The price of nickel rose 2.39% yesterday (21 October), after Chinese nickel producers advanced plans to cut production in Indonesia.
Nickel is sitting at US$18,253 ($25,884) per tonne, according to the Shanghai Metals Market, representing an increase of US$426.
Just yesterday, this news service reported that executives from leading producers, including Tsingshan Holding Group, GEM, Lygend Resources & Technology (HKG:2245), and Zhejiang Huayou Cobalt (SHA:603799), are expected to meet this week.
The meeting will allow executives to finalise a potential coordinated output reduction.
The producers have been discussing potential output cuts at their high-pressure acid leaching plants, which could reduce production of mixed hydroxide precipitate.
Mixed hydroxide precipitate is an intermediate product used in battery-grade nickel production.
The nickel rally from yesterday sits inside of a 1.44% monthly decrease, as well as a 5.92% yearly increase for the metal, according to Trading Economics.
The broader nickel picture
Indonesia is the world’s largest nickel producer by a significant margin.
According to the US Geological Survey, Indonesia produced 2.6 million tonnes of nickel in 2025, up from 2.31 million tonnes in 2024. The country also holds an estimated 62 million tonnes in nickel reserves.
The Philippines is the second-largest contributor to global nickel production, although its output of 270,000 tonnes in 2025 was significantly lower than Indonesia’s.
Meanwhile, Australia produced just 45,000 tonnes of nickel last year, despite holding the world’s second-largest nickel reserves at 25 million tonnes.
A turning industry in Australia
In 2024, the ASX’s largest nickel producer Nickel Industries (ASX:NIC) claimed that Australia was simply not competitive in the nickel industry, with domestic mines unlikely to attract a ‘green’ premium on product.
The Australian Financial Review reported that Nickel Industries Managing Director Justin Werner expected Indonesia to flood the market with supply for years to come.
“We are in a very low-price nickel environment, and it is exposing the unfortunate truth that from a nickel perspective, Australia isn’t competitive any more,” Werner said at the time.
However, with potential nickel production cuts, this story is likely to change for Australian miners.
Australia has the nickel reserves to support global demand, where Indonesia is potentially cutting back.
As the mining powerhouse of Australia, Western Australia stands out for its nickel holdings, with the state accounting for around 96% of the country’s total resources, according to Geoscience Australia.
Explorers are there and chomping at the bit.
Australia’s up-and-coming explorers
Terra Metals (ASX:TM1) is no stranger to nickel mineralisation at its Dante Project in Western Australia.
Earlier this month, the company intersected broad zones of platinum group metal (PGM), copper (Cu), and nickel (Ni) mineralisation from surface at the Southwest prospect.
Key shallow intercepts returned 194m @ 1.01g/t platinum, palladium, and gold (PGE3) and 0.17% Ni from 15m, including 24m @ 1.84g/t PGE3, 0.19% Cu, and 0.27% Ni from 43m.
Another intercept returned 200m @ 0.75g/t PGE3 and 0.16% Ni from surface, including 35m @ 1.11g/t PGE3, 0.12% Cu, and 0.21% Ni from 4m.
The company is focusing on returning a maiden mineral resource estimate for the Southwest prospect in Q1 2027, which will then be followed by a Scoping Study.
Terra Metals is a critical minerals explorer focused on advancing its flagship Dante Project in WA.
Write to Maddison Elliott at Mining.com.au
Main Image: Nickel Industries
