Nickel traded around $16,930 per tonne after rebounding from an over one-month low, as potential production cuts at Indonesia’s largest nickel-processing hub raised concerns about tighter supply. Indonesia Morowali Industrial Park said El Niño-driven water shortages could reduce production by 30%-40% if new water sources are not secured. Some Chinese-backed producers are also considering coordinated 30% cuts at high-pressure acid leaching (HPAL) plants, although no agreement has been reached. Indonesia’s 2026 mining quota is set at around 260 million to 270 million tonnes, down from 379 million tonnes in 2025. However, elevated LME inventories, weak Chinese demand and increased Philippine ore imports into Indonesia continue to weigh on prices and could offset tighter domestic supply. Indonesia imported 11.4 million tonnes of Philippine nickel ore during January-July, compared with 6.82 million tonnes a year earlier, while mixed hydroxide precipitate (MHP) supply recovered somewhat after improved sulfur arrivals lifted output at some Indonesian projects.