Indonesia cuts quota and supply disturbance, nickel prices strongly hit nearly two-year highs.

Due to the reduction in mining quotas in Indonesia, a major nickel-producing country, combined with the global sulfur shortage, the supply of this key metal for electric vehicle batteries is expected to continue tightening, with nickel prices reaching a nearly two-year high. Since the outbreak of the Iran conflict, the London Metal Exchange nickel futures prices have risen by about 10%. The conflict has driven sulfur prices significantly higher, and there is widespread concern in the market about disruptions to the global mining industry chain, with risks of interruptions in the production of mixed nickel hydroxide precipitate in Indonesia and copper leaching operations in Africa. There are also reports that Iran has submitted a new plan to the US to reopen the Strait of Hormuz for navigation, and traders are assessing the possibility of conflict resolution, leading to divergent trends in the overall base metal market. In order to boost industrial metal prices, Indonesia has significantly reduced nickel production quotas, putting pressure on the local nickel mining industry. In a research report, Jinrui Futures stated that the market sentiment towards nickel is overall positive, with the industry eagerly awaiting positive factors such as a significant reduction in the production of mixed nickel hydroxide precipitate (MHP), providing support for further upward movement in nickel prices. Market data shows that nickel prices rose by a maximum of 1.8% in a single day, reaching $19,350 per ton, the highest since June 2024; as of the time of writing, nickel prices have fallen back to $19,260 per ton. Copper prices rose slightly by 0.1% to $13,325 per ton, while tin prices fell slightly by 0.4% to $50,150 per ton.