Indonesian Nickel Ore Prices Surge Amid Tight Supply

Indonesian Nickel

Weather Disruptions and Mine Closures Drive Market Shift

Indonesian nickel ore prices have risen sharply in 2025 as domestic supply constraints tighten. Prices for 1.6pc nickel content ore with 35pc moisture reached $53/wet metric tonne (wmt) in May, up from $44/wmt in January, driven by stronger premiums. The surge is linked to extended heavy rains on Sulawesi Island since November 2024, which disrupted operations in key hubs such as the Morowali Industrial Park. Sulawesi holds about 70pc of Indonesia’s total nickel ore resources.

The government’s order for state-owned PT Aneka Tambang (Antam) to halt mining in West Papua’s Raja Ampat — a marine protected area — further tightened supply. The site, with a 3mn wmt/yr quota, produces high-grade nickel ore. Limited availability has shifted mining firms toward tender-based sales rather than bilateral deals, while large buyers offer $1–2/wmt premiums to secure volumes over 100,000wmt.

Upstream-Downstream Price Divergence

Despite the rise in nickel ore prices, downstream products have seen declines. China’s stainless steel 304 cold-rolled coil prices fell to 13,250 yuan/t in May from 13,650 yuan/t in March. Indonesia’s nickel pig iron (NPI) export prices dropped to $116/metric tonne unit (mtu) in June from $124.50/mtu in March. This divergence stems from the upstream market remaining a seller’s market since 2023, as ore supply growth lags behind expanding nickel products capacity.

Indonesia’s nickel products output — including NPI, ferronickel, mixed hydroxide precipitate, and matte — is projected to rise to 2.49mn t in nickel metal equivalent in 2025, up from 1.83mn t in 2023. Consequently, ore demand could increase from 200mn wmt to 280mn wmt in the same period.

Rising Imports from the Philippines

With local ore insufficient, Indonesian producers have increased nickel ore imports from the Philippines since mid-2023. Imports surged to nearly 10mn t in 2024, representing around 6pc of total demand, and are on track for another increase in 2025. Shipments in January–April already exceeded imports in the first half of 2024.

Philippine ore is essential for blending with Indonesian ore to achieve the required silicon and magnesium ratios for different processing technologies, including RKEF and HPAL. Changing ore specifications after 15 years of intense mining in Indonesia have made such blending critical to meet production needs.

The Metalnomist Commentary

Indonesia’s nickel ore market illustrates how environmental conditions and policy decisions can shift global supply chains. As upstream prices climb despite downstream weakness, reliance on Philippine imports will likely deepen, reshaping trade flows and influencing pricing power in the nickel sector.