[SMM Analysis] New Order Negotiations in Indonesia for December—HPM & Premium Both Weakening?

As we approach late November, based on the current progress of negotiating new orders for Indonesian domestic trade laterite nickel ore, some mines are still maintaining an intended premium of around $17/wmt. However, due to the ongoing decline in domestic high-grade NPI prices, some downstream smelters have lowered their intended premium for new orders in December to around $15/wmt.

Additionally, due to bearish sentiment towards the overall price of Indonesian domestic trade laterite nickel ore for December, some smelters are expected to further reduce or partially cancel the upper limits and amounts of additional rewards for silicon-magnesium ratios and tonnage incentives. Despite the current market's bearish outlook on both Indonesian domestic trade laterite nickel ore and NPI prices for December as well as the significant decline in raw material cost support, some mines still have concerns and worries about the actual process of starting to use the new RKAB quotas from the end of December this year to January next year. On this basis, the raw material costs for high-grade NPI in Indonesia are expected to continue to decline in the future.