【SMM Analysis】Weekly Review of Indonesian Nickel Market - 7.18

Nickel Ore

"Indonesian RKAB Quota in 2025 Reached 364 million tonnes? Nickel Ore Prices Likely to Fall"

Nickel ore prices in Indonesia held steady this week. For the benchmark price, the second half of July HMA price saw a slight decline, settling at $14,926/dry metric ton — down 0.11% from the previous period. The mainstream premium for Indonesian laterite nickel ore remained at $24–26/wmt. SMM's delivered price for 1.6% laterite nickel ore stood at $50.4–53.9/wmt, unchanged from last week. SMM’s delivered price for 1.3% ore also remained stable at $26–28/wmt, unchanged week-on-week.

• Pyrometallurgical Ore:

On the supply side, the rainy season continues across Sulawesi and Halmahera, disrupting mining operations and transport routes. Despite this, Indonesia’s 2025 RKAB quota reached 364 million tons, indicating a potential increase in supply. From demand perspective, NPI prices remain relatively weak. Some smelters have stopped or reduced production due to operating losses, resulting in reduced nickel ore procurement and weaker demand for pyrometallurgical ore. Overall, although rainfall continues to hamper mining and production, the ongoing approval of additional RKAB quotas and cost pressures on smelters have weakened purchasing power for current nickel ore prices. Looking ahead, prices for pyrometallurgical ore are likely to face further downward pressure.

• Hydrometallurgical Ore:

On the supply side, availability has stabilized and is sufficient to meet current market demand. The continued progress in RKAB quota approvals is expected to further boost supply. From the demand side, downstream production remains steady, with MHP (Mixed Hydroxide Precipitate) producers have a slight increase on their nickel ore purchases. With continued RKAB quota approvals, hydrometallurgical ore prices may also face downward pressure in the near term.

NPI

Stainless Steel Prices Stabilize as Raw Material Costs Remain Under Pressure

This week, the average price of high-grade NPI (8–12%) was RMB 901 per nickel unit (ex-works, including tax), down RMB 4.3 from the previous week. The Indonesian NPI FOB index also declined by USD 0.6 to USD 109.8 per nickel unit. On the supply side, the premium on Indonesian pyrometallurgical nickel ore has slightly declined, easing cost pressure on smelters. However, profit margins remain negative due to persistently low finished product prices. With refined nickel prices rebounding, some smelters have shifted to producing high-grade matte, leading to expectations of reduced NPI output. On the demand side, stainless steel futures continued to recover, but spot market performance was weak, and inventory drawdowns in Wuxi and Foshan remained slow. While stainless steel mills are still cautious about raw material procurement, the stabilization in spot prices has boosted speculative sentiment among some traders, which may offer short-term support to market prices.

Based on nickel ore prices from 25 days ago, high-grade NPI smelters continue to operate at a loss. Auxiliary material costs rose modestly this week, supported by stronger ferrous markets as China’s “anti-involution” policy drives industrial pricing reform. Meanwhile, Philippine nickel ore prices began to soften due to weakening downstream buying interest, which may lower input costs for smelters in the coming weeks. Nevertheless, falling NPI prices have kept finished product revenues under pressure, deepening the cost inversion. Looking ahead to next week, auxiliary material costs are likely to stay elevated, while nickel ore costs may decline slightly. This could help narrow smelter losses, but sustained pressure on product prices means overall profitability is expected to remain weak in the near term.