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

Nickel Ore

Indonesian nickel ore prices remain stable this week. In terms of benchmark prices, Indonesia’s domestic nickel ore benchmark for the first half of December was USD 14,599 per dry metric ton, down 0.46% 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 50.8–52.8 per wet metric ton, decline of 0.2% WoW. 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:

From a supply perspective, Major production hubs are in the peak rainy season. Morowali and Halmahera saw cumulative rainfall of 90–130mm, while Konawe recorded 65–95mm. Increased rain has hindered production at several mines. Furthermore, the Ministry of Forestry's enforcement actions continue; under this regulatory pressure, mines remain cautious (holding back stock), leading to a conservative shipping pace. From the demand perspective, Procurement from NPI smelters was weak as restocking was completed in previous weeks. Year-end holiday lulls (Christmas/New Year) have dampened market sentiment; activity is expected to recover after the holidays. Regarding RKAB (Work Plan and Budget), many Indonesian mining companies are currently in the submission and evaluation phase.

• Hydrometallurgical Ore:

On the supply side, supply side remains stable with relatively sufficient circulating ore, and inter-island transport volumes remain at low levels. On the demand side, some smelters have reduced procurement due to ample inventories, leading to price declines.

The market is highly focused on potential 2026 HPM formula revisions mentioned by APNI, which may treat Cobalt (Co) and Iron (Fe) as independent commodities with a 1.5%–2% royalty. Additionally, reports suggest the 2026 RKAB production target may be slashed by 34% to 250 million tons to support prices.

Latest from ESDM: SMM's latest communication with the Ministry of Energy and Mineral Resources (ESDM) indicates no further updates on 2026 fixed quotas. The government emphasizes that quota approvals must be based on "clear and rigorous research," and the allocation mechanism is currently under deep internal discussion.

Nickel Pig Iron

"Macro Sentiment and Cost Support Drive High-Grade NPI into Upward Channel"

The average price of SMM 10-12% NPI average price rose by RMB 8.6 per nickel unit week-on-week to RMB 894 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index dropped by USD 1.19 per nickel unit to USD 111.65 per nickel unit. Driven by positive macro sentiment, both stainless steel futures and spot prices rose, leading to a significant recovery in high-grade NPI transaction prices and a marked increase in market activity.

On the supply side, macro sentiment and cost support have prompted upstream producers to hold prices firm. With a relatively clear upward trend, participation from upstream/downstream enterprises and traders has increased significantly, and market trading activity has warmed up, providing a floor for high-grade NPI prices. On the demand side, stainless steel spot prices rose. Combined with the year-end approach, some steel mills have restocking needs, and hoarding sentiment among traders has also increased. Overall, market sentiment has improved, activity across the chain has picked up, and transaction prices for high-grade NPI have risen, with further upside expected in the short term.