Nickel Prices Rise#
Nickel prices have surged to their highest level in almost two years, driven by growing concerns about supply from Indonesia, the world's largest nickel producer. On Monday, benchmark nickel on the London Metal Exchange increased by 2.3%, reaching $19,445 per metric ton, with a peak of $19,470, the highest since June 2024.
Supply Concerns from Indonesia#
Indonesia has set its nickel ore production quota, known as RKAB, between 260 million and 270 million tons for this year. However, the nickel smelter association, FINI, estimates that demand will be significantly higher, ranging from 340 million to 350 million tons. This discrepancy between production quotas and expected demand raises concerns about potential shortages in the market.
Impact of Sulphur Shortages#
In addition to the supply issues from Indonesia, there are also shortages of sulphur, a key component needed for nickel production. These combined factors are contributing to the rising prices, as traders react to the potential for reduced availability of this essential metal.