Nickel is trading with a supply premium again. Rzzro's LME nickel read is $17,380/mt, close to the $17,900/t level cited in recent research. The driver is Indonesia, which controls about 60% of global nickel output and has cut its 2026 ore quota to roughly 250-270 million tonnes from 379 million tonnes in 2025.
The quota cut creates an estimated 80-100 million tonne gap between approved ore supply and smelter demand. That gap raises costs across the chain, from NPI and ferronickel to stainless steel surcharges.
The market still has a ceiling. ING projects a 261,000 tonne global surplus, and LME stocks remain elevated. The result is a market that can rally on Indonesian policy news but struggles to sustain a breakout without inventory draws.
For stainless-linked nickel exposure, secure feedstock coverage before quota announcements tighten again. For battery-linked exposure, keep optionality because high inventories can cap rallies.