[SMM Analysis] Weekly Review of the Indonesian-1.17 Nickel Market for the second Week of 2025

Nickel Ore
Active Transactions in Indonesian Domestic Trade Laterite Nickel Ore During the Week, Prices Fluctuated Upward

Supply side, currently, Indonesia has approved 207 RKABs, and this week, most mines have successively passed the MOMS review in the SIMBARA system, with normal shipping and delivery. Demand side, the issuance of temporary quotas and the reduction of premiums in Q4 last year led to sufficient stockpiling by downstream smelters. At present, nickel ore raw material inventories of local smelters remain above two weeks. From the perspective of supply and demand, the supply of Indonesian domestic trade ore is relatively ample, with an increase in market circulation. Compared to the same period at the beginning of last year, the level of looseness is particularly evident.

Regarding market transactions during the week: both upstream and downstream negotiations were relatively active this week, and market sentiment improved significantly YoY compared to the previous week. The mainstream transaction premium for Indonesian medium- and high-grade nickel ore remained mostly concentrated at $15-17. During the week, the selling prices of Indonesian nickel smelting products, including Indonesian NPI and intermediate products, saw a slight increase, and the production profits of downstream smelters improved slightly. However, spot supply of nickel ore remained relatively ample, coupled with raw material inventories of smelters still at safe levels, leading to limited acceptance of high-priced nickel ore by downstream smelters. Looking ahead, some projects in Indonesia are expected to commence or ramp up production within the year, and the supply-demand balance of Indonesian nickel ore may gradually tighten during the year.

It is expected that in the second half of this month, nickel ore CIF prices will remain stable with an upward trend. Indonesian local policy stances and the progress of temporary quota issuance will continue to have a significant impact on the global nickel resource supply and nickel prices.

High-Grade NPI

High-Grade NPI Market Transactions Rebound; Prices May Rise and Recover in the Short Term

The Indonesian NPI FOB index increased by $0.2/mtu WoW. This week, high-grade NPI prices rebounded upward. Supply side, some mid-tier smelters in Indonesia reduced production, while top-tier enterprises maintained output growth. Coupled with the contribution of new capacity, high-grade NPI supply rose slightly compared to December. Demand side, as the Chinese New Year holiday approaches, stainless steel market activity weakened, and stainless steel mills entered a seasonal maintenance period, leading to a pullback in demand for high-grade NPI. However, some market traders held a bullish outlook, improving market sentiment. Transaction prices hit a recent low during the week. Additionally, with an increase in the proportion of long-term contracts by steel mills, marketable resources were relatively limited. In the short term, high-grade NPI prices may rise and recover.

Nickel Ore Prices Stabilized 25 Days Ago; High-Grade NPI Losses Slightly Recovered
Based on nickel ore prices 25 days ago, the cash cost of high-grade NPI smelting showed that smelter losses eased WoW. Raw material side, auxiliary material prices dropped back slightly this week, and coke prices also dropped back slightly due to weak downstream demand, leading to a slight decline in auxiliary material costs for NPI smelters during the week. Ore side, after the Philippines entered the rainy season, shipments were relatively limited, and market transactions remained sluggish. Nickel ore prices in the Philippines stabilized 25 days ago. This week, the easing of smelter losses was mainly attributed to the upward recovery of high-grade NPI prices. Next week, auxiliary material prices are expected to remain stable ahead of the Chinese New Year, while nickel ore prices show no signs of decline. High-grade NPI prices may rise and recover driven by pre-holiday restocking demand from traders, further easing smelter losses compared to this week.