Widespread flooding in Indonesia’s central nickel ore mining hub has driven the price of nickel futures up.

According to a Reuters report, recent floods in the North Konawe regency have cut production at the region’s nickel mines.

“A number of mines haven’t been able to operate in the past two weeks,” Lengkey said. An estimated 15 to 20 miners who each produce 50,000 to 100,000 tonnes of nickel ore per month, were affected by the flooding, Reuters quoted secretary general of Indonesia’s Nickel Miners Association, Meidy Lengkey, as saying.

While other nickel mining areas in the country haven’t been affected, it was enough to spook investors in London — with the metal rising to two-week highs.

Benchmark nickel on the London Metal Exchange (LME) on Friday rose as much as 1.9 percent to a two-week high of $12,065 ($A17,535) a tonne — while prices went higher in Shanghai.

Prices there rose 3 percent to 101,360 yuan per tonne ($A21,271) — its highest level since May 28.

Reuters quoted a China-based nickel analyst as saying that the rise caught a few traders on the hop, with the market just needing “an incident to make prices fall”.

The recent rise is a classic supply disruption story — but nickel prices have gone down by about 25 percent this year, although there are a few pointers to suggest it may be on the way up.

Any elongated supply constraint from Indonesia may see pricing support while any rebound in construction in China may revise stainless steel manufacturing production — giving nickel further support.

This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.