China's top nickel producer, Tsingshan, reduced its ferronickel production in Indonesia due to ongoing ore shortages linked to delays in mining quota approvals, according to industry sources. This tight supply raised nickel production costs, prompting Indonesian smelters to source ore from the Philippines, the world's second-largest nickel producer.

The delays in issuing quotas hindered the rapid expansion of nickel production, which is vital for electric vehicle batteries and stainless steel. While Tsingshan's specific production cuts remain undisclosed, reports indicate slowing nickel pig iron output at its Morowali and Weda Bay facilities.

Forecasts suggest that Indonesian nickel output will grow 15% this year to approximately 2.2 million tons, reflecting a slight downward adjustment. Additionally, Indonesia's imports of nickel ore from the Philippines surged significantly in 2024, indicating a shift in sourcing strategies amid local challenges.