Nickel Eases from 2-Month High

Nickel futures fell to below the $15,200 per tonne mark, erasing the rally that topped at a two-month high of $15,640 on July 24th amid ample supply and the Chinese government’s efforts to cut industrial capacity, limiting demand for nickel as industrial alloys. Beijing furthered its rhetoric in cutting capacity for steel mills, reducing the output for finished steel and limiting nickel bidding for stainless steel production. In the meantime, available nickel stockpiles at LME warehouses rose by 40,000 tonnes this year to 190,000, aligned with robust Chinese refiners in Indonesia. The Indonesian government reduced nickel mining quotas by 120 million tons to 150 million this year, cutting global supply by 35% from current levels, although soft bidding prices throughout the year indicated that markets don’t see constraints dampening the oversupplied backdrop.