Nickel rose for a fourth day as the prospect of coordinated output cuts by Chinese producers in Indonesia raised expectations of tighter supply.
The metal climbed as much as 2.7% to exceed US$16,000 a tonne on the London Metal Exchange (LME), building on gains since hitting a nine-month low last Thursday.
Executives from several major Chinese nickel producers are considering potential output curbs at their Indonesian operations, including plants that produce a key feedstock for batteries. A previous attempt to agree on cuts in August was unsuccessful.
“What everyone is really focused on right now is the size of the production cuts,” said Gao Yin, an analyst at Shuohe Asset Management Co. “The numbers being circulated in the market are quite significant.”
Producers in Indonesia have been grappling with weaker prices and rising costs, while tighter mining quotas have also constrained ore supplies. The Southeast Asian nation dominates global nickel production, making changes to output there a key driver for the market.
Elsewhere, the Middle East’s biggest aluminium producer Emirates Global Aluminium said it has restored half the capacity at its main smelter that was hit during the Iran war. It maintained its target of returning to full capability by the first quarter of next year.
The aluminium market has been roiled this year by the Iran war, disrupting flows of metal from the Middle East — which accounts for about 10% of global production — sending prices and premiums higher.
Aluminium was 0.8% higher on the LME at 9.59am local time. Nickel was up 2.1% at US$16,005 a tonne, trimming this year’s decline to less than 4%. Other metals were little changed. Uploaded by Felyx Teoh
