Nickel may get boost as Indonesia mulls quota cuts

NICKEL could receive surprise support this year if Indonesia reduces its production quota, according to a report by the Financial Times.Citing Indonesia’s Ministry of Energy and Mineral Resources, the newspaper said on Tuesday the quota for this year could be set at 150 million to 200 million tons. Indonesia approved quotas of around 270 million tons last year.“Nickel production should be in accordance with the needs of the domestic industry and the export market, ensuring that the volume produced does not cause a continuous decline in the price of the commodity and price of the commodity is more stable in the global market,” Tri Winarno, director-general of mineral and coal at the ministry told the Financial Times.The nickel price dropped about 40% over the past two years to around $16,000 per ton because of an abundance of supply from Indonesia as demand growth slows for electric vehicles globally. Indonesia controls over half of global refined nickel production.“If ore quotas were to drop then we would likely see a slowdown in growth of refined nickel output and therefore a potential reduction in the global market surplus,” said Harry Fisher, product director of cobalt and nickel at Benchmark Mineral Intelligence (BMI) in the article.The decline in the nickel price forced large producers to make cuts. In July last year, BHP suspended its Australian nickel production until 2027 at least, saying it was unable to “ovecome the substantial economic challenges” of global oversupply of the metal.Glencore announced in February it would shutter its 49%-owned Koniambo mine in which it had sunk more than $4bn into Koniambo since 2013 while First Quantum Minerals said it would halt mining at its nickel and cobalt operation in Western Australia and cut a third of the workforce in response to weaker metal prices and higher costs.As for July last year there had been a 400,000 ton cut in nickel production over 12 months, about 10% of total production.Citing Macquarie, the Financial Times said the global nickel market was oversupplied by 200,000 tons last year. Macquarie expects a smaller surplus of 60,000 tons this year, due to anticipated cuts in Indonesia and a recovery in electric vehicle battery demand.The post Nickel may get boost as Indonesia mulls quota cuts appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com