LME three-month nickel futures extended gains to 10%, touching $18,735 per tonne, the highest level since June 2024. A previous report from the International Nickel Study Group (INSG) forecasted that global nickel demand would reach 3.82 million tonnes in 2026, with nickel production reaching 4.09 million tonnes. According to institutional calculations, Indonesia's nickel production is expected to decrease by 200,000 to 300,000 tonnes, which may lead to a reversal in nickel supply and demand by 2026. Boosted by plans from Indonesia, the world's largest producer, to cut supplies, nickel prices have hit their highest level in nine months. "This round of nickel price increases is primarily driven by the narrative of Indonesia reducing nickel ore quotas combined with macroeconomic sentiment," said Dai Zizhao, a nickel researcher at Jinyuan Futures. Indonesia's nickel production is the key factor determining next year's nickel price trend. The Indonesian government is expected to control supply by tightening the issuance of mining quotas (RKAB). In addition to tightening mining quotas to control supply, according to earlier reports, Indonesia's Ministry of Energy and Mineral Resources also plans to revise the nickel ore benchmark pricing formula in early 2026. Meidy Katrin Lengkey, Secretary-General of the Indonesian Nickel Miners Association (APNI), revealed that one key point of the revision is that the government will begin treating nickel-related minerals (particularly cobalt) as separate commodities and impose royalties on them. In the view of Wang Weimang, a fund manager at Zhonghui Futures, this sharp rise in nickel prices is mainly driven by drastic policy changes on the supply side. As the world's largest nickel producer, Indonesia plans to significantly reduce its 2026 nickel ore production target from 379 million tonnes to 250 million tonnes, a cut of 34%. This policy signal, aimed at controlling oversupply and supporting prices, is the core trigger that ignited the market. Concurrently, Vale Indonesia has suspended mining activities. CICC stated that considering the relatively small impact of the current tightening of nickel ore quotas on the Indonesian economy, and that higher nickel prices are beneficial for increasing tax revenue and enhancing the value of domestic resources, the probability of the tightened nickel ore quota policy being fully implemented is relatively high. Hong Kong-listed stocks related to the nickel industry chain: LYGEND RESOURCE (02245): LYGEND RESOURCE announced that the company has submitted application materials, including a draft A-share prospectus, to the Shenzhen Stock Exchange for the proposed A-share issuance and received the acceptance notice from the Shenzhen Stock Exchange regarding the application for the proposed A-share issuance on December 31, 2025. It is reported that LYGEND RESOURCE currently covers the entire industry chain, including nickel ore trading, smelting production, equipment manufacturing, and sales. CNGR (02579): CNGR recently stated on an interactive platform that, based on the strategic needs of industrial integration, the company has made strategic investments in upstream nickel, phosphorus, lithium, and other mineral resources globally since 2022, and has obtained mineral resources such as lateritic nickel ore in Indonesia, lithium salt lakes in Argentina, and phosphate rock in Guizhou. Soochow Securities estimates that the company is expected to self-supply 30,000 tonnes of metal nickel (equity basis) in 2026, with a self-supply ratio exceeding 25%, potentially boosting profits by 200-300 million yuan; furthermore, if metal nickel prices increase, it will bring significant profit elasticity. XINXIN MINING (03833): Public information shows that XINXIN MINING wholly owns four nickel-copper mines: Kalatongke, Huangshandong, Huangshan, and Xiangshan; two vanadium mines: Xianghe Street and Mujiahe; and the Kaerqiaer fluorite mine.
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