【SMM Analysis】Weekly Review of Indonesian Nickel Market - Jan 30

Nickel Ore

The price of Indonesian nickel ore remained flat this week. In terms of benchmark prices, the domestic Indonesian nickel ore benchmark for the first half of January was $16,427 per dry ton, up 12.28% from the previous period. Regarding premiums, according to SMM data for domestic Indonesian laterite nickel ore, the average premium for 1.4% grade was $22, $25.5 for 1.5% grade, and $26 for 1.6% grade, unchanged from last week. The delivered price of SMM domestic Indonesian laterite nickel ore (1.6% grade) was $54–56 per wet ton, unchanged from last week. For hydrometallurgical ore, the delivered price of SMM domestic Indonesian laterite nickel ore (1.3% grade) held steady at $23–24 per wet ton, unchanged from last week.

• Pyrometallurgical Ore:

From a supply perspective, Major production hubs are in a sporadic rainy seasons in most parts of Sulawesi, although not as heavy as the early January. 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 several NPI smelters relatively increased this week due to supply constraints that happened due to the RKAB uncertainties in this month. Therefore, it is expected that the nickel ore premium and benchmark price to rise in the upcoming months.

• Hydrometallurgical Ore

The supply side remained stable at year-end, with relatively ample availability of wet-process ore, while cross-island shipments remained at low levels. On the demand side, MHP production at some smelters declined, reducing their demand for nickel ore. Although some old 2026 RKAB quotas can be used in Q1, most mines are unable to ship normally due to delays in MOMS system verification.

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

"Large Gap Between Upstream and Downstream Offers, High-Nickel Pig Iron Prices Stabilize at Week's End"

The average price of SMM 10-12% NPI average price rose by RMB 20.9 per nickel unit week-on-week to RMB 1053 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index increased by USD 2.99 per nickel unit to USD 133.26 per nickel unit.

During the week, futures remained high, with a few high-priced transactions observed in the market, driving further gains in NPI prices.

On the supply side, amid strong macroeconomic sentiment, upstream producers maintained firm pricing, though some chose to cash in profits, leading to a divergence in NPI transaction prices. On the demand side, stainless steel scrap remained more economically attractive, and with the approaching Lunar New Year, downstream steel mills adopted a wait-and-see approach. Only a few specialty steel mills made limited high-priced purchases, resulting in subdued overall market trading volume.

Overall, while upstream players remained bullish and held firm on prices, downstream buyers maintained lower price expectations. Coupled with planned production cuts in 300-series stainless steel, weakening demand led to a stabilization of NPI prices after consecutive gains by the week's end. Looking ahead, NPI prices are expected to remain elevated in the short term, though some producers may face fundamental pressure due to pre-holiday sales needs.