Nickel supply concerns are rising after the Indonesian government cut output at the PT Weda Bay Nickel mining area by 71%, reducing production from 42 million to 12 million tons. A safety incident during the Lunar New Year holiday further disrupted operations, tightening market expectations.

Although LME nickel prices surged before the holiday, they failed to hold above US$18,000 per ton and fluctuated between US$16,861 and US$17,350 during the break. Market participants said demand slowed due to the holiday in major Asian markets, limiting gains.

However, nickel pig iron (NPI) prices continued to climb, rising about CNY 50 per nickel point in the week before the holiday. Spot prices have surpassed CNY 1,100 per nickel point, supporting expectations that stainless steel prices will remain firm with potential upside.

Market participants said that Tsingshan Indonesia’s pricing stance this week will be a key factor for further market direction.