Nickel price extends rebound after Indonesia signals mine output cut

Nickel advanced for a third day, extending its rebound from an eight-month low on the prospect of reduced supply from top producer Indonesia.

The metal rose as much as 1.5% on Friday, two days after Indonesia proposed cutting nickel ore production in 2026. The government’s work plan budget for next year envisages output of about 250 million tons, down from this year’s goal of 379 million tons.

The planned reduction is a response to a slump in nickel prices. The metal, used in stainless steel and electric vehicle batteries, has declined roughly by half over the past three years on the London Metal Exchange as production in Indonesia, as well as China, outpaces global demand.

Indonesia’s plan presents “a risk” for bearish investors at a time when nickel prices have sunk to near the cost of production in the country, said Gao Yin, an analyst at China’s Shuohe Asset Management Co. The exit of investors from arbitrage trades involving base metals such as copper and aluminum might also have contributed to this week’s gains, she said.

In addition to the proposed reduction in mining, Indonesia’s Ministry of Energy and Mineral Resources plans to revise its benchmark pricing formula for nickel ore in early 2026, a move that would classify byproducts such as cobalt as separate commodities subject to royalties, Bloomberg Technoz reported, citing Indonesian Nickel Miners Association Secretary General Meidy Katrin Lengkey.

“Going into 2026, if the cut does take place, then our view is that nickel is likely to outperform the rest of the base metal complex,” Bernard Dahdah, an analyst at Natixis, said in an emailed note. “Most metals in the complex have already reached record highs, and as such the price increase momentum is likely to slow down, if not reverse in some cases.”

Industrial metals have posted a mixed performance this year, with, copper gaining by about a third, and hitting a record $11,952 a ton last week. That’s come as robust global demand for a metal crucial to the green transition has coincided with supply disruptions and stockpiling of the metal in the US.

Nickel is the only metal on course for an annual decline, with prices down 3.7%, while tin is leading the pack with year-to-date gains of 50%.

Nickel was up 0.7% to $14,750 a ton on the LME as of 10:15 a.m. local time. It has gained more than 3% since closing at $14,263 on Tuesday, its lowest since April 9. Copper rose 0.3% to $11,811 and aluminum climbed 0.4% to $2,929.

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