【SMM Analysis】Weekly Review of Indonesian Nickel Market - Nov 21

Nickel Ore

In mid November, Indonesian nickel ore prices showed a downward trend. In terms of benchmark prices, Indonesia’s domestic nickel ore benchmark for the first half of October was USD 14,999 per dry metric ton, down 0.51% from the previous period. For premiums, according to SMM data on Indonesia’s domestic laterite nickel ore premiums, 1.4% grade averaged USD 22, 1.5% grade averaged USD 25.5, and 1.6% grade averaged USD 26. The delivered price for 1.6% Ni laterite ore in Indonesia was USD 51.5–53.5 per wet metric ton, decrease by USD 0.2 per wet metric ton. For hydrometallurgical ore, the delivered price for 1.3% Ni remained stable at USD 24–26 per wet metric ton, unchanged from last week.

• Pyrometallurgical Ore:

In the pyrometallurgical sector, parts of Sulawesi are about to enter the rainy season, while Halmahera Island remains in the dry season. Overall, production has not been affected so far. On the production side, as the year-end approaches, several companies have relatively limited remaining RKAB quotas. However, mines with larger remaining quotas will continue to ramp up output. From an incremental perspective, nickel ore production growth has slowed. In addition, ongoing reviews by Indonesia’s Forestry Working Group continue to create minor disruptions to current shipments. From an RKAB standpoint, Indonesia’s Ministry of Energy and Mineral Resources (ESDM) plans to lower its 2026 nickel production target, following the Ministry of Industry’s decision to restrict new smelter permits due to global and domestic oversupply. ESDM’s Director General of Minerals and Coal, Tri Winarno, stated that the 2026 Work Plan and Budget (RKAB) will be adjusted based on market demand and is expected to be lower than this year’s level of around 319 million tons. On the demand side, some Indonesian smelters are still in a restocking phase ahead of year-end. However, overall procurement enthusiasm is no longer as aggressive as last month, given uncertainties surrounding future RKAB approvals. Smelters’ inventory cycles are expected to increase slightly by the end of next year. Overall, Indonesia faces a potential decline in nickel ore supply, and together with the ongoing negative cost margins in NPI production, these factors are expected to support the market and keep nickel ore premiums stable going forward.

• Hydrometallurgical Ore:

From the limonite ore perspective, the supply side remains relatively stable, with overall production steady and even somewhat abundant. From the demand side, several HPAL smelters have slightly increased their ore procurement, although their inventory levels remain relatively ample. With uncertainties surrounding new RKAB allocations and expectations of reduced quotas, wet-process nickel ore prices are expected to remain stable in the near term, with limited downside potential.

Nickel Pig Iron

“Mainstream Steel Mills’ Tender Prices Fall Sharply; High-Grade NPI Prices Under Downward Pressure”

The average price of SMM 10-12% NPI average price fell by RMB 12.8 per nickel unit week-on-week to RMB 896.8 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index dropped by USD 1.49 per nickel unit to USD 110.88 per nickel unit. The downtrend was driven by persistent cost-pressure losses in downstream stainless steel mills, coupled with the stable cost advantage of stainless steel scrap, which led to increased scrap usage and weaker NPI demand. During the traditional off-season, terminal demand remained weak, and high-grade NPI prices broke through historical lows. Meanwhile, a major steel mill released tender prices and concluded transactions of tens of thousands of tonnes, driving prices to continue declining. On the supply side, the persistent fall in high-grade NPI prices has led upstream producers to withhold spot quotations. Current prices have pushed some Indonesian NPI smelters into losses, significantly weakening their willingness to sell. On the demand side, a mainstream stainless-steel mill issued tender prices and procured several tens of thousands of tonnes during the week, improving downstream inquiry activity. However, overall transaction volume remained limited. Market supply-demand imbalances deepened, and oversupply conditions persisted. Looking into next week, downstream demand is expected to remain weak while supply stays relatively stable. High-grade NPI prices are likely to remain under upward pressure.