Background on Key Figures and Relevance
Indonesia, the world’s largest nickel producer, holds approximately 60% of global nickel production, making it more influential than OPEC in the oil sector. The country has recently taken steps to control nickel supply, which has led to a significant rise in nickel prices.
Eramet, a French mining company, operates a joint venture with Chinese firm Tsingshan and Indonesian company PT Antam called PT Weda Bay Nickel. This joint venture received an initial production allocation of 12 million metric wet tonnes for 2026, down from 32 million tonnes in 2025. The partnership plans to seek a review of this decision.
Nickel Price Surge
The benchmark three-month nickel price on the London Metal Exchange rose by 2.1% to $17,860 per tonne as of 10:00 GMT. The price had previously climbed by up to 2.8% to $17,980, its highest level since January 30.
Nickel is a crucial component in stainless steel and rechargeable battery production. After a prolonged period of low prices, nickel has increased by approximately 18.6% over the past three months and reached a three-year high on January 25, following Indonesia’s commitment to reduce nickel supply.
“Indonesia is realizing its power to set prices,” said Nitesh Shah, a materials strategist at WisdomTree. “With control over around 60% of global nickel production, it’s more powerful than OPEC in the oil sector.”
“The country has recognized that it doesn’t need to overproduce to generate decent revenue,” added Shah.
Nickel Supply Concerns and Other Metals’ Performance
Despite the rise in nickel prices, the International Nickel Study Group has forecasted a surplus of 261,000 tonnes for this year.
Other base metals also experienced gains due to the weakening US dollar, making commodities more affordable for investors using other currencies.
- Copper: Increased by 1.2% to $13,266.50 per tonne
- Aluminum: Rose by 1.1% to $3,127.50 per tonne
- Zinc: Gained 1.4% to $3,442.50 per tonne
- Lead: Advanced by 0.6% to $1,985 per tonne
- Tin: Surged by 2.8% to $50,700 per tonne
Chinese Lunar New Year Impact
The surge in metal prices comes ahead of the Chinese Lunar New Year, which could further boost demand as businesses and consumers stock up on metals for infrastructure projects and manufacturing.
