Chinese nickel producers weigh coordinated output cuts in Indonesia

Nickel prices have risen for a fourth straight session as top Chinese producers prepare to discuss trimming Indonesian output

Executives from several of China's largest nickel producers plan to meet as early as Tuesday to discuss coordinated cuts to output at their battery material plants in Indonesia, Bloomberg reported. The companies involved include Tsingshan Holding Group, GEM, Lygend Resources & Technology and Zhejiang Huayou Cobalt, according to Bloomberg, which said the firms aim to finalise the scale of any reductions after weak metals prices squeezed profitability at their high-pressure acid leaching operations, which produce an intermediate nickel product called mixed hydroxide precipitate.

One proposal under discussion would have each producer cut output by about 30%, a figure first reported in August, according to Mining.com.au. A similar push to coordinate cuts collapsed after a meeting in August failed to produce an agreement, Bloomberg reported, and Mining.com.au said there is still no guarantee the companies will reach one this time, or that the meeting will even take place.

Nickel on the London Metal Exchange rose for a fourth consecutive session on Tuesday, climbing nearly 2% and approaching $16,000 a ton, according to Bloomberg News, extending a recovery from a nine-month low hit last week. Indonesia is the world's largest nickel producer, according to GuruFocus.

A reduction in Indonesian supply would tighten a nickel market that has been running on excess capacity, a dynamic separate from the trade friction between the EU and China over hybrid vehicles and market access that has dominated recent headlines. Lower output eases the feedstock pressure that had kept prices depressed, which matters for copper-adjacent mining and metals producers already facing margin questions as China posted stronger-than-expected growth and retail sales data for the third quarter. The timing, alongside Beijing's other incremental opening moves such as soybean purchases and payments-access talks, suggests the discipline being discussed in nickel reflects producer economics rather than a broader trade signal.