Nickel leads base metals sell-off on Indonesia output uncertainty

Nickel plunged on Thursday, snapping a sharp rally since December, after the Indonesian government refrained from disclosing its 2026 mining output quota, raising concerns about a rollback of supply curbs.

The most-active nickel contract on the Shanghai Futures Exchange closed daytime trading down 6.14% at 136,440 yuan ($19,538.32) a metric ton, after plunging as much as 7.96% to 133,800 yuan.

The benchmark three-month nickel on the London Metal Exchange fell 4.05% to $17,170 a ton, as of 0700 GMT, after posting a 5.92% dive to $16,835.

The sharp decline halted a more than 30% rally since December, which was fuelled by the Indonesian government's plan to cut 2026 mining output quotas, locally known as RKAB, to support prices.

In a press briefing on Thursday, Energy and Mineral Resources Minister Bahlil Lahadalia reiterated the government's plan to cut nickel quotas and the quotas will be adjusted to meet demand by local smelters, without giving a number on the 2026 quota level after the reduction.

Investors have been sceptical about the Indonesian government's policy, worrying that it might eventually walk back the quota reduction, risking a dismissal of the rally.

Meanwhile, stocks in London Metal Exchange-registered warehouses <MNISTX-TOTAL> pointed to ample supply, with a 20,088-ton inflow lifting inventories to 275,634 tons, the highest level since June 2018, according to LME data.

More broadly, the base metals complex is easing due to profit-booking after broad gains, analysts said.

The most-traded copper contract on the Shanghai Futures Exchange closed 2.76% lower at 101,220 yuan a ton, after tumbling to as low as 100,040 yuan.

The benchmark three-month copper on the London Metal Exchange dropped 0.62% to $12,820 a ton.

Copper prices remained elevated despite the profit-booking ease, as the red metal was still supported by supply jitters amid mine disruptions and regional dislocation amid United States tariff worries.

Elsewhere among SHFE base metals, aluminium lost 2.89%, zinc shed 1.36%, lead declined 2.01% and tin dropped 1.83%.

Among other LME metals, aluminium dropped 0.57%, lead lost 1.36%, tin was down 0.39%, while zinc was the sole gainer, nudging 0.08% higher.