SHFE Indonesian Nickel Cathode Brands Strengthen Indonesia’s Class I Nickel Role

The Shanghai Futures Exchange

SHFE Indonesian nickel cathode brands have gained a major credibility boost after the Shanghai Futures Exchange approved two Indonesian-produced nickel cathode brands for delivery against SHFE contracts. The approvals cover PTENICO from Eternal Nickel Industry and DX zwdx from CNGR Dingxing New Energy.

The approvals mark an important step in Indonesia’s move from nickel ore and intermediate products toward exchange-deliverable Class I nickel. Indonesia has already become the world’s dominant nickel processing hub, but exchange approval gives its refined metal greater financial-market recognition.

SHFE Indonesian nickel cathode brands also reinforce the role of Chinese-backed industrial parks in building Indonesia’s downstream nickel value chain. Both approved producers are linked to major Chinese groups with strong positions in stainless steel or battery materials.

The development matters because exchange-deliverable nickel sits at the intersection of physical supply, futures market liquidity and industrial procurement. Approval by SHFE gives the brands wider acceptance among Chinese market participants and strengthens Indonesia’s role in Class I nickel trade.

Tsingshan and CNGR Extend Indonesia’s Refined Nickel Platform

Eternal Nickel Industry’s PTENICO brand was approved by SHFE after previously being listed on the London Metal Exchange on 16 December 2025. The company is a subsidiary of Chinese stainless steel producer Tsingshan Holding Group.

The plant is located in the Weda Bay Industrial Park in Halmahera, North Maluku. It uses an electrolytic process and has 50,000 t/yr of nickel cathode capacity, with nickel content of 99.96%.

Tsingshan’s involvement is strategically important. The group transformed global nickel markets through Indonesian nickel pig iron and stainless steel expansion, and it is now extending that influence into refined Class I nickel.

CNGR Dingxing New Energy’s DX zwdx brand was also approved by SHFE. The plant is located at the Indonesia Morowali Industrial Park and also uses an electrolytic process. It has 50,000 t/yr of nickel cathode capacity, with nickel content of 99.96%.

CNGR Dingxing is a subsidiary of CNGR, a major Chinese lithium-ion battery cathode active material precursor producer. This gives the brand a direct connection to battery materials supply chains, not only stainless steel demand.

The LME accepted CNGR Dingxing’s Indonesian nickel cathode brand in May 2024. It also approved cobalt cathode produced by CNGR in Qinzhou, Guangxi, in March, showing the company’s expanding exchange-approved metals footprint.

Together, PTENICO and DX zwdx represent 100,000 t/yr of Indonesian nickel cathode capacity. Their SHFE approval gives Indonesia a stronger position in futures-linked refined nickel supply.

Exchange Approval Changes Nickel Market Positioning

The two brands are the first Indonesian-produced nickel cathodes approved by SHFE for delivery. That is significant because Indonesia’s nickel rise was initially built around ore, nickel pig iron, ferronickel, matte and mixed hydroxide precipitate.

Exchange-deliverable cathode is a different market category. It requires tighter quality control, brand recognition and acceptance by financial and physical market users.

SHFE has approved Chinese-produced nickel cathode brands totalling 121,000 t since 2024. Adding Indonesian brands expands the pool of deliverable material and shows how Indonesia is being integrated into China’s nickel pricing and delivery system.

This could gradually influence nickel market structure. More deliverable Indonesian metal may improve flexibility for Chinese buyers, increase acceptable supply for futures settlement and strengthen the link between Indonesian production and Chinese exchange pricing.

The approvals also come during a period of Class I nickel oversupply. LME and SHFE inventories have risen as new refined nickel capacity has entered the market faster than demand growth from batteries and alloys.

Against that backdrop, brand approval can become a competitive advantage. Producers with exchange-deliverable status may have better access to financing, trade channels and customers that require recognised specifications.

For Indonesia, the approval supports a broader industrial policy objective. The country wants to capture more value from its nickel resources by moving beyond raw ore and intermediate exports into higher-value metal and battery materials.

For China, the approvals deepen supply-chain integration with Indonesian assets. Chinese companies are not only investing in Indonesian mines and smelters; they are building exchange-recognised refined metal capacity that can serve Chinese industrial and financial markets.

The Metalnomist Commentary

SHFE approval of Indonesian nickel cathode brands confirms that Indonesia is moving deeper into Class I nickel, not only bulk stainless and battery intermediates. The strategic issue now is whether this new exchange-deliverable capacity strengthens market liquidity or adds further pressure to an already oversupplied refined nickel market.

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 NPI Export Exemption Eases Nickel Trade Fears but Leaves Policy Risk

Nickel pig iron

Indonesia NPI export exemption has eased immediate concerns in the nickel market after sources said nickel pig iron will not need to be exported through Danantara Sumberdaya Indonesia. The clarification reduces near-term disruption risk for Indonesia’s dominant nickel alloy product.

Indonesia NPI export exemption matters because more than 90% of Indonesia’s nickel-alloy output is nickel pig iron. NPI is mainly used in stainless steel production and forms the backbone of Indonesia’s nickel downstreaming model.

Indonesia NPI export exemption does not remove all uncertainty. Ferro-nickel exports are still expected to be traded through DSI, while the industry lacks an official definition that clearly separates ferro-nickel from NPI.

That ambiguity is important because ferro-nickel and NPI share the same HS code under global and Indonesian trade frameworks. Market participants usually distinguish them by nickel content, with ferro-nickel typically above 20% nickel and NPI usually around 10-14%.

NPI Exclusion Protects Indonesia’s Core Nickel Flow

The exclusion of NPI from the DSI export requirement is commercially significant. NPI is Indonesia’s largest nickel product by volume and a critical feedstock for stainless steelmakers.

If NPI had been included, the rule could have disrupted contracts, pricing, payment flows and export execution across a major share of Indonesia’s nickel industry. That risk has now been reduced, at least for the near term.

The clarification also helps Chinese and regional stainless steel buyers. These customers rely heavily on Indonesian NPI because it offers a cost-effective alternative to pure nickel metal in stainless production.

However, the inclusion of ferro-nickel still matters. A small number of Indonesian smelters produce higher-nickel ferro-nickel, and those exports may now face a more centralised transaction structure through DSI.

The policy could therefore split Indonesia’s nickel alloy market into two regulatory paths. NPI would remain outside the new state export channel, while ferro-nickel would fall under tighter government control.

The risk is classification. Without a formal technical definition, exporters may face uncertainty over which products qualify as NPI and which are treated as ferro-nickel.

Policy Clarity Still Matters for Investment

Indonesia announced on 20 May that exports of key commodities, initially including palm oil, coal and ferro-alloys, must be routed through DSI. The aim is to centralise control over strategic commodity exports.

The nickel industry welcomed the NPI clarification, but investors remain cautious. Indonesia’s mining and metals policy has changed frequently, creating uncertainty around timing, scope and implementation.

This matters because downstream nickel projects require large capital commitments. Smelters, matte converters, HPAL plants and battery-material facilities all need stable rules before investors can justify long payback periods.

The DSI rule follows other policy shifts, including changes to ore pricing, royalty plans, export levies and RKAB approval processes. Even when policies support state revenue and downstreaming, sudden changes can raise financing risk.

Indonesia still holds enormous leverage in global nickel. Its dominance in NPI and stainless-linked supply gives Jakarta significant influence over trade flows and pricing.

But policy predictability is now becoming just as important as resource control. If rules change too quickly or remain unclear, investors may delay decisions even when Indonesia remains the strongest nickel platform.

The NPI exemption is therefore a useful correction. But the market still needs formal definitions, clear transaction rules and stable implementation before confidence fully returns.

The Metalnomist Commentary

Indonesia has reduced immediate nickel disruption by excluding NPI from the DSI export channel. But the ferro-nickel ambiguity shows that policy risk remains embedded in the country’s downstreaming model.

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

Zhejiang Jutai Plant

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

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

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

MHP and Matte Supply Drive New Refining Capacity

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

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

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

China Nickel Cathode Output Continues to Expand

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

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

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

The Metalnomist Commentary

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

Nickel Industries RKAB Quota Secures Feedstock for Indonesian HPAL Expansion

RKAB

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

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

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

ENC HPAL Project Raises Nickel Industries’ Battery Materials Exposure

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

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

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

Indonesia’s Quota Tightening Keeps Ore Supply Risk High

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

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

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

The Metalnomist Commentary

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

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

Nickel cathode

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

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

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

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

Class I Nickel Oversupply Keeps Metal Prices Under Pressure

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

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

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

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

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

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

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

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

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

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

MHP and HPAL Costs Could Rebuild the Spread Over Time

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Metalnomist Commentary

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

Indonesia HPM Formula Raises Nickel Ore Cost Risk for HPAL Producers

ESDM

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

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

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

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

Cobalt, Iron and Chromium Inclusion Changes Nickel Ore Valuation

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

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

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

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

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

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

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

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

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

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

Nickel Policy Shift Extends to Bauxite and Signals Broader Resource Control

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

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

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

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

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

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

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

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

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

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

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

The Metalnomist Commentary

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

Centaurus Glencore Nickel Offtake Strengthens Jaguar Project Financing Path

Centaurus Glencore

Centaurus Glencore nickel offtake has given the Jaguar nickel project a stronger commercial base as Centaurus Metals moves toward financing and development in Brazil. The binding agreement secures a major customer for future high-grade nickel concentrate and supports the company’s plan to reach a final investment decision.

Glencore will purchase 20,000 dry metric tonnes per year of 32% nickel concentrate from Jaguar for an initial five-year period starting in 2029. The volume is equivalent to about 6,400 tonnes per year of contained nickel.

The concentrate will be shipped to Glencore’s Sudbury smelting operations in Canada for processing. This gives the Centaurus Glencore nickel offtake clear downstream integration and links Brazilian mine development with established North American nickel smelting capacity.

Jaguar Nickel Project Gains Commercial Validation

The Jaguar nickel project is expected to produce 65,000 tonnes per year of nickel concentrate, meaning the Glencore contract covers roughly one-third of planned output. This contracted volume improves project bankability because lenders often require visible offtake before supporting mine development.

Pricing will be linked to the London Metal Exchange nickel cash settlement price. Nickel payability will vary with market conditions, while copper and cobalt by-products contained in the concentrate will also receive payability.

At current nickel prices of around $17,200 per tonne, the agreement could generate more than $450 million in revenue during the initial contract period. That revenue visibility matters as Centaurus works with Brazil’s national development bank on potential debt financing and seeks a strategic investor.

The agreement remains conditional on key development milestones. Centaurus must make a final investment decision by 30 September 2026, complete half of tailings dam construction by December 2027, and achieve first concentrate production by 15 January 2029.

Nickel Market Recovery Supports New Sulphide Supply

The Centaurus Glencore nickel offtake comes as nickel markets show signs of tightening after several years of weak pricing. Rapid growth from Indonesian laterite supply pressured global prices, but recent gains above $17,000 per tonne suggest the market may be moving closer to balance.

Jaguar’s sulphide concentrate profile gives the project strategic relevance. High-grade concentrate can feed conventional smelting routes and may become more valuable if buyers seek diversified nickel units outside the dominant Indonesian laterite chain.

Centaurus expects Jaguar to produce an average of 22,600 tonnes per year of contained nickel during its first seven years. The proposed 3.5 million tonne per year operation is forecast to produce nickel at all-in sustaining costs of about $9,764 per tonne.

The project also carries industrial history. Centaurus acquired Jaguar in 2019 after it was previously owned by Vale, giving the company a known Brazilian nickel asset at a time when battery, stainless steel, and alloy supply chains remain focused on secure feedstock.

The Metalnomist Commentary

The Centaurus Glencore nickel offtake shows that disciplined sulphide nickel projects can still attract strategic buyers despite years of weak nickel prices. If the market keeps tightening, high-grade concentrate with smelter-ready characteristics could regain importance in global nickel supply chains.

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.

Vale Thompson Nickel Belt Restructuring Secures New Capital for Canadian Nickel Supply

Vale Base Metals

Vale Thompson Nickel Belt restructuring marks a strategic move to keep one of Canada’s established nickel districts operating while reducing Vale’s direct exposure. Vale Base Metals has agreed to form a consortium for its Thompson nickel operations following a strategic review.

Vale Thompson Nickel Belt assets will receive up to $200mn in partner commitments to support long-term sustainability. Vale will retain an 18.9% interest in the consortium, while also securing a nickel concentrate offtake agreement.

Vale Thompson Nickel Belt restructuring matters because western buyers are paying closer attention to non-Indonesian nickel supply, origin transparency and long-term feedstock security. Thompson offers a Canadian source of nickel concentrate at a time when the market remains heavily influenced by Indonesian production growth.

The consortium is expected to close by the end of 2026, subject to regulatory approvals. Vale did not name the consortium partners.

Thompson Deal Preserves Exposure While Reducing Operating Risk

The new structure suggests Vale wants to keep Thompson in production without carrying the full capital and operating burden alone. The company is reducing direct exposure but preserving strategic access through its retained stake and concentrate offtake.

This matters because Thompson has faced operational pressure. Production at the mine fell by 66.7% on the year to 12,000t in the first quarter after a pipeline blockage was aggravated by poor weather.

The consortium model could help stabilise the asset if new partners bring capital, operational focus and a longer-term investment plan. For a mature nickel operation, sustaining capital and reliability upgrades can be as important as headline resource size.

The concentrate offtake agreement is equally important. It gives Vale continued access to material while allowing outside capital to support the mine’s future.

For western nickel supply chains, Thompson has strategic relevance beyond its near-term production volume. Non-Indonesian nickel units are becoming more valuable for buyers seeking diversified supply, lower geopolitical concentration and clearer provenance.

This is especially relevant for stainless steel, alloy, battery and defence-linked customers that want alternatives to Indonesia-dominated supply growth. Canadian nickel concentrate can help support that diversification if the operation remains stable.

Strong Copper and Nickel Prices Lift Vale Base Metals Earnings

The Thompson restructuring came as Vale Base Metals reported a sharp improvement in first-quarter earnings. Net revenue rose by 37% on the year to $2.38bn, while adjusted Ebitda more than doubled to $1.2bn from $554mn.

Nickel earnings recovered strongly. Adjusted nickel Ebitda climbed to $277mn from $41mn a year earlier, supported by higher realised prices, stronger sales, lower unit costs and better by-product credits.

Vale’s average realised nickel price rose by 6% to $17,015/t. Nickel sales volumes increased by 15% to 45,000t.

Cost improvements at Sudbury, Voisey’s Bay and Long Harbour also supported the nickel result. This shows that Vale’s Canadian nickel platform still has earnings leverage when operating performance improves and prices firm.

Copper delivered an even stronger contribution. Copper-adjusted Ebitda rose by 74% year on year to $949mn in the first quarter.

Vale’s realised copper price jumped by 48% to $13,143/t, while copper sales volumes rose by 18% to 72,000t. Stronger gold by-product revenues and improved performance at Sossego also supported the result.

The company increased copper sustaining capital expenditure by 54% to $83mn, with spending on the Bacaba copper project a key driver. Total copper capex, including growth spending, rose by 56% to $89mn.

At group level, Vale’s adjusted Ebitda rose by 23% to $3.83bn. The result shows how stronger copper and nickel prices can quickly improve earnings when production, sales and by-product credits align.

For Vale, the strategic message is clear. Copper provides growth and margin strength, while nickel requires selective restructuring, cost discipline and stronger asset-level sustainability.

The Metalnomist Commentary

Vale’s Thompson move shows that western nickel supply will increasingly depend on partnership models, not only mine ownership. The asset’s value lies in preserving Canadian concentrate supply at a time when buyers want alternatives to Indonesian nickel dominance.

Eramet Weda Bay Nickel Faces Care and Maintenance Risk as RKAB Quota Tightens

Eramet - Nickel

Eramet Weda Bay nickel operations face a potential care and maintenance move in May after Indonesia approved a sharply reduced 2026 nickel ore quota. The French mining group said PT Weda Bay Nickel received an initial RKAB permit covering only 12mn wet metric tonnes of nickel ore production and sales.

The Eramet Weda Bay nickel quota is more than 70% below last year’s authorised level. PT WBN initially received 32mn wmt in 2025, later revised up to 42mn wmt.

Eramet has requested an upward revision to the 2026 permit. The company said the current quota will be exhausted by the middle of next month, making the permit decision the most important near-term issue for its nickel business.

The initial 12mn wmt permit includes 3mn wmt for internal use. This leaves Eramet’s external sales target at only 9mn wmt for 2026, well below the level implied by the mine’s operating capacity.

Indonesia’s RKAB Limits Threaten Ore Supply and NPI Continuity

PT Weda Bay Nickel is preparing to enter care and maintenance if the quota is not increased. Eramet said its nickel pig iron plant will continue operating using ore stocks, but the mining restriction creates clear supply risk.

The permit issue matters because Weda Bay is a key ore supplier inside Indonesia’s nickel ecosystem. Its saprolite ore supports nickel pig iron and stainless steel production, while limonite ore feeds high-pressure acid leach plants producing battery intermediates.

PT WBN delivered strong first-quarter output before the quota risk escalated. Marketable nickel ore production rose by 10% on the year to 10mn wmt.

External ore sales climbed by 54% to 8.3mn wmt. Saprolite sales increased by 27% to 4.8mn wmt, while limonite sales jumped by 118% to 3.6mn wmt.

The limonite increase was driven by stronger demand from HPAL plants at the Indonesia Weda Bay Industrial Park. Internal ore consumption for Eramet’s NPI plant was 1mn wmt during the quarter.

Strong sales partly reflected a weak comparison with early 2025, when IWIP plants were destocking after ending 2024 with high inventories. Still, the result shows that downstream demand remains firm.

PT WBN also continued to benefit from premiums of more than 100% above Indonesia’s benchmark floor price for high-grade saprolite. This reflected tight domestic ore supply and stronger competition for available material.

Nickel Market Rebalancing Depends on Permits, Sulphur and Ore Costs

Eramet’s nickel ferro-alloy production was broadly stable in the first quarter. Output reached 9,000t of nickel, down only 1% from a year earlier.

Adjusted nickel turnover, excluding New Caledonia’s Societe Le Nickel, rose by 43% to €163mn. Eramet’s share of PT WBN turnover, excluding its offtake contract, increased by 59% to €116mn.

The company said first-quarter market conditions were supportive. The average London Metal Exchange nickel price rose by 12% on the year to $17,362/t, driven partly by uncertainty over Indonesian ore supply.

Global primary nickel demand rose by 3% to 900,000t in the first quarter. Stainless steel, batteries and aerospace supported consumption.

Global primary nickel production fell by 3%, although the market remained in a modest surplus. Eramet said the nickel market could gradually rebalance over the rest of the year.

Restricted Indonesian mine permits are one reason. Sulphur supply problems are another, because they are raising costs for HPAL producers that depend on sulphuric acid or sulphur feedstock.

PT WBN’s production costs are expected to rise from 2025 levels. Eramet cited authorised volume limits, mining plan adjustments and higher fuel prices.

Indonesia’s revised mineral benchmark formula could also reshape ore economics. The formula, effective from mid-April, now includes cobalt and other contained metals in ore valuation.

This change could increase costs for HPAL feedstock and alter the economics of limonite supply. It also strengthens the government’s ability to capture more value from contained metals in nickel ore.

For Eramet Weda Bay nickel operations, the quota decision will determine whether strong first-quarter performance can continue. Without a higher RKAB, the mine faces a sudden operating constraint despite firm downstream demand.

The Metalnomist Commentary

Eramet Weda Bay nickel is becoming a test case for Indonesia’s tighter control over ore supply. If the RKAB quota is not revised, the impact will reach beyond one mine and reinforce cost pressure across NPI, HPAL and battery-linked nickel supply chains.

Eternal Nickel LME listing reshapes Indonesian nickel trade

Eternal Nickel

The Eternal Nickel LME listing marks a new phase for Indonesian nickel as PTENICO cathodes move toward global benchmark status and add fresh liquidity to a market already facing surplus pressure. Eternal Nickel, a subsidiary of China’s Tsingshan Group, has applied for the Eternal Nickel LME listing with full-plate nickel cathodes produced at Weda Bay in North Maluku, where nameplate capacity reaches 50,000 t/yr. As a result, the Eternal Nickel LME listing would cement Indonesia’s role in refined nickel, not just intermediate products, while also deepening the pool of deliverable brands for price discovery on the London Metal Exchange.

Eternal Nickel LME listing adds to Asian LME nickel capacity

The proposed Eternal Nickel LME listing comes only months after the first Indonesian brand, DX-zwdx, secured LME approval in 2024, lifting new Asian registered capacity to 232,600 t since mid-2023. PTENICO cathodes would be the second Indonesian nickel brand listed, reinforcing the rapid shift of refined nickel capacity toward Indonesia as high-pressure acid leach and conversion projects mature. Meanwhile, surplus nickel has been flowing into LME warehouses because many producers find LME delivery the most efficient route to immediate liquidity. LME nickel stocks climbed to 224,700 t in September from 162,336 t in January, with Chinese-origin material surging to 152,454 t from 81,564 t. Therefore, any additional Indonesian cathode tonnage registered on the LME is likely to weigh further on prices, even if it improves tradability and hedging options for consumers.

Surplus stocks pressure prices as more Indonesian cathodes line up

The Eternal Nickel LME listing would arrive in a market where the official three-month LME nickel price has stayed rangebound around $15,000–16,000/t, averaging just $15,432/t in 2024. However, producers continue to commission new cathode capacity and are actively preparing LME applications, treating warehouses as an outlet for surplus production rather than cutting supply. Indonesian producer Nickel Industries Limited plans to add nickel cathode output, while major producer QMB is upgrading its technology to produce LME-grade cathodes, both from plants in Central Sulawesi. As these projects advance, more Indonesian cathode brands are expected to seek registration, reinforcing the structural oversupply narrative and keeping spot prices under pressure, even as stainless steel and battery sectors look for cost advantages.

The Metalnomist Commentary

The Eternal Nickel LME listing underlines how Indonesia is moving rapidly up the nickel value chain from ore and intermediates to globally deliverable cathode brands. For traders and hedgers, more Indonesian brands enhance liquidity and flexibility, but they also lock in a heavier overhang of exchange stocks that can cap rallies. Strategically, the trend raises important questions for non-Indonesian producers: competing on cost alone against the Weda Bay and Sulawesi hubs will be tough, making product differentiation, specialty alloys and long-term customer partnerships more critical than ever.

Indonesia-Philippines Nickel Corridor Gains Momentum as Ore Supply Gap Widens

Indonesia Nickel mining

Indonesia-Philippines nickel corridor plans are gaining strategic importance as the region’s two largest nickel-producing countries deepen cooperation across the nickel value chain. The Indonesian Nickel Miners Association and the Philippine Nickel Industry Association signed a second memorandum of understanding in Cebu on 7 May.

The Indonesia-Philippines nickel corridor is designed to improve coordination between upstream ore supply, processing demand and downstream battery-related investment. The agreement builds on an earlier MoU signed in Manila in February 2026.

The Indonesia-Philippines nickel corridor also reflects a practical market need. Indonesia’s domestic nickel ore supply is tightening, while its smelting and battery-material capacity continues to expand.

The latest agreement was signed alongside the Association of Southeast Asian Nations summit, giving the partnership a stronger regional policy dimension. It signals that nickel is becoming a strategic industrial platform for Southeast Asia, not only a mined commodity.

Ore Supply Coordination Becomes Critical for Indonesia

Indonesia’s nickel processing industry is facing a widening feedstock challenge. APNI estimates the country’s approved nickel ore production quota for 2026 at 260mn-270mn wet metric tonnes.

That level still leaves a projected supply gap of around 80mn wet metric tonnes. This shortfall highlights the growing role of Philippine ore as supplementary feedstock for Indonesian smelters.

Indonesia imported 15.3mn t of nickel ore in 2025. That trade flow could increase if domestic mining quotas remain tight and processing demand continues to grow.

Philippine ore is not a simple replacement for Indonesian ore. The two countries’ ores differ in chemical composition, which can affect processing performance, recovery rates and smelter efficiency.

However, blending Philippine and Indonesian ore can help optimise smelter feed. This gives the partnership a direct operational purpose, especially for nickel pig iron, stainless steel and battery-linked processing routes.

The agreement therefore formalises a market trend already developing through trade. Indonesian processors need reliable ore, while Philippine miners can benefit from stronger regional demand and closer customer integration.

Nickel Corridor Supports Southeast Asia’s Battery Ambition

The partnership also supports Southeast Asia’s emerging electric vehicle battery ecosystem. Nickel remains a key input for high-nickel cathode materials, mixed hydroxide precipitate, stainless steel and specialty alloy production.

Indonesia has already become the centre of regional nickel processing. But its growth depends on stable ore access, clear mining quotas, sulphur and acid availability, power supply and downstream investment.

The Philippines brings complementary upstream strength. Its ore exports can help fill Indonesia’s feedstock gap while giving Manila a more active role in the regional battery materials chain.

The MoU framework covers supply-chain integration, policy dialogue and industry development. This is important because nickel markets are increasingly shaped by regulation, quotas, export policies and downstream industrial strategy.

The corridor could also influence Asian nickel ore pricing. If Indonesian demand for Philippine ore increases, regional benchmark dynamics may shift as buyers compete for suitable feedstock.

For smelters, the biggest value may come from consistency. Better coordination between miners, processors and policymakers can reduce uncertainty around ore availability and improve long-term planning.

For battery supply chains, the agreement shows that Southeast Asia is trying to build a more integrated regional nickel platform. Indonesia and the Philippines together can influence ore flows, processing economics and downstream investment decisions.

The Metalnomist Commentary

The Indonesia-Philippines nickel corridor is a response to Indonesia’s processing success creating its own ore shortage. The next phase of Southeast Asian nickel competition will depend less on who has ore alone, and more on who can coordinate feedstock, processing and battery-market access.

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.

Indonesia Nickel Export Rule Creates New Uncertainty for Global Supply

Indonesia Nickel mining

Indonesia nickel export rule changes have created fresh uncertainty in the nickel market as Jakarta moves to centralise key commodity exports through state-owned enterprises. Market participants are now waiting for clearer details on scope, pricing and implementation.

Indonesia nickel export rule plans were announced by president Prabowo Subianto on 20 May. The policy will require exports of key commodities to be routed through a state-owned enterprise, or BUMN, which would act as the sole counterparty to overseas buyers.

Indonesia nickel export rule uncertainty matters because the country is the world’s dominant nickel producer, accounting for more than 60% of global supply. Most of that output is nickel pig iron, a ferroalloy used mainly in stainless steelmaking.

The policy will initially target palm oil, coal and ferrous alloys. Nickel pig iron is expected to fall under the rule because it is a ferroalloy, although other nickel products have not yet been explicitly included.

Nickel Pig Iron Trade Faces Centralisation Risk

Nickel pig iron is central to Indonesia’s nickel position. It is a lower-cost nickel-bearing feedstock for stainless steel production, but it cannot be used directly in batteries.

To enter the battery chain, NPI must first be converted into nickel matte and then processed further into nickel sulphate for cathode manufacturing. This means any disruption to NPI flows can affect stainless steel first, but may also influence battery-related nickel routes over time.

Indonesia has already used centralised systems for other commodities. Tin exports must be traded through official domestic exchanges, such as ICDX or JFX.

The new system would go further by placing a state-owned enterprise at the centre of export contracts, transactions and payment flows. From June to August, exporters are expected to gradually transfer these functions to BUMN. From September, all export transactions are expected to move fully through the state-owned structure.

Market participants are sceptical about the timeline. Many believe implementation from 1 June is too early because the policy still appears under preparation.

The lack of broad industry consultation has also increased concern. Traders say Jakarta consulted only a limited number of stakeholders before announcing the policy, contributing to confusion and weak market confidence.

Pricing and Product Scope Remain Unclear

The main uncertainty is scope. Ferroalloys are expected to be covered, but other nickel products have not been clearly defined. Many participants expect the policy to eventually expand across more nickel products.

Pricing is another major question. Buyers and sellers do not yet know whether export prices will be set by BUMN or negotiated commercially between counterparties.

A separate pricing framework may be introduced, but details are still missing. This matters because Indonesia’s nickel market already faces policy-driven cost changes, including ore pricing formula updates and royalty uncertainty.

The new export rule could tighten supply conditions if it slows contracting, complicates payments or reduces flexibility for private exporters. Even if physical output remains unchanged, transaction friction can affect availability.

The market reaction has so far been cautious rather than dramatic. Indonesia’s Jakarta Composite Index fell, while LME nickel showed only limited movement after the announcement.

However, the longer-term implication is more significant. Indonesia is moving toward stronger state control over strategic natural resource flows.

For nickel buyers, this means procurement risk is no longer only about mine quotas, ore grades or processing costs. It now includes export governance, state counterparty risk and policy timing.

The Metalnomist Commentary

Indonesia is turning nickel from a commodity export into a managed strategic resource. The rule may support state control, but poor implementation could disrupt the very downstream supply chain Jakarta has worked so hard to build.

Danantara Weda Bay Nickel Stake Plan Signals Stronger Indonesian Control

Weda Bay Nickel

Danantara Weda Bay Nickel stake interest signals Indonesia’s push to increase domestic participation in strategic nickel assets. The sovereign investment agency is considering acquiring Eramet’s stake in Weda Bay Nickel after discussions with president Prabowo Subianto.

Danantara Weda Bay Nickel stake talks remain at an early stage, with no final decision made. But the move shows that Jakarta wants stronger local ownership in assets central to its electric vehicle battery supply chain strategy.

Danantara Weda Bay Nickel stake interest comes as Indonesia continues to use policy, quotas and state-backed entities to shape the nickel value chain. The country wants to capture more value from mining, processing and downstream battery materials.

Weda Bay Nickel is located in North Maluku and has operated under a special mining permit since 2019. It is one of Indonesia’s most important nickel ore assets.

Domestic Participation Becomes a Strategic Priority

Danantara could position itself as a strong local partner in Weda Bay Nickel. That role would support Indonesia’s broader effort to increase national participation in critical mineral assets.

Eramet currently holds around 37.8% of the project. China’s Tsingshan owns about 51.2%, while state-controlled Aneka Tambang holds roughly 10%.

This ownership structure already reflects Indonesia’s nickel strategy. Foreign capital and Chinese processing expertise have helped build the sector, but Jakarta is now seeking greater domestic influence over key assets.

A Danantara investment would not only change ownership. It could also strengthen state-linked oversight of production, ore allocation and downstream integration.

For Eramet, the talks come at a sensitive time. The company has already faced pressure after Weda Bay Nickel’s 2026 RKAB production quota was cut sharply.

RKAB Quota Cut Raises Nickel Supply Uncertainty

Eramet confirmed in February that Weda Bay Nickel’s 2026 RKAB quota was reduced by 70% to 12mn wet metric tonnes. That cut has made the asset’s production outlook more uncertain.

The quota reduction matters because Indonesia’s downstream nickel capacity depends on stable ore supply. Smelters, high-pressure acid leach plants and battery-material producers need consistent feedstock to maintain output.

Weda Bay Nickel is a key part of that supply chain. Any change in ownership, production quota or operating strategy can affect ore availability and regional nickel pricing.

Indonesia is trying to balance several goals at once. It wants more state participation, higher domestic value capture, stronger downstream processing and continued investor confidence.

Danantara’s potential entry could help align Weda Bay Nickel more closely with national policy. But it may also raise questions for foreign partners about operating certainty and long-term control.

The nickel market should watch whether the talks progress from early-stage discussions into a formal transaction. If Danantara moves ahead, it would mark another step in Indonesia’s shift from attracting foreign nickel investment to actively reshaping ownership of strategic assets.

The Metalnomist Commentary

Danantara’s interest in Weda Bay Nickel shows that Indonesia’s nickel strategy is entering a more state-directed phase. The key risk is whether greater domestic control can improve supply-chain resilience without unsettling the foreign capital and technical partners that built the sector.