Indonesia Nickel Production Drops 100,000 Tons Amid Drought

Smelters at the Pt. Indonesia Morowali Industrial Park (IMIP) on Sulawesi island are reducing the production of nickel pig iron following a severe water shortage caused by an El Niño-driven drought. The scarcity of water has compromised the cooling and protection of critical equipment, forcing the industrial hub to notify tenant companies of mandatory output cuts.

Total production reductions are estimated at approximately 100,000 tons of nickel pig iron. This action follows a warning issued earlier in September that production could plummet by 30% to 40% if water conditions failed to improve.

Because Indonesia produces more than half of the global nickel supply, these disruptions may help stabilize market prices. Nickel prices on the London Metal Exchange have fallen roughly 18% since early May.