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2026-07-16 20:40:11
[Hormuz Storm Resurfaces, Nickel Prices Surge, Triggering Supply Chain Cost Earthquake] ⑴ LME nickel futures surged 3% on Thursday, hitting a more than three-week high since June 23, as geopolitical risks are reshaping the pricing logic of non-ferrous metals through supply chain transmission. ⑵ Renewed concerns about obstructed passage through the Strait of Hormuz have reignited expectations of tight sulfur supply. For producers using high-pressure acid leaching to extract nickel, sulfur is a key raw material for sulfuric acid production, and supply disruptions directly push up the cost curve. ⑶ Indonesia, the world's largest nickel producer, relies on imports from the Middle East for about 75% of its sulfur. The standoff between the US and Iran in the Strait has substantially disrupted shipping. Analysts point out that Indonesian producers, who were originally at the bottom of the cost curve, are now facing a cost increase of about $10,000 per ton due to soaring sulfur prices, almost reversing their cost advantage. ⑷ The Indonesian government is also seeking to restrict nickel ore quotas for high-pressure acid leaching producers. The market is awaiting the approval results of additional supply applications in the middle of the year. The expectation of policy tightening combined with rising raw material costs is further exacerbating the pressure of supply-side contraction. (5) Overall, the Strait of Hormuz controversy is spilling over from the energy market, eroding profit margins in nickel smelting through sulfur, a key industrial raw material. The steepening cost curve, coupled with tightening Indonesian policies, means that the upside risk for nickel prices remains dominant in the short term. The focus going forward will be on whether the situation in the Strait can ease and the clarification of Indonesia's quota policy.
