SHANGHAI, Apr 24 (SMM) – Nickel pig iron (NPI) smelters invested by Chinese companies in Indonesia will face an increase in smelting costs as Indonesia has planned to implement a floor price on nickel ore, which is aimed at preventing local smelting companies from purchasing ore at prices deemed too low.

According to the country's Energy and Mineral Resources Ministry, starting from May 14, the monthly mineral benchmark price will be used as a floor price for nickel ore trades.

SMM learned that the latest prescribed benchmark prices stand at $26.35/wmt fob for 1.7% grade nickel ore, at $29.45/wmt fob for 1.8% grade ore and $32.72/wmt fob for 1.9% grade ore. 

The ministry will allow for a price at a maximum 3% below the floor prices, according to the regulators.

Indonesia, the world’s biggest supplier of nickel ore, stopped exports of unprocessed minerals from January 2020 as it seeks to process more of its resources at home. The government has seen local smelters capitalise on the ban, which resulted in nickel ore trading at artificially low prices.