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【SMM Analysis】Weekly Review of Indonesian Nickel Market-3.21

iconMar 21, 2025 18:36
Source:SMM
NICKEL ORE Indonesian Ore Supply Tightness Continues, Costs and Sentiment May Both Strengthen Under Policy Influence High-Grade NPI High-Grade NPI Cost Support Strengthens, Prices Relatively Stable with Strong Trend

NICKEL ORE

Indonesian Ore Supply Tightness Continues, Costs and Sentiment May Both Strengthen Under Policy Influence

Current market transaction prices: For pyrometallurgy ore, the SMM Indonesia's local ore 1.6% weekly price is $49.5/wmt; for hydrometallurgy ore, the SMM Indonesia's local ore 1.2% grade weekly price is $26.5/wmt. The March mainstream premium for Indonesian nickel ore from pyrometallurgy remained stable at $19-21/wmt. The slight increase in CIF prices mainly came from the benchmark price for Indonesia's local ore released by the Indonesian Ministry of Energy and Mineral Resources on the 15th for the second half of March, which rose slightly WoW, with 1.2 grade ore up $0.26 and 1.6 grade up $0.46. From a supply perspective, the rainy season in Sulawesi this year has been longer, affecting the mining and transportation of nickel ore. The recovery of supply in major mining areas such as Sulawesi has been slow. Additionally, the Eid holiday at the end of March further exacerbated the supply tightness. On the demand side, inventories of Indonesian NPI smelters are generally low, and there is still a need for restocking, leading to high downstream purchasing sentiment. SMM expects that the supply of nickel ore may continue to be tight.

In terms of policy, the Indonesian Ministry of Energy and Mineral Resources signaled this week that the PNBP policy might be implemented before Eid. If the policy is implemented as scheduled, the sales costs for nickel mines will increase. Coupled with the continuous rise in NPI and MHP prices, the current market situation indicates that mines have strong bargaining power. The increased costs brought by the policy may largely be passed on to downstream enterprises, providing strong support for nickel ore prices. Overall, SMM expects that the price of Indonesia's local nickel ore may continue to rise.

High-Grade NPI

High-Grade NPI Cost Support Strengthens, Prices Relatively Stable with Strong Trend
SMM 8-12% high-grade NPI average price WoW increased, and Indonesia NPI FOB index WoW also rose. The overall high-grade NPI market was relatively stable with a strong trend, and prices continued to rise slightly. Supply side, domestically, as the rainy season in the Philippines neared its end, it still took time for nickel ore supply to increase, and nickel ore prices remained stable. Smelters had weak production incentives, and output operated at low levels. In Indonesia, recent abundant rainfall coupled with tight nickel ore supply led to low smelter nickel ore inventories. Despite new capacity releases, production only maintained a slight increase. On the stainless steel spot market, stainless steel futures orders were quite satisfactory. Stainless steel scrap prices followed the upward trend of finished product prices, reducing the economic advantage of using scrap. Steel mills' sentiment towards purchasing high-grade NPI improved, and market inquiries became more active. In summary, in the short term, high-grade NPI cost support is strong, and with tightening supply and demand, prices are expected to remain relatively stable with a strong trend.

Nickel Ore Prices Stable, High-Grade NPI Average Price Rises, Smelter Profits Improve
Based on nickel ore prices 25 days ago, high-grade NPI smelter profits improved this week. Raw material side, coking coal and coke prices remained stable, not significantly impacting production costs. From the ore perspective, the rainy season in the Philippines was nearing its end, but it still took time for nickel ore supply to increase, and nickel ore prices remained stable with a tight supply. In summary, domestic smelters saw profit rebound under the support of costs and tightening supply and demand. Next week, auxiliary material prices are expected to remain stable, while nickel ore prices may rise slightly due to tight supply. High-grade NPI prices are expected to continue to be relatively stable with a strong trend, and smelter profits are likely to further improve.

REFINED NICKEL

One project in Indonesia is still ramping up production

This month, the Dingxin project in Indonesia continued full-capacity production, supplying 4,000 mt of refined nickel to the market monthly. Additionally, the Yongheng project is in the process of ramping up production and is expected to reach full capacity (4,000 mt/month) in March-April.

Policy
NPI
Pig Iron Price
Indonesia

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