Indonesia to See Nickel Boost as European, Chinese Smelters Shut Down

Nickel prices are expected to remain poor for the foreseeable future. The LME’s nickel squeeze and Russia’s invasion of Ukraine caused the global supply to drop, but Indonesia’s current nickel surge is expected to further affect nickel prices. Although September and October are high points in the year for nickel purchases, the battery metal could see a bumpy road ahead of the fourth quarter.

In the beginning of September, nickel prices started to climb from their summer fall, which could indicate an upward trajectory in prices, much to the benefit of Indonesia, the world’s top producer. Almost 24% of the world’s nickel comes from Indonesia, which produced 814,000 tonnes of the metal in the past year. The country also generates over $20 billion annually from steel and steel-related products.

Smelter shutdowns in both Europe and China further bolster Indonesia’s nickel prospects. Many feel that Indonesian companies have a golden opportunity on their hands, especially after the LME’s March nickel squeeze. In addition, nickel demand for electronics keeps growing.

Nickel prices managed to bounce after declining sharply in the early summer. But after the LME nickel shut down in March, nickel volume levels declined significantly.

And while volumes remain low, nickel prices bounced back from a sharp downtrend. For the time being, nickel remains in a sideways trend firmly between resistance and support. Unfortunately, this also means there is no clear direction to either side. In the long term, experts, traders, and nickel buyers are eager to see a definable trend.

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