Chinese Nickel Firms Weigh Production Cuts in Indonesia

Executives from four major Chinese nickel firms are discussing coordinated production cuts of mixed hydroxide precipitate (MHP) to combat falling prices and shrinking profit margins. Tsingshan Holding Group Co., GEM Co., Lygend Resources & Technology Co., and Zhejiang Huayou Cobalt Co. met to consider lowering operating rates at their high-pressure acid leaching plants in Indonesia, with one proposal suggesting a 30% reduction in output.

No formal agreement has been reached yet due to concerns over execution. The industry is currently facing multiple pressures, including increased nickel ore prices set by the Indonesian government and rising sulfur costs linked to conflict in the Middle East. These factors coincide with a sharp drop in refined nickel and cobalt benchmarks.

Zhejiang Huayou Cobalt Co. has already taken unilateral action in the region, having cut production by 50% at its Weda Bay plant in April citing sulfur costs. The current discussions represent a potential shift toward a coordinated industry response to the volatile market conditions.