Nickel price hits nine-month high as Indonesia plans to cut output

Nickel hit the highest since March after top producer Indonesia flagged plans to cut supply in order to boost prices.

Output will be reduced in 2026 to better match demand with supply, said Energy and Mineral Resources Minister Bahlil Lahadalia, according to CNBC Indonesia. The Southeast Asian country’s production of the metal, which is used in both stainless steel and electric vehicle batteries, has surged this decade to almost 70% of the world’s total.

Nickel is still among this year’s weaker performers on the London Metal Exchange as demand from the battery sector continues to disappoint due to the rise of alternative chemistries. Supply from Indonesia has continued to rise even as prices dragged for much of the year, causing stockpiles in warehouses tracked by the LME to rise rapidly.

Indonesian production is now central to the outlook for nickel prices next year. The government is able to control supply by tightening the issuance of mining quotas, known locally as RKABs.

Nickel rose as much as 4.7% to $16,560 a ton on the LME, extending a rally that tracked other metals from mid-December.

Read More: Indonesia nickel move may cut global supply by 35%, Macquarie says