Tsingshan Group, a prominent Chinese nickel producer, has initiated commercial production of refined nickel in Indonesia, according to three sources familiar with the matter who spoke to Reuters on Monday.
The production facility is located in Morowali, Indonesia, with an eventual planned annual capacity of 50,000 metric tons. The sources, who chose to remain anonymous as they lack authorization to speak to the media, reported that commercial production began last week. Tsingshan Group did not respond to calls or emails from Reuters seeking confirmation.
The sources indicated that the plant has commenced the production of nickel plate, but the current production capacity and the timeline for achieving the planned 50,000-ton capacity remain unclear.
It has been reported that Tsingshan intends to seek approval for the nickel produced at this facility to be recognized as a deliverable brand on the London Metal Exchange (LME). This recognition typically necessitates a minimum of three months of stable production.
A subsidiary of China’s Zhejiang Huayou Cobalt Co has already obtained approval for its nickel produced at a 36,600-ton plant in Zhejiang province to be listed as a deliverable brand on the LME. Likewise, Jingmen Gem Co, a unit of GEM Co Ltd, has applied to list its nickel from a 10,000-ton plant in Hubei province.
It is anticipated that more Chinese producers will follow suit and apply for LME listing for their nickel brands, especially in light of the LME’s efforts to revitalize nickel trade volumes following a crisis in 2022. This crisis occurred when LME nickel prices experienced a rapid doubling within hours, leading to chaotic trading conditions on March 8, 2022. Consequently, the LME suspended its nickel market for the first time since 1988 and canceled all nickel trades on that day.
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