Highlights:

• Nickel futures climbed to $15,450 per tonne, their highest in a month.

• Indonesian output cutbacks provide temporary relief but oversupply remains entrenched.

• Prices are up modestly month-on-month but remain significantly below last year’s levels.

Nickel prices have staged a modest rebound, climbing to $15,450 per tonne in September, the highest level in a month. The gains come as production cutbacks in Indonesia, the world’s top supplier, momentarily reduced pressure from an enduring oversupply. Yet, with inventories still elevated and demand growth uncertain, the sustainability of this rally remains in question. Investors are now weighing whether the latest move represents the beginning of a structural recovery or merely a temporary respite in a persistently weak market.

Indonesian Output Adjustments Provide Short-Term Relief

Indonesia continues to dominate the global nickel industry, both as a supplier of nickel pig iron and as a hub for refining. Output of nickel pig iron fell 1.7% in July from the previous month, as several smelter suspensions were extended. In addition, the government reduced mining quotas by 120 million tons to 150 million this year, cutting global supply by an estimated 35% relative to current levels.

These production measures have provided some support for prices, which had been languishing near their lowest levels since Indonesia imposed its ore export ban in 2020. Still, the broader market remains skeptical. Soft bidding prices throughout the year signal that investors and consumers do not view the adjustments as sufficient to shift the market away from a fundamentally oversupplied backdrop.

Market Range-Bound Despite Price Uptick

On September 1, 2025, nickel prices reached $15,475 per tonne, marking a 0.45% gain from the previous day and a 2.45% increase over the past month. However, the metal remains 6.92% lower compared to a year ago, reflecting a market unable to break free from its trading range.

The contrast between nickel’s current price and its historic peak of $54,050 in May 2007 underscores how far the market has shifted from its previous boom cycles. The expansion of refining capacity within Indonesia after the export ban has kept supply elevated, preventing a meaningful recovery even as other commodities have surged during the global energy transition.

Demand Growth Remains the Missing Piece

A critical factor holding back nickel prices is the absence of robust demand growth. While the energy transition and electric vehicle (EV) markets are often cited as long-term drivers, near-term consumption has lagged supply growth. Major stainless steel producers—the largest consumers of nickel—have faced tepid order books in 2025, further dampening price momentum.

For investors, the lack of visible demand strength amplifies concerns that the latest rebound may not have staying power. Commodity traders often exhibit a cautious stance in such conditions, prioritizing short-term gains while avoiding deep commitments until clearer demand signals emerge.

Outlook: Watching Supply Cuts and EV Demand

The nickel market is likely to remain volatile in the coming months as traders track Indonesian mining quotas, smelter activity, and signs of demand recovery in both stainless steel and battery markets. If EV adoption accelerates more strongly than expected, nickel could find new momentum as a strategic metal in global decarbonization efforts. Conversely, if oversupply persists and global industrial growth weakens, the market may return to testing its recent lows.

For now, nickel’s modest rally offers temporary relief but falls short of signaling a structural turnaround. Investors in both Israel and the U.S. will be watching closely to see whether policy shifts, demand dynamics, or further supply adjustments provide the catalyst for a more durable recovery.