【SMM Analysis】Weekly Review of Indonesian Nickel Market - Jan 9

Nickel Ore

Indonesian nickel ore prices slightly decreases this week. In terms of benchmark prices, Indonesia’s domestic nickel ore benchmark for the first half of January was USD 14,630 per dry metric ton, increase 0.21% 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, unchanged from last week. For hydrometallurgical ore, the delivered price for 1.3% Ni remained stable at USD 23–24 per wet metric ton, decreased by one dollar compared to last week.

• Pyrometallurgical Ore:

From a supply perspective, Major production hubs are stil in the peak rainy season. Heavy rainfall has disrupted mining operations. Between January 5th and 11th, Halmahera experienced the most severe precipitation, with accumulations reaching 70-110mm and frequent thunderstorms. Rainfall in Sulawesi (Konawe and Morowali) was relatively moderate, primarily afternoon thunderstorms, with weekly totals around 40-65mm and 35-55mm, respectively. Most mines are currently facing shipping obstacles due to verification delays in the MOMS system (Mineral and Coal Online Monitoring System). At the same time, ongoing audits by the Forestry Task Force, combined with the MOMS delays, have created a "double regulatory" pressure. Consequently, miners are adopting a "wait-and-see" stance, showing reluctance to sell and maintaining conservative shipping schedules. From the demand side, procurement demand from NPI smelters was relatively weak this week. With initial restocking completed, the pace of shipments has notably slowed

• Hydrometallurgical Ore

The market for limonite remains stable with sufficient tradable supply. However, some smelters have reduced MHP production, leading to a decrease in ore demand.

The recent surge in LME nickel prices is expected to drive a significant increase in the next HPM cycle, which should provide a strong floor for ore premiums.

Market focus remains fixed on the Ministry of Energy and Mineral Resources (ESDM). In a press conference on the afternoon of January 8th, Minister Bahlil Lahadalia did not disclose specific figures for the 2026 RKAB (Work Plan and Budget) approvals. He stated that quotas are still being calculated and will be adjusted based on the total demand from smelting enterprises in 2026. Until the RKAB details are finalized, miners are expected to remain cautious, maintaining the current "steady-to-firm" pricing environment.

Nickel Pig Iron

"Arbitrage Window Opens, Boosting Market Transactions; Upside Potential Remains for High-Grade NPI Prices"

The average price of SMM 10-12% NPI average price rose by RMB 31.23 per nickel unit week-on-week to RMB 946.4 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index dropped by USD 4.26 per nickel unit to USD 118.92 per nickel unit.

This week, futures prices pulled back after an initial surge. The price spread between weekly futures and high-grade NPI spot prices widened significantly to a relative high, triggering arbitrage positioning within the market. From the supply side, bullish sentiment is prevalent upstream. Smelters are aggressively firming up prices, leading to a steady climb in market quotes. Furthermore, several iron plants in Indonesia remain offline with no immediate recovery in sight, leading to a decline in overall market supply. On the demand side, although the downstream sector remains in its traditional off-season with limited terminal demand, the rally in futures has improved profit margins for stainless steel enterprises, pushing bid intentions upward in tandem. In summary, despite the "dual-weak" supply and demand environment, arbitrage behavior by certain traders has locked up significant NPI volumes. Consequently, circulating market supply is expected to remain tight in the short term. High-grade NPI prices are likely to remain supported by both macro and fundamental factors in the short term, with further room for upward movement.