LME nickel prices surge to 18-month high on Indonesia supply uncertainty

• 2026 quota of 270 mnt falls short of 410 mnt estimated demand
• SHFE futures gain up to 4%, reflecting tight supply expectations

LME nickel prices averaged $18,860/tonne (t) in the week ended 24 January, up 5.8% w-o-w from $17,825/t, hitting an 18-month high on Indonesia supply concerns. Meanwhile, LME-monitored inventories were at 283,728 t, slightly down from 285,732 t, limiting upside momentum as ample stocks continued to cap sustained rallies.

Market updates

Nickel prices climb as Indonesia supply concerns grow

Nickel prices strengthened on 23 January as concerns grew over Indonesia’s ability to meet rising ore demand. The Indonesian Nickel Miners Association warned that planned mining quotas of around 270 million tonnes (mnt) for 2026 are well short of the estimated demand of nearly 410 mnt. Expectations of the projected shortfall lifted prices across Asian markets, with nickel futures gaining up to 4% on the SHFE and LME prices rising toward $18,500/t, reflecting tightening supply expectations.

Indonesia’s nickel curbs fuel rally, but supply impact uncertain

Nickel prices have rallied sharply on expectations of tighter supply after Indonesia signalled possible cuts in mining permits. However, the actual impact may be limited, as quotas are issued in wet tonnes and past allocations exceeded real output. At the same time, smelter demand continues to rise with ongoing capacity additions, creating a mismatch between ore supply and downstream needs. Markets are now focused on a potential mid-year policy review, keeping near-term nickel prices volatile.

FPX Nickel advances Baptiste project into environmental review

FPX Nickel has launched the Environmental Assessment process for its Baptiste Nickel Project in central British Columbia after its Initial Project Description was accepted by provincial and federal authorities. The project, backed by strong engagement with governments and First Nations, is positioned as a long-life, low-carbon nickel source for stainless steel and battery supply chains. Supported by Canada’s Critical Minerals initiatives, Baptiste is one of the world’s largest undeveloped nickel projects and could become a globally competitive, low-emission producer.

Outlook

Nickel prices are likely to remain volatile in the near term, supported by policy uncertainty and speculative positioning. However, sustained upside will depend on whether Indonesia’s quota reductions translate into real, enforceable supply constraints rather than headline adjustments.