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Indonesia, the world’s largest nickel producer, may cut its nickel output quota for 2025 to 150 million tons, from 272 million tons in 2024 — a cut of 44.84%.
Reports suggest the Energy and Mineral Resources Ministry wants to cut production to boost nickel prices, after global nickel prices fell by 45% in 2023.
If Indonesia goes ahead with the cuts, Macquarie Group estimate that global supply could be cut by more than a third.
Nickel is at the centre of a global trade war over market share, with Indonesia forcing the price down to take out Western competitors. However, booming Indonesian output and weakening demand from battery makers and the stainless steel industry has meant nickel prices slumped for the second year in a row in 2024.
The share of nickel in electric batteries has been steadily falling as Chinese battery manufacturers have increasingly switched their battery chemistries from nickel-manganese-cobalt-oxide (NMC) to lithium-iron-phosphate (LFP).
The reason nickel prices have fallen so dramatically is because Indonesia has flooded the market to protect market share. There are two main reasons for this:
- take out global competitors
- reduce cost of nickel for electric battery and vehicle manufacturers
In the past year, the list of nickel mines closing is increasingly long, with at least six mines closing in Australia by February 2024.
Our report on The Great Nickel Trade War:
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