LME nickel closed at $17,640/mt on June 22, extending its losing streak to three consecutive weeks. The metal is down 3.97% for June — the worst monthly performance among the six base metals — and has now surrendered all gains from the brief April rally that briefly pushed prices above $19,000. The culprit is the same story that has haunted nickel since 2023: too much supply from Indonesia.
Indonesian nickel pig iron (NPI) production hit an annualized 1.52 million tons in May, another record. The country now accounts for roughly 55% of global nickel supply, up from 30% in 2020. New HPAL (high-pressure acid leach) projects continue to come online — IMIP and Weda Bay expansions added an estimated 80,000 tons of annual nickel capacity in Q1 2026 alone. Every time the market looks like it might tighten, another Indonesian project ships more metal.
LME inventories reflect the glut. At 276,216 tons, stocks are at the highest level since June 2021 and up 380% from the 2023 trough of 37,000 tons. The nickel market is running a surplus of approximately 180,000–200,000 tons for 2026, according to the INSG. There is no supply panic in nickel — there is a supply deluge.
Nickel is the one base metal where buyers have genuine leverage. With a 180,000–200,000-ton surplus and rising inventories, this is a buyer's market for at least the next 6–9 months. Pressure suppliers on formula pricing: push for a discount to LME rather than a premium, especially for Class 2 nickel and NPI. If you're buying Class 1 nickel (LME-deliverable), the premium over Class 2 has compressed to $800–1,200/mt — still historically high but trending down. For Q3 contracts, floating pricing with monthly LME average settlement is safer than fixed — you capture any further downside.