SMM reported on January 26 that
in January 2025, Indonesia's NPI metal content rose by approximately 0.99% MoM and 17.97% YoY. After entering 2025, Indonesia's nickel mines were still in a phase where production had not yet commenced. In some major production areas with sufficient nickel ore stockpiles from earlier periods, ore grades continued to rise, driving an increase in total metal content. However, in some production areas, the scarcity of high-grade nickel ore resources in domestic trade led to a decline in ore grades, resulting in a decrease in metal content. In January, new capacity on Obi Island began to be released, leading to a slight increase in production. Additionally, while high-grade NPI prices declined in January, the cost line for Indonesian smelters eased. Driven by profits, smelters did not show a downward trend in production. Meanwhile, profits for high-grade nickel matte recovered due to the upward correction in LME nickel prices. The mutual competition between the conversion of high-grade nickel matte and high-grade NPI was relatively weak in January, and the conversion of high-grade nickel matte had a limited impact on the supply increase of high-grade NPI. As a result, Indonesia's NPI production in January saw a slight MoM increase.
In February 2025, it is expected that due to the Chinese New Year holiday and fewer overall production days in February, Indonesia's NPI metal content will decrease by approximately 3.00% MoM but increase by about 20.21% YoY. According to an SMM survey, in one major production area in Indonesia, production schedules are expected to be adjusted in the short term due to further optimization of project management, leading to a slight decline in production. Meanwhile, the release of new capacity on Obi Island is expected to continue, resulting in another production increase. Consequently, although the metal content in February is expected to decline, the overall decrease will likely be limited.
