By: Editorial Team, StoneX Media
Global nickel markets are entering a more politically controlled phase where government intervention is becoming as important as underlying industrial demand. Indonesia has rapidly expanded its dominance across the nickel supply chain over recent years, but policymakers are now shifting focus away from maximizing output and toward defending profitability and domestic strategic control. At the same time, the Iran conflict and tightening sulfur availability are creating new pressure points across the refining process. Consequently, nickel markets are increasingly reacting to supply chain bottlenecks and geopolitical disruptions rather than broad manufacturing optimism.
Natalie Scott-Gray, Senior Metals Analyst at StoneX, has tracked base metals markets through multiple commodity supercycles and geopolitical disruptions. Her analysis combines detailed knowledge of mining economics, refining constraints, and global metals trade flows, giving her a distinct perspective on how Indonesian policy shifts are reshaping nickel pricing and industrial supply chains.
Indonesia is deliberately tightening global nickel supply after years of aggressively expanding production capacity. Scott-Gray explains that Indonesian policymakers want nickel prices trading closer to "18 to $19,000 per tonne" after prolonged weakness pushed margins lower across the industry. Consequently, the government has reduced mining and smelting quotas, significantly limiting available production. These restrictions are already impacting major producers, including Weda Bay, which Scott-Gray notes has potentially moved toward care and maintenance after rapidly exhausting its quota allowance. Over time, these interventions are likely to reinforce Indonesia’s dominance over global nickel pricing while tightening availability across international supply chains.
Nickel refining margins are now coming under additional pressure from sulfur shortages linked to the Iran conflict and disrupted Middle East trade flows. Scott-Gray emphasizes that sulfur prices have already "jumped by about 80% this year", creating major cost pressures for Indonesian high pressure acid leaching producers that depend heavily on imported sulfur. Indonesia currently has roughly "76% reliance on the Middle East to get sulfur into the country", making the market especially vulnerable to disruption through the Strait of Hormuz. As a result, several major producers have already reduced output, including one large operator that "had to cut output by 50%" because of escalating sulfur costs. If physical sulfur shortages intensify through the second half of 2026, nickel supply risks could accelerate significantly even as broader industrial demand starts to weaken.
Access live prices, supply and demand data, and actionable market commentary focused on the Metals sector. Sign up for StoneX Market Intelligence today and see how our Metals insights can elevate your strategy.
Sign up for a Market Intelligence trial today See our financial videos hub
--- Written by Gus Farrow, Senior Manager, StoneX TV
--- Expert: Natalie Scott-Gray, Senior Metals Analyst at StoneX
The subsidiaries of StoneX Group Inc. provide financial products and services, including, but not limited to, physical commodities, securities, clearing, global payments, risk management, asset management, foreign exchange, and exchange-traded and over-the-counter derivatives. These financial products and services are offered in accordance with the applicable laws in the jurisdictions in which they are provided and are subject to specific terms, conditions, and restrictions contained in the terms of business applicable to each such offering. Not all products and services are available in all countries. The products and services offered by the StoneX Group of companies involve risk of loss and may not be suitable for all investors. Full Disclaimer. This content is not intended for residents of any particular country, and the information herein is not advice nor a recommendation to trade nor does it constitute an offer or solicitation to buy or sell any financial product or service, by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Please refer to the Regulatory Disclosure section for entity-specific disclosures. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc. The information herein is provided for informational purposes only. This information is provided on an ‘as-is’ basis and may contain statements and opinions of the StoneX Group of companies as well as excerpts and/or information from public sources and third parties and no warranty, whether express or implied, is given as to its completeness or accuracy. Each company within the StoneX Group of companies (on its own behalf and on behalf of its directors, employees and agents) disclaims any and all liability as well as any third-party claim that may arise from the accuracy and/or completeness of the information detailed herein, as well as the use of or reliance on this information by the recipient, any member of its group or any third party.
© 2026 StoneX Group Inc. all rights reserved.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
The base metals complex continues to be pulled between supportive physical fundamentals, escalating geopolitical risks, and growing tariff uncertainty. While stronger Chinese policy support and AI-related demand themes remain constructive, a firmer US dollar and expanding trade restrictions are increasing market volatility.
Aluminum markets are adjusting to a new reality as supply chains prove more resilient than many expected despite ongoing geopolitical disruption. Alternative trade routes, recovering production and stronger output from China are beginning to outweigh the supply shock that initially drove prices sharply higher.
For investors and industrial consumers, the most important themes to monitor over the coming weeks are: 1. US-Iran developments and shipping disruptions. 2. Chinese policy support measures following weak economic data. 3. US tariff decisions (Sections 122, 301 and potential copper-related measures). 4. Sulfur availability and its implications for nickel supply. 5. Whether copper's physical tightness can offset growing concerns around medium-term surplus conditions.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve, our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
