JAKARTA, Dec 25 (NNN-ANTARA) – Indonesia, one of the world’s largest nickel producers, is considering limiting ore production, to stabilise prices in the international market, an official said.
The move aims to address oversupply, which has driven down prices globally, according to Tri Winarno, director general of minerals and coal, at the Ministry of Energy and Mineral Resources.
He acknowledged that escalating global conflicts, disrupted supply chains, economic downturns, and high commodity price volatility, have further weakened demand and nickel prices.
As a result, nickel prices have dropped significantly, falling from their peak of 48,199 U.S. dollars per metric tonne on May 7, 2022, to 15,500 U.S. dollars per metric tonne as of yesterday, according to data from TradingEconomics.
“On nickel, we will start to manage its supply in the global market, which has been saturated. We will limit it,” Winarno said, though he did not specify when the initiative would be implemented.
Deputy Minister of Energy and Mineral Resources, Yuliot Tanjung, emphasised the significant impact of supply and demand on nickel prices. “The falling price is related to oversupply. If we look at the industry, oversupply is one of the main causes,” Tanjung noted on Nov 18, in Bali.
A report from PT Samuel Sekuritas Indonesia, pointed to weak demand and global economic uncertainty as factors likely to continue pressuring nickel prices, through the end of the year.
The World Bank echoed this sentiment, stating that, the decline in nickel prices during the third quarter of 2024 was largely due to increased production, amid weakening demand from the stainless steel and battery markets.
Nickel is a strategic resource for Indonesia. The government has been developing the downstream sector, which has created significant added value and provided thousands of jobs.
Indonesia has around 72 million tonnes reserves of nickel, or 52 percent of world’s total, according to the 2020 data, from the country’s Ministry of Energy and Mineral Resources.– NNN-ANTARA
