LME nickel market remains steady w-o-w as Indonesia cuts mining quota duration

• Global nickel market to face 256,000-t surplus in 2026
• EU concerned over China-controlled MMG’s nickel deal

Nickel futures on the London Metal Exchange (LME) experienced minor fluctuations last week, remaining range-bound. The three-month nickel futures settled at $15,355/tonne (t) on the last trading day, slightly down from $15,400/t the previous week.

During the same period, LME warehouse nickel stocks increased gradually from 231,654 t on 3 October to 237,378 t on 10 October, signalling growing supply pressure in the market.

Indonesia cuts mining quota validity to 1 year

Indonesia has cut the validity of its mining production quotas from three years to one year, effective 3 October 2025, aiming to exert greater control over output levels to stabilise prices of key commodities such as coal and nickel. While quotas for 2025 remain valid, miners must reapply annually for 2026 and 2027 quotas. Companies are required to submit RKAB proposals detailing planned mining volumes between 1 October and 15 November each year.

The Indonesian Coal Mining Association has raised concerns about the shortened approval timeline potentially impacting operations. Additionally, new rules mandate miners to demonstrate financial provisions for land rehabilitation before securing quota approvals. This change is part of Indonesia’s broader strategy to manage supply, support commodity prices, and strengthen environmental compliance.

Global nickel market to stay surplus in 2026

Sumitomo Metal Mining (SMM) forecasts the global nickel market will remain in surplus for the third consecutive year in 2026, with a projected oversupply of 256,000 t, slightly lower than 263,000 t in 2025. Indonesia’s nickel pig iron production is expected to increase by 4.1% to 1.76 million tonnes (mnt). While stainless steel demand will support growth, battery sector demand is projected to remain slow due to the rising popularity of nickel-free lithium-iron-phosphate batteries in China. Overall supply is forecast to rise 2.0%, outpacing demand growth of 2.4% in 2026.

EU concerned over China-controlled MMG’s nickel deal

MMG’s $500 million acquisition of Anglo American’s nickel assets faces regulatory scrutiny from the EU and concerns from steelmakers. EU regulators are worried about China’s growing influence over critical mineral supplies, especially nickel used in stainless steel and EV batteries. The American Iron and Steel Institute has urged the US to block the deal, citing strategic resource control concerns. The decision, pending approval, could impact global nickel supply chains and market dynamics.

Outlook

Nickel prices are expected to remain under pressure in the near term amid high inventories and weak demand. However, downside risks are cushioned by Indonesian cost support and potential supply disruptions from stricter mining policies.