LME nickel prices inch up as Indonesia policy tightening supports market

• Ample supply offsets support from weak dollar
  
  
• Subdued downstream demand caps upside
  
  

Nickel prices on the London Metal Exchange (LME) inched up in the week ended 10 April, with the three-month contract closing at $17,200/t, up marginally from $17,060/t in the previous week. LME inventories stood stable at 281,670 t, reflecting a broadly balanced global market amid mixed supply-demand signals.

Indonesian policies underpin cost support

The market continued to draw strength from Indonesia's tightening regulatory environment. Delays in RKAB approvals and strict mining quotas, currently capped at 190-200 million tonnes (mnt), have constrained ore availability, supporting upstream prices. Market participants highlighted that tightening ore supply is establishing a firm cost floor, particularly as saprolite availability for pyrometallurgical routes remains limited.

Further, Indonesias Ministry of Energy and Mineral Resources is reviewing the Mineral Reference Price (HPM) mechanism, with potential implementation expected in April 2026. Industry participants noted that revisions could better reflect market-linked premiums and may signal a shift away from tax-free exports of intermediate products such as nickel pig iron (NPI) and mixed hydroxide precipitate (MHP), potentially reshaping global cost structures.

Macro tailwinds offset weak demand

A weaker US dollar, following easing geopolitical tensions in the Middle East, provided additional support to nickel prices. However, upside remained capped by elevated refined nickel inventories and ample NPI supply.

Demand-side fundamentals remained subdued. Recovery in Chinas stainless steel and EV battery segments fell short of expectations, while port-side ore inventories declined only gradually, indicating sluggish consumption

NPI market stable but under pressure

High-grade NPI prices remained largely stable, with the market witnessing a tug-of-war between mills and suppliers. Increased availability of stainless steel scrap and weak downstream demand pressured NPI prices, while rising domestic ore costs in Indonesia continued to squeeze producer margins.

Outlook

Nickel prices are expected to remain firm in the near term, supported by supply-side constraints and policy tightening in Indonesia. However, weak stainless steel and battery sector demand, along with high inventory levels, may limit sharp upside.