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.

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.

GEM MHP output cut tightens Indonesia battery nickel feedstock

GEM

A GEM MHP output cut in Indonesia is tightening near-term nickel feedstock for batteries. Market participants say GEM will halve monthly mixed hydroxide precipitate output to about 6,000t nickel equivalent. However, limited tailings capacity at Morowali operations drives the decision.

This is the second forced cut tied to tailings disposal constraints. In March, a landslide at subsidiary QMB halted output for 45 days. Meanwhile, the plant restarted in May and returned to design rates in July.

The scale of GEM’s Indonesian portfolio makes the cut market-relevant. It runs three MHP projects with 150,000t/yr nameplate capacity across Sulawesi. Output reached 79,916t nickel equivalent in January–September, up 150% year on year. Therefore, a move to 6,000t per month can dampen spot MHP availability.

MHP economics and cobalt content reshape feedstock choices

MHP demand rose because it can replace nickel matte in downstream refining. Producers value MHP’s economics and its cobalt content for precursor production. Meanwhile, Democratic Republic of Congo export restrictions tightened cobalt availability and lifted MHP interest. As a result, tighter MHP supply can ripple into nickel sulfate and cathode schedules.

Tailings and ESG pressure intensify in Indonesia’s HPAL boom

Indonesia’s HPAL expansion has increased tailings volumes and raised ESG scrutiny. Companies must prove safe disposal as investors and customers demand traceability. Meanwhile, the government has suspended some mines for weak reclamation guarantees. Authorities also seized land from Weda Bay Nickel and Tonia Mitra Sejahtera over forestry permit gaps.

The Metalnomist Commentary

The GEM MHP output cut shows how waste management now caps nickel growth, not ore supply. However, repeated disruptions will push buyers toward diversified feedstock and stricter contracts. Therefore, Indonesian HPAL operators must invest early in tailings systems to protect market access.

Antam 1H nickel ore output doubles as Indonesia’s MHP demand surges

Antam

Antam 1H nickel ore output doubles on strong low-grade ore demand from Indonesia’s MHP plants. The miner produced 9.1mn wmt in six months. Domestic processors prioritized low-grade feed for mixed hydroxide precipitate production. Antam 1H nickel ore output doubles as processors secure supply amid rapid battery growth.

MHP growth reshapes Indonesia’s nickel feedstock flows

Indonesia’s MHP expansion is driving structural ore demand. Second-quarter output reached 4.47mn wmt, up 63pc year on year. Most volumes supplied domestic MHP producers that favor low-grade ore. As a result, ore flows shifted from export-oriented routes to HPAL-linked hubs. Forecast MHP output could hit 480,000t Ni-equivalent in 2025. Therefore, Indonesia’s battery precursor pipeline keeps tightening ore balances.

Ferronickel softens while export channels stay active

Ferronickel output fell 11pc to 9,067t Ni-equivalent in the half. Second-quarter production dropped 15pc year on year to 4,569t. However, Antam exported all ferronickel, mainly to South Korea, India, and China. Price spreads favored MHP over ferronickel in recent quarters. Consequently, asset utilization tilted toward low-grade ore supply. Antam 1H nickel ore output doubles, but ferronickel remains cyclical.

EV supply chain momentum supports long-term strategy

Antam’s battery JV with CATL targets start-up by 2026. The project anchors upstream-to-cathode integration in Indonesia. Meanwhile, ore grade trends and permitting will influence HPAL costs. Therefore, stable domestic feed becomes a strategic hedge. Antam 1H nickel ore output doubles, reinforcing Indonesia’s EV supply chain leadership.

The Metalnomist Commentary

Antam’s pivot to low-grade ore for MHP underscores where margins sit today. Watch HPAL ramp rates, ore grade drift, and policy signals. Any RKAB or environmental delays could tighten MHP and lift nickel sulfate premia.

Nickel Industries HPAL Expansion Targets Indonesian MHP Growth Through Acquisitions

Tsingshan

Nickel Industries HPAL expansion will move forward through acquisitions rather than new project development as Indonesia tightens control over additional high pressure acid leach capacity. The Australian producer will acquire stakes in two MHP projects next to its existing Excelsior Nickel Cobalt operation in Central Sulawesi.

Nickel Industries HPAL expansion is strategically important because Indonesia has stopped issuing licences for new HPAL developments since late 2025, according to the company. That makes existing permitted projects increasingly valuable to producers seeking battery-grade nickel growth.

Nickel Industries HPAL expansion covers the planned Teluk Metal Industry and Chengsheng New Energy projects. Together, the stakes would give NI attributable MHP capacity of almost 17,000 t/yr.

Both projects are located in the Indonesia Morowali Industrial Park and will use ore from NI’s Sampala mine. Their output will feed the electric vehicle battery supply chain.

TMI and CNE Add MHP Capacity Around Existing ENC Platform

NI will pay $169mn for a 17.5% stake in the Teluk Metal Industry HPAL project. TMI has planned nameplate MHP capacity of 38,640 t/yr, giving NI 6,775 t/yr of attributable output.

The transaction also carries construction protection from Tsingshan. The Chinese nickel and stainless steel producer has guaranteed that NI’s investment will be capped at $169mn and that TMI will reach nameplate production by September 2027.

This lowers construction risk for NI and reinforces its relationship with Tsingshan, which already owns an indirect 44% stake in the ENC project.

TMI’s remaining ownership includes Singapore-based Sumber International Investment and a South Korean-Japanese consortium involving LS MnM, Hanwa and another strategic investor. The structure shows how Asian industrial groups are positioning themselves around Indonesian battery nickel supply.

NI is also pursuing a 36% stake in the Chengsheng New Energy HPAL project together with a local partner. The acquisition will be funded by transferring 30% of their combined ownership in the Sampala nickel mine.

CNE has MHP capacity of 28,357 t/yr, with 10,208 t/yr attributable to NI. Commissioning is expected by mid-2027.

The CNE transaction still requires shareholder approval because an NI director is associated with the selling investment firm. That adds a governance step before completion.

Indonesia Licensing Limits Increase Value of Existing HPAL Assets

Indonesia’s decision to stop issuing new HPAL licences changes the economics of nickel expansion. Producers can no longer rely on greenfield development to add battery-grade processing capacity.

This gives existing permitted projects a scarcity premium. Companies seeking growth must acquire stakes, partner with current licence holders or expand existing operations.

For NI, TMI and CNE extend the company’s battery nickel platform around ENC. The 46%-owned ENC project is preparing to produce nickel cathode and nickel sulphate, giving NI exposure further downstream than MHP alone.

The strategy also integrates mining and processing. Ore from the Sampala project will supply both TMI and CNE, linking captive feedstock with HPAL conversion and battery-material output.

That integration matters because Indonesia’s nickel industry is increasingly constrained by ore availability, regulatory approvals and government efforts to manage oversupply.

The policy shift could support nickel prices by slowing future HPAL growth. But it also raises the value of projects already holding development rights.

For NI, acquisitions therefore become more than a growth option. They are now the main route to expanding Indonesian MHP production under a tighter licensing regime.

The Metalnomist Commentary

Indonesia’s HPAL licensing freeze is turning permitted projects into strategic assets. Nickel Industries is responding by buying access to existing capacity, showing how policy can shift competition from project development to asset acquisition.

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.

Nickel Industries HPAL Expansion Targets More Indonesian MHP Supply

Nickel Ore

Nickel Industries HPAL expansion will add stakes in two Indonesian high-pressure acid leach projects next to its existing Excelsior Nickel Cobalt operation in Central Sulawesi. The acquisitions give the company access to additional mixed hydroxide precipitate capacity for the electric vehicle battery market.

Nickel Industries HPAL expansion comes as Indonesia restricts new HPAL project development. The government stopped issuing new licences in late 2025, making acquisitions of existing permitted projects increasingly important for producers seeking growth.

Nickel Industries HPAL expansion covers the Teluk Metal Industry and Chengsheng New Energy projects, both located in the Indonesia Morowali Industrial Park. Together, the transactions could add nearly 17,000 t/yr of attributable MHP capacity to Nickel Industries.

The strategy deepens the company’s downstream exposure beyond nickel ore and conventional smelting into battery-grade nickel intermediates, nickel sulphate and cathode production.

HPAL Licence Restrictions Increase the Value of Existing Projects

Nickel Industries will pay $169mn for a 17.5% stake in the planned Teluk Metal Industry HPAL project.

TMI has nameplate MHP capacity of 38,640 t/yr. Nickel Industries’ equity share will provide around 6,775 t/yr of attributable production.

Tsingshan has provided a construction guarantee covering the project, capping Nickel Industries’ investment at $169mn and targeting nameplate production by September 2027.

The company will also gain exposure to the Chengsheng New Energy project through a separate transaction involving equity in its Sampala nickel mine.

CNE has MHP capacity of 28,357 t/yr, with around 10,208 t/yr attributable to Nickel Industries. Commissioning is expected by mid-2027.

The two acquisitions are especially valuable because Indonesia is no longer approving new HPAL developments. This effectively raises the strategic value of existing permits and projects already in development.

For producers seeking to expand battery-nickel capacity, buying into permitted facilities may now be more realistic than pursuing greenfield HPAL projects.

MHP Growth Strengthens Battery-Nickel Integration

Both TMI and CNE will operate alongside Nickel Industries’ 46%-owned Excelsior Nickel Cobalt project in the Morowali industrial complex.

ENC is expected to produce nickel cathode and nickel sulphate, extending the company further downstream into products used in battery supply chains.

TMI and CNE will produce MHP using ore from the Sampala project, strengthening the link between mine supply and downstream processing.

This integration can improve control over ore quality, operating costs and feedstock availability.

Indonesia’s policy shift also suggests that future nickel growth may become more concentrated among producers that already control mines, processing infrastructure and approved HPAL projects.

That could slow the pace of new supply while strengthening larger integrated groups with existing licences and partnerships.

For the global battery market, the acquisitions reinforce Indonesia’s central role in nickel intermediates even as Jakarta tries to limit oversupply and support prices.

The Metalnomist Commentary

Indonesia’s HPAL restrictions are turning existing licences into strategic assets. Nickel Industries is responding by buying into permitted projects, allowing it to expand battery-grade nickel supply without relying on new greenfield approvals.

Ramu Restores Full MHP Output After Upgrades, Targets Higher Nickel and Cobalt Volumes in 2025

Nickel 28 Capital

Papua New Guinea Plant Bounces Back Following Planned Shutdown and Mechanical Issues

Nickel 28 and Metallurgical Corporation of China Expect Production Growth

Ramu, the mixed-hydroxide-precipitate (MHP) plant in Papua New Guinea (PNG), has resumed full production capacity after scheduled upgrades and mechanical setbacks in late 2024. Nickel 28, the Canada-based metals investment firm, confirmed the restart, noting that Ramu’s output reached 28,669 tonnes of nickel and 2,625 tonnes of cobalt in 2024. These totals came in slightly below targets due to a planned September–October shutdown and temporary blower failure in the acid plant.

2025 Outlook: Production Guidance Expects Record Nickel and Cobalt Output

Looking ahead, Ramu’s 2025 production guidance stands at 32,000 tonnes of nickel and 2,900 tonnes of cobalt as MHP. This positions Ramu for a strong year, capitalizing on rising demand for battery materials. Ramu NiCo Management, a subsidiary of the Metallurgical Corporation of China, owns 85% of the project, while Nickel 28 holds 8.56%. The remainder is owned by PNG government-related entities and local landowners, ensuring strong domestic participation.

China’s MHP Imports Grow, but PNG Shipments Drop

MHP is a key feedstock for nickel sulphate and nickel cathode production—critical for batteries and electric vehicles. In 2024, China imported 1.43 million tonnes of MHP, up 8.4% from a year earlier, yet PNG’s exports to China dropped 31% year-on-year to 118,531 tonnes. With Ramu back at full capacity, PNG’s share in the global MHP market may rebound in 2025.

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.

MHP and Nickel Sulphate Fuel Significant Growth in Indonesia's Nickel Exports

Indonesia has experienced a substantial increase in nickel exports during the first half of 2024, driven by a sharp rise in production capacities for mixed hydroxide precipitate (MHP) and nickel sulphate. According to research conducted by Australian bank Macquarie, Indonesia's total nickel exports reached 805,000 tonnes between January and June, reflecting a 20.7% year-on-year increase. When including stainless steel, total exports rose by 22% to 998,000 tonnes.

The growth in exports is largely attributed to the country's four high-pressure acid leach (HPAL) plants, which exported a combined 139,000 tonnes of nickel metal in the form of MHP and nickel sulphate during the first half of the year, a staggering 106% increase from the same period in 2023. The second quarter alone saw 81,000 tonnes exported. Specifically, nickel sulphate exports skyrocketed from 5,400 tonnes in the first half of 2023 to 85,400 tonnes in 2024, equivalent to 19,000 tonnes of nickel metal. Meanwhile, MHP exports grew by 80% year-on-year to 120,000 tonnes.

Nickel pig iron (NPI) remains Indonesia's largest nickel export by volume, growing by 13% year-on-year to 544,000 tonnes in the first half of 2024. However, the slower growth in NPI exports compared to MHP and nickel sulphate suggests Indonesia's increasing focus on the battery materials sector.

Despite the overall rise in exports, high-grade matte exports from Indonesia declined by 17.8% to 101,000 tonnes as more of this supply was utilized domestically for nickel metal production.

Macquarie's data also indicates that nickel ore exports increased in the second quarter of 2024, with Indonesia importing 900,000 wet metric tonnes (wmt) of nickel ore from the Philippines in June, up from 200,000 wmt in March. This increase reflects ongoing tightness in domestic supply despite the government's accelerated approval of mining quotas.

Interestingly, NPI exports to China declined in the first half of the year, with China's share of Indonesian NPI exports dropping to 74% in June, the lowest since the first quarter of 2022. Instead, more NPI is being exported to India and Europe due to cost advantages.

Additionally, Indonesian stainless steel production surged by 25% year-on-year in the first half of 2024, reversing the declines of 4% and 9% seen in 2022 and 2023, respectively.

China’s FeNi and MHP Imports Decline in August, but Nickel Matte Surges

FeNi

China experienced a decline in Ferro-Nickel (FeNi) and mixed hydroxide precipitate (MHP) imports during August, largely due to shipment delays caused by typhoons. Despite this, the country saw a rise in nickel matte imports, reflecting increased availability of matte with lower nickel content.

Indonesia's Role in Nickel Supply Dominates

In August, China imported 522,315 metric tons of ferro-nickel, marking a significant 36% drop compared to the same period last year and a 43% decline from July. Although imports from other suppliers like New Caledonia, Brazil, and Colombia rose, the drop from Indonesia, China’s largest supplier, was much steeper.

Indonesia continues to dominate China’s nickel supply, providing 95% of nickel pig iron (NPI), 90% of nickel matte, and 80% of MHP imports. Indonesia’s expanding stainless steel output, driven by lower production costs, boosted NPI exports to markets like India, South Korea, Italy, and Germany, further emphasizing Indonesia’s role in the global nickel supply chain.

China’s nickel matte imports surged in August, increasing by 25% from the previous month and by 72% on the year. Much of this rise is attributed to low-nickel matte imports, which have a nickel content of around 20%, compared to high-nickel matte with about 70% nickel content. Low-nickel matte is processed in China to produce higher-value nickel sulphate or nickel cathode.

Imports of nickel matte from Russia also saw notable growth, reaching 5,155 metric tons in August—a year-on-year increase of 18% and a doubling of imports from the previous month.

MHP Imports Drop Despite Lygend Project Growth

Mixed hydroxide precipitate (MHP) imports dropped by 11% compared to July, totaling 122,272 metric tons in August. This decline was driven by a 15% decrease in Indonesian arrivals, despite an 11% year-on-year rise fueled by the ramp-up of Indonesia’s Lygend project. Market participants are closely watching how these developments will shape future trends in China’s nickel imports.

China's GEM Increases Battery Material Sales in 1H

Sales Surge Driven by Full Capacity

Green Eco-Manufacture (GEM), a leading Chinese cobalt refiner and lithium cathode active material (CAM) precursor producer, reported a significant increase in sales of CAM precursors, cobalt, and nickel for the first half of the year. The company attributed this rise to full capacity operations across its main product lines.

GEM's sales of ternary precursors, including lithium nickel-cobalt-manganese (NCM) and lithium nickel-cobalt-aluminium (NCA), surged by 45% year-on-year to exceed 100,000 tons. The firm also experienced a remarkable 133% increase in ternary CAM sales, reaching 7,119 tons.

Expansion and Strategic Partnerships

In August, GEM secured a supply agreement with South Korean lithium-ion battery CAM manufacturer Ecopro for 265,000 tons of ternary precursors from 2025 to 2028. The company is also expanding its production capabilities, with a new 50,000 tons per year ternary precursor plant in Indonesia set to start operations in the latter half of this year.

GEM's cobalt tetroxide sales soared by 163% year-on-year to 10,500 tons, driven by higher demand from the consumer electronics sector. The company sources cobalt from long-term contracts with Switzerland-based Glencore and from its mixed hydroxide precipitate (MHP) projects in Indonesia.

Nickel Production and Cost Reduction Goals

GEM's nickel MHP shipments from its QMB project in Indonesia doubled to over 20,000 tons nickel metal equivalent during January-June, with a full capacity rate. The firm plans to expand its nickel smelting capacity to 150,000 tons per year by year-end and aims to ship 60,000 tons of MHP in 2024. GEM also targets reducing MHP smelting costs to $7,500 per ton by the end of the year, benefiting from decreased sulfuric acid costs.

The company is involved in recycling power batteries, cobalt, nickel, and tungsten scrap, with recycled cobalt shipments reaching 8,987 tons and power battery recycling up by 37% to 16,300 tons or 1.84 GWh in the first half of the year.

GEM serves a global client base, including South Korean firms like Ecopro, Samsung SDI, SK On, and LGC, Chinese companies such as XTC New Energy Materials and BYD, as well as international entities like Umicore, Sandvik, and Kennametal.

China's Gem Delivers Ultra-High Nickel NCM Precursors

GEM

Breakthrough in NCM Technology Strengthens China’s Battery Supply Chain

Chinese battery materials firm Green Eco-Manufacture (GEM) has achieved a major milestone by delivering its first ultra-high nickel content NCM precursors. The delivery, made by its subsidiary Jingmen Gem New Material on 7 April, marks the world’s first large-scale production of 9-series NCM precursors. These materials play a critical role in high-energy lithium-ion batteries, particularly for electric vehicles.

Gem plans to produce 3,000 tonnes per month of 9-series NCM precursors. This follows its successful commercialization of 8-series high nickel content precursors in 2022, signaling its leading position in the high-nickel battery materials market.

Indonesia Operations Drive Nickel Supply Security

To secure raw material feedstock, Gem has built 150,000 t/yr of mixed hydroxide precipitate (MHP) capacity in Indonesia. In the first quarter of 2025, Gem shipped 25,000 tonnes of MHP, achieving over a 95% capacity run rate. The firm also aims to boost its high-nickel precursor production in Indonesia to 50,000 t/yr.

In November 2024, Gem signed a key agreement with PT Vale Indonesia (PTVI) to co-develop a high-pressure acid leaching (HPAL) plant in Central Sulawesi. The facility will produce 66,000 t/yr of nickel metal equivalent MHP, further reinforcing Gem’s supply chain for battery-grade nickel.

China Boosts Imports of Indonesian Nickel

China’s dependence on Indonesian nickel continues to deepen. Imports of MHP from Indonesia surged 73% year-on-year to 258,709 tonnes in the January–February 2025 period. This growth stems from efficient production at Chinese-owned facilities in Indonesia, ensuring a steady flow of critical battery inputs despite global supply chain volatility.

The Metalnomist Commentary

Gem's advancement in ultra-high nickel NCM precursors reflects China’s growing command of the battery materials value chain. By integrating upstream supply from Indonesia and advancing precursor technologies, China is setting the pace in next-generation EV materials while reducing its dependence on traditional suppliers.

GEM raises CAM and cobalt tetroxide sales amid shifting battery supply chains

GEM

GEM raises CAM and cobalt tetroxide sales in the first half of 2025. GEM raises CAM and cobalt tetroxide sales on stronger consumer electronics demand and Indonesian feedstock growth. As a result, GEM raises CAM and cobalt tetroxide sales while ternary precursor shipments decline.

Product mix shifts and headline numbers

GEM’s cobalt tetroxide shipments reached 14,590t, up 39% year on year. CAM sales rose 74% to 12,399t. However, ternary precursor shipments fell about 14% to 86,000t. The mix reflects electronics-led cobalt oxide demand and slower NCM and NCA precursor offtake.

Securing feedstock with Indonesian MHP capacity

GEM secures cobalt feedstock via Glencore contracts and its Indonesian MHP projects. Total smelting capacity reached 150,000 t/yr nickel metal equivalent in 2024. In January–June, Indonesia produced 43,977t nickel metal equivalent and 3,667t cobalt metal equivalent. Therefore, MHP output mitigated DRC export risks since the 22 February cobalt ban.

Downstream positioning and long-term contracts

GEM signed a supply deal with EcoPro for 265,000t of ternary precursors in 2025–28. The firm also supplies CATL, BYD, LGES affiliates, and Kennametal. Meanwhile, its closed-loop footprint spans battery recycling, cobalt salts, CAM, cobalt metal and powders, and nickel metal.

The Metalnomist Commentary

GEM’s strategy balances near-term cobalt oxide strength with longer-dated ternary commitments. Indonesian MHP integration meaningfully hedges geopolitical risk and price volatility. Watch precursor recovery timing versus EV demand, and CAM margin discipline.

Indonesia’s Nickel Ambitions Face Obstacles Amid HPAL Expansion

HPAL

Indonesia is poised to increase its nickel production in the coming years, primarily by boosting its high-pressure acid-leaching (HPAL) capacity. However, this ambitious plan faces significant hurdles, notably the scarcity of sulphuric acid and challenges in managing tailings waste effectively. Despite these concerns, production is still expected to grow, even as the global nickel market anticipates a surplus.

Sulphuric Acid Supply and Tailings Management: Key Challenges

The HPAL process relies heavily on sulphuric acid to extract nickel and cobalt from ore, producing mixed hydroxide precipitate (MHP), which is essential for downstream nickel sulphate and battery production. Indonesia is projected to produce between 325,000 to 345,000 tons of MHP this year, a jump from 269,000 tons in 2023. With several new MHP projects on the horizon, output is expected to rise significantly, potentially tripling to 800,000-900,000 tons by 2026, as highlighted by Indonesia's Deputy Minister Septian Hario Seto during a recent metal industry event in London.

The increase in MHP production will necessitate more nickel ore and sulphuric acid, raising concerns about the sustainability of limonite ore supplies, which could deplete quickly like saprolite ore, currently used for nickel pig iron and matte production. The Indonesian government plans to address these issues with industry stakeholders.

Currently, Indonesia's four operational HPAL facilities—Huayou's Huayue and Huafei projects, GEM's QMB project, and Lygend's HPAL project—have been importing sulphuric acid primarily from China and South Korea. However, the rising cost has led some producers, such as Halmahera Persada Lygend, to switch to cheaper sulphur alternatives. The startup of new smelters, like Freeport McMoran's Manyar in Java and AMNT's copper smelter in Nusa Tenggara, is expected to add 3 million tons per year of acid capacity by 2025, potentially easing supply pressures.

Another critical issue is the proper disposal of tailings waste, which has come under increased scrutiny due to environmental, social, and governance (ESG) standards. The HPAL process generates substantial amounts of waste, with energy consultancy Wood Mackenzie estimating 1.4-1.6 tons of tailings per ton of nickel produced. Three disposal methods—tailings dams, deep sea disposal, and dry stacking—each have their risks, with dry stacking viewed as the more sustainable option. Yet, Indonesia’s wet climate and seismic activity pose challenges for safe waste storage.

To ensure the successful expansion of its HPAL production, Indonesia must secure a stable supply of sulphuric acid and implement sustainable methods for managing tailings waste. Addressing these issues is critical for maintaining the momentum in the country’s nickel production growth while adhering to stricter ESG standards.

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 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 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.

MMP nickel matte supply to China rises with new East Kalimantan smelter

Mitra Murni Perkasa

MMP nickel matte supply to China will increase after production began on 26 June. Indonesia’s first domestically owned nickel producer started high-grade nickel matte in Kariangau. The RKEF smelter is designed for 28,000 t per year of HGNM. The nickel content exceeds 70 percent, above typical Indonesian grades.

Capacity, technology, and upstream integration

MMP nickel matte supply to China benefits from fully domestic funding and ownership. The project supports Indonesia’s battery supply-chain ambitions and energy transition goals. Chinese EPC firm ENFI built the plant under a 2023 agreement. ENFI is also constructing a 52,000 t per year HGNM project for Posco. Therefore, regional engineering depth should aid reliability and ramp-up.

Market context, pricing, and feedstock choices

China imported about 194,641 t of nickel matte in January–May, up 42 percent year on year. Indonesia supplied roughly 85.6 percent of those volumes. However, offers paused in June amid thin margins, then resumed in early July. Downstream users still view MHP as more cost-effective than HGNM. As a result, smelter premiums will track rival feedstock economics.

MMP nickel matte supply to China could stabilize feed for converters and battery precursors. Meanwhile, higher HGNM grade may improve unit transport and refining economics. Yet pricing must compete with MHP and intermediates tied to sulfate routes. Therefore, offtake terms and sulfuric acid balances will be closely watched.

The Metalnomist Commentary

MMP adds a domestically funded node to Indonesia’s nickel value chain and China’s feed security. The commercial test will be margins versus MHP and contract flexibility. Watch ENFI’s execution, blending strategies, and delivered costs into coastal China.

China’s Nickel Sulphate Prices Rise as Producers Struggle with Mounting Losses

China’s Nickel Sulphate

Chinese nickel sulphate producers increased prices following the Golden Week holiday to offset growing losses, as raw material prices for class 1 nickel and mixed hydroxide precipitate (MHP) rose. On October 10, these producers reported a nearly 2,000 yuan per tonne ($283/t) loss, up from a 500 yuan loss before the holiday, driven by international nickel and MHP price hikes.

Following these losses, producers raised nickel sulphate offers by around 1,000 yuan to reach 27,800-28,200 yuan per tonne on October 11, up from 26,800-27,200 yuan before the holiday. Despite this increase, market activity remains low due to ample inventory and a declining outlook in the electric vehicle (EV) sector, particularly in the fourth quarter.

Limited Demand Despite Supply Adjustments

Nickel sulphate is vital for the production of batteries in the EV industry, which comprises nearly all battery demand in China. However, weak downstream interest has dampened pricing, as cathode active material (CAM) prices, specifically nickel-cobalt-manganese (NCM), have remained stable post-holiday. Many suppliers, seeking to avoid further price drops, are destocking their inventories, further affecting demand.

The country imported 122,272 tonnes of MHP and 68,227 tonnes of nickel matte in August, primarily from Australia, Papua New Guinea, Indonesia, and New Caledonia. While many sulphate producers continued output to retain market share, low profitability has forced others to delay new projects, including planned expansions in Guangxi and Guizhou.

Recent data from the China Automotive Battery Innovation Alliance show that newly installed power-battery volumes rose by 33% year-on-year to 292.1GWh from January to August. However, nickel sulphate output held steady at around 380,000 tonnes, indicating that destocking and overstocking issues from previous years continue to impact the industry. "We aren’t seeing significant demand growth due to ongoing destocking efforts after EV producers overestimated their needs in 2021-22," noted an NCM CAM producer.