[SMM Analysis] Weekly Review of the Indonesian Nickel Market for the First Week of 2025

Nickel Ore

Uncertainty in Indonesian Domestic Trade Laterite Nickel Ore Policy Ferments, Driving Stronger Downstream Stocking Willingness

This week, influenced by significant policy uncertainty and the potential impact of the local rainy season on subsequent supply, the transaction situation of Indonesian domestic trade nickel ore improved. Supply side, according to SMM, mines have gradually passed the MOMS system review under the SIMBARA system since the beginning of the month. Mines that have obtained RKAB approval quotas have started selling and shipping domestic trade ore, leading to a short-term stabilization in nickel ore supply. Demand side, driven by policy uncertainty and pre-holiday stocking demand, the purchase willingness of Indonesian nickel-iron plants in January strengthened. In terms of price trends, the January HPM benchmark price remained stable with a slight decline compared to December, but premium prices may rise under the influence of Indonesian policies, becoming a key parameter affecting Indonesian nickel ore prices. Overall, Indonesian nickel ore prices may fluctuate upward in the future.

High-Grade NPI

High-Grade NPI Supply-Demand Imbalance Becomes Prominent, Short-Term Prices Still Face Downside Risks
During the week, the Indonesian NPI FOB index decreased by $0.7/mtu WoW. This week, Indonesian high-grade NPI prices continued to fluctuate downward. Supply side, Indonesian high-grade NPI production kept increasing due to the release of new capacity and the conversion from high-grade nickel matte to high-grade NPI. Demand side, stainless steel entered a seasonal maintenance phase, weakening demand for high-grade NPI. Leading steel mills had relatively sufficient raw material stocking for the long term, and market transactions remained sluggish this week. Additionally, cost side, Indonesian laterite nickel ore premiums remained stable, providing strong cost support for high-grade NPI. Thus, the downside room for high-grade NPI prices is limited in the short term.

Refined Nickel
Indonesia's Refined Nickel Projects Continue to Ramp Up Production, with Additional Output Still Expected in 2025
In December 2024, Indonesia's refined nickel production was approximately 5,500 mt. PT Dingxing maintained continuous production throughout 2024, and PT Yongheng ramped up production since mid-year, currently achieving a monthly output of around 1,500 mt and still increasing.
Indonesia's refined nickel production is expected to continue increasing in 2025, with potential new projects coming online in the future.