Nickel prices rose during Wednesday trading, extending gains amid concerns over tighter supply after Indonesia ordered the world’s largest nickel mine to sharply cut production in a move aimed at tightening global supply and supporting prices.

Indonesia plans to issue production quotas ranging between 260 million and 270 million tons of nickel ore this year, according to Bloomberg. While slightly above previous estimates of 250–260 million tons, the figure remains well below the 379 million-ton target set for 2025. Authorities manage output levels through annual mining permits known as RKABs, with volumes subject to mid-year review.

PT Weda Bay Nickel is set to receive a quota of 12 million tons of ore this year, down sharply from 42 million tons in 2025. The mine, located on Halmahera Island in North Maluku, is jointly owned by Tsingshan Holding Group Co, Eramet SA, and PT Aneka Tambang. Eramet confirmed the reduction, noting it intends to request a review, while Indonesia’s Ministry of Energy and Mineral Resources said quotas remain under assessment.

Price Management

Indonesia is seeking to curb a persistent global surplus after its output surged to roughly 65% of global supply, contributing to two years of price declines and forcing high-cost producers in Australia and New Caledonia to shut operations.

The quota reductions are expected to significantly affect Weda Bay, which had planned to raise output to more than 60 million tons of ore to support a nearby industrial complex. Instead, the mine has imported large volumes of ore from the Philippines to offset domestic shortages.

Nickel is widely used in stainless steel production and electric vehicle batteries, but demand from the battery sector has been weaker than expected as some manufacturers shift toward nickel-free battery chemistries.

In January, Macquarie Group raised its 2026 nickel price forecast by 18% to $17,750 per ton on the London Metal Exchange, citing a sharp reduction in the expected surplus due to tighter Indonesian quotas.

Coal Output Cuts

Indonesia is also moving to reduce thermal coal production, with mining quotas expected to fall by around 25% compared with the previous year. The Indonesian Coal Mining Association said these cuts could force some operations to close and leave overseas buyers searching for alternative supplies.

In market trading, spot nickel contracts rose 1.8% to $17,900 per ton as of 15:32 GMT.

Bitcoin jumped 3% to reach $66,000 after US President Donald Trump delivered the longest State of the Union address in US history.

During the nearly two-hour speech before Congress, Trump praised what he described as a “booming US economy,” injecting fresh optimism into cryptocurrency markets.

Data from CoinGecko showed that investors poured approximately $52 billion into cryptocurrencies while the speech was underway.

Although Trump did not mention cryptocurrencies directly, the 79-year-old Republican president highlighted broader market performance, saying: “The stock market has set 53 new record highs since the election. Everybody is making money, big money.”

He added that global investors have injected $18 trillion into the US economy since he took office, aligning with bullish projections previously outlined by economists such as Ed Yardeni.

The upbeat tone comes as Bitcoin remains down 49% from its October peak of $126,000, amid concerns over significant economic disruptions.

However, the cryptocurrency trimmed part of its gains registered during the speech and was trading slightly above $65,000 at the time of writing.

This follows weeks after data showed that the US labor market posted its weakest January performance since 2009 — when the economy was emerging from the worst crisis since the Great Depression — with more than 100,000 layoffs.

Doubts Over the Recovery

Despite the optimistic speech, analysts remain skeptical about the cryptocurrency market’s ability to regain momentum quickly, given multiple headwinds facing the sector.

Aurelie Barthere, Principal Research Analyst at Nansen, said in a note to investors that slowing regulatory momentum and continued selling in the technology sector are adding pressure to Bitcoin’s downside trend.

Artificial Intelligence Concerns

Concerns are also mounting over the broader economic impact of artificial intelligence.

A report by Citrini Research titled “The Global Intelligence Crisis 2028” unsettled markets, particularly technology stocks, which are closely correlated with Bitcoin’s price.

The report outlines a scenario in which AI systems replace administrative workers, leaving them unable to service their debts and triggering a 38% decline in the S&P 500.

BlackRock’s flagship technology fund fell an additional 3% after the report gained wide attention. The fund, which tracks major technology companies such as Microsoft, Oracle, and Palantir Technologies, is now down 27% year-to-date.

Not everyone shares these concerns about AI’s labor market impact.

Laurent Kssis, research analyst at Kaiko, said the effect would likely be gradual: “Will it impact the job market? To some extent yes, but it’s about adapting to new technology or being left behind. I believe we will see a soft landing in the sense that it will gradually affect and reshape certain roles.”

He also noted that if AI were to trigger widespread job losses, the US government and the Federal Reserve would likely step in with liquidity support similar to measures taken during the COVID-19 pandemic, potentially supporting Bitcoin prices.

“Bitcoin tends to rise in response to increases in money supply and concerns about currency debasement,” he said.

Arthur Hayes, co-founder of BitMEX, offered a similar outlook earlier in February, suggesting that renewed money printing by the Federal Reserve could push Bitcoin to new record highs, although the timing remains uncertain.

Oil prices remained trading near seven-month highs on Wednesday as investors assessed supply risks stemming from the possibility of a military conflict between the United States and Iran.

Brent crude futures rose by 33 cents to $71.10 per barrel by 11:27 GMT, while US West Texas Intermediate crude gained 22 cents to $65.85 per barrel.

Brent prices had reached their highest level since July 31 on Friday, while WTI touched its highest level since August 4 on Monday, after the United States strengthened its military presence in the Middle East in an effort to push Iran toward negotiations aimed at ending its nuclear and ballistic missile programs.

Any prolonged conflict could disrupt supplies from Iran — OPEC’s third-largest crude producer — as well as from other key oil-producing countries in the Middle East.

Prices also found support after US President Donald Trump briefly outlined his justification for a possible strike on Iran during Tuesday’s State of the Union address, saying he would not allow what he described as the world’s biggest state sponsor of terrorism to obtain a nuclear weapon.

Ole Hvalbye, commodity analyst at SEB, said: “The market is trying to digest what is happening between the US and Iran. Without escalation or harsh rhetoric from either side, Brent would likely trade between $60 and $65 per barrel.”

US envoys Steve Witkoff and Jared Kushner are scheduled to meet an Iranian delegation in Geneva on Thursday for a third round of talks.

Iranian Foreign Minister Abbas Araghchi said on Tuesday that reaching an agreement with the United States was “within reach, but only if diplomacy is prioritized.”

In a research note, IG market analyst Tony Sycamore said: “Trump warned that if no deal is reached, there will be very severe consequences. It remains to be seen whether Iranian concessions will meet Washington’s red line of zero enrichment.”

Amid rising tensions, Iran has accelerated talks to purchase Chinese anti-ship cruise missiles, according to Reuters sources — weapons that could potentially target US naval forces positioned near Iranian waters.

While geopolitical tensions supported prices, the market also faced pressure from concerns over large inventory increases as global supply continues to exceed demand.

According to market sources, the American Petroleum Institute reported late Tuesday a sharp rise in US crude inventories of 11.43 million barrels for the week ending February 20.

Official US oil inventory data from the Energy Information Administration is scheduled for release later on Wednesday.

The US dollar traded mostly stable against major currencies on Wednesday, while the Japanese yen fell to a two-week low versus the dollar, pressured by renewed uncertainty over the Bank of Japan’s policy path and rising tensions with China, as investors monitored global risk sentiment.

The Japanese currency weakened on Tuesday after a report said that Prime Minister Sanae Takaichi had expressed reservations to the Bank of Japan about moving forward with additional interest rate hikes. The yen was also affected by China’s decision to add more Japanese companies to its export restriction list, a move widely seen as a response to Takaichi’s comments regarding Taiwan.

Following Takaichi’s decisive victory in the February 8 election, the yen had previously strengthened on market expectations that a government leaning toward fiscal stimulus could shift the balance of risks toward tighter monetary policy.

The yen fell by 0.50% to 156.70 against the dollar after touching 156.82, its weakest level since February 9.

In a move that could reinforce a more dovish stance, the Japanese government on Wednesday nominated two academics viewed as strong supporters of stimulus policies to the central bank’s policy board, potentially steering the Bank of Japan toward a more accommodative path, although MUFG’s Head of Global Markets Research, Derek Halpenny, expressed some caution.

He said: “It cannot be concluded that this will significantly change the overall direction of the policy board, particularly since the departing members already belonged to the dovish camp.”

Nvidia Earnings in Focus

Investors are awaiting results from AI chipmaker Nvidia after Wednesday’s market close, as the stock carries nearly an 8% weight in the S&P 500, meaning its results could have a meaningful impact on market risk appetite.

Francesco Pesole, FX strategist at ING, said: “If the US dollar declines alongside higher-risk currencies, that would be a worrying signal that markets are developing broader concerns linked to a reassessment of the US AI sector.”

He added: “We see this scenario as less likely, and expect the dollar to continue respecting its — albeit weaker — negative correlation with US equities.”

The Australian dollar rose 0.35% to $0.7084 following faster inflation, which strengthened expectations for further interest rate hikes.

The Australian dollar is considered a highly risk-sensitive currency, closely tied to the performance of global risk assets, especially equities, and remains vulnerable to sharp swings if equity markets become volatile due to its stretched positioning.

Euro Driven by Dollar Moves

With the European Central Bank expected to keep its monetary policy unchanged throughout 2026, euro trading is likely to remain largely driven by movements in the US dollar.

Roberto Mialich, global FX strategist at UniCredit, said: “The recent US Supreme Court ruling on tariffs increases uncertainty and could push the Donald Trump administration to seek a weaker currency to support exports and reduce the widening trade deficit.”

Trump made only limited comments in Tuesday’s State of the Union address, failing to ease concerns over the direction of future trade and tariff policies.

The euro rose 0.05% to $1.1718, while the US Dollar Index edged down 0.05% to 97.92.

The Chinese yuan — which has gained around 7% over the past ten months — reached 6.8766 against the dollar on Tuesday, its highest level in nearly three years, and later stabilized at 6.8652 in offshore trading.

Analysts at Goldman Sachs said that the starting point of deeply undervalued currency levels, combined with strong export-sector performance, remains a significant supporting factor.

China also confirmed that it is closely monitoring US policies and will decide “at the appropriate time” whether to adjust its countermeasures to US tariffs.