LME nickel drops 14% m-o-m in Jun’26 on easing Indonesian supply concerns, high inventories

• High inventories and weak demand weigh on prices
• Indonesia’s RKAB review remains key market catalyst

SteelDaily: Global nickel prices recorded their sharpest monthly decline of 2026 in June, pressured by easing concerns over Indonesian supply constraints, elevated exchange inventories, and weak downstream demand. Market participants are now closely watching Indonesia’s review of its 2026 nickel mining work plan and budget (RKAB), expected to be finalised during July.

LME nickel prices fell 13.7% month-on-month (m-o-m), retreating from around $19,050/t at the beginning of June to approximately $16,455/t by month-end. Similarly, SHFE nickel futures dropped below RMB 130,000/t, marking their lowest level in several months.

The decline was driven by a combination of macroeconomic and fundamental factors. The US Federal Reserve’s indication that interest rates could remain elevated strengthened the US dollar. A stronger dollar typically makes dollar-denominated commodities, including nickel, more expensive for overseas buyers, weighing on prices. At the same time, expectations that Indonesia could approve higher nickel mining quotas weakened the supply-tightness narrative that had supported prices earlier this year.

Although Indonesian authorities have denied reports suggesting the country’s 2026 RKAB quota could increase to 360 million t, they confirmed that revisions will be reviewed throughout July. Market participants believe the scale of additional approvals will determine nickel ore availability and influence global supply expectations.

Meanwhile, exchange inventories remain elevated. Combined nickel stocks across the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) reached around 469,000 t, the highest level since 2015, reflecting sluggish consumption and ample availability. Weak seasonal demand from the stainless steel sector and cautious procurement by the battery industry have further weighed on prices.

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