May LPR Unchanged: 1-Year at 3%, Over-5-Year at 3.5%

A leaked draft of a Government Regulationreveals plans under President's administration to funnel the export of strategic natural resources, specifically highlighting coal, oil palm, and other strategic commodities, exclusively through designated State-Owned Enterprises (BUMN Ekspor). It outlines that these SOEs will be mandated to manage outbound trade to secure national interests and domestic supply. While officials note the policy is still being finalized and awaits a presidential signature, under the rumored transition timeline, exporters must trade through designated SOEs until December 31, 2026, after which all exports must be fully executed by the SOEs.

On May 20, SMM #1 refined nickel prices rose 700 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,450 yuan/mt, unchanged from the previous trading day, and mainstream domestic electrodeposited nickel brands ranged from -500 to 500 yuan/mt.

Market rumors ahead of tomorrow’s presidential address suggest Indonesia may establish a specialized state agency to centralize strategic commodity exports, initially targeting CPO and coal, with minerals under discussion. Under the rumored framework, producers would bypass direct international sales and sell to this state trading entity, which would export globally and potentially capture a trading spread. While the official narrative focuses on curbing under-invoicing, securing state revenue, and retaining foreign exchange to defend the rupiah, the market treats this as a major policy risk.