'Nickel Production 3rd Place' Nouvelle-Caledonie, Unrest... Nickel Supply Concerns Drive Price Surge

On the 15th, black smoke was rising in Noumea, the capital of New Caledonia. [Image source=Yonhap News]

A riot broke out in New Caledonia, a French territory in the South Pacific. Concerns over supply disruptions from the world's third-largest nickel producer caused nickel futures prices to surge by more than 5%.

According to Bloomberg on the 17th (local time), nickel futures on the London Metal Exchange rose 5.7%, marking the largest intraday gain since September 15 last month. As of 8:07 a.m., prices were trading up 5.5% at $20,880 per ton. Other non-ferrous metals also showed gains, with aluminum and copper rising 1.1%.

New Caledonia ranked as the third-largest nickel producer last year. Nickel is a key mineral used in battery manufacturing.

Since the night of the 13th, violent riots related to constitutional election clause amendments have erupted in New Caledonia, resulting in at least four deaths and hundreds of injuries. France has declared a state of emergency for at least 12 days.

Nickel production in New Caledonia had already sharply declined due to weakened demand in the battery sector and increased supply from Indonesia. Subsequently, delays in mining permits in Southeast Asian countries and sanctions on Russian metals pushed nickel prices on the London Metal Exchange above $20,000 per ton for the first time since September last year.