Indonesia nickel ore market continued to recover, output and sales are expected to increase this year

SHANGHAI, Feb 25 (SMM) — Recently, Meidy Katrin Lengkey, secretary general of the Indonesian Nickel Miners Association (APNI), said that the recovery of the COVID-19 vaccine and vaccination will improve nickel production and sales this year. By 2020, APNI member companies have sold 40 million mt of nickel ore to smelters, accounting for about 40% of last year's total work plan and budget (RKAB). Meidy said that nickel mining activities have begun to normalise, especially shown in the recent increase in nickel prices. "Of course, this will stimulate nickel mining companies to increase production capacity or maximise the use of existing RKAB quotas."

At present, the reference price (HPM) of nickel ore with a grade of 1.8% and a moisture content (MC) of 30% was set at an FOB price of $42.74 per metric mt in February 2021. Meidy has not disclosed details about the target number of nickel ore production and sales. To be sure, production and sales performance will adjust the input capacity of the smelter.

The current economic and market developments provide a positive outlook for the demand for mineral and metal commodities. In addition, the super-cycle momentum of some major pillar commodities in Indonesia can also stimulate people's enthusiasm for the production and sales of mining products. In this cycle, as the demand for several industries that are highly dependent on the supply of minerals and metals increases, the prices of several commodities are on the rise. Arif S. Tiammar, a mining and smelting industry practitioner, said, “Therefore, the initial forecast for the production and sales of minerals and metals in Indonesia by 2021 is optimistic, it will increase and be better than last year.”

Regarding last year's output, Sugeng Mujiyanto, Director of Mineral Development and Business of the ESDM Department, revealed that nickel ore output stood at 48 million mt last year. He said that according to regulations, the export of nickel ore was closed last year and all sales were absorbed by the domestic market. "Since 2020, all nickel ore production must be sold domestically, not exported. Output and sales are expected to increase in 2021."