Only Indonesia can help nickel recover from price bust

LONDON, Jan 24 (Reuters): Nickel ended 2024 trading at four-year lows, a spectacular reversal of fortune for a metal that soared so high in 2022 it almost broke the London Metal Exchange (LME).

There is no mystery to this dramatic tale of boom and bust. Indonesia has flooded the world with more metal than it can absorb, crushing the price and leaving a trail of casualties among the rest of the world's producers.

The market's fortunes this year depend on whether Jakarta can tame the excesses of its nickel sector and align supply more closely with demand.

There are positive signs. Indonesia's mining ministry plans to cut, opens new tab the nickel ore mining quota to 200 million metric tons this year from a previously planned 240 million.

The news has sparked a modest price revival, LME 3-month nickel rising by 3 per cent since the start of January. Whether it's enough to generate a more sustained recovery remains to be seen.

Indonesia has emerged as the world's dominant nickel producer over the last decade.

The country's mined production exploded from 358,000 tons in 2017 to 2.2 million tons in 2023, according to the World Bureau of Metals Statistics. Indonesian supply was equivalent to over half of global demand that year.