Indonesia's Weda Bay nickel mine output cut: how will it impact global nickel prices?

Indonesia's Weda Bay nickel mine output cut: how will it impact global nickel prices?
Indonesia's plan to slash Weda Bay nickel mine quotas by 71% to 1.2 million tonnes has triggered a supply scare, lifting LME nickel prices from near five-year lows of $14,000/t to a $17,000-19,000/t range, a gain of over 20%. However, the rally lacks durability. LME and SHFE nickel inventories remain at multi-year highs, meaning refined nickel supply is ample even as ore tightens. The market is trading two opposing logics: upstream ore scarcity supports costs, while downstream refined nickel glut caps gains. Nickel is fragmented across stainless steel, battery intermediates, and refined metal markets, so ore quota cuts do not automatically translate into broad price spikes. If downstream stainless demand stays weak, mills will resist higher costs by cutting output, keeping price upside limited.