JAKARTA, Dec. 24 (Xinhua) -- Indonesia, one of the world's largest nickel producers, is considering limiting ore production to stabilize prices in the international market, an official has 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 ton on May 7, 2022, to 15,500 U.S. dollars per metric ton as of Tuesday, 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 emphasized 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 tons of reserves of nickel ore, or 52 percent of the world's total, according to 2020 data from the country's Ministry of Energy and Mineral Resources. Enditem
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