- Inventories rise amid strong Indonesian supply
- Stainless steel demand remains largely muted
Nickel prices on the London Metal Exchange (LME) slightly edged up from last week, with the 3-month contract closing at $15,218/tonne (t). LME nickel stocks edged up by 2% w-o-w to 207,576 t from 203,900 t a week earlier, driven by strong Indonesian supply alongside subdued demand from the global stainless steel sector.
Market highlights
Nickel prices volatile on SHFE amid economic uncertainty
Nickel prices remained volatile this week, oscillating around RMB 120,000/t ($15,065/t), influenced by global macroeconomic factors. Initial declines driven by US tariff threats and a stronger dollar were followed by a rebound due to improved sentiment and short-covering. Despite the recovery, risks of a downward shift persist amid ongoing geopolitical and economic uncertainty. Inventories saw mixed movement, with domestic stocks rising slightly while bonded zone inventories fell.
Impact of Indonesia’s new nickel rules on Chinese investment
Indonesia’s new nickel rules under Government Regulation No.25 of 2024 mandate onshore processing, ban raw ore exports, and require foreign miners to divest majority ownership to Indonesian entities. These changes aim to boost domestic value addition and industrial growth. Chinese companies like Tsingshan and GEM are adapting by investing in local smelting and battery facilities. To navigate ownership caps, many are exploring flexible equity structures and partnerships. These regulatory shifts require strategic realignment and compliance to sustain long-term operations in Indonesia’s nickel sector.
Homeland Nickel exploration results
Homeland Nickel Inc. has released positive exploration results from its Eight Dollar Mountain property in Oregon. Fifty-six surface samples collected in June showed nickel laterite values ranging from 0.21% to 2.21%, averaging 0.67% Ni. The strongest sample, 2.2% Ni, came from a shallow historic pit. The company continues to await permitting for its Red Flat project nearby.
BHP’s nickel output plummets
In fiscal 2025, BHP’s nickel production plunged 63% y-o-y to just 30,000 t after suspending its Western Australia Nickel operations. The sharp drop comes as global nickel prices remain weak and operating costs high, prompting BHP to consider selling its Australian nickel assets. Over 85% of last year’s production served the EV sector, but current market conditions have forced a major strategic review.
Outlook
Nickel prices are expected to remain rangebound with intermittent volatility as the market digests supply signals from Indonesia and waits for tangible demand improvement.
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