FX.co ★ Nickel Futures Surge to 19-Month High

Nickel futures have risen to approximately $18,900 per tonne, marking the highest point in nineteen months, fueled by optimism surrounding Indonesia's plans to control excessive output. The Indonesian government has announced that ore production quotas for 2026 will be decreased by about 34%, to between 250 and 260 million wet tons, down from 379 million in 2025. Although recoverable nickel might be reduced due to ore moisture and increasing demand from smelters, this announcement highlights the government's intention to curb the oversupply that has pressured prices over the past two years. This strategy aims to align ore supply with the country's processing capacity and promote downstream development, such as nickel pig iron and intermediate products. Additionally, the authorities have intensified their crackdown on illegal mining activities and have been enforcing environmental regulations, bolstering the narrative of a "disciplined supply." On the demand front, China continues to be a major influence, with stainless steel manufacturers and electric vehicle battery producers increasing their purchases amid strong industrial and electric vehicle demand.