SMM Analysis On October Indonesian NPI Production And November Forecast

In October 2024, Indonesian NPI production continued to rise, up 7.53% MoM and up 13.5% YoY. The cumulative production for 2024 rose by 7.3% YoY. In terms of supply, the long-awaited RKAB quota for October finally materialized in the market. Apart from a small portion allocated to medium-sized mines near Sulawesi and Halmahera Islands, the majority of the quota was concentrated on WBN. Although the cumulative RKAB quota approved for WBN this year was somewhat lower than expected, the market's expectation of circulating supply. The supply of nickel ore from Halmahera Island saw a significant increase in Q4, reducing the pressure of cross-island external purchases, which to some extent supported the upward trend in Indonesian NPI production for the month. On the other hand, due to the strong intention to stand firm on quotes for high-grade NPI in China's market and the recovery of downstream profits, the price of Indonesian NPI also had some room for a slight increase. Additionally, due to fluctuations in nickel prices in the futures market during the month, the overall transaction volume in the high-grade nickel matte market was sluggish, weakening the drive for converting to nickel matte production. This provided some room for an increase in NPI production from lines that had switched to nickel matte production. With some new production lines expected to come online gradually within the year, Indonesian NPI production in November is expected to rise 2.13% MoM and 5.3% YoY, with cumulative production up 7.1% YoY.