Nickel Stabilizes at $17,710: Indonesia Ore Quota Constraints Meet LME Inventory Overhang

Price Stabilization: LME Nickel finds Support near $17,710

Nickel prices on the London Metal Exchange (LME) stabilized around $17,710 per tonne on June 22, 2026. The price action reflects a structural balancing act between Indonesian ore supply restrictions and persistent global warehouse surpluses. Shanghai Metals Market (SMM) midday reviews confirmed that LME nickel rose over 1% on June 22, outperforming domestic Chinese markets, even as downstream battery-grade nickel sulphate prices edged slightly lower due to mediocre trading sentiment.

Indonesia Quotas: RKAB Reductions Tighten Intermediate Supply

The primary support floor for nickel is Jakarta's policy shift regarding mining quotas. The Indonesian government transition to 1-year RKAB allocations has reduced the 2026 quota to 270 million wet metric tons (wmt), down from 375 million wmt in 2025. This restriction has tightened intermediate supply, pushing the FOB price of Indonesian Mixed Hydroxide Precipitate (MHP) to $16,387 per tonne Ni and high-grade nickel matte to $16,474 per tonne Ni. Additionally, HPAL (High Pressure Acid Leach) operations in Indonesia face rising costs due to higher sulphuric acid prices and declining feed ore grades, which require greater acid consumption.

Warehouse Overhang: LME Inventories Contrast with Deficit Forecasts

Despite these supply bottlenecks, LME and Shanghai warehouse stocks remain relatively high, presenting a near-term inventory overhang. This has kept spot prices from staging a larger rally, keeping the market focused on demand-side caution. However, the International Nickel Study Group (INSG) notes that Indonesian quota constraints could push the global refined nickel market into a deficit for 2026, marking the first deficit since 2021 as demand from EV battery and stainless steel sectors continues to grow.

Technical Map: Key Support and Resistance Zones

Following the recent correction, nickel's daily price structure presents key levels for market participants:

1. Support at $17,000: The immediate downside target is the critical support zone near $17,000 to $17,200 per tonne. Defending this level is essential to keep the long-term bullish structure intact.
2. Resistance at $18,500: To reclaim its bullish momentum, nickel must break and hold above the key resistance level at $18,500 on a daily closing basis.

The Comdex View: Nickel's stabilization near $17,710 reflects the clash between LME warehouse surpluses and Indonesian ore restrictions. While high stocks create a near-term cap on prices, the reduction of Indonesia's RKAB mining quotas represents a major structural shift. As HPAL processing costs rise and a global deficit looms for 2026, the physical floor will remain highly supportive. We view any consolidation near the $17,000 support level as an attractive long-term entry point.