News

Nickel Ore "Transition in Pricing Systems and Standardization of Pyrometallurgical Ore Benchmarks; Convergence of Iron, Cobalt, and Chrome Elements" 1. Price Dynamics and HMA Revisions The Indonesian nickel market experienced overall price volatility this week. The Ministry of Energy and Mineral Resources (ESDM) has officially released the Nickel Mineral Benchmark Price (HMA) for the first half of May 2026. Nickel HMA: $17,802/dmt (up $868.57 or 5.13% from $16,933.57 in late April). Cobalt HMA: $55,854/dmt. Iron Ore HMA: $1.56/dmt. Chrome Ore HMA: $6.37/dmt. Current port-delivered prices for 1.6% grade pyrometallurgical ore (saprolite) stand at $74.5–$77.5/wmt, an increase of $1 from last week, remaining largely stable. In contrast, 1.2% grade hydrometallurgical ore (limonite) is priced at approximately $28.33/wmt, down $2 from the previous week. 2. Supply-Demand Fundamentals and Weather Impacts Pyrometallurgical Ore: As the rainy season concludes in Halmahera and Sulawesi, mine production is expected to rebound significantly in May. Despite RKAB approvals reaching 90%, spot supply for high-grade saprolite remains tight. However, market expectations for easing supply have strengthened. Notably, the average grade of ore accepted by smelters has begun to trend downward. While the decline is not yet significant, some smelters have started blending low-grade ore to mitigate the pressure of high-grade shortages and surging costs. Current pricing follows either a "fixed price" or "HPM + $7–$10 premium" model. Furthermore, some smelters are implementing standardized benchmarks for pyrometallurgical ore (Cobalt 0.05%, Iron 20%, Chrome 1%), regardless of actual ore variations. Bon have shrunk to minimal levels as most are now covered by fixed premiums. Hydrometallurgical Ore: Limonite prices have trended downward, failing to follow the uptick in the new HPM. Demand is under pressure due to potential MHP production cuts caused by a sulfuric acid shortage in May. With relatively stable inventories, smelters continue to exert strong downward pressure on prices. 3. SMM Internal Estimates The new pricing formula has led to increased price divergence and amplified volatility, particularly influenced by higher associated cobalt content in certain ores. SMM calculations show that the new HPM for 1.2% grade limonite is approximately $47.82, significantly higher than current market assessments. The new HPM for 1.6% grade saprolite is $64.85; the inclusion of higher cobalt content in the new formula has markedly amplified price fluctuations. While actual market transaction prices currently remain above this benchmark, the gap is steadily narrowing. 4. Regulatory Quotas (RKAB) and Market Outlook According to the ESDM, RKAB approvals for 2026 have reached approximately 90%. SMM statistics indicate that the total approved quota for Indonesian nickel ore stands at roughly 230–240 million wmt. The final quota is widely expected to be finalized by the end of April. Due to the convergence of reduced RKAB expectations, resource uncertainty, and high-grade ore shortages, some smelters have increased trade dividends and premiums to secure supply. The market is closely monitoring Weda Bay Nickel (WBN). Due to a severely depleted RKAB quota for 2026, WBN plans to enter a "maintenance and care" phase starting in May. The company is actively pursuing a quota increase to alleviate the ore shortage at the IWIP industrial park. During this period, its downstream NPI plants will consume existing strategic inventories to maintain operations. 5. Regulatory Revisions: PP 19/2025 On May 8, the Directorate General of Mineral and Coal held a public hearing on the revision of PP 19/2025, seeking feedback on adjustments to mineral royalty rates. Nickel Ore: The revision proposes lowering the minimum HMA threshold from <$18,000/t to <$16,000/t, and the maximum threshold from ≥$31,000/t to ≥$26,000/t. The tax tiers would be refined from 5 to 6 levels, with rates ranging from 14% to 19%. Impact: Based on today’s Nickel HMA of $17,802, the applicable royalty rate would rise from 14% to 15% if the revision is implemented. Additional Provisions: A 2% independent levy is proposed for cobalt in nickel matte and non-nickel smelting products, while a 2.5% tax rate is proposed for alloy pig iron. The impact on mainstream NPI projects will depend on Indonesia’s final product classification criteria. Nickel Pig Iron " NPI Average Prices Rally Strongly; Market Enters High-Level Deadlock " The average price of SMM 10-12% NPI average price increased by RMB 30.5 per nickel unit week-on-week to RMB 1150.5 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index increased by USD 3.58 USD per nickel unit to an average of USD 146.78 per nickel unit. This week, the high-nickel pig iron market first declined and then rose. This week, favorable policies and exchange movements drove prices steadily higher, pushing the price center further up. However, by the end of the week, the market transitioned from a unilateral uptrend into a high-level deadlock. Upstream producers maintained a strong stance on pricing, with some anchoring their target at RMB 1,200/nickel unit and showing a high reluctance to sell. Conversely, downstream stainless steel mills showed weak acceptance of these high prices. Having completed their initial restocking, these mills saw a decline in procurement appetite, with the maximum acceptable price being limited. Additionally, a correction in the exchange market fueled "fear of heights" (market caution); despite active inquiries, actual transaction volumes were significantly lower than those seen before the holiday. The price gap between high and low-grade materials widened further, intensifying the structural divergence of supply. Looking ahead, while cost support remains, demand follow-through is insufficient. NPI prices are expected to remain in a high-level tug-of-war in the short term. Based on high-nickel pig iron cash costs calculated from nickel ore prices 25 days ago, smelter profit margins continued to recover this week, with many operations returning to profitability. On the raw material side, auxiliary material prices rose, while ore prices remained stable in the Philippines and saw a slight correction in Indonesia. Overall, the expansion of domestic smelter profits this week was primarily driven by the upward shift in NPI prices coupled with lower raw material costs. For next week, raw material prices are unlikely to see significant increases, and NPI prices are expected to remain at high levels, which should lead to further improvements in smelter profit margins. ​​​​​​​

Published: May 07, 2026 - 2:28 AM Updated: May 07, 2026 - 2:41 AM (Kitco News) - The gold market is seeing some renewed momentum, with prices testing new resistance at $4,700 an ounce. While it still has some way to go to regain key price levels, one investment bank expects prices to eventually move higher. In her latest precious metals note, Amy Gower, Morgan Stanley Research’s Metals & Mining Commodity Strategist at Morgan Stanley, reiterated her call for gold prices to end the year around $5,200 an ounce, up roughly 10% from current prices. Gower added that she is not surprised gold has struggled in recent months despite heightened geopolitical uncertainty from the ongoing war in Iran. “With the conflict triggering an energy supply shock that has reduced hopes for lower U.S. interest rates, it is not surprising that gold has struggled to work as a safe haven this time,” said Amy Gower, Morgan Stanley Research’s Metals & Mining Commodity Strategist. “ Gold ’s sensitivity to monetary policy has taken over as the key price driver. This has overshadowed its safe-haven status and reduced its effectiveness as a hedge against both geopolitical and inflation risks. Gold prices reflect not just the impact of a particular event but, more importantly, the policy response that follows.” High oil prices, driving inflation pressures, are forcing the Federal Reserve to reevaluate its easing policy stance and, as a result, markets have started to price out rate cuts this year. However, Morgan Stanley is still betting on at least one rate cut this year, which will support higher gold prices. “ Gold is likely to remain sensitive to real yields, but we see room for further upside,” Gower said. Morgan Stanley sees one rate cut in January followed by another rate cut in March 2027. “This should benefit gold, with ETF purchasing decisions particularly sensitive to policy signals and gold now realigning with real rates,” Gower said. As indicated by the current market volatility, gold ’s future depends heavily on what happens with the conflict in the Middle East. Overnight, President Donald Trump said that great progress is being made toward a lasting peace agreement. Analysts have said that if the crisis ends soon, the global economy should be able to recover from the current energy supply crisis. However, Gower added that the longer the conflict continues, the greater the risks are for gold. “ Gold prices may suffer if markets begin to anticipate prolonged rate holds or even hikes,” Gower warned. “At the same time, upside in a resolution scenario could be limited, as already elevated prices may constrain demand from ETFs, central banks and consumers.” Source： https://www.kitco.com/news/article/2026-05-06/morgan-stanley-sees-gold-prices-climbing-5200-despite-geopolitical