FTSE mining stocks have significantly dropped, reaching a two-year low, due to an influx of inexpensive Indonesian nickel in the global market.
The plummeting nickel prices have rendered many of the world’s largest nickel mines unprofitable. This metal is crucial for developing green technologies.
As Western governments strive to achieve net zero targets, they face challenges in securing nickel supplies. The situation is compounded by the dominance of coal-powered nickel mining in Indonesia, supported by China, which undercuts more environmentally friendly producers.
Nickel is currently trading at its lowest in over two years, although there has been a slight increase of about 4.3% in the past month.
Industrial metal miners within the FTSE 350 have experienced a decline of up to 2.6% today and over 7% in the past month, reaching their lowest point since November 2021. This decline is also influenced by falling copper prices.
Duncan Wanblad, CEO of Anglo American, commented last week on the issue, stating, “There is a serious structural challenge as a result of Indonesian nickel. They don’t seem to be letting up anytime soon.”
