- LME inventories decline despite ample global supply
- Indonesia expands downstream nickel investments
London Metal Exchange (LME) three-month nickel prices increased 3% w-o-w to $17,430/t in the week ended 25 July 2026, compared with $16,870/t a week earlier. Meanwhile, LME nickel inventories declined 2.5% to 267,342 t from 274,584 t, indicating continued warehouse destocking despite inventories remaining at historically elevated levels.
Geopolitical risks support sentiment
Global macroeconomic sentiment remained mixed during the week. Geopolitical tensions resurfaced after the US reportedly carried out another strike on Iran, while renewed concerns over potential disruptions to the Strait of Hormuz raised fears of tighter sulfur supply, a key input for the nickel value chain. Market participants also remained focused on the upcoming US Federal Reserve’s July FOMC meeting, with monetary policy expectations continuing to influence broader base metals sentiment.
Indonesia strengthens nickel value chain
Despite an estimated 200,000 t global nickel surplus in 2025, investment in Indonesia’s nickel industry continues to gain momentum as producers prioritise long-term supply security over near-term market oversupply. South Korea’s EcoPro BM recently announced plans to invest a significant portion of its capital raising into an Indonesian nickel smelter to secure compliant raw material supplies amid tightening US and European critical minerals regulations.
Indonesia, which accounts for nearly two-thirds of global nickel mine production, continues to reinforce its position in the global battery supply chain through downstream investments. At the same time, regulatory uncertainty remains a key concern after Chinese investors highlighted challenges related to mining quota revisions and foreign exchange regulations. While some Chinese producers have slowed expansion plans, Indonesia is advancing its downstream strategy through state-backed entities including Danantara and MIND ID, strengthening domestic control over the nickel value chain.
Outlook
LME nickel prices are expected to remain volatile in the near term as geopolitical developments and inventory trends continue to influence market sentiment. While continued warehouse destocking may provide some support, ample global supply and uncertainty surrounding Indonesia’s mining quota (RKAB) policy are likely to limit significant upside. Market participants will also closely monitor developments in the Middle East and upcoming US Fed policy signals for further price direction.
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