LME nickel prices have fallen below US$16,750/ton due to high inventories and weak demand. As of early September, LME nickel stockpiles reached 271,000 tons, while slow demand from the stainless steel industry continues to limit nickel consumption.

On the supply side, Indonesia plans to reduce its 2026 nickel ore mining quota from 379 million tons in 2025 to 260-270 million tons. However, this supply cut has been partly offset by strong exports from the Philippines. From January to July, Philippine nickel ore shipments to Indonesia increased from 6.82 million tons to 11.4 million tons, helping Indonesian smelters secure enough raw materials.

At the same time, stronger-than-expected U.S. employment data has increased expectations of further interest rate hikes. This has supported the U.S. dollar and Treasury yields, putting additional pressure on nickel and other dollar-priced commodities.

Despite the weak short-term outlook, supply risks may offer support in the medium term. Lower cobalt by-product revenues have reduced the profitability of HPAL projects. As a result, some high-cost producers may cut output, which could tighten supply and help support nickel prices in the future.