[SMM Weekly Review of Indonesian Nickel Ore] HPM Prices Increase, {{and}} Prices of Indonesia's Local Ore for Pyrometallurgy Rise Again

According to SMM data, the mainstream premium for Indonesia's local laterite nickel ore remained at $26-30/wmt this week. Regarding the prices of ore used for pyrometallurgy, the HPM (Harga Patokan Mineral) prices for Indonesia in H2 are expected to rebound due to the increase in LME prices, leading to a slight uptick in the prices of ore used for pyrometallurgy this week. The delivery-to-factory price for 1.6% Indonesia's local laterite nickel ore stood at $53.3-57.3/wmt, up $0.7 from last week, representing an increase of approximately 1.2%. In terms of the prices of ore used for hydrometallurgy, the delivery-to-factory price for 1.3% Indonesia's local laterite nickel ore remained stable at $23-25/wmt, unchanged from last week.

For ore used for pyrometallurgy, the supply from Sulawesi Island continues to be disrupted by persistent rainfall. Meanwhile, Halmahera Island entered the rainy season in May. Additionally, some Indonesian mines have had their mining activities under IUP permits restricted due to not yet obtaining RKAB quotas, further exacerbating the tight supply situation. On the demand side, with NPI prices continuing to decline slowly, the costs of Indonesian pyrometallurgy smelters have been breached, limiting their ability to accept further increases in nickel ore prices. In terms of inventory, after experiencing low inventory levels and ore stockpiling in April, the current inventory levels of Indonesian pyrometallurgy smelters have improved, reducing their willingness to compete for ore at prices above the market rate. Overall, although Indonesia still faces supply disruptions due to factors such as the rainy season and the slow approval progress of RKAB quotas, prices are unlikely to see significant increases in the short term due to the drag from downstream demand.

For ore used for hydrometallurgy, there has been no significant tightening in the supply side yet. However, an accident occurred at the MHP project in the MOROWALI Industrial Park, affecting MHP production in April and leading to a decrease in local demand for ore used for hydrometallurgy in Indonesia. Overall, the prices of ore used for hydrometallurgy are trending weaker. Nevertheless, the relevant production lines in the park are expected to resume production gradually in May, and SMM anticipates that ore prices may rise easily in the future.

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