【SMM Analysis】Weekly Review of Indonesian Nickel Market - Sep 26

Nickel Ore

Indonesian nickel ore prices remained stable this week. For the second 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:

From the supply side, the rainy season has largely ended in the main mining regions. On the regulatory side, however, nickel ore continues to face significant uncertainties. From the RKAB perspective, current supply is still considered sufficient to meet demand. The new one-year RKAB approvals are expected to be issued in September, but have not yet been officially released, raising expectations of delays in next year’s submissions. Meanwhile, the government’s recent temporary suspension measures have heightened market anticipation regarding nickel prices. On the demand side, active procurement has been observed as of this month, and as of next month the stockpiling activity have started. Buyers tend to secure supply in anticipation of potential ore shortages should more mining companies be suspended. Overall, pyrometallurgical ore price may have the potential to trend upward amid the prevailing regulatory uncertainties.

• Hydrometallurgical Ore:

Supply remains sufficient. Since August, the 1–2 months of stockpiling demand has largely been fulfilled, with no additional procurement needed in the short term, as MHP production will not increase before the end of 2025. However, Indonesia’s upcoming RKAB policy for next year, together with the possibility that new HPAL smelters set to commence in 2026 may advance their ore procurement, could provide support for price trends. As a result, the downside potential for limonite prices remains limited.

Nickel Pig Iron

“Seasonal Support Weakens, Low-Price Deals Emerge, High-Nickel Pig Iron Prices Turn Downward”

The average price of SMM 10–12% high-grade NPI rose by RMB 0.5/Ni unit to RMB 954.7/Ni unit (ex-works, including tax), while the Indonesia NPI FOB index held flat at USD 117.44/Ni unit. After a period of price standoff, high-nickel pig iron prices began to show a downward trend this week. On the supply side, although it remains the traditional peak season and cost support is firm, weak downstream procurement has persisted, leading to rising inventories among upstream producers and a weakening of their price-holding strength. On the demand side, the destocking pace of stainless steel social inventories has slowed, stainless steel producers continue to face margin pressure, and buying interest remains subdued. In some regions, low-priced transactions have already appeared, dragging market prices downward. As seasonal support fades, trading sentiment is under pressure. The high-NPI market has shifted toward trading on a more pessimistic outlook for fundamentals, with prices beginning to decline. It is expected that high-NPI prices will continue to edge down slightly around the China's National Day holiday.

From cash cost perspective, this week, smelter margins for high-nickel pig iron declined. On the raw materials side, while nickel ore prices held steady, prices of coking coal and coke rose significantly, and summer electricity tariffs also increased, pushing costs higher. At the same time, high-nickel pig iron prices came under downward pressure. Looking ahead to next week, auxiliary raw material prices are expected to remain elevated, while nickel ore prices are likely to stay elevated. With high-nickel pig iron prices under further pressure, smelter margins are expected to continue declining.

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