(Bloomberg) — Nickel retreated from the highest level in 19 months, as a strong rally that’s lifted base metals took a breather.

Three-month futures declined, after spiking as much as 10.5% to near $18,800 a ton on Tuesday. The intraday surge — aided by risks to output in top supplier Indonesia, as well as a broad-based flood of investment in China’s domestic metals markets — was the largest since late 2022.

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Indonesia has flagged plans to reduce nickel production this year to better balance supply with demand. It’s also set to levy punitive fines on miners for violating forestry permits, which may bankrupt some firms and disrupt output.

In addition, buying requests from China for nickel pig iron have been more active than usual, according to traders based in Asia, who declined to be named because the information is private, citing industry stocking ahead of Chinese Lunar New year.

Base metals have seen a strong start in 2026, with the LMEX Index that tracks the six main metals in London surging to the highest level since 2022, when the sector peaked. In addition to the rapid advance in nickel, copper hit a record earlier this week amid concerns the US may impose import tariffs, while aluminum rallied to the highest level since April 2022.

Nickel — which is used in stainless steel and batteries — was 0.8% lower at $18,370 a ton on the London Metal Exchange at 1:55 p.m. in Shanghai. Copper, aluminum, zinc and lead also declined.

The drop in nickel was profit-taking after the surge, which was “largely driven by financial capital inflows,” said Fan Jianyuan, an analyst at Mysteel Global. On a fundamental level, the nickel market remains in surplus, according to Fan.

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