, has fallen more than 3% this year and is the only industrial metal on the London Metal Exchange on track for an annual decline. As well as Indonesia, China has raised production at a level outpacing global demand.
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Indonesia’s plan presents “a risk” for bearish investors at a time when nickel prices have sunk to near the cost of production in the country, said Gao Yin, an analyst at China’s Shuohe Asset Management Co. The exit of investors from arbitrage trades involving base metals such as copper and aluminum might also have contributed to this week’s gains, she said.
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In addition to the proposed reduction in mining, Indonesia’s Ministry of Energy and Mineral Resources plans to revise its benchmark pricing formula for nickel ore in early 2026, a move that would classify byproducts such as cobalt as separate commodities subject to royalties, Bloomberg Technoz reported, citing Indonesian Nickel Miners Association Secretary General Meidy Katrin Lengkey.
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Most industrial metals have risen this year. Copper has gained around a third, hitting a record $11,952 a ton last week, as robust global demand for a metal crucial to the green transition has coincided with supply disruptions and stockpiling of the metal in the US.
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Nickel rose 1.5% to $14,855 a ton on the LME as of 11:10 a.m. in Shanghai. It has gained more than 4% since closing at $14,263 on Tuesday, its lowest since April 9. Copper slipped 0.4% to $11,732 and aluminum edged down 0.1% to $2,914.
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Bloomberg Technoz is a partnership between Mayapada Group’s PT Berita Mediatama Indonesia and Bloomberg Media Group, a division of Bloomberg LP.
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—With assistance from Chandra Asmara.
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English (US)