Nickel Price Drops After Indonesia Policy Shift-June 2026

Time: Early June 2026

Coverage: Nickel alloys / stainless steel / related raw materials

Focus Keywords: nickel price forecast 2026, stainless steel market update, Indonesia nickel policy, CBAM carbon tax steel export, stainless steel trade barriers

Data Sources: Indonesia ESDM, European Commission (EC), China Trade Remedy Information Network (MOFCOM), LME, SMM, INSG, and publicly available market data

1. Supply & Demand Dynamics

China Stainless Steel Production:

June crude stainless steel output is estimated at 3.6 million tons, down 5.6% month-on-month, mainly due to seasonal demand weakness and scheduled mill maintenance.
300-series (nickel-containing grades) output is around 2.0 million tons, with a smaller decline than 200-series products, reflecting relatively stronger profitability in nickel-bearing stainless steel grades.

Nickel Raw Material Supply:

Indonesia’s policy stance has shifted from “tightening” toward selective easing. While expectations of lower upstream cost support have weakened, actual supply has not yet significantly increased.

The end of the rainy season in the Philippines has increased nickel ore shipments. Meanwhile, geopolitical disruptions briefly affected supply chains:

• On June 11, Iran announced the closure of the Strait of Hormuz, disrupting sulfur transport and restricting Indonesia’s HPAL (MHP) capacity (e.g., Huafei project output cut by 50%).
• On June 15, a preliminary understanding between the U.S. and Iran improved shipping expectations, and the Strait may reopen, though uncertainty remains in the short term.

2. Key Corporate & Market Actions

• Tsingshan Holding Group: accelerating its nickel industrial park project in Madagascar, strengthening “Indonesia diversification” in its supply chain.
• Lygend Resources & Technology: restarting New Caledonia projects and evaluating nickel resources in Tanzania.
• Domestic steel mills: overall production cut in June, with relatively mild reductions in 300-series stainless steel.
• Baosteel (July futures pricing): Electrical steel: +300 RMB/ton; Medium plate / hot-rolled coil base prices unchanged

Summary

The key shift this period is Indonesia’s policy signal toward easing nickel constraints, including removal of profit-sharing mechanisms and flexible production quotas. Combined with U.S. interest rate expectations and seasonal downstream weakness, nickel and stainless steel prices have retreated from previous highs.

Short-term impact: export pricing is under pressure, but cost reductions may support margin recovery.

1. Indonesia Nickel Policy Shift

Source: Indonesia Ministry of Energy and Mineral Resources (ESDM)

Key updates:

• Official cancellation of the nickel industry profit-sharing mechanism.
• Relaxation of coal and nickel ore production quotas.
• The 2026 RKAB mining work plan will dynamically adjust nickel output to match domestic smelting demand.
• Planned tax increases on mining rights and export duties have been postponed.

Interpretation:

Indonesia’s previous tightening successfully supported nickel prices. The current adjustment is a deliberate policy correction, which is bearish for nickel prices in the medium to long term.

2. EU CBAM Update

Source: European Commission (EC)

Key updates:

• Importers with annual CBAM-covered volumes ≤ 50 tons are exempt from emissions reporting and carbon certificate obligations.
• If default EU carbon values are used:
  • 2026: +10% carbon cost
  • 2027: +20%
  • From 2028 onward: fixed +30%

Interpretation:

Exporters with weak carbon accounting systems will face steadily increasing compliance costs, leading to further market segmentation.

3. U.S. Section 232 Tariff Adjustment (Effective June 8)

Source: U.S. White House / USTR

Key updates:

• Stainless steel processed products (e.g., agricultural and HVAC components): tariffs reduced from 25% to 15%.
• Products with ≥85% U.S. domestic metal content may qualify for a 10% preferential rate.
• Primary products (slabs, hot-rolled coils) remain at 50% tariffs.
• Additional product categories (e.g., steel shelving) added to the 25% tariff list.

Interpretation:

Overall U.S. steel trade barriers remain high, with only limited relief for downstream high-value products.

4. Eurasian Economic Union (EAEU) Anti-Dumping Extension Proposal

Source: Eurasian Economic Commission

Key updates:

• Proposed extension of anti-dumping duties on Chinese stainless steel welded pipes for five years.
• Duty range remains 14.62%–17.28%.
• Covers welded pipes with thickness 0.4–6 mm (round, square, rectangular).
• Stakeholders may submit objections before June 25, 2026.

Interpretation:

Chinese stainless steel pipe exports to Russia and EAEU markets will continue facing elevated tariff barriers through 2031.

5. Other Global Trade Remedies

• June 3: EU initiated anti-dumping investigation on welded steel mesh from China and Turkey.
• June 3: Argentina launched second sunset review on Chinese stainless steel cutlery.
• Early June: Australia issued final anti-circumvention ruling on Chinese welded pipes.

1. Nickel Price Movement

• LME nickel: $17,700–17,800/ton(mid-June), down from ~$19,100/ton at end of May.
• SHFE nickel: ~134,500 RMB/ton.

Drivers of decline:

• Indonesia policy easing expectations
• Stronger USD and Fed tightening expectations
• Weak seasonal demand from stainless steel downstream sector

Inventory pressure:

LME nickel inventories remain high at ~275,000 tons, continuing to weigh on prices.

2. Stainless Steel & Specialty Alloys

• 304 cold-rolled stainless steel (Wuxi): ~14,500 RMB/ton, slightly lower MoM with weak demand.
• 316L spread remains high due to molybdenum cost support.
• Export pricing remains competitive globally.
• Nickel-based high-temperature alloys maintain strong overseas price advantages and stable profitability.

Demand outlook:

Aerospace and gas turbine sectors continue to grow, supporting strong fundamentals in high-performance alloys.

Risk Factors

• Indonesia may introduce an additional 15% quota adjustment mid-year.
• Potential reopening of the Strait of Hormuz could further depress nickel prices.

Trend 1: Indonesia policy easing weakens nickel upside momentum

Nickel prices are expected to remain range-bound with a downward shift in price center.

Trend 2: Diversification of nickel supply sources

Major players such as Tsingshan and Lygend are expanding into Africa and Oceania, reducing reliance on Indonesia.

Trend 3: Triple-layer trade barriers reshape export structure

EU CBAM + U.S. Section 232 + EAEU anti-dumping measures are collectively increasing export barriers, pushing diversification toward emerging markets.

Trend 4: High-performance alloys remain structurally strong

Nickel alloys, 316L stainless steel, and duplex stainless steels continue to outperform commoditized stainless products due to technical barriers and pricing advantages.

• Raw material price decline supports margin recovery, but intensifies export price competition.
• High-value products remain resilient, especially nickel alloys, duplex stainless steel, and 316L.
• Export compliance requirements are rising, while market diversification toward the Middle East, Southeast Asia, Africa, and South America becomes increasingly important.