【SMM Analysis】Weekly Review of Indonesian Nickel Market - Dec 5

Nickel Ore

Indonesian nickel ore prices decrease this week. In terms of benchmark prices, Indonesia’s domestic nickel ore benchmark for the first half of December was USD 14,667 per dry metric ton, down 2.21% 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 50.9–52.9 per wet metric ton, decrease by USD 0.6 per wet metric ton. For hydrometallurgical ore, the delivered price for 1.3% Ni remained stable at USD 24–25 per wet metric ton, unchanged from last week.

• Pyrometallurgical Ore:

On the supply side, parts of Sulawesi have fully entered the rainy season, with significantly heavier rainfall disrupting production at several mines.From the demand side, NPI smelters’ procurement remains relatively stable, though buying enthusiasm has softened slightly compared with earlier peaks. Regarding RKAB, many Indonesian mining companies are still in the submission and evaluation stage, and no new RKAB approvals have been released recently. This week’s benchmark price decline has strengthened the role of premiums as support. In the short term, premiums are expected to remain stable.

• Hydrometallurgical Ore:

On the supply side, the market is steady, available HPAL feedstock remains ample, and cross-island shipments are still relatively limited. On the demand side, some smelters have reduced purchasing due to sufficient inventories, resulting in downward price pressure. In the short term, since RKAB approvals still lack clear progress, miners remain cautious, which in turn provides some support to prices. As a result, the room for further price declines is limited.

Industry's Focus :

Debate continues over the dedicated airport inside the IMIP industrial park. The issue began when the operator sent a letter in September 2025 rejecting the Ministry of Transportation’s plan to upgrade the airport to international status, arguing that the facility serves only internal park operations and is not for commercial use. Although the Minister of Transportation briefly approved the international designation, it was quickly withdrawn. During a military exercise inspection, the Minister of Defense mentioned the absence of customs and immigration supervision, prompting external speculation about a possible “illegal airport,” which the Ministry of Transportation later denied. Luhut, Chairman of the National Economic Committee, emphasized that the airport’s original approval was legally granted to support more than USD 20 billion of Chinese investment, and it was never intended to operate as an international airport, only to serve domestic flights for the industrial park.

Nickel Pig Iron

“Upstream Price-Supporting Actions Help Stabilize High-Grade NPI Prices, but Short-Term Fundamental Pressure Remains”

The average price of SMM 10-12% NPI average price fell by RMB 4 per nickel unit week-on-week to RMB 881.3 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index dropped by USD 0.21 per nickel unit to USD 109.63 per nickel unit. Entering December, with stainless steel and SHFE nickel prices moving higher, market sentiment has improved slightly. At the same time, high-grade NPI smelters are facing dual pressures: ongoing long-term contract negotiations and spot prices falling below production costs. As a result, their intention to hold prices firm has strengthened, and high-grade NPI prices have gradually stabilized. On the supply side, with long-term contract negotiations approaching and cost inversion worsening, upstream smelters and traders have been reluctant to sell and are actively supporting prices. Some high-priced transactions were concluded during the week. On the demand side, stainless steel mills have planned production cuts for December, and current procurement demand remains weak. Stainless steel mills show limited acceptance of high-priced NPI. Overall, although upstream players are firmly supporting prices, downstream acceptance remains sluggish and the oversupplied market has not improved. High-grade NPI prices have stabilized, and transaction levels may edge up. However, given the still-weak fundamentals, upward momentum remains constrained in the short term.