Cuts of at least 100,000 metric tons expected
Much deeper cuts could be needed to remove oversupply
Nickel pig iron faces biggest surplus

LONDON, Feb 12 Reuters China and Indonesia are set to reduce nickel output by at least 100,000 metric tons this year as producers seek to limit losses following a slump in the price of the metal used in stainless steel manufacture and for EVs, traders and analysts said.

They added further cuts would be needed if producers wanted to boost prices and remove the surplus from the market, rather than just halt losses.

Nickel prices had surged in 2022, peaking at a record above 100,000 after expectations of reduced supplies from major producer Russia following its invasion of Ukraine prompted the market to cut bets on lower prices.

Now the metal is trading around 16,000 a ton after production rose in Indonesia, which last year accounted for more than half of global mined supplies, estimated at around 3.4 million metric tons. Indonesian supplies were 30 of the total in 2020.

As the extra supply compounded the impact of economic weakness that lowered demand, Western miners, including BHP, which had made nickel core to its green strategy, and half a dozen other companies mothballed assets, delayed projects or reduced production.

Cuts so far have removed more than 230,000 tons or around 6 of potential supply for this year, according to Macquarie analysts. This was not enough to boost prices.

A source at a global producer, speaking on…