Indonesia’s Nickel Production Growth Revised Downward for 2024

Indonesia’s nickel production is expected to grow by 15% in 2024, a slower rate than previously forecast, according to a report by Macquarie Group. The British company’s managing director for commodity markets, Jim Lennon, noted that the production estimate for the year has been revised down to 2.20 million tons, from an earlier projection of 2.25 million tons.

The global outlook for nickel production remains positive. The International Nickel Study Group (INSG) estimates that global nickel output will reach 3.52 million tons in 2024, a 4.9% increase from 3.356 million tons in 2023. Production is expected to further rise to 3.65 million tons by 2025.

However, Indonesia, a key player in the global nickel market, has faced recent production challenges. Nickel pig iron (NPI) output, particularly in the industrial parks of Morowali and Weda Bay on Sulawesi island, has been declining. Factors such as nickel ore shortages and a shift in focus to more profitable nickel products have contributed to this decline.

Data from China’s Shanghai Metals Market (SMM) shows that Indonesia produced 795,300 tons of NPI nickel in the first seven months of 2024, marking a 3.8% year-on-year increase. Despite this growth, production in July was down 12.1% compared to the same month in 2023, with a further estimated decline of 5.9% in August.