- Slow stainless steel production in China weighs on prices
- Indonesia limits new nickel permits for intermediate products
Nickel prices on the London Metal Exchange (LME) remained range-bound during the week, with three-month contracts settling at $15,070/t on 7 November, down by $175/t w-o-w from $15,245/t in the previous week. LME nickel inventories stood at around 253,104 t, marginally higher than last week’s 252,102 t, indicating stable yet elevated stock levels.
Prices slipped amid persistent oversupply and weak demand from the stainless steel sector, keeping market sentiment subdued. Elevated inventories reflected ample availability, limiting any recovery momentum. Additionally, sluggish stainless steel production in China and rising nickel pig iron (NPI) output from Indonesiaexerted further downward pressure. Overall, muted buying interest and the absence of strong fundamentals kept nickel prices under pressure through the week.
Market highlights
Indonesia limits new nickel permits to boost downstream processing
Indonesia has halted new industrial permits for nickel plants producing certain intermediate products such as nickel pig iron and mixed hydroxide precipitate, without plans for further processing. This move aims to push the country up the nickel value chain, supporting downstream investment and reducing oversupply. The regulation may impact plants completing after 2027, potentially causing project delays or cancellations as firms adjust to new requirements.
Fed remains cautious amid economic uncertainties
The US Federal Reserve remains cautious about future interest rate cuts. While two consecutive 25-basis-point cuts have brought rates to their lowest since 2022, officials are divided on the path ahead due to inflation risks and data uncertainties. Market expectations for a December cut persist, but Fed Chair Powell emphasised it is not guaranteed, reflecting concerns over sticky inflation and a slowing labour market. Overall, the Fed’s stance indicates a careful watch on economic indicators before deciding on further easing.
Outlook
Nickel prices are expected to remain volatile within the current range as macroeconomic uncertainties, including Fed policy outlook and supply-side regulations from Indonesia, continue to influence market dynamics. Additional factors like possible US government shutdown risks and global demand trends could further impact price movement.
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