One of Indonesia’s largest nickel smelters, with an annual production capacity of 1.8 million tonnes of nickel pig iron, is on the verge of shutting down. According to multiple media reports, nearly all of its 20 production lines have already been halted, with only a few exceptions.
Nickel Smelter Facing Complete Closure
PT Gunbuster Nickel Industry, a subsidiary of the now-bankrupt Chinese stainless steel giant Jiangsu Delong Nickel Industry Co., is struggling to secure nickel ore supplies. The company has also suspended payments to local energy providers, leading to operational difficulties. If these challenges persist, the smelter is expected to halt production entirely in the near future.
Rising Prices for Nickel Pig Iron
Nickel pig iron (NPI) prices in Indonesia continued their upward trend on Monday, rising by approximately 1.6%. Similarly, prices for Chinese stainless steel scrap (grade 304) also increased by 1.6%.
Aluminium Prices Surge
Last week, aluminium prices on the London Metal Exchange (LME) climbed to nearly USD 2,715 per tonne, marking a nine-month high. This increase is attributed to supply constraints and anticipated demand recovery.
Record Aluminium Production in China
In 2024, China’s aluminium production reached a record 44 million tonnes. However, with the government maintaining a 45 million-tonne production cap since 2017 to curb emissions, further supply expansion remains limited. Despite this, China is actively working to stimulate its economy and stabilize the real estate sector, which could further impact global aluminium markets.
Favourable Market Conditions for Aluminium
In the US, the ISM manufacturing sentiment index showed unexpected improvement in January, marking the sector’s first expansion in over two years. Additionally, new US tariffs on Chinese imports, EU sanctions on Russian raw aluminium, and increasing demand are expected to continue supporting aluminium prices.
US Tightens Foreign Investment Regulations
On Friday, US President Donald Trump issued a presidential action under the America First Investment Policy, aiming to restrict Chinese access to key US companies, technologies, and innovations.
At the same time, fast-track investment procedures are being introduced to simplify foreign investment for trusted allies and partners. The US government is also allocating additional resources to facilitate investments from key partner nations.
