A major Indonesian stainless steel mill is once again increasing its prices due to the high nickel levels. Analysts are optimistic about the commodity markets following the FED's interest rate cut.

Wells Fargo analysts foresee a positive impact on commodity markets from both current and future interest rate reductions by the Federal Reserve. The decrease in borrowing costs is expected to boost global demand, historically leading to strong commodity market performance post-rate cuts, particularly during non-recessionary periods.

The lower borrowing costs are anticipated to stimulate demand, contributing to the ongoing bullish trend in commodities. With the absence of a US recession, analysts project an increase in commodity demand, typically resulting in price hikes within the next 12 to 18 months post-rate cuts.

Wells Fargo anticipates that improved global liquidity and more favorable credit conditions will bolster prices in crucial commodity sectors such as metals, energy, and agriculture. The bank maintains a positive outlook on the Bloomberg Commodity Index.

The Indonesian stainless steel mill has raised its prices for the second time in a few weeks due to the limited availability of nickel pig iron, US interest rate cuts, and a fiscal policy package announced by the Chinese government. This has caused a surge in raw material and steel prices.

Nickel prices on the LME commodities exchange have surged over 9.6% since the beginning of September 2024, repeatedly crossing the USD 18,000/MT threshold in recent days. Nickel prices remained strong on Monday, hovering around USD 17,990/MT shortly after trading commenced.