Indonesia Nickel Pricing Sets Floor and Ceiling as HPAL Costs Rise

Huafei Nickel Cobalt

Indonesia nickel pricing is increasingly defining the global nickel market as ore quotas, benchmark pricing rules and sulphuric acid availability reshape supply economics. UK broker Sucden Financial said Indonesia is now setting both the floor and ceiling for nickel prices.

Indonesia nickel pricing has moved the market away from a simple oversupply story. The key question is no longer only how much nickel Indonesia can produce, but how tightly Jakarta chooses to manage supply.

Indonesia nickel pricing is also becoming more important because HPAL producers face rising costs for ore, sulphur and sulphuric acid. These inputs directly affect mixed hydroxide precipitate production, which feeds battery-grade nickel supply chains.

The London Metal Exchange nickel price settled at $19,500/t on Wednesday, while Sucden said Indonesia’s current policy stance is creating a firmer floor around $18,000/t. But upside may also be capped if higher prices encourage new quota approvals.

Indonesia Turns Ore Policy Into Market Control

Indonesia remains the central force in nickel because it controls the largest source of new supply. In recent years, Indonesian output growth, large exchange stocks and Chinese-linked processing capacity defined the market.

That structure is now changing. Sucden said Indonesia appears focused on supporting prices and discouraging weaker producers, rather than allowing unrestricted supply growth.

The country has reduced 2026 ore quotas by around 30% year on year. It has also revised its domestic benchmark ore pricing system, strengthening the link between ore valuation, contained metals and producer costs.

This policy approach gives Indonesia unusual pricing power. If supply is restricted, the market finds a firmer floor. If prices rise too far, Indonesia can relax quotas and allow more material through the system.

That means nickel’s upside is managed. Sucden warned that the market should become more cautious near $20,000/t, where additional supply approvals and producer hedging could begin to limit further gains.

This is why Indonesia now acts as both support and restraint. It can tighten ore availability to stabilise prices, but it can also prevent a strong rally from damaging downstream competitiveness.

The result is a more policy-driven nickel market. Traditional inventory and demand indicators still matter, but Jakarta’s quota and ore pricing decisions are now central to global price formation.

HPAL Costs Expose Battery Nickel Supply Risk

HPAL production is becoming the second major driver of nickel pricing. Unlike nickel pig iron and ferro-nickel, HPAL is highly dependent on sulphur and sulphuric acid.

This makes battery-grade nickel supply more vulnerable to chemical input availability. HPAL plants need stable acid supply to process limonite ore into MHP, and Indonesia’s inventory buffers are relatively tight.

Huayou’s decision to place half of its Huafei Nickel Cobalt MHP capacity into temporary care and maintenance from 1 May shows how quickly reagent costs can affect production. The company cited elevated sulphur costs and prolonged high operating rates.

The HPAL sector now faces a double squeeze. Ore prices are rising because of Indonesia’s revised pricing framework, while sulphur and sulphuric acid costs are increasing because of tighter chemical supply.

This changes the nickel cost curve. Producers with secure ore, sulphur access and integrated infrastructure can operate more defensively. Those relying on external feedstock or exposed to high reagent prices face greater margin pressure.

The shift also matters for battery supply chains. MHP is a key intermediate for nickel sulphate and other battery chemicals. If HPAL margins weaken, battery-grade nickel output can become less responsive than headline capacity numbers suggest.

Sucden said tighter nearby spreads and higher trading volumes may indicate increased hedging and another shift in market balance. That suggests producers and traders are adjusting to a market where costs and policy now matter more than simple surplus.

Nickel is still not structurally tight like copper. But it is no longer a market where oversupply alone explains price direction. Indonesia’s supply discipline and HPAL cost inflation are giving nickel a stronger base, even if the rally remains capped.

The Metalnomist Commentary

Indonesia has turned nickel into a managed market where policy controls supply and chemistry controls cost. The winners will be producers with secure ore, acid access and enough balance-sheet strength to survive Jakarta’s tighter discipline.

Nickel Industries Indonesian Output Shows Ore Pressure Despite HPAL Growth

Nickel Industries, Indonesian

Nickel Industries Indonesian output was mixed in the first quarter as lower mining volumes and declining nickel grades contrasted with higher nickel pig iron and mixed hydroxide precipitate production. The Australia-based producer reported weaker ore output but stronger downstream processing across its Indonesian RKEF and HPAL assets.

Nickel Industries Indonesian output reflects the increasingly complex operating environment for nickel producers in Indonesia. Mining permits, ore grades, sulphur availability and downstream ramp-up timing are all shaping production performance.

Nickel Industries Indonesian output also shows why Indonesia’s nickel market can no longer be viewed only through capacity additions. Feedstock access and ore quality are becoming just as important as new processing plants.

Total nickel ore production fell by 30% from a year earlier to 3.96mn wet metric tonnes in January-March. However, output almost tripled from the previous quarter after mining activity recovered from RKAB quota delays late last year.

RKAB Quota Recovery Supports Ore Flow but Grades Weaken

Nickel Industries received 14.3mn wmt of 2026 RKAB nickel ore quota this year. This was 36% higher than its total approved quota of 10.5mn wmt in 2025.

The higher quota helped production recover from the December quarter, when mining was disrupted by RKAB delays. The company also plans to apply for additional RKAB quotas later this year.

The Hengjaya mine supplies ore to Nickel Industries’ RKEF and HPAL plants. These facilities produce nickel pig iron for stainless steel markets and mixed hydroxide precipitate for battery material supply chains.

Total NPI output from the Hengjaya, Ranger, Oracle and Angel RKEF operations rose by 4.4% year on year and 1.7% quarter on quarter to 274,086t.

However, nickel-contained production fell to 30,264t because the average nickel content of NPI dropped to 11% from 12.1% a year earlier. This is a critical signal for margins because lower grades reduce metal output even when furnace volumes rise.

The result shows how Indonesian nickel producers face a tightening relationship between ore availability and processing efficiency. Higher RKEF output does not automatically mean stronger nickel production if feedstock grades weaken.

HPAL Growth Continues as ENC Start-Up Moves to Second Quarter

Nickel Industries’ Huayue Nickel Cobalt HPAL project produced 21,526t of nickel and 2,370t of cobalt in MHP form during the first quarter. Nickel output rose by 1.7% from a year earlier, while cobalt output increased by 23%.

This growth strengthens Nickel Industries’ exposure to battery materials. MHP remains a key intermediate product for nickel sulphate and other battery chemical supply chains.

The company’s next major step is the Excelsior Nickel Cobalt HPAL project. Commissioning has been delayed to the second quarter, with full ramp-up targeted by the end of October.

ENC had previously been expected to start commissioning in the first quarter. The delay matters because HPAL projects are technically complex and depend on stable feedstock, acid supply, utilities and commissioning discipline.

Nickel Industries said it has enough sulphur inventory to support ENC’s ramp-up until the third quarter. The company previously bought sulphur at an average price of $450/t.

Sulphur availability is now a strategic issue for HPAL producers. Any disruption in sulphur or sulphuric acid supply can raise costs and slow production growth across Indonesia’s battery nickel chain.

The company also plans to list nickel cathode produced at ENC on both the London Metal Exchange and Shanghai Futures Exchange. Exchange approval would support market acceptance and improve the project’s commercial flexibility.

Nickel Industries increased its stake in ENC by 2% for $46mn on 1 April, lifting its interest to 46% and making it the project’s largest shareholder. This gives the company greater exposure to Indonesia’s move from NPI and MHP toward Class I nickel products.

The broader implication is clear. Nickel Industries is moving across the Indonesian nickel value chain, from ore mining and RKEF production into HPAL, MHP and exchange-deliverable cathode.

The Metalnomist Commentary

Nickel Industries’ quarter shows that Indonesia’s nickel growth is becoming more constrained by ore quality, RKAB permits and sulphur logistics. Capacity still matters, but the winners will be producers that control feedstock, manage HPAL complexity and secure recognised Class I nickel routes.

Indonesia HPAL Nickel Ore Costs Rise as New HPM Formula Hits Limonite Feedstock

Nickel ore

Indonesia HPAL nickel ore costs are set to rise sharply after the government’s revised mineral benchmark price lifted the mandated price floor for limonite ore. The new HPM formula is expected to increase limonite ore costs by at least 50%, adding immediate margin pressure to mixed hydroxide precipitate producers.

The revised HPM for limonite ore containing 1.2% nickel, 0.1% cobalt and 2% chromium is calculated at $45.24/wmt under the updated Harga Mineral Acuan. That is around 50% higher than early April transacted prices of about $30/wmt for 1.2% limonite ore.

Indonesia HPAL nickel ore costs are also far above the previous benchmark level. Under the old formula, the HPM for similar ore was only $17.17/wmt, meaning the new benchmark is nearly three times higher.

The change matters because HPAL operations rely on limonite ore as feedstock to produce MHP, which is used in battery-grade nickel and cobalt supply chains. A higher government-mandated ore floor will raise raw material costs, increase royalty payments and pressure margins across Indonesia’s battery nickel industry.

Limonite Ore Repricing Raises MHP Cost Pressure

The new HPM framework has the strongest impact on limonite ore because this material typically trades closer to benchmark values than saprolite ore. HPAL producers therefore face a more direct cost increase than rotary kiln-electric furnace operators.

MHP producers will now have to absorb higher ore purchase costs and higher royalties. Since royalties are linked to official valuation, the total cost increase could exceed the headline 50% rise in limonite ore pricing.

The revised formula also changes how Indonesia captures ore value. It includes cobalt, iron and chromium in nickel ore valuation, making these contained elements taxable. This is especially important for limonite ore because cobalt content adds value to HPAL feedstock.

The correction factor for cobalt is set at 30% when ore contains at least 0.05% cobalt. Iron carries a 30% correction factor when content is 35% or lower, while chromium carries a 10% correction factor.

This means Indonesia is no longer valuing nickel ore mainly by nickel grade. The government is moving toward a broader contained-metal pricing model, capturing more value from battery-related by-products and ore chemistry.

For MHP producers, this creates a structural cost problem. HPAL projects were built around access to Indonesian limonite ore, sulphuric acid and integrated processing infrastructure. If ore costs rise by more than a third to half, the cost floor for MHP production moves higher.

This could affect downstream nickel sulphate and cathode material economics. Producers with stronger integration, lower acid costs and better logistics will be better positioned. Higher-cost operators may face squeezed margins if MHP prices do not rise enough to offset the new ore benchmark.

The change also comes as Indonesia tightens wider nickel policy. Mining quota uncertainty, export tax discussions and stricter pricing formulas all point to a broader state strategy of capturing more mineral value before material moves downstream.

Sulphuric Acid Tightness Adds a Second Cost Shock

Indonesia HPAL nickel ore costs are rising at the same time as sulphuric acid prices surge. This creates a double pressure point for MHP producers.

HPAL operations require large volumes of sulphuric acid to leach nickel and cobalt from limonite ore. Any disruption in sulphur or acid supply directly affects processing costs and production reliability.

The US-Iran conflict has stranded several sulphur cargoes bound for Indonesian HPAL producers, preventing them from transiting the Strait of Hormuz. As a result, producers have shifted toward buying sulphuric acid directly.

That market was already tight because of limited copper concentrate availability. Sulphuric acid supply is expected to tighten further as China suspends exports from May.

Southeast Asian sulphuric acid prices have risen sharply. Prices reached $277.50/t cfr on 9 April, up 71% from $162.50/t before the conflict.

This is a major issue for Indonesian HPAL plants. Higher limonite ore costs increase feedstock expenses, while higher sulphuric acid prices increase processing costs. Together, they raise the full cost of producing MHP and weaken the advantage of low-cost Indonesian battery nickel.

Saprolite ore faces less immediate disruption. Saprolite is mainly used in RKEF operations to produce nickel pig iron and ferronickel. Although the new HPM for typical saprolite ore containing 1.6% nickel, 18% iron and 2% chromium rises to $52.90/wmt from $29.94/wmt, it remains below early April transacted prices of about $70/wmt.

This means RKEF producers may see limited immediate transaction impact because market prices are already above the benchmark. HPAL producers, by contrast, face a direct reset of the cost floor.

The difference could reshape relative economics between Indonesia’s stainless-linked and battery-linked nickel chains. NPI producers remain supported by high saprolite prices, while HPAL producers now face rising limonite, royalty and acid costs.

For the global battery supply chain, the key risk is that Indonesia’s MHP cost curve shifts upward. That could support nickel sulphate prices over time, especially if acid tightness persists or HPM-linked royalty costs remain elevated.

For Indonesia, the policy strengthens resource rent capture. The government is recognising that limonite ore contains not only nickel but also cobalt and other valuable elements. This gives Jakarta a stronger fiscal claim over battery material feedstock.

However, the policy also increases operating uncertainty. HPAL investors need predictable ore pricing, acid availability and tax treatment to justify large-scale expansion. A sharp change in HPM could force producers to revisit cost assumptions, procurement strategies and product pricing.

The Metalnomist Commentary

Indonesia’s new HPM formula marks a turning point for HPAL economics. The country is capturing more value from limonite ore, but the combined shock of higher ore prices, royalties and sulphuric acid costs could reset the cost floor for global MHP supply.

NPI–Class I Nickel Spread Narrows as Metal Oversupply Pressures Prices

Nickel cathode

NPI–class I nickel spread narrowed sharply in March as persistent oversupply in the class I nickel market pushed metal prices lower, while nickel pig iron prices stayed supported by elevated production costs. The average spread fell to $2,975/t in March, down from the 2025 annual average of $3,696/t.

The narrower NPI–class I nickel spread shows how differently the two nickel markets are behaving. Class I nickel remains under pressure from high exchange stocks and weak absorption from battery and alloy users. NPI, by contrast, is being held up by Indonesian ore costs and a firmer production cost floor.

The current spread also discourages additional class I output from NPI conversion. Estimated conversion costs from NPI to class I nickel remain around $4,000/t, meaning producers using NPI as feedstock would face negative margins at current price levels.

This creates an important signal for the nickel supply chain. Oversupply is still weighing on refined metal, but high feedstock and processing costs are preventing prices from falling evenly across all nickel products.

Class I Nickel Oversupply Keeps Metal Prices Under Pressure

Class I nickel oversupply remains the main reason behind the compressed spread. London Metal Exchange nickel stocks reached 289,506t on 26 February, the highest level since May 2018.

Ample exchange inventory has pressured class I nickel prices and opened an import arbitrage window into China. China’s nickel imports rose by 18% in January-February as lower overseas prices made imported metal more attractive.

However, end-user demand has not been strong enough to absorb the surplus. Battery and alloy-sector consumption remained insufficient to clear the additional metal units, pushing Shanghai Futures Exchange nickel stocks higher.

SHFE nickel inventories rose to 65,764t on 10 April from 45,544t on 9 January. This inventory build shows that imports and domestic availability are running ahead of immediate consumption.

The oversupply problem is structural in the near term. New class I capacity has continued to emerge, while demand from stainless steel, batteries and specialty alloys has not grown fast enough to rebalance the market.

The NPI conversion route is therefore unattractive. When the NPI–class I nickel spread sits below conversion cost, producers have little incentive to turn NPI into refined metal. This helps prevent additional supply from that route, but it does not immediately remove existing class I oversupply.

NPI prices have been more resilient because they are tied closely to Indonesian ore economics. Indonesian nickel ore prices remain elevated and continue to trade above the government-mandated price floor.

Concerns over tight ore availability have supported feedstock values. This has limited NPI producers’ willingness to cut prices, even though stainless steel demand remains only average.

That cost floor is important. NPI is not rising because downstream demand is exceptionally strong. It is holding because ore, mining quotas and Indonesian pricing policy are preventing a deeper fall.

The result is a distorted market structure. Class I nickel is being pulled down by inventory pressure, while NPI is being supported by feedstock costs. This explains why the spread has narrowed despite weak overall nickel sentiment.

MHP and HPAL Costs Could Rebuild the Spread Over Time

Mixed hydroxide precipitate is becoming the more important cost driver for future class I nickel production. Much of the newly added class I capacity relies on MHP feedstock rather than NPI.

Integrated producers with their own Indonesian MHP capacity have a cost advantage. Their MHP production costs are estimated at around $13,000/t in nickel metal equivalent, with conversion costs from MHP to metal at roughly $3,000/t.

This places the total cost of class I production through the MHP route at about $16,000/t. That cost base can still support production for integrated operators, but it leaves less room for producers relying on third-party MHP.

The market problem is that MHP supply is not sufficient to meet all feedstock requirements for new class I capacity. This creates competition for MHP units and limits how much low-cost refined nickel can be produced through this route.

Cost pressure is also rising across HPAL operations. Middle East tensions have tightened sulphur availability and lifted sulphur prices, which directly affects MHP producers that rely on sulphuric acid-intensive processing.

Sulphur and sulphuric acid are central to HPAL economics. Any disruption to sulphur flows can raise operating costs, reduce margins or force producers to curtail output if acid availability becomes constrained.

Indonesia’s revised nickel ore pricing formula adds another layer of pressure. The new formula is expected to have a greater impact on ore consumed by HPAL projects than on ore used by rotary kiln electric furnace operations.

This is because HPAL ore often trades closer to official pricing levels, while RKEF ore used for NPI already trades at premiums well above the benchmark. As a result, HPAL producers may feel the revised HPM framework more directly.

Higher ore prices and higher taxes could lift MHP production costs. That would eventually raise the cost floor for class I nickel produced through the MHP route, especially for integrated producers that had previously enjoyed lower feedstock costs.

This cost inflation may support class I nickel prices over time. While current oversupply is weighing on metal values, producers cannot keep adding supply indefinitely if feedstock and conversion costs rise.

NPI prices are also likely to remain anchored by costs. Indonesian ore tightness, quota uncertainty and pricing reforms should continue to support NPI even if stainless steel demand stays moderate.

As MHP costs rise and NPI prices remain cost-supported, the NPI–class I nickel spread may widen back toward the $3,500-4,000/t range over time. That would restore a more normal relationship between feedstock products and refined metal.

However, the timing depends on inventory absorption. Class I nickel prices will struggle to recover strongly until exchange stocks stop rising and downstream demand improves.

For battery supply chains, the key issue is cost pass-through. If MHP and HPAL costs rise while class I prices remain weak, margins across nickel sulphate and cathode material chains could tighten.

For stainless steel producers, NPI resilience means raw material costs may remain sticky even without strong demand. This could limit margin recovery if finished stainless prices do not rise in parallel.

The nickel market is therefore entering a complex adjustment phase. Oversupply is pushing refined metal lower, while policy, ore availability, sulphur costs and HPAL economics are raising the cost floor beneath intermediate products.

The Metalnomist Commentary

The narrowing NPI–class I nickel spread is not a sign of healthy convergence. It reflects class I oversupply on one side and cost-protected NPI on the other. The next shift will likely come from rising HPAL and MHP costs, not from a sudden recovery in nickel demand.

Indonesia HPM Formula Raises Nickel Ore Cost Risk for HPAL Producers

ESDM

Indonesia HPM formula changes will reshape nickel ore pricing from 15 April, adding new cost pressure across the country’s nickel processing chain. The energy and mineral resources ministry revised the mineral benchmark price mechanism for nickel and aluminium ore, with nickel valuation now expanded beyond nickel content alone.

The Indonesia HPM formula raises the correction factor for 1.6% nickel ore to 30%, compared with the previous 20% correction factor for 1.9% ore. Under the new framework, the correction factor rises or falls by one percentage point for every 0.1% change in nickel content.

This means the correction factor for 1.9% nickel ore will rise to 33%. The change increases the official value of nickel ore and could raise taxes, royalties and feedstock costs for processors that rely on HPM-linked transactions.

The Indonesia HPM formula also adds cobalt, iron and chromium into ore valuation. This is a major policy shift because these contained elements were not previously priced in the same way. Indonesia is now moving toward a more complete ore-value model, especially for laterite ores used in battery and stainless steel supply chains.

Cobalt, Iron and Chromium Inclusion Changes Nickel Ore Valuation

Indonesia’s new nickel HPM framework gives cobalt a correction factor of 30% when ore contains at least 0.05% cobalt. This is particularly important for high-pressure acid leach producers because cobalt-bearing ore can generate additional value through mixed hydroxide precipitate.

The ministry also introduced a 10% correction factor for iron when ore contains 35% or less iron. Chromium content also carries a 10% correction factor. These additions make ore valuation more complex and link pricing more closely to the full chemistry of laterite deposits.

The inclusion of cobalt is the most strategically important change. Indonesia’s HPAL projects produce nickel-cobalt intermediates for battery supply chains, and cobalt content can materially affect project economics. By taxing cobalt-bearing value inside ore, Jakarta is capturing more upstream rent from battery-linked mineral flows.

The Indonesia HPM formula therefore moves beyond a simple nickel-grade benchmark. It pushes the country toward a broader mineral-value system that recognises by-product metals and secondary contained value.

The ministry kept the Harga Mineral Acuan reference price unchanged. This means the immediate policy impact comes from correction factors and added contained elements, rather than a change in the headline reference price.

Market participants are now assessing how the new rules will pass through to actual transactions. For nickel ore used in rotary kiln-electric furnace production, spot prices remain nearly double the HPM level. This limits the immediate impact on some stainless-linked ore trades because market prices already sit well above the official benchmark.

The impact is likely to be much stronger for HPAL ore. Ore used in HPAL processing often trades without the same premium seen in RKEF feedstock. As a result, the revised HPM formula could lift transacted HPAL ore prices by more than a third.

That cost increase would move directly into battery-grade nickel economics. Market participants estimate that higher ore prices and taxes could raise mixed hydroxide precipitate production costs by more than $1,000/t in nickel metal equivalent.

This matters because Indonesia has become the centre of global MHP supply growth. Chinese-backed HPAL projects rely on Indonesian ore, sulphuric acid, energy and logistics to supply nickel and cobalt intermediates to global battery chains. Higher ore costs could narrow margins across MHP, nickel sulphate and cathode material supply.

The change also arrives during a period of wider nickel policy uncertainty. Indonesia has been tightening mining quotas, reviewing export taxes and seeking greater value capture from its mineral resources. The revised HPM formula fits that direction by increasing government control over pricing and taxable value.

Nickel Policy Shift Extends to Bauxite and Signals Broader Resource Control

Indonesia’s pricing reform did not stop at nickel. The ministry also revised the HPM formula for bauxite, changing the price basis to dollars per wet metric tonne from dollars per dry metric tonne.

The bauxite change adds a silica discount and raises the correction factor to $1.40/wmt for each one percentage point increase in aluminium oxide content. The previous formula used $1/dmt. This changes how moisture and ore quality are reflected in benchmark pricing.

The ministry also changed the price basis for lead ore to dollars per wet metric tonne from dollars per dry metric tonne. This effectively removes moisture content from the pricing formula and simplifies the benchmark around wet material values.

These changes suggest a broader policy direction. Indonesia is refining benchmark pricing across mineral commodities to improve tax collection, capture more contained value and align official pricing with ore quality.

For nickel, the change has immediate market significance because Indonesia dominates global laterite supply. Nickel ore pricing affects stainless steel, ferronickel, nickel pig iron, MHP, nickel sulphate and battery cathode supply chains.

The Shanghai Futures Exchange nickel price response showed that traders are treating the policy as price-supportive. Nickel closed at Yn136,900/t after rising from Yn133,010/t on 3 April, with participants citing support from the revised HMA-linked pricing framework.

However, the real market impact will depend on how producers, smelters and government agencies implement the rules. If HPM-based taxes rise sharply while spot ore prices remain high, margin pressure could build across processors with weaker cost positions.

HPAL producers are the most exposed because their feedstock pricing may move more directly with the revised benchmark. RKEF operators may see less immediate change because their ore costs already reflect strong market premiums.

For battery materials buyers, the risk is that Indonesia’s cost base becomes more expensive even as global nickel markets remain oversupplied. Higher ore valuation may not tighten physical supply immediately, but it can raise the floor for production costs in one of the world’s most important nickel processing hubs.

For Indonesia, the policy strengthens resource sovereignty. The government is using pricing formulas, mining quotas, export controls and tax compliance to ensure that more mineral value stays inside the country. This could support domestic revenue and downstream investment, but it may also increase uncertainty for processors and foreign investors.

The new framework also creates a precedent. If Indonesia successfully captures more value from cobalt, iron and chromium in nickel ore, other resource-rich countries may consider similar contained-metal pricing models.

The Metalnomist Commentary

Indonesia’s revised HPM formula shows that nickel policy is moving from volume control to value capture. The biggest impact will fall on HPAL producers, where cobalt-bearing ore valuation could raise MHP costs and change battery nickel economics.

Hanrui Indonesian Nickel Smelter Nears Completion With Hot Commissioning Start

Hanrui Indonesian

Hanrui Indonesian nickel smelter development has moved into hot commissioning, signalling that Nanjing Hanrui’s delayed nickel matte project in Central Sulawesi is nearing completion. The Chinese cobalt producer launched the commissioning phase on 10 April at the Huabao Industrial Park in Morowali.

The Hanrui Indonesian nickel smelter is designed to produce 20,000 t/yr of nickel matte on a nickel metal equivalent basis. The project will use oxygen-enriched continuous blowing technology to convert nickel feedstock into matte for downstream processing.

Hanrui Indonesian nickel smelter progress matters because Indonesia remains the centre of global nickel capacity growth. New matte projects help connect Indonesian nickel resources with battery materials supply chains, especially where producers need feedstock for nickel sulphate and other battery-grade products.

Hot Commissioning Marks Final Step Before Commercial Output

Hot commissioning means production lines are being tested under operating conditions before full commercial production begins. This stage is important because it tests equipment integration, process stability, safety systems and product quality.

Hanrui had originally planned to start production in May 2025, but later deferred the schedule to March 2026. The start of hot commissioning now suggests the company is moving closer to operational readiness after earlier delays.

The project’s location in Morowali gives Hanrui access to one of Indonesia’s most important nickel industrial clusters. Morowali has become a major processing centre for Chinese-backed nickel investments, supported by integrated infrastructure, smelting capacity and downstream materials ambitions.

Chinese Producers Expand Nickel Matte Capacity in Indonesia

Hanrui’s project forms part of a broader Chinese investment wave in Indonesian nickel processing. Chinese companies are building matte, mixed hydroxide precipitate, ferronickel and other nickel products to serve both stainless steel and battery markets.

Huayou has also started construction of its Huaxing nickel matte project at the Indonesia Pomalaa Industry Park. That project is planned for 40,000 t/yr of nickel matte on a nickel metal equivalent basis, although Huayou has not disclosed its construction timeline or start-up date.

The expansion of nickel matte capacity gives Chinese producers more flexibility in feedstock flows. It also strengthens Indonesia’s position as a processing base, not only an ore supplier.

However, new capacity still faces execution risks. Power supply, sulphur availability, environmental controls, commissioning performance and market prices will determine how quickly these projects move from nameplate capacity to stable commercial production.

The Metalnomist Commentary

Hanrui’s hot commissioning shows that Indonesia’s nickel buildout continues despite delays and market uncertainty. The strategic issue is whether new matte capacity can ramp smoothly enough to support battery supply chains without adding further pressure to an already competitive nickel market.

Lygend Indonesian Nickel Output Drives Sharp Profit Growth in 2025

Lygend Indonesia

Lygend Indonesian nickel output drove a sharp increase in the company’s revenue and profit in 2025. China’s major nickel producer reported revenue of 40.24bn yuan, or about $5.85bn, up 379% from a year earlier.

Net profit attributable to shareholders rose by 61% to 2.85bn yuan. The improvement reflected higher production from Lygend’s Indonesian nickel operations and stronger cobalt prices after export controls in the Democratic Republic of Congo tightened the cobalt market.

Lygend Indonesian nickel output also strengthened the company’s position across both battery and stainless steel raw material chains. Its Indonesian assets produce mixed hydroxide precipitate, nickel sulphate, cobalt sulphate and ferronickel, giving the company flexibility across demand cycles.

HPAL and RKEF Projects Lifted Nickel and Cobalt Volumes

Lygend’s Obi Island HPAL project operated at full capacity in 2025. The six-line facility produced 120,000t in nickel metal equivalent and 14,250t in cobalt metal equivalent during the year.

The HPAL project can produce mixed hydroxide precipitate, nickel sulphate or cobalt sulphate depending on market demand. This flexibility matters because battery materials markets can shift quickly between intermediate products and refined sulphate demand.

The company’s HJF phase I project also ran at nameplate capacity, producing 95,000t in nickel metal equivalent through rotary kiln electric furnace technology. Meanwhile, Lygend ramped up output at its KPS phase II project, which has nameplate capacity of 185,000 t/yr in nickel metal equivalent.

Cobalt Prices Helped Offset Rising Input Costs

Lygend benefited from higher cobalt prices because its MHP contains cobalt. The DRC’s cobalt export controls lifted cobalt market sentiment and increased the value of cobalt-bearing intermediates.

Cobalt prices more than doubled during 2025, rising to about $25/lb in December from around $11.5/lb in January. This gave Lygend additional revenue support from MHP sales.

The stronger cobalt contribution helped offset higher costs for sulphur, energy and other consumables. These inputs remain critical for HPAL operations, where sulphuric acid availability and cost can directly affect processing economics.

Lygend also received approval from Indonesia for sulphuric acid import quotas. This allows partial substitution of sulphur with sulphuric acid when needed, improving feedstock flexibility and supply chain resilience.

The Metalnomist Commentary

Lygend’s 2025 results show how Indonesia has become the operating center of China-linked nickel growth. The company’s advantage now comes from scale, HPAL flexibility and cobalt exposure, but sulphuric acid supply will remain a key cost variable.

Brunp Battery Materials Project Expands CATL’s Recycling and LFP Supply Chain

Brunp Battery Materials

Brunp battery materials project development has advanced in Yichang, Hubei province, as Guangdong Brunp Recycling Technology broke ground on a 500,000 t/yr production complex. The project carries total investment of 6.1bn yuan, or about $840 million.

The new plant is designed to produce 300,000 t/yr of iron phosphate, 180,000 t/yr of nickel sulphate and 12,000 t/yr of cobalt sulphate. Construction is scheduled for completion in the second half of 2027.

Brunp battery materials project investment strengthens the upstream materials platform behind China’s battery industry. Brunp is a controlling subsidiary of CATL, the country’s largest battery producer, and focuses on recycling, resources and battery materials.

Yichang Base Builds Scale Across LFP and Recycling

The Yichang base will become a major integrated battery materials hub once the new project is operational. It will have 750,000 t/yr of iron phosphate capacity, 450,000 t/yr of lithium iron phosphate capacity and 500,000 t/yr of battery recycling capacity.

Brunp has already made several investments in Yichang since entering the city in 2021. The company launched a 450,000 t/yr LFP factory in December, reinforcing the site’s role in China’s expanding phosphate-based battery supply chain.

This matters because LFP batteries continue to gain share in electric vehicles and energy storage systems. Large-scale iron phosphate and LFP capacity gives CATL-linked supply chains stronger control over cost, material availability and recycling integration.

Recycling Capacity Deepens China’s Battery Materials Control

Brunp Recycling processed more than 200,000t of power batteries in 2025. The company now plans to raise total recycling and processing capacity to more than 1mn t/yr by 2030.

The strategy reflects a wider shift in battery materials sourcing. Recycling is becoming a strategic source of nickel, cobalt, lithium and other battery inputs, especially as governments and manufacturers seek lower-carbon and more secure supply chains.

The Yichang project also adds nickel sulphate and cobalt sulphate capacity, linking recycling with precursor material production. However, weaker upside in metals prices has limited buyer appetite in China’s black mass market, even as NCM payables edged higher in early March.

The Metalnomist Commentary

Brunp’s Yichang expansion shows how CATL is tightening control over the full battery materials loop, from recycling to LFP and sulphate production. The project also underlines China’s advantage in building scale across both primary materials processing and circular battery supply chains.

Jutai Nickel Cathode Production Adds Flexibility to China’s Downstream Nickel Chain

Zhejiang Jutai Plant

Jutai nickel cathode production has started at Zhejiang Jutai’s integrated refinery in Zhoushan, adding new capacity to China’s fast-expanding downstream nickel processing sector. The facility has 30,000 t/yr of nickel cathode capacity and can use mixed hydroxide precipitate or nickel matte as feedstock.

Jutai nickel cathode production strengthens the company’s ability to respond to changing nickel market conditions. The same Zhoushan site also hosts a 100,000 t/yr nickel sulphate project that was commissioned in October 2025, giving the complex around 55,000 t/yr of nickel capacity on a metal equivalent basis.

The new operation matters because China is rapidly converting imported nickel intermediates into higher-value products. Jutai nickel cathode production shows how MHP and matte supply are reshaping the country’s refining system beyond battery chemicals alone.

MHP and Matte Supply Drive New Refining Capacity

Nickel intermediates are becoming the foundation of China’s new nickel processing model. Growing supplies of MHP and nickel matte allow refiners to produce nickel sulphate, nickel cathode, and other downstream products depending on margins and customer demand.

Zhejiang Jutai’s Zhoushan complex reflects this flexible approach. The company can switch between nickel sulphate and nickel cathode output, which gives it commercial optionality across battery materials and refined metal markets. This flexibility is important when nickel prices, sulphate demand, and stainless steel-linked sentiment move in different directions.

The development also shows how China continues to capture value from Indonesia-linked nickel flows. As MHP and matte availability expands, Chinese refiners can build more diversified processing routes and strengthen their role in the global nickel value chain.

China Nickel Cathode Output Continues to Expand

China’s nickel cathode production reached 415,000t in 2025, up 24pc from the previous year. Output is expected to keep rising in 2026 as new capacity starts up, existing plants expand, and firmer nickel prices improve production economics.

Higher LME nickel prices are also supporting the sector. The average LME cash price reached $15,150/t in 2025, while the year-to-date average climbed to $17,482/t by late February, driven partly by reduced Indonesian nickel ore supply.

Shaanxi Jutai, Zhejiang Jutai’s parent company, already has experience in battery material production. Its Xi’an complex began producing nickel sulphate in 2018 and also produces cobalt sulphate, manganese sulphate, vanadium pentoxide, and molybdenum products. This gives the group a broader platform across strategic metals used in batteries, alloys, and industrial materials.

The Metalnomist Commentary

Jutai’s Zhoushan project highlights China’s strength in processing flexibility. The country is not only adding nickel capacity; it is building assets that can shift between battery chemicals and refined metal as market conditions change.

Nickel Industries RKAB Quota Secures Feedstock for Indonesian HPAL Expansion

RKAB

Nickel Industries RKAB quota approval gives the Australian producer a stronger feedstock position in Indonesia’s tightening nickel market. The company has secured a 2026 nickel ore quota of 14.3mn wet metric tonnes, supporting both its rotary kiln electric furnace operations and its expanding battery-grade nickel platform.

The approved quota represents a 36pc increase from the company’s 10.5mn wmt quota in 2025. Of the total, up to 6mn wmt of saprolite ore will supply Nickel Industries’ RKEF operations, while 8.3mn wmt of limonite ore will support feed requirements for the Excelsior Nickel Cobalt HPAL project.

Nickel Industries RKAB quota approval follows the company’s receipt of an environmental permit from Indonesia’s environment ministry. The AMDAL permit is valid for five years and could support a further quota increase to around 19mn wmt in 2026, giving the company room to apply for additional feedstock later this year.

ENC HPAL Project Raises Nickel Industries’ Battery Materials Exposure

The ENC HPAL project is central to Nickel Industries’ shift beyond ferronickel and nickel pig iron-linked operations. The project is expected to be commissioned in the first quarter and is designed to produce 72,000 t/yr of nickel in mixed hydroxide precipitate, nickel sulphate, and nickel cathode.

This matters because limonite ore availability is becoming increasingly strategic in Indonesia. HPAL plants require consistent limonite feed to produce MHP and downstream nickel chemicals for batteries. Any restriction in ore quotas can directly affect project ramp-up schedules, operating rates, and customer supply planning.

Nickel Industries RKAB quota approval therefore gives the company an advantage over producers facing sharper quota cuts. It also supports the company’s ability to position ENC as part of Indonesia’s growing battery materials supply chain, where nickel intermediate production remains a major source of global supply growth.

Indonesia’s Quota Tightening Keeps Ore Supply Risk High

Indonesia’s wider nickel market remains under pressure despite Nickel Industries’ higher quota. The government plans to cut the 2026 RKAB nickel production quota to 260mn-270mn t from about 379mn t in 2025. That reduction signals a more controlled policy environment and tighter ore availability across the sector.

The impact is already visible. Weda Bay Nickel reportedly saw its RKAB cut by 70pc to 12mn wmt this year, showing that quota approvals are becoming more selective. Producers with stronger environmental approvals and clearer downstream integration may be better positioned, while others face greater uncertainty.

Nickel Industries also experienced the operational risk of delayed approvals. Its nickel ore production fell 77pc year on year to 1.67mn wmt in October-December 2025 because of downtime linked to RKAB delays. The company has since resumed operations at Hengjaya and expects mine sales to recover, but the episode shows how regulatory timing can quickly affect Indonesian nickel output.

The Metalnomist Commentary

Indonesia’s nickel market is entering a more disciplined phase where permits, ESG compliance, and quota access matter as much as installed capacity. Nickel Industries’ approval is positive, but the wider RKAB tightening means ore security will remain one of the biggest risks for nickel and battery materials supply.

Critical Mineral Stockpiles Need an Oil-Style Security Framework

IEA map

Critical mineral stockpiles are moving closer to the center of industrial security policy. The IEA says governments should apply an oil-style security framework to critical minerals. The goal is to reduce exposure to supply disruptions caused by wars, trade controls, and geopolitical shocks. As a result, critical mineral stockpiles are becoming a more urgent policy priority.

The comparison with oil is important. After the 1973 oil crisis, IEA members built coordinated emergency stock systems. That framework helped countries respond to severe supply shocks over decades. Therefore, the IEA now argues that strategic mineral reserves should serve a similar role in critical materials.

However, critical minerals are more complex than oil. These materials vary widely in physical form, storage requirements, market size, and end-use exposure. That means governments cannot simply copy the oil model without major adaptation. Consequently, critical mineral stockpiles will need more tailored design and coordination.

Critical Mineral Stockpiles Must Match Real Industrial Use

Critical mineral stockpiles will only work if countries store the right materials in usable forms. The IEA says governments should hold the forms actually consumed by industry in their regions. That means stockpiling oxides, magnets, salts, or refined products rather than only raw ores. As a result, stockpile design becomes an industrial strategy issue, not just a reserve policy issue.

The most urgent materials are already becoming clear. Rare earths, gallium, germanium, graphite, tungsten, and manganese sit near the top of the risk list. Many of these materials already face export controls or high supply concentration. Therefore, stockpiling policy is increasingly tied to real trade vulnerability.

The IEA also warns against focusing only on today’s restricted materials. Governments should prepare for future disruptions in markets with high volatility or fragile new supply. Lithium, vanadium, cobalt, and rare earths all fit that profile. Consequently, critical mineral stockpiles must look forward, not only backward.

Storage Costs and Governance Will Decide Whether the Model Works

Storage complexity is one of the biggest differences between oil and minerals. Lithium hydroxide degrades quickly in air and reacts badly to humidity. Gallium needs temperature control because of its low melting point. Therefore, stockpiling policy must account for chemistry, warehousing, and shelf life.

Costs also vary sharply by material. Minor metals such as gallium and germanium require relatively small tonnages. That makes stockholding more affordable in absolute terms. However, bulkier materials such as lithium hydroxide, synthetic graphite, and nickel sulphate become much more expensive to store at scale. As a result, stockpile strategy must balance urgency with economic practicality.

Governance may matter even more than storage. The IEA supports a public-private hybrid system with international cooperation. Countries should coordinate purchasing, release principles, and emergency deployment to avoid market distortion. Meanwhile, they can support diversification, aggregate demand, and reserve capacity for crises.

The Metalnomist Commentary

The IEA is right to frame critical mineral stockpiles as a security issue, not just a trade issue. But the real challenge will be execution. Oil can be stored in barrels, while critical minerals require far more selective, technical, and coordinated stock strategies.

BSE On-Spec MHP Output Marks a New Step in Indonesia’s Nickel Battery Chain

Harum Energy

BSE on-spec MHP output marks an important commissioning milestone for Indonesia’s battery materials industry. Blue Sparking Energy has now produced qualified mixed hydroxide precipitate at its HPAL plant in Weda Bay Industrial Park. That confirms the project has moved beyond early trial production into a more advanced operating stage. As a result, BSE on-spec MHP output strengthens confidence in another major Indonesian downstream nickel asset.

This matters because MHP remains a critical intermediate product for the battery supply chain. BSE’s plant has nameplate capacity of 67,000 t/yr of nickel in MHP and 7,500 t/yr of cobalt. Those are meaningful volumes for a project that only began trial production in late November 2025. Therefore, BSE on-spec MHP output signals that new capacity in Indonesia is still moving forward despite a crowded nickel market.

The achievement also matters at the industrial park level. BSE is now the second MHP producer operating in IWIP after Huafei. That adds another layer of downstream conversion inside one of Indonesia’s most important nickel processing hubs. Consequently, Weda Bay MHP production is gaining more depth and scale.

Indonesia HPAL Plant Commissioning Is Advancing Toward Stable Operations

The Indonesia HPAL plant operated by BSE now appears closer to commercial readiness. Producing on-spec material is one of the most important steps in any HPAL commissioning cycle. It shows the process can deliver product quality that meets market requirements. Therefore, the milestone matters more than a simple trial output update.

HPAL projects are rarely judged only by design capacity. They are judged by whether they can ramp safely, consistently, and within product specification. BSE began construction in late December 2023 and initially targeted early 2026 for commercial operations. As a result, this update suggests the plant is moving broadly in line with that schedule.

This progress also reinforces Indonesia’s commitment to downstream nickel conversion. The country has built strong momentum in NPI, matte, and now MHP capacity. However, each new HPAL success still matters because technical execution remains difficult. Therefore, BSE on-spec MHP output is a useful operating signal for the wider market.

Weda Bay MHP Production Supports Harum’s Broader Downstream Strategy

Weda Bay MHP production also fits clearly into Harum Energy’s broader portfolio strategy. Harum already controls downstream assets through subsidiaries producing NPI and nickel matte. Adding qualified MHP output gives the group stronger exposure across multiple processing routes. Consequently, the company is building a more diversified nickel conversion platform.

That portfolio approach matters in the current market. Different nickel products serve different end markets, from stainless steel to battery chemicals. A producer with exposure to NPI, matte, and MHP can respond more flexibly to changing demand and pricing conditions. Therefore, BSE on-spec MHP output strengthens Harum’s strategic position, even in an oversupplied nickel environment.

The timing is also notable because more Indonesian battery-materials capacity is still coming. Harum also holds a stake in Nickel Industries, whose ENC project is preparing to add more nickel units through MHP, sulphate, and cathode production. As a result, BSE’s milestone is part of a broader wave of Indonesian downstream growth rather than a standalone event.

The Metalnomist Commentary

This milestone is important because it shows Indonesia’s nickel chain is still expanding deeper into battery materials. The real question now is not whether new HPAL projects can start. It is whether the market can absorb all this qualified downstream supply without further margin pressure.

Nickel Industries Hengjaya Mine Suspension Raises New Risks for Indonesia Nickel Supply

Nickel Industries

Nickel Industries Hengjaya mine suspension has introduced fresh uncertainty into Indonesia nickel supply. The company halted all operations after a fatal incident on 25 March. The suspension affects its Hengjaya mine in Morowali. As a result, Nickel Industries Hengjaya mine suspension now matters beyond one site.

The timing is especially sensitive for the company’s wider growth plan. Hengjaya recently secured a 2026 RKAB nickel ore quota of 14.3mn wmt. The company also planned to seek additional quota later this year. Therefore, the operational pause could affect mining momentum and project sequencing.

The incident also connects directly to downstream expansion. The fatal accident occurred on the haul road near infrastructure for the slurry plant and dry stacked tailings facility. Those works support the Excelsior Nickel Cobalt project. Consequently, investors will now watch both safety findings and project timing more closely.

Hengjaya Mine Operations Face Unclear Restart Timing

Hengjaya mine operations now depend on the outcome of the government investigation. Indonesia’s energy and mineral resources ministry is expected to begin its review immediately. However, the company has not disclosed when operations may restart. That leaves near-term mine supply visibility weak.

This uncertainty matters because Hengjaya is not a minor asset. Nickel Industries owns 80pc of the mine. It is a core upstream source for the company’s Indonesian nickel position. Therefore, even a temporary disruption could affect ore flow planning and internal coordination.

The broader market will also pay attention to regulatory response. Indonesian mining incidents often trigger tighter scrutiny on operating practices and site controls. That can slow activity beyond the initial suspension period. Meanwhile, safety performance remains critical for companies expanding aggressively in the country.

ENC HPAL Project Progress Now Faces Greater Market Attention

ENC HPAL project development now becomes the second major issue for Nickel Industries. The project is expected to be commissioned in the first quarter of this year. It is designed to produce 72,000 t/yr of nickel. Output is planned as MHP, nickel sulphate, and nickel cathode.

That production mix gives the project importance across both stainless steel and battery materials chains. The company had planned to ramp up ore supply through larger RKAB quotas. However, the Hengjaya interruption may complicate that path. As a result, the market will focus on whether commissioning stays on schedule.

For Indonesia nickel supply, this event highlights a recurring industry challenge. Rapid expansion creates pressure on mining, logistics, and downstream integration at the same time. Safety incidents can quickly expose those weak points. Therefore, execution quality matters as much as capacity ambition.

The Metalnomist Commentary

This suspension is important because it touches both ore supply and downstream nickel conversion. Indonesia’s nickel industry still grows fast, but speed does not remove operational risk. If the restart takes time, the market will reassess how resilient integrated nickel projects really are.

Chengtun halts Indonesian nickel matte project as battery materials economics shift

Chengtun

Chengtun halts Indonesian nickel matte project after reassessing the market outlook. The company says the investment no longer meets expectations. As a result, Chengtun halts Indonesian nickel matte project before construction begins.

The paused plan targeted Weda Bay on Halmahera, Indonesia. Chengtun formed a venture with a planned $245mn investment. The facility aimed for 40,000 t/yr of nickel matte in nickel equivalent.

Why Chengtun paused Weda Bay expansion

Chengtun halts Indonesian nickel matte project while it restructures its Indonesian growth plan. The project missed its original late-2023 launch window. However, it never advanced beyond planning and preparation.

Chengtun will dissolve the ChengMach Nickel venture after the halt. The decision reduces near-term supply growth expectations at Weda Bay. Therefore, market participants may reassess which projects stay financeable.

Meanwhile, Chengtun keeps operational flexibility through its Youshan Nickel project at Weda Bay. The site can switch output across high-nickel matte, low-nickel matte, and NPI. That flexibility helps the company respond faster to changing price signals.

What it means for nickel sulphate and NCM battery supply

Nickel matte feeds nickel sulphate production for battery materials. Nickel sulphate supports NCM precursor manufacturing alongside cobalt and manganese sulphates. As a result, the pause signals pressure across the upstream EV battery chain.

Battery producers still require stable nickel units and consistent chemistry. However, producers now scrutinize conversion routes and margin stacking more aggressively. Therefore, integrated refiners may capture advantage when they control feed and logistics.

The decision also highlights Indonesia’s evolving role in battery metals. Indonesia still offers scale and resource depth at Weda Bay. Yet investors now demand clearer returns across sulphate, precursor, and cathode pathways.

The Metalnomist Commentary

Chengtun halts Indonesian nickel matte project as the industry shifts from growth-at-all-costs to margin discipline. However, flexible plants will still win when demand rebounds. The next cycle will reward operators who can pivot between battery and stainless markets.

Stellantis Alliance Nickel offtake agreement unravels as nickel prices slump

Stellantis

Stellantis Alliance Nickel offtake agreement is ending, underscoring how weak nickel markets are reshaping EV battery contracts. The Stellantis Alliance Nickel offtake agreement covered nickel and cobalt sulphate from Australia’s NiWest project but failed on key milestones. As a result, the Stellantis Alliance Nickel offtake agreement now joins a growing list of battery metal deals under pressure from low prices and tight funding.

NiWest delays expose battery metals project risk

Alliance Nickel and Stellantis agreed in 2023 to supply 170,000t of nickel sulphate and 12,000t of cobalt sulphate. The volumes represented around 40pc of NiWest’s forecast production, anchoring the project’s commercial foundation. However, low nickel prices and tighter financing conditions have slowed NiWest’s development and triggered missed contractual milestones.

Market conditions have turned sharply since the deal was signed. Oversupply from Indonesia and softer demand from EV and steel sectors have hit prices. The LME three-month nickel price has dropped nearly 40pc since May 2023, falling to $15,117.50/t by 7 November. In this context, long-term offtake commitments are harder to sustain for both miners and OEMs.

The termination becomes effective on 3 December, formally ending the 2023 agreement. For Alliance, the loss of a top-tier automotive anchor customer complicates project financing. For Stellantis, it removes a fixed nickel sulphate commitment tied to a project still at the development stage.

EV supply chains tighten standards on battery materials

Stellantis is also recalibrating its broader battery materials portfolio. Earlier this week, it cancelled a supply agreement with Australian battery materials supplier Novonix over product specification issues. This second cancellation highlights how automakers now demand tighter performance, quality and timing certainty from upstream partners.

Battery metal developers face a tougher landscape as OEMs pursue flexibility and risk diversification. Projects like NiWest must now compete not only on resource quality and ESG credentials, but also on cost resilience under low-price scenarios. Stronger balance sheets, staged developments and diversified customer bases will be critical to securing future offtake.

At the same time, OEMs remain under pressure to secure long-term critical mineral supply for electrification targets. Strategic partnerships will likely shift toward more advanced projects, integrated value chains, and suppliers with proven technical and financial execution.

The Metalnomist Commentary

The collapse of the Stellantis Alliance Nickel offtake agreement illustrates how quickly the battery metals balance of power can shift. When nickel prices slide and capital tightens, marginal projects and early-stage offtakes become vulnerable, even with blue-chip OEM partners. For miners, bankable projects now require true cost competitiveness and technical robustness, not just strong EV narratives.

Nickel surplus to widen through 2026: INSG outlook for miners and metals markets

INSG(

The nickel surplus to widen through 2026 is reshaping expectations for miners, traders and stainless producers worldwide. According to the latest INSG forecast, the nickel surplus to widen through 2026 will see production consistently outpace usage, even as global economic activity proves more resilient than expected. As a result, the nickel surplus to widen through 2026 is set to reach 209,000t in 2025 and 261,000t in 2026, with primary output rising to 3.81mn t this year and 4.09mn t in 2026 against usage of 3.6mn t and 3.82mn t.

Stainless demand supports nickel, but batteries lose momentum

Nickel demand remains supported by stainless steel, but battery growth has clearly cooled. Higher stainless steel output continues to underpin core nickel usage, particularly in Asia and Europe. However, battery demand has slowed as automakers and cell producers shift towards non-nickel chemistries such as LFP and accelerate plug-in hybrids over pure battery electric vehicles. Therefore, the high-growth battery narrative has softened, easing pressure on high-purity nickel sulphate demand.

Meanwhile, this demand shift is forcing producers and investors to reassess project pipelines focused on battery-grade nickel. Margins are under strain where costs are high and product mixes are heavily exposed to the EV segment. In this environment, stainless steel remains the anchor sector, but it cannot fully absorb the excess tonnes entering the system. This imbalance feeds directly into the widening surplus and keeps a lid on any sustained price rally.

Indonesia drives supply growth as others retrench

On the supply side, Indonesia remains the dominant driver despite tighter regulatory control. The government has delayed permit approvals, seized non-compliant land and punished firms that fail reclamation duties. However, the INSG believes these interventions have only created temporary disruptions, with overall Indonesian nickel output still expected to increase through 2026. This continued expansion reinforces the structural surplus and raises competitive pressure on higher-cost regions.

Outside Indonesia, weaker profitability has already forced several producers to scale back or suspend operations. In China, the shift from nickel pig iron towards more refined cathode output is forecast to continue as the industry optimises for flexibility and value. Nickel sulphate production is expected to ease in 2025 as battery demand softens, before recovering in 2026 when market conditions stabilise. For now, prices remain trapped between steady stainless demand and a widely recognised surplus in exchange-traded Class 1 inventories, with three-month nickel recently trading near $15,480/t.

Financial conditions are improving, with global inflation forecast to decline across most G20 economies by 2026. Even so, the INSG warns that tariffs and trade measures could offset some macro tailwinds by adding friction to investment decisions, supply chains and downstream demand growth. If policy risk rises, it may delay project sanctions and accelerate closures at the margin, but the current surplus path remains firmly in place.

The Metalnomist Commentary

The INSG nickel surplus outlook underscores a market where supply discipline lags structural investment made during the last bull cycle. For producers, cost reduction, product differentiation and downstream partnerships will be critical to survive a prolonged surplus. For consumers in stainless and batteries, the coming years offer a rare window to secure long-term nickel units on favourable terms before the next demand wave arrives.

China Nickel Sulphate Market Holds Firm Amid Supply Tightness and Weak NCM Demand

Nickel Sulphate

China nickel sulphate prices have remained stable for over a month due to constrained supply and sluggish demand from the NCM battery sector. Despite declining output and elevated feedstock costs, producers have resisted lowering prices to protect margins. The China nickel sulphate market is now facing a complex supply-demand imbalance shaped by both upstream disruptions and shifting downstream preferences.

Feedstock Supply Disruptions Tighten Production Margins

Nickel sulphate output in April dropped to 30,000 tonnes (nickel metal equivalent), down 13% month-on-month and 18% year-on-year. Cumulative output for January–April stood at 127,000 tonnes, 1.6% lower than the previous year, according to CNIA data. This production cut stems from limited availability of mixed hydroxide precipitate (MHP) and nickel matte, both critical inputs for sulphate production. Heavy rainfall in Morowali, Indonesia, disrupted MHP production in March and April, reducing output by 5,500 tonnes. At the same time, matte producers in China shifted to more profitable nickel pig iron (NPI), reducing matte availability. Consequently, the payable indicators for MHP and matte rose significantly, eroding margins and compelling some plants—like those in Guangxi—to convert from matte to MHP feedstock. These factors have kept the China nickel sulphate market tight despite weak demand.

NCM Battery Demand Shrinks as LFP Dominance Grows

While supply tightens, demand has faltered. NCM and NCA batteries, once dominant, have lost significant market share to lithium iron phosphate (LFP) chemistries. As of April, NCM batteries accounted for just 20% of China’s battery output, while NCA stood at 17%, down from a combined 65% in 2019. This shift has impacted upstream nickel demand, causing several international projects to stall. In recent months, Eramet and BASF withdrew from their Weda Bay refining JV, and Hanrui Cobalt cancelled its MHP investment in Indonesia. Meanwhile, automakers like Volkswagen are pivoting toward LFP technology to cut costs. Demand for NCM batteries is expected to remain weak through Q2 2024, with some exporters front-loading shipments earlier in the year due to global trade tensions. As a result, the China nickel sulphate market remains under pressure, with producers navigating tight margins amid uncertain downstream growth.

The Metalnomist Commentary

China’s nickel sulphate market exemplifies the structural turbulence within the EV battery supply chain. As feedstock constraints collide with weakening demand for NCM chemistries, producers must brace for lower growth visibility and rising volatility across Asia’s nickel value chain.

Nickel Market Surplus 2025 to Reach 198,000t on Indonesian Output Growth: INSG

Nickel Factory

Surplus Widens as Global Nickel Supply Outpaces Demand

The nickel market surplus in 2025 is expected to reach 198,000 tonnes, according to the International Nickel Study Group (INSG). This marks an increase from 170,000t in 2023 and 179,000t in 2024, driven largely by continued production expansion in Indonesia across all major nickel product types. Global primary nickel production is forecast at 3.735mn tonnes, while demand lags behind at 3.537mn tonnes.

Indonesia Leads Supply Growth Despite Ore and Royalty Headwinds

Indonesia remains the engine of global nickel supply, despite recent permit issuance delays and the introduction of a new royalty regime based on the Harga Mineral Acuan, a price benchmark tied to LME nickel pricing. The full impact of these changes on mining output is still unclear. Meanwhile, China is also ramping up production of nickel cathode and nickel sulphate, although its nickel pig iron (NPI) output is expected to decline.

Mixed Demand Outlook: Stainless Steel Grows, Battery Demand Slows

The nickel market surplus in 2025 also reflects shifting demand trends. The stainless steel sector is projected to grow further, supporting baseline nickel consumption. However, demand from the EV battery sector is expected to slow due to rising use of non-nickel chemistries and increased adoption of plug-in hybrid vehicles. Still, new ternary cathode projects globally may support medium-term nickel usage recovery.

The Metalnomist Commentary

The projected nickel market surplus in 2025 signals continued pressure on prices. As Indonesia leads global production, market rebalancing may hinge on battery chemistry shifts and Chinese industrial demand.