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.

Indonesian Cobalt Production Capacity Set to Double by 2027

Indonesian Cobalt

Indonesian cobalt production capacity will more than double to 114,000 tonnes by 2027 from 55,000 tonnes in 2024, according to National Economic Council member Septian Hario Seto. The expansion comes from Indonesia's high-pressure acid leach (HPAL) operations, which process nickel laterite ores to extract both nickel and cobalt. However, Indonesian cobalt production capacity growth will likely plateau after 2027 due to rising project costs and slower-than-expected nickel consumption growth.

HPAL Operations Drive Cobalt Output Growth Despite Rising Costs

Indonesia's cobalt capacity expansion relies heavily on HPAL technology, which extracts cobalt as a byproduct of nickel processing operations. China Nonferrous Metals Industry Association's Xu Aidong confirmed that capacity increases will probably stabilize given mounting economic pressures. Meanwhile, rising sulfur prices used in hydrometallurgical production lines are increasing HPAL project costs significantly.

Mixed hydroxide precipitate (MHP) production maintains 30-40% profit margins even with nickel prices around $15,000 per tonne, partly due to cobalt content value. Indonesia exported nearly 1.56 million tonnes of MHP last year, with cobalt exports reaching approximately 44,350 tonnes. Therefore, Indonesian cobalt production remains economically viable despite commodity price volatility.

DRC Export Ban Creates Market Uncertainty and Technology Shifts

The Democratic Republic of Congo's cobalt export ban threatens to drive prices higher while potentially reducing long-term cobalt demand through technology adaptation. Seto warned that sustained export restrictions could backfire by accelerating battery chemistry changes to reduce cobalt content. As a result, the industry witnessed massive adoption of nickel-cobalt-manganese (NCM) 811 technology during 2017-2018 price spikes.

Indonesia processes MHP directly into precursors without crystallizing nickel sulfate first, streamlining production efficiency and reducing costs. The country views cobalt as inseparable from nickel production rather than an independent mineral resource. However, Indonesia recognizes its responsibility as a major producer to ensure reliable global supply chains.

Seto emphasized that Indonesia's position on nickel mirrors the DRC's influence on cobalt markets, requiring careful market management. Major producers must balance supply control with market reliability to avoid being perceived as unreliable suppliers. Consequently, both countries face pressure to maintain sufficient global supply while maximizing domestic value addition.

The Metalnomist Commentary

Indonesia's strategic approach to cobalt as a nickel byproduct positions the country advantageously in global battery supply chains while the DRC's export restrictions create market uncertainty. The doubling of Indonesian cobalt production capacity by 2027 could provide crucial supply diversification for battery manufacturers seeking alternatives to DRC sources, though technology shifts toward lower-cobalt chemistries may limit long-term demand growth.

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.

Merdeka Nickel Ore Production Hits Target as Downstream Expansion Gains Pace

Merdeka Battery Materials

Merdeka nickel ore production reached its 2025 target as stronger mining capacity and better weather lifted output at Sulawesi Cahaya Mineral. MBMA produced 7mn wet metric tonnes of saprolite and 14.7mn wet metric tonnes of limonite during the year. Both results rose sharply from 2024. As a result, Merdeka nickel ore production now shows that upstream growth is still supporting Indonesia’s broader nickel strategy.

The scale of the increase matters because ore supply remains the foundation of Indonesia nickel downstream expansion. Saprolite output rose 42pc year on year, while limonite output increased 45pc. The company met its saprolite target and exceeded its limonite target. Therefore, Merdeka nickel ore production is giving the group a stronger base for its processing chain.

This performance also highlights the importance of operating conditions in Indonesian mining. MBMA said optimized mining activity and lower rainfall disruption supported the result. That means the production gain did not come from capacity alone. Consequently, Merdeka nickel ore production reflects both better execution and more favorable site conditions.

Indonesia Nickel Downstream Expansion Still Shows Uneven Product Performance

Indonesia nickel downstream expansion remains the central strategic story for MBMA, but 2025 results showed a mixed product picture. The company’s downstream portfolio includes NPI, high-grade nickel matte, and mixed hydroxide precipitate. Each product line moved differently over the year. As a result, MBMA nickel output was not uniformly strong across the chain.

NPI production fell 10pc to 73,871t in nickel metal equivalent because of maintenance at the RKEF smelters. Even so, the result still landed inside the company’s guidance range. That suggests NPI operations remained resilient despite maintenance pressure. Meanwhile, high-grade nickel matte output fell much more sharply, dropping 60pc to 19,998t in nickel metal equivalent.

That matte weakness reflected a deliberate operating shift. MBMA halted HGNM production in the first quarter of 2025 and only restarted output in October after securing a new contract. Therefore, the lower HGNM result was not simply an operational failure. It also reflected a commercial reset inside the product mix.

HPAL Nickel Growth Is Becoming More Important for MBMA’s Next Phase

HPAL nickel growth is now becoming the most important part of MBMA’s medium-term outlook. The PT ESG HPAL plant, operated with Green Eco-Manufacture, produced 25,994t of nickel in MHP in 2025. That gives the company a stronger foothold in battery-linked nickel chemicals. Consequently, Indonesia nickel downstream expansion is moving deeper into higher-value processing.

The next growth driver is already under construction. The Sulawesi Nickel Cobalt HPAL project is expected to start commissioning in the second half of this year. With capacity of 90,000 t/yr of nickel in MHP, the project could materially change MBMA’s downstream profile. Therefore, HPAL nickel growth may become the main reason investors watch MBMA more closely in 2026.

The company’s new guidance supports that view. MBMA raised its 2026 ore production targets for both saprolite and limonite, while also lifting its HGNM target sharply. MHP output from PT ESG is also expected to rise. As a result, Merdeka nickel ore production is no longer just an upstream success story. It is increasingly the feed base for a much broader downstream buildout.

The Metalnomist Commentary

MBMA’s 2025 result shows that Indonesia’s nickel model still depends on strong ore delivery before downstream value can scale. The real takeaway is not just that ore targets were met. It is that HPAL and chemical capacity are becoming more central to the company’s future than traditional nickel products alone.

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.

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.

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.

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.

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.

Merdeka Battery Materials Reports Mixed Nickel Output in Q3 Amid Expansions

Merdeka Battery Materials

Indonesian nickel producer Merdeka Battery Materials (MBMA) reported a mixed production performance for the third quarter of 2023. While the company’s nickel ore output doubled due to favorable weather and increased mining capacity, nickel intermediates production experienced a decline.

Nickel Ore Output Surges, Intermediates Decline

During Q3, MBMA produced 4.74 million wet metric tonnes (wmt) of ore from its Sulawesi Cahaya Mineral (SCM) mine. Limonite and saprolite output reached 3.70 million wmt and 1.04 million wmt, respectively, more than doubling compared to the previous quarter. This growth was attributed to better weather conditions and expanded mining equipment deployment.

In contrast, nickel intermediates saw declines. Nickel pig iron (NPI) and low-grade nickel matte (LGNM) production from MBMA’s rotary kiln electric furnaces (RKEF) smelters fell 6.1% quarter-on-quarter to 20,557 tonnes. High-grade nickel matte (HGNM) output dropped by 3.2% to 12,979 tonnes of nickel.

Despite these quarterly dips, the company maintained its 2024 production guidance at 50,000-55,000 tonnes of HGNM and 80,000-85,000 tonnes of NPI.

Strategic Investments and Growth Plans

MBMA's long-term strategy focuses on bolstering output through strategic investments and partnerships. The SCM mine supplies saprolite ore to MBMA’s RKEF smelters and limonite ore to Huayue Nickel Cobalt’s HPAL plants. A second feed preparation plant (FPP), slated for commissioning by mid-2025, is expected to increase limonite ore processing capacity to over 9 million wmt annually.

The company collaborates with leading battery manufacturers to support its limonite production, targeting over 300,000 tonnes per year of nickel in mixed hydroxide precipitate (MHP). Key partnerships include:

• Green Eco-Manufacture (GEM): Joint development of PT ESG and PT Meiming HPAL plants with capacities of 30,000 t/yr and 25,000 t/yr of nickel in MHP, respectively.
• Brunp: Partnership with the subsidiary of Contemporary Amperex Technology (CATL) to establish a 60,000 t/yr HPAL plant for nickel in MHP.

Outlook for 2024 and Beyond

The company’s production guidance for 2024 remains robust, with saprolite ore projected at 4–5 million wmt and limonite ore at 9.5–10.5 million wmt. With the new FPP in operation by 2025, MBMA aims to significantly scale up production and maintain its competitive edge in the rapidly growing battery materials market.

As global demand for nickel intensifies, MBMA's strategic expansions and partnerships position it as a key player in the supply chain for electric vehicle batteries and renewable technologies.

Weak NCM Demand Restrains Nickel Consumption Growth in China

Lygend

China’s nickel consumption growth has been constrained this year, primarily due to weak demand in the nickel-cobalt-manganese (NCM) cathode active material (CAM) sector and the increasing market dominance of lithium-iron-phosphate (LFP) CAM.

NEV Battery Market Trends

Despite a 37% year-on-year increase in China’s new energy vehicle (NEV) battery production from January to September, NCM battery growth lagged at 19.2%, while LFP surged by 45.6%, according to the China Innovative Alliance of Automotive Battery Industry.

• NCM precursor output grew by 4%.
• NCM CAM production rose by 10%, highlighting a slower growth trend compared to downstream NEV battery production.
• Nickel sulphate output is projected to decline by 1%, even though total supply is expected to rise by 6% due to increased imports.

The discrepancy in growth rates between upstream, midstream, and downstream sectors is expected to stabilize next year as inventories decline and buying interest increases.

Rising Imports of MHP and Matte

China’s imports of mixed hydroxide precipitate (MHP) and matte, key feedstocks for nickel sulphate and class I nickel production, have risen sharply:

• MHP Imports: Up 17% to 1.07 million tons during January-September, with Indonesia accounting for 57% growth due to increased capacity from Chinese companies such as Lygend’s ONC, GEM’s QMB project, and Huayou’s Huafei facility.
• Matte Imports: Increased by 61% to 341,494 tons, driven by the ramp-up in new capacities.

Transition in Nickel Matte Production

A significant portion of the matte imports consists of low-grade matte (20% nickel content), which is further refined into high-grade matte (70% nickel content) in China for nickel sulphate or cathode production. However, some matte producers have shifted focus to producing nickel pig iron (NPI) due to its higher profit margins.

Nickel Metal Output Outlook

While nickel sulphate production is forecast to dip, China’s overall nickel metal output is expected to surge by 34%, reaching 320,000 tons in 2024. This increase underscores the country’s reliance on imported feedstocks and growing domestic capacity to meet demand.

Future Prospects

As inventories dwindle and buying interest rebounds, 2024 is likely to see a narrowing of growth disparities across the supply chain. However, China’s nickel market remains under pressure from fluctuating demand patterns, shifts in feedstock sourcing, and competition between NCM and LFP technologies.

Weiming Launches Nickel Cathode Production in Zhejiang Province

Weiming

Chinese Manufacturer Aims to Boost Nickel Output with New Facility

Weiming, a major Chinese environmental protection equipment manufacturer, has started producing nickel cathodes at its subsidiary, Weiming Shengqing, located in Wenzhou, Zhejiang province. This development marks a significant milestone as the company ramps up its nickel production capacity to meet growing global demand for the metal.

The first phase of the project is focused on a 25,000-tonne-per-year (t/yr) production capacity for nickel cathodes. Weiming is progressing well with this phase, and it expects to complete the second phase—also adding another 25,000 t/yr—by the first half of 2025. Once fully operational, the plant will contribute significantly to China's nickel supply, which is essential for battery production and other industrial applications.

Sourcing Raw Materials for Cathode Production

Weiming uses nickel matte and mixed-hydroxide-precipitate (MHP) as the primary feedstocks for its nickel cathode production. In August 2024, the company received its first shipment of nickel matte from Indonesia, amounting to 1,429 tons. This shipment marks a key milestone in Weiming’s strategy to secure reliable and sustainable sources of raw materials for its operations.

The company also operates the Jiaman high nickel matte project in Indonesia in partnership with Merit International Capital. This project, with a nameplate capacity of 40,000 tons per year of nickel metal equivalent, is poised to further support Weiming’s nickel supply chain. Located in the Weda Bay region of North Maluku Province, the project features four production lines, each capable of producing 10,000 tons of nickel metal equivalent annually.

Future Outlook for Weiming's Nickel Production

As the demand for nickel continues to rise, particularly in the electric vehicle (EV) and battery sectors, Weiming's expansion into nickel cathode production strengthens its position in the global metals market. The company’s strategic investments in Indonesia, alongside its domestic production capacity, will help ensure a steady supply of nickel to meet both local and international demand.

With the second phase of the production facility expected to complete by mid-2025, Weiming is set to play an increasingly pivotal role in global nickel production. This expansion reflects broader trends in the metals industry, where companies are focusing on securing sustainable and high-quality feedstocks to support the green energy transition.

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QMB Nickel Licence Review Signals Tougher Indonesia Nickel Oversight

QMB Nickel Indonesia

QMB nickel licence risk is rising after a landslide damaged a tailings facility at Indonesia Morowali Industrial Park. The Indonesian government is reviewing QMB New Energy Materials’ environmental permit, raising new uncertainty around nickel supply from one of the world’s most important battery materials hubs.

The review follows a landslide at IMIP in Sulawesi on 18 February that damaged heavy equipment and reportedly buried an operator. A final decision has not been made, but the case shows that Jakarta is applying stronger scrutiny to environmental and safety performance across the nickel industry.

QMB nickel licence pressure matters because the company has 150,000 t/yr of nickel capacity in mixed hydroxide precipitate. MHP is a key intermediate for battery supply chains, and any production disruption in Indonesia can quickly affect buyers across China, Korea, Japan, and the global electric vehicle sector.

Tailings Risk Adds Pressure to Indonesia’s MHP Supply Chain

QMB’s operations have not been fully suspended, but output has softened as site conditions continue to evolve. The only clearly unaffected portion appears to be QMB’s ESG-linked joint project with Merdeka Battery Materials, which is designed for around 40,000 t/yr and uses independent tailings infrastructure.

The incident is significant because QMB has already faced tailings-related disruption. A landslide at its tailings dam in March 2025 forced a 45-day shutdown of MHP production. The company restarted operations in May and returned to designed capacity in July.

This repeated disruption highlights a wider risk in Indonesia’s fast-growing nickel sector. Rapid capacity expansion has created major supply growth, but it has also increased pressure on waste management, tailings systems, environmental controls, and operating discipline. For battery makers, the issue is not only nickel volume, but also the reliability and ESG quality of that volume.

RKAB Quotas Tighten the Nickel Operating Environment

Indonesia is also tightening nickel supply through its RKAB production quota system. Government-approved ore quotas for 2026 are expected at around 260mn-270mn t, far below the roughly 379mn t mined in 2025. That signals a structural reduction in ore availability and a more controlled operating environment.

RKAB approvals are increasingly tied to ESG performance, which raises compliance risk for miners and processors. Companies with stronger environmental systems may gain more predictable access to ore and permits, while weaker operators could face delays, output cuts, or licence reviews.

The QMB nickel licence review therefore fits a broader policy shift. Jakarta appears to be reducing grey areas in mining regulation and linking production rights more directly to safety, environmental compliance, and operational accountability. This could support a more sustainable nickel sector, but it may also create near-term supply uncertainty.

The Metalnomist Commentary

Indonesia’s nickel market is moving from aggressive expansion toward stricter control. The winners will be producers that can prove safe tailings management, stable operations, and ESG compliance while still delivering battery-grade nickel at scale.

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.

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.

Lygend's Indonesian HPAL Project Surpasses Output Target Ahead of Schedule

Lygend

China’s leading nickel producer, Lygend, has achieved its annual output target at its high-pressure acid leaching (HPAL) project in Indonesia on December 19, nearly 10 days ahead of schedule. The project, known as HPL, produced 65,000 tonnes (t) of nickel metal equivalent in mixed hydroxide precipitate (MHP)—exceeding its designed capacity of 55,000 t/yr.

Located at Lygend’s industrial park on Obi Island in Indonesia’s North Maluku province, the facility is divided into two phases with three production lines. Operations commenced in May 2021, and after reaching its designed capacity in November 2023, the plant has now surpassed expectations, reinforcing Indonesia’s role as a global nickel production hub.

Expanding Nickel Capacity Through ONC Project

Lygend is further expanding its HPAL nickel operations with its ONC project, which includes another three production lines on Obi Island. With this expansion, Lygend’s total HPAL nickel production capacity has now reached 120,000 t/yr, strengthening its position as a key supplier in the battery-grade nickel market.

MHP, a crucial feedstock for nickel sulphate production, is widely used in the nickel-cobalt-manganese (NCM) battery industry. On December 19, the assessed payable indicator for MHP remained stable at 81-82% of London Metal Exchange (LME) nickel cash official prices, as long-term contracts continued to dominate market activity.

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.

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.