Nickel futures slid to around $16,700 per tonne in mid-March, hitting its weakest level in over two months, amid rising global risk aversion as Middle East tensions lifted oil prices and reinforced inflation concerns. The shift has supported a stronger US dollar and tempered expectations for near-term Federal Reserve rate cuts, adding broad downside pressure across industrial metals. At the same time, the conflict has exposed vulnerabilities in the nickel supply chain, particularly for battery-grade materials, as processing relies heavily on sulfur inputs linked to Middle Eastern trade routes. Prolonged disruptions could raise costs for high-pressure acid leach (HPAL) operations, increasing price volatility even without direct ore shortages. Meanwhile, in Indonesia, supply risks have also intensified after authorities halted operations at a nickel processing facility in Morowali following a fatal landslide, adding to ongoing regulatory scrutiny and production uncertainty.

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