Nickel Declines from Recent Peak

Nickel futures in the UK sank to $17,700 per tonne after hovering near the 19-month high of $19,000 throughout January, tracking the drop in other base metals as the rebound in the dollar triggered the close of speculative positions in the sector. Still, contracts remained sharply higher since the start of the year on the risk of lower supply. Jakarta confirmed it will cut mining permits to 260 million wet tons of tin ore this year compared to 379 million tons in the previous year, removing a significant source of global supply as electrification and datacenter demand surge across major economies. However, the ambiguity on production around a cap on wet tons allowed some flexibility on production for miners, while the lack of reporting on production levels for major producers in the country limited the outlook of lower supply. This is despite Indonesia’s effort to crack down on illegal mining activities.