Nickel prices rose slightly during Wednesday trading, supported by a stronger US dollar against most major currencies, as well as mixed forecasts for the industrial metal.

According to a new analysis released this week by UBS, the global nickel market is expected to remain in surplus until 2026, despite recently announced production cuts.

The report noted that the market experienced a "significant surplus" from 2022 to 2024, adding that current nickel prices and market trends already reflect these weak fundamentals. Analysts do not expect a near-term recovery in demand, citing reduced stainless steel production and low probability of a rebound in battery demand growth.

Some progress has been made on the supply side toward rebalancing the market in 2024, with production cuts totaling around 250,000 tonnes and project delays totaling about 140,000 tonnes. However, UBS views these measures as insufficient, given that Indonesia continues to expand output capacity despite some raw material constraints.

While global nickel demand has shown relative resilience compared to other base metals in recent years, oversupply has led to production cuts in the stainless steel sector in both China and Indonesia. UBS expects nickel demand growth to remain strong at 4% to 5% annually from 2025 to 2028, compared to 9% annually between 2021 and 2024.

Although UBS forecasts a smaller market surplus during the 2025–2028 period, it is still expected to be “large enough to contribute to further buildup in refined nickel inventories on the London Metal Exchange (LME).” The report noted that current LME nickel prices are situated in the upper quartile (75%) of the cost curve, a level that has historically supported prices. However, UBS warned that nickel has previously traded within the cost curve for extended periods.

Second Half Outlook

Analysts now expect nickel prices to rebound sharply in the second half of 2025, driven by nickel ore shortages and the closure of several mines in Indonesia.

In mid-June 2025, the Indonesian government revoked mining licenses for several nickel mines after it was revealed that extraction operations were taking place on legally protected islands where mining should not be permitted. Although the four mines represented a small portion of Indonesia’s total annual output, they accounted for a large share of the country’s remaining high-grade nickel ore deposits.

Declining ore quality in Indonesia, particularly in medium- and high-grade reserves, had already begun to negatively affect the production of nickel pig iron (NPI) even before the mining ban.

Separately, EU member states agreed on a sweeping update to customs procedures, aimed at adapting to digital and global trade developments.

However, the first changes are not expected to take effect until 2028 and will initially be limited to e-commerce companies, as part of a long-term plan to overhaul the European customs framework.

Meanwhile, the US dollar index rose by 0.1% to 97.4 points at 15:00 GMT, reaching a high of 97.6 and a low of 97.3.

As for trading, spot nickel contracts rose 1.2% to $15,500 per tonne as of 15:11 GMT.

Bitcoin showed slight fluctuations during Wednesday trading as risk appetite improved following a trade agreement between the United States and Japan. However, the world’s largest cryptocurrency remains locked in a narrow trading range after hitting record highs earlier this month.

As of 13:13 GMT, Bitcoin was down 0.5% at $118,582.7 on CoinMarketCap.

Despite recent gains, Bitcoin has remained in a technical consolidation zone after surging to a new all-time high above $123,000 last week. The market has since trimmed gains amid continued monitoring of global regulatory and economic developments.

US-Japan trade deal lifts global risk appetite

Overall market sentiment remained broadly positive, supported by President Donald Trump’s announcement of a wide-ranging trade agreement with Japan, which boosted risk assets worldwide.

Trump stated that Washington and Tokyo agreed to a 15% tariff on all Japanese imports—lower than the previously proposed 25%.

Under the deal, the United States also secured $550 billion in Japanese investments in the US economy. The agreement opens Japanese markets to American exports including cars, agricultural goods, and energy products, bolstering optimism over global trade and demand growth.

Risk assets rose globally, while gold prices declined, reflecting improved risk sentiment.

Still, Bitcoin continued to trade within tight ranges, as investors remained cautious awaiting further trade progress before the August 1 deadline.

Additional boost from US crypto legislation and Fed meeting in focus

The crypto market received further support from the recent passage of key regulatory legislation in the United States.

President Trump signed the GENIUS Act into law, establishing a federal regulatory framework for stablecoins. The House of Representatives also passed two other major crypto-related bills, both now heading to the Senate.

Investor attention is now focused on the upcoming Federal Reserve meeting on July 30, in search of signals on the future path of interest rates.

Is Bitcoin poised for a 20% rally?

Analysts suggest that Bitcoin may be on the verge of a strong breakout that could lead to new all-time highs. Technical indicators show that the digital asset is currently in a bullish continuation pattern known as a "bull flag," which could soon trigger a price surge.

After breaching its historical level at $122,000, the price has entered a consolidation phase near $118,000, which analysts view as temporary. Many expect a move toward $140,000.

Technical indicators support the bullish case

Bitcoin charts show several bullish patterns:

- A bull flag pattern, a classic signal of trend continuation.

- An inverted head and shoulders on the 3-hour chart, also targeting $140,000.

- The $139,000 level aligns with strong resistance on the MVRV Bollinger Band indicator.

Could Bitcoin dip to $115,000 first?

Despite optimism, some analysts warn of a potential short-term correction to $115,000 to test support levels before resuming the uptrend. They see this as a buying opportunity for investors, though the scenario is neither guaranteed nor necessary.

Overall, technical signals and analysis suggest Bitcoin is on track for a strong upward wave. With price stability above $118,000, the $140,000 target appears feasible, especially if institutional inflows and supportive US legislation continue.

Investors are advised to closely monitor support and resistance levels to capitalize on upcoming market opportunities.

Oil prices steadied during Wednesday trading after three consecutive days of losses, as a trade agreement between the United States and Japan helped improve global market sentiment on trade.

As of 09:07 GMT, Brent crude fell by 12 cents, or 0.2%, to $68.47 per barrel. US West Texas Intermediate (WTI) crude also declined by 14 cents, or 0.2%, to $65.17 per barrel.

Both benchmarks had lost about 1% during Tuesday’s session, after the European Union announced plans to consider retaliatory measures against US tariffs amid fading hopes of reaching an agreement before the August 1 deadline.

US President Donald Trump said on Tuesday that the country had reached a trade agreement with Japan that includes a 15% tariff on US imports from Japan.

“The recent price drop over the past three sessions appears to have halted, but I don’t expect a major upward push from the US-Japan deal, as delays and roadblocks in talks with the EU and China will continue to weigh on sentiment,” said Vandana Hari, founder of Vanda Insights, an energy market analysis firm.

Separately, China’s Ministry of Commerce said on Wednesday that the Chinese commerce minister and the EU trade commissioner had held frank and in-depth discussions on economic and trade cooperation, as well as other issues facing both sides, ahead of an upcoming summit.

On the inventory front, market sources citing American Petroleum Institute (API) data on Tuesday reported that US crude oil and gasoline inventories fell last week, while distillate inventories rose by 3.48 million barrels.

“This development will provide some support to the distillates market, which is increasingly facing tightness,” ING analysts said in a note, adding that the drop in crude inventories could lend some price support, even as a large surplus is expected to enter the market later this year.

In another bullish sign for the oil market, the US Energy Secretary said on Tuesday that the United States is considering imposing sanctions on Russian oil as part of its efforts to end the war in Ukraine.

Last Friday, the European Union approved its 18th sanctions package against Russia, which included lowering the price cap on Russian crude oil.

Market attention on Wednesday centered on the Japanese yen, which saw sharp fluctuations as traders assessed the impact of the newly announced US-Japan trade deal and speculated over the future of Prime Minister Shigeru Ishiba.

The yen initially surged to its strongest level since July 11 at 146.20 per dollar, supported by President Donald Trump's announcement of a trade agreement with Tokyo. However, it quickly reversed into losses following reports suggesting Ishiba planned to resign next month after his party suffered a major defeat in the upper house elections.

Ishiba denied the reports, stating that claims of his resignation were “completely baseless,” which helped the yen recoup some losses and later stabilize at 146.83 per dollar.

The trade deal—which includes tariff cuts on car imports and shields Tokyo from new harsh duties—impacts the yen in two ways: its effect on the economy and on Bank of Japan policy, which has been cautiously moving toward rate hikes.

“The trade agreement opens the door for the Bank of Japan to raise rates this year,” said Jane Foley, head of FX strategy at Rabobank. “That’s positive for the yen and makes a return to 150 per dollar more difficult.”

She added, “With trade and political uncertainty lingering, it was clear the bank would not act hastily. Of course, the uncertainty isn’t over yet, which will keep the BoJ cautious—but nobody expected swift moves anyway.”

Elsewhere, movements in other currencies were limited amid persistent uncertainty over tariffs and broader skepticism on how currencies might react even if trade clarity emerges.

The US dollar has been one of the biggest losers since Trump first announced sweeping tariffs on April 2. While the weakness continued even after a temporary suspension to allow further negotiations, the pace of decline has slowed this month.

The euro slipped 0.1% to $1.1744, still near its four-year high reached earlier this month. Meanwhile, the British pound edged up slightly to $1.1354.

In contrast to the euro’s performance, European equities climbed on hopes the Japan deal could pave the way for further trade agreements, including one with the European Union.

Trump announced that EU negotiators would arrive in Washington on Wednesday.

The European Central Bank is expected to meet on Thursday, though it is unlikely to have a major impact on the currency, as interest rates are expected to remain unchanged.

Improved sentiment toward the global economy following the trade deal, along with rising metal prices, also supported the Australian dollar, which rose 0.4% to $0.6581, despite ongoing market caution.

As of 11:57 GMT, the US dollar index rose 0.1% to 97.4 points, with a high of 97.5 and a low of 97.3 points.