Nickel prices fell toward their lowest level since mid-July as reports emerged that Indonesia may grant additional ore production quotas to a major producer, rekindling persistent concerns over oversupply in a market already grappling with structural surpluses. According to ING Think's commodities analysis published on August 7, 2026, the prospect of higher Indonesian output renewed bearish sentiment across the nickel complex, reinforcing expectations that the market will remain comfortably supplied through the second half of the year. The development underscores the dominant role Indonesia plays in global nickel supply dynamics, with any expansion in the country's production quotas carrying outsized implications for prices.
ING analysts Warren Patterson and Ewa Manthey maintained a cautious stance on the metal, noting that continued Indonesian supply growth is likely to keep the market in surplus and limit any meaningful upside potential in the near term. The brokerage's view suggests that structural headwinds from the world's largest nickel-producing nation will continue to weigh on prices, with little near-term catalyst for a sustained recovery. The bearish nickel backdrop stood in stark contrast to broader base metals developments on the day.
Copper traded near record highs, with LME prices comfortably above $14,000 per tonne, driven by tariff-related stockpiling into the United States and increasingly tight physical conditions outside the country. Additional upward pressure came from reports that the Democratic Republic of Congo had moved to restrict exports of copper concentrates, though ING noted the impact on the refined copper market is likely to be limited, as most of the DRC's copper is exported as cathode rather than concentrate. For nickel specifically, the Indonesian supply narrative remains the dominant market driver.
Indonesia has consistently expanded its nickel ore production and processing capacity in recent years, and any further liberalization of output quotas is viewed by analysts as a direct downward pressure on global prices. ING's assessment points to a market in surplus for the foreseeable future, with no significant supply disruptions on the horizon capable of offsetting the volume coming from Southeast Asia. The session's nickel weakness also came against a broader commodities backdrop shaped by renewed geopolitical tension in energy markets.
Oil prices rallied sharply, with ICE Brent settling 3.8% higher and breaking back above $82 per barrel, driven by fading prospects for a US-Iran diplomatic agreement that could have brought additional Iranian crude supply to market. Source: ING Think, Warren Patterson and Ewa Manthey, The Commodities Feed, August 7, 2026.
Source: think.ing.com