By Dylan Duan and Lewis Jackson

April 28 (Reuters) - Zhejiang Huayou Cobalt

said on Tuesday that its Indonesian unit will temporarily halt

some production lines from May 1, slashing about half of the

plant's output, after rising sulphur prices lifted costs at one

of its key battery-nickel projects.

The Chinese nickel and cobalt maker said in a statement that

the Huafei Nickel Cobalt plant would cut production because of

the higher sulphur costs as well as maintenance required after a

long period of producing at high capacity.

It did not state how long the outage would last.

Spot prices for sulphur delivered to Indonesia have risen above

$800 a metric ton as the Iran war disrupted production and

shipping of the key raw material from the Gulf. The region

produces about a quarter of global sulphur supply and about 75%

of Indonesia's supply.

Reuters reported on April 14 that several Indonesian HPAL

producers operated by Huayou, Lygend Resources and

Tsingshan Group had trimmed output by at least 10% due to rising

sulphur prices since March.

The outage at the Huafei plant is one of the clearest

company-level signs yet that a global sulphur squeeze is hitting

Indonesia's high-pressure acid leach, or HPAL, nickel sector.

HPAL plants use sulphuric acid to process laterite ore into

mixed hydroxide precipitate, an intermediate product used in

electric vehicle batteries.

Huayou said it would speed up process upgrades to reduce

sulphuric acid consumption and expand sulphur supply channels.

It also said it would accelerate development of nickel, cobalt

and lithium mining resources obtained through investment and

equity stakes.

Huafei generated 14.50 billion yuan ($2.12 billion) in

revenue in 2025, accounting for 17.89% of Huayou's total

revenue. It made 1.25 billion yuan in net profit, while Huayou's

share of attributable profit from the unit was 569 million yuan,

or 9.32% of the company's parent net profit.

($1 = 6.8372 Chinese yuan renminbi)

(Reporting by Dylan Duan and Lewis Jackson; Editing by Emelia

Sithole-Matarise)