Nickel futures were at $15,200 per tonne, rebounding from the over two-month low of $14,780 touched on June 23rd as markets assessed the magnitude that output cuts from Indonesia will have on countering the current oversupply of metal in major exchanges. The Indonesian government reduced nickel mining quotas by 120 million tons to 150 million this year, cutting global supply by 35% from current levels.
This was due the surge of Chinese smelting projects in Indonesia after the latter prohibited the export of nickel ores in 2020. Indonesia was the host of 44 nickel smelting operations as of September, compared with four a decade ago. Consistently, nickel warrants available at LME warehouses rose by 40,000 tonnes since the start of the year to 190,000 tonnes. In the meantime, lingering skepticism over whether the White House will be refrain from reigniting aggressive tariffs against trading partners by the July 9th deadline also pressured base metals.
