It is stated that, China and Indonesia are preparing to reduce nickel production by at least 100,000 metric tons this year. In 2022, nickel prices rose to record levels with expectations that supply would decrease after Russia invaded Ukraine. But with increased production in Indonesia, nickel is now trading close to $16,000 per tonne.
Western miners are shelving assets or reducing production due to economic weakness. According to analysts, more than 250,000 tonnes of cuts are needed to balance the global nickel market this year. However, the decline in NPI (nickel pig iron) prices has made it unprofitable for many NPI plants in China.
Differences in nickel prices raise concerns about the asking price of battery-grade nickel. Western miners may be forced to produce at a loss and cut production unless prices increase.
These developments could cause major fluctuations in the nickel industry and have an impact on industrial production.
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