【SMM Analysis】Weekly Review of Indonesian Nickel Market - Sep 19

Nickel Ore

Indonesian nickel ore prices are stable this week. For the first period of September, domestic benchmark price of Indonesian nickel ore is USD 15,000/dry metric ton. For premiums, according to SMM data on Indonesian domestic laterite nickel ore, 1.4% grade averaged USD 22.2, 1.5% grade averaged USD25.2, and 1.6% grade averaged USD25.7. This week, SMM domestic laterite nickel ore 1.6% delivered to works price ranged from USD 50.5–53.8/wet ton, unchanged from last week. For lower-grade ores, the SMM domestic laterite nickel ore 1.3% delivered to works price remained stable at USD 24–26/wet ton, unchanged from last week.

• Pyrometallurgical Ore:

On the supply side, Sulawesi and Halmahera are now entering the dry season, with only occasional light rainfall. This is expected to support higher ore production, potentially increasing market supply. Regarding RKAB Approvals, the latest round of quota revisions is anticipated to be released this month, followed by new RKAB submissions for 2026 as indicated by ESDM. Meanwhile, the Forestry Task Force continues to conduct investigations into mining companies (IUP), though so far these activities have had little impact on nickel mining output. On the demand side, the NPI market has remained firm, supported by a slight increase in prices. Market feedback indicates improved ore procurement, as some smelters have raised their NPI production in September. Looking ahead, nickel ore prices are likely to remain stable in the near term. While mining and smelting companies are adopting a wait-and-see approach, the Forestry Task Force’s actions have introduced mild upward sentiment, helping to stabilize prices overall.

• Hydrometallurgical Ore:

In September, limonite supply has remained relatively abundant, with smelters reporting signs of oversupply. This has been largely driven by the increase in RKAB allocations, resulting in a higher availability of limonite compared with saprolite in the Indonesian market. On the demand side, most smelters have already secured sufficient feedstock for their operations, leading to a moderation in procurement activity in recent weeks. Inter-island shipments have also declined, as smelters on each island generally hold adequate inventories to meet their requirements. Looking ahead, any potential decline in limonite prices is expected to be limited, given market expectations of possible delays in 2026 RKAB approvals and the likelihood of early procurement by HPAL smelters toward the end of this year.

Nickel Pig Iron

“Upward Trend on NPI, Weaker-than-Expected Consumption Limits NPI Price Gains”

The average price of SMM 10–12% high-grade NPI rose by RMB 3.1/ni unit to RMB 954.2/Ni unit (ex-works, including tax), while the Indonesia NPI FOB index increased by USD 0.54/Ni unit to USD 117.44/Ni unit. High-nickel pig iron (NPI) prices maintained their upward trend this week, but the pace of gains has clearly slowed. On the supply side, aided by the traditional peak season, stainless steel social inventory continued to decline, while a rebound in auxiliary material prices strengthened the domestic cost line, leaving smelters still inclined to hold firm on prices. On the demand side, despite continued inventory drawdowns, stainless steel finished product prices failed to rebound. Output and consumption of 300-series stainless steel fell short of expectations, raising overall production costs for mills and dampening their outlook for October consumption, which has created upward pressure on NPI prices. Overall, terminal consumption has grown slowly, and the "weaker-than-expected" 300-series stainless steel demand has capped further NPI price increases. Still, supported by costs and seasonal factors, NPI prices are expected to remain strong and fluctuate at high levels next week.

Meanwhile, auxiliary material prices have rebounded, putting smelter margins at renewed risk of decline. Based on nickel ore prices from 25 days ago, NPI smelters are still operating under negative cash margins this week. Raw material costs remain firm, with notable increases in coking coal and coke prices pushing up the cost baseline, while resistance to NPI price gains persists. Looking ahead, auxiliary material costs are expected to stay high, nickel ore prices are likely to remain stable, and under continued price pressure, smelters may once again face narrowing or negative margins.