LME nickel is trading around $19,004/t as of May 29, marginally softer over the month but still 23.8% higher year-on-year. The market is in a tactical consolidation phase — supported by Indonesian policy floors but capped by surplus expectations and soft demand in both stainless steel and EV batteries.
Indonesia has sharply cut nickel ore mining quotas to roughly 260-270 million tonnes for 2026, down from 364-379 million tonnes last year. PT Weda Bay Nickel's quota was slashed from 42 million tonnes to just 12 million tonnes. These cuts have already created raw-material shortages at some domestic smelters, forcing output reductions and underpinning prices.
However, the surplus narrative dominates for now. ING projects a 261,000-tonne surplus in 2026, with LME inventories elevated at 287,550 tonnes (+44% YoY). Demand from EV batteries has underperformed as manufacturers shift to LFP chemistries, while stainless steel demand remains sluggish. Tacto's procurement analysis notes the market is now pricing surplus management rather than supply tightness.