DIGIVESTASI - Nickel prices surged last week due to unrest in New Caledonia. This raised concerns about further supply disruptions from France. Based on Barchart data, July 2024 nickel futures on the London Metal Exchange (LME) closed up 6.44% to $21,019/mt at the end of trading on Friday (17/May 2024).

Within a week, nickel prices strengthened 11.09%. According to Bloomberg, New Caledonia, an island nation in the South Pacific that is the third-largest nickel producer, experienced unrest last week due to changes in election regulations. The unrest disrupted the production of French nickel miner Eramet SA, which operates nickel mines in the country with minimal capacity. 

New Caledonia's nickel production was cut after prices fell due to slowing battery industry consumption and increased supply from Indonesia. Since then, a ban on mining licenses and sanctions on Russian metals have helped push LME prices above $20,000 per tonne for the first time since September. 

Gao Yin, analyst at Horizon Insights, said nickel prices are catching up with other base metals such as aluminum and tin. “The incident in New Caledonia added a little disruption to the nickel market which also caused prices to rise further,” Yin said as quoted by Bloomberg, Sunday (May 19, 2024). Previously, riots in New Caledonia led to the burning of businesses, cars, looting of shops and road closures for three days, as well as cutting off access to medicine and food.

France declared a state of emergency on the island, placed at least 10 people under house arrest and banned the social networking app TikTok. Meanwhile, three Kanak youths were recorded dead and 22 policemen died from gunshot wounds in the unrest. Meanwhile, authorities have arrested the perpetrators of the shooting of two Kanak residents on Thursday (May 16, 2024).

For your information, the electoral reform is the latest flashpoint in a decades-long conflict over France's role on the mining island in the southwest Pacific, located about 1,500 kilometers (930 miles) east of Australia.

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