Nickel prices moved higher on Tuesday as the market reacted to potential supply disruptions in Indonesia, the world’s largest nickel producer, following reports that Tsingshan Group had instructed nickel pig iron producers at its Weda Bay industrial complex to scale back output.
Three-month nickel on the London Metal Exchange rose 0.4% to $18,567 per metric ton by 08:17 GMT.
According to reports, Tsingshan Group asked producers operating at Weda Bay to reduce nickel pig iron production so that more electricity capacity could be diverted toward aluminium manufacturing operations.
Tsingshan operates both nickel pig iron facilities and aluminium smelters within the industrial park, with both businesses relying on captive coal-fired power generation.
The move highlights how the company’s growing expansion into aluminium production is beginning to place pressure on its nickel manufacturing capacity, raising concerns over tighter supply conditions in the global nickel market.