- Spot trade slows as buyers complete restocking before Lunar New Year
- Oversupply concerns emerge despite quota cuts, may cap Jan’26 rally
LME nickel prices averaged $17,700/t in the week ended 30 January, down 6% w-o-w from $18,860/t after briefly touching an 18-month high earlier in the month. Prices were initially supported by concerns over Indonesia’s nickel ore supply policy, but gains faded as ample global availability and elevated exchange inventories curbed sustained upside.
LME-monitored nickel stocks stood at 286,284 t, marginally higher by 1% than 283,728 t a week earlier, but still historically high. Market participants noted that while stocks have stabilised, the absolute inventory overhang continues to act as a ceiling on rallies, especially amid slowing stainless steel offtake.
Nickel market sentiment softened towards the end of the week after an early rally supported by favourable macro cues and strong speculative interest. As risk appetite cooled and capital flows eased, trading activity turned cautious ahead of the holiday period. Spot transactions slowed as end-users completed restocking ahead of the Lunar New Year holiday, while a build-up in domestic inventories reinforced expectations of near-term consolidation and a corrective phase.
Market updates
Indonesian output strength offsets policy risks
PT Aneka Tambang Tbk (Antam) reported a sharp rise in nickel ore production and sales in 2025, marking its strongest performance in a decade following Indonesia’s export ban. Nickel ore output climbed to 16.11 million wet metric tonne (wmt) from 9.93 million wmt in 2024, while sales rose to 14.58 million wmt from 8.35 million wmt. However, ferro nickel and gold production declined, even as bauxite and alumina volumes hit record highs.
PT Vale advances Pomala smelter, mining to start in 2026
PT Vale Indonesia reaffirmed its commitment to sustainable mining under its Pomala growth project in Southeast Sulawesi, confirming plans to complete smelter construction by end-2025 and commence large-scale nickel mining in 2026. The company clarified land-use concerns, stating that only 880.3 hectares, or 4.3% of the permit area, have been cleared. PT Vale stressed on sustained regulatory support and sustainable mine management, covering environmental protection, community welfare, and safety.
Outlook
Nickel’s January price spike is expected to soften even as Indonesia plans to cut its 2026 nickel ore production quota by around one-third to 250-260 mnt from prior levels, subject to final approval in March. Market participants remain cautious, noting surplus availability and rising inventories. While stainless steel prices may reflect higher input costs in the near term, fundamentals point to limited upside as excess supply continues to dominate sentiment.
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