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.

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.

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.

China's August Nickel Metal Imports Surge, Exports Drop

China's Nickel

China’s nickel metal imports saw a significant rebound in August, largely driven by delayed shipments from Russia in July finally arriving. The gap between Chinese domestic nickel prices and London Metal Exchange (LME) nickel prices narrowed, leading to a sharp reduction in nickel exports.

According to customs data, China imported 8,794 tonnes of nickel metal in August, more than doubling the volume from the previous month and marking a 28% increase from the same period last year. The dip in imports in July was mainly attributed to logistical challenges, which were resolved by August, resulting in the spike. Russian exports, which usually maintain a steady level each month, rose sharply in August to 5,242 tonnes, compared to just 946 tonnes in July.

Nickel imports from Indonesia remained stable in August, reaching 1,232 tonnes, reflecting a 13% month-on-month increase. Despite the August surge, China's total nickel imports for the January-August period fell by 15%, amounting to 54,713 tonnes. The decline was due to reduced shipments from Russia, Australia, and Canada, which outweighed the increase in Indonesian imports. Indonesia is increasingly becoming China’s main source of nickel feedstock, replacing traditional suppliers.

Exports Fall Amid Stable Domestic Supply

In contrast, China’s nickel metal exports dropped to 12,496 tonnes in August, a 17% decline from July. However, exports were nearly eight times higher than a year earlier. Taiwan remained the leading export destination due to its close proximity to an LME warehouse, making it a key hub for trade.

During the January-August period, China’s total nickel exports more than tripled, reaching 71,020 tonnes. South Korea also emerged as a major destination, accounting for 37% of China’s total exports, a position similar to Taiwan, driven by geographical convenience.

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.

Xinxin nickel matte output hits record high in 2025

Xinjiang Xinxin Mining Industry

Xinxin nickel matte output hits record high in 2025 after the producer raised operating rates. Xinxin nickel matte output hits record high in 2025 as the company extended production to ten months. As a result, Xinjiang Xinxin Mining Industry pushed nickel matte output above 30,000 tonnes by 21 December.

The record output marks a 25% increase from 2024 production of about 24,000 tonnes. The company credited tighter process control and steadier operations. Meanwhile, longer campaign stability reduced downtime and lifted effective utilization.

Longer operating window lifts matte output

A longer production period drove the largest share of the gain. The company ran for ten months in 2025 versus eight months in 2024. Therefore, higher run time converted directly into higher matte tonnage.

Improved operating discipline also matters for state-controlled producers. Better stability helps manage unit costs and smelter planning. However, the broader nickel market still faces margin pressure when supply rises faster than demand.

Downstream nickel metal supply outlook

Xinxin nickel matte output hits record high in 2025 and supports higher nickel metal production. The company expects nickel metal output to reach 13,500 tonnes in 2025. That level implies roughly 42% growth versus an estimated 9,500 tonnes in 2024.

More nickel metal supply can shift the local balance for stainless and battery-linked demand. Meanwhile, buyers will watch whether higher output holds through 2026. Therefore, consistency may become the key signal for contract confidence.

The Metalnomist Commentary

This result shows how operating discipline can move volumes without new capacity. However, sustained gains will depend on feed availability and cost control. Producers that stabilize run time will shape near-term nickel pricing power.

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.

Lygend Indonesian Nickel Output Drives Sharp Profit Growth in 2025

Lygend Indonesia

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

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

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

HPAL and RKEF Projects Lifted Nickel and Cobalt Volumes

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

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

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

Cobalt Prices Helped Offset Rising Input Costs

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

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

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

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

The Metalnomist Commentary

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

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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Hanrui Indonesian Nickel Smelter Nears Completion With Hot Commissioning Start

Hanrui Indonesian

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

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

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

Hot Commissioning Marks Final Step Before Commercial Output

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

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

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

Chinese Producers Expand Nickel Matte Capacity in Indonesia

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

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

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

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

The Metalnomist Commentary

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

Jogmec FPX nickel exploration in Canada targets low-carbon battery metals

Nickel

Japan’s Jogmec FPX nickel exploration in Canada signals a deeper strategic push into secure battery metal supply. The partners are testing awaruite nickel resources in Newfoundland and Labrador to support long-term decarbonisation. As a result, Jogmec FPX nickel exploration in Canada sits at the intersection of energy security, EV growth and critical mineral policy in both countries.

Strategic drivers behind Jogmec FPX nickel exploration in Canada

The first phase of Jogmec FPX nickel exploration in Canada focuses on the Advocate area in northwest Newfoundland and Labrador. Jogmec will pay C$1.64mn over three years for an option to acquire a 48pc stake from Shoreline Exploration. However, the exploration timeline and ultimate nickel yield remain uncertain, underlining the early-stage nature of the project.

Japan’s government has placed storage batteries on its list of 11 vital materials since late 2022. Therefore Jogmec is mandated to lock in battery metal supply, including nickel, to underpin its 2050 decarbonisation targets. Canada has emerged as Japan’s preferred partner for these efforts, combining resource depth, ESG credibility and strong policy backing for critical minerals.

Meanwhile, Jogmec and FPX are already familiar collaborators in awaruite nickel. They previously explored the 28km² Klow area in British Columbia, building geological knowledge and technical confidence. This continuity reduces project risk and strengthens the case for scaling Jogmec FPX nickel exploration in Canada into a long-term supply platform.

Awaruite nickel, FPX portfolio and supply chain implications

Awaruite nickel, hosted in ultramafic rocks, offers potential processing and ESG advantages compared with some sulphide and laterite routes. If exploration succeeds, Jogmec FPX nickel exploration in Canada could deliver large-scale, low-impurity feedstock for battery precursors. However, investors will still demand clarity on recovery rates, capex intensity and permitting pathways before committing major capital.

FPX Nickel sits at the centre of this emerging supply chain. Its 59,000 t/yr Baptiste Nickel Project in British Columbia already attracted a strategic stake from Japan’s Sumitomo Metal Mining. As a result, Japan’s industrial ecosystem could gain multi-asset access to Canadian nickel via Jogmec, Sumitomo and FPX, spanning both Baptiste and Advocate.

For Canada, this partnership reinforces its positioning as a reliable supplier of low-carbon critical minerals to advanced economies. For Japan, diversified awaruite supply helps reduce exposure to high-risk jurisdictions and volatile spot markets. Over time, successful Jogmec FPX nickel exploration in Canada could anchor new midstream investments in refining and active materials aligned with EV and storage demand.

The Metalnomist Commentary

Jogmec’s move with FPX shows how state-backed agencies are now competing directly for future battery nickel. If the Advocate and Baptiste projects advance on schedule, Canada could become one of Japan’s most strategic nickel partners outside traditional sulphide hubs. The key question now is whether policy support and project economics will align fast enough to meet the next wave of EV demand.

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.

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.

LME Harjavalta Nickel Suspension Puts Class 1 Nickel Warrants Under Review

Harjavalta Nickel

LME Harjavalta nickel suspension will stop new warranting of Norilsk Nickel Harjavalta’s primary nickel briquettes and cathodes from 19 June. The London Metal Exchange said no further deliveries of these Finnish-produced products will be accepted for warranting after that date.

The LME Harjavalta nickel suspension does not remove existing warranted metal from the system. Material already on warrant can continue to circulate, but once cancelled after the deadline, it will not be eligible for re-warranting.

The move matters because Harjavalta is a key European source of class 1 nickel. Its cathodes and briquettes are used in stainless steel, battery materials, alloy production, and other high-purity nickel applications.

Administrative Review Appears More Likely Than Supply Disruption

Market participants view the LME Harjavalta nickel suspension as likely procedural rather than a sign of quality or production problems. The three-month lead time suggests the issue may relate to documentation, compliance, or brand listing requirements.

The LME regularly reviews listed brands to ensure producers meet exchange rules. These rules include responsible sourcing standards and documentation obligations, which have become more important across metals markets.

That interpretation limits the immediate market impact. Traders do not expect a major disruption to European nickel availability or premiums, especially because other high-grade nickel brands remain available within the broader class 1 supply pool.

Class 1 Nickel Flexibility Reduces Near-Term Market Risk

Harjavalta material remains important, but the European market has some flexibility through substitution between high-grade forms such as cathodes, briquettes, and rounds. This flexibility should reduce the short-term impact of the warranting suspension.

The spot market may also see limited direct disruption because Harjavalta has reportedly committed most near-term capacity to term contracts. That means spot availability was already constrained before the LME announcement.

Still, the suspension highlights the rising importance of exchange compliance in critical metal supply chains. For nickel buyers, warrant eligibility, responsible sourcing documentation, and brand approval status are becoming part of supply risk management.

The Metalnomist Commentary

The LME Harjavalta nickel suspension is unlikely to trigger an immediate supply shock, but it shows how administrative compliance can affect market liquidity. In class 1 nickel, exchange status now matters almost as much as physical availability.

ARM Nkomati Nickel Mine Restart Moves Closer With Boliden Concentrate Deal

African Rainbow Minerals

ARM Nkomati nickel mine restart prospects have strengthened after African Rainbow Minerals signed a multi-year nickel concentrate sales agreement with Swedish mining and smelting group Boliden. The agreement could support the return of one of South Africa’s important multi-metal nickel assets.

The ARM Nkomati nickel mine has been on care and maintenance since 2020. ARM and Norilsk Nickel placed the operation into suspension after profitability weakened because of lower output.

The ARM Nkomati nickel mine produced nickel, copper, cobalt, chrome and platinum group metals. Its potential restart would therefore add more than nickel units to the market, supporting several metals linked to batteries, stainless steel, alloys and industrial supply chains.

The deal with Boliden remains conditional. It depends on approval to recommence open-pit mining of nickel-bearing ore at Nkomati, responsible sourcing due diligence by Boliden and other regulatory clearances.

Boliden Agreement Gives Nkomati a Processing Route

The sales agreement gives ARM a potential outlet for Nkomati nickel concentrate if mining restarts. Boliden expects the concentrate to be shipped to its Harjavalta smelter in Finland.

Harjavalta produces nickel matte, making it a logical destination for nickel-bearing concentrate. The route would connect South African mine supply with European smelting capacity.

This matters because nickel concentrate needs secure processing access before a restart can become commercially meaningful. A mine can have geological potential, but it still needs offtake, logistics, smelting capacity and customer qualification.

Boliden’s responsible sourcing due diligence is also important. European smelters and customers increasingly require stronger documentation around mine origin, ESG standards and supply-chain integrity.

The agreement therefore does more than provide a buyer. It gives the Nkomati restart a possible downstream pathway into a European refining and smelting system.

For ARM, the deal could improve the commercial case for reopening the mine. For Boliden, it could provide another concentrate source for its nickel operations at a time when secure non-Indonesian nickel supply remains strategically relevant.

South African Nickel Supply Could Regain Strategic Relevance

Nkomati’s ownership structure has changed since the mine entered care and maintenance. Nornickel’s South African subsidiary agreed in November 2023 to transfer its 50% stake to ARM, and the transaction was finalised in July 2025.

Full ARM control gives the South African company more direct strategic flexibility. It can evaluate restart options without the same joint-venture complexity that previously shaped the asset.

The potential restart comes at a time when nickel markets remain divided. Indonesia dominates new supply growth, but European and western buyers are increasingly interested in diversified, traceable and geopolitically balanced feedstock.

Nkomati’s multi-metal profile adds to its relevance. Nickel remains important for stainless steel, batteries and superalloys. Cobalt supports batteries and high-performance alloys. Platinum group metals serve automotive catalysts, hydrogen technologies and industrial applications.

However, restart economics will be the decisive issue. The mine was suspended because lower output weakened profitability. Any recommencement will need a stronger operating plan, stable grades, reliable processing economics and clear market support.

The Boliden agreement is an important step, but not the final decision. The project still needs operational approval, regulatory clearance and successful due diligence before concentrate flows can resume.

The Metalnomist Commentary

The ARM-Boliden agreement shows that idled nickel assets can regain value when buyers prioritise diversified and traceable supply. Nkomati’s restart will depend less on headline nickel prices alone and more on whether ARM can rebuild a reliable mine-to-smelter route.

Sumitomo Metal Mining to Take Full Ownership of Coral Bay Nickel Smelter

Sumitomo Metal Mining (SMM)

Sumitomo Metal Mining (SMM), a leading Japanese mining and trading conglomerate, has announced its intention to acquire the remaining 15.625% stake in Coral Bay Nickel Corporation (CBNC) from Nickel Asia Corporation (NAC). This acquisition will result in SMM holding 100% ownership of CBNC, solidifying its control over this crucial nickel processing facility. Currently, SMM holds an 84.375% share in CBNC.

CBNC: A Key Player in Nickel and Cobalt Production

CBNC, located in the Philippines, is notable for being the first hydrometallurgical metal processing plant in the country to utilize the High-Pressure Acid Leaching (HPAL) process. This advanced technology allows for the efficient extraction of nickel and cobalt from lateritic ores. The smelter boasts a production capacity of 24,000 tonnes per year of nickel and 2,500 tonnes per year of cobalt, making it a significant contributor to the global supply of these critical metals.

Strengthening SMM's Position in the Nickel Market

This strategic acquisition by SMM further expands its presence in the Philippine nickel sector. The company also holds a 75% stake in the Taganito HPAL nickel facility, another prominent HPAL plant in the Philippines. In addition to its Philippine operations, SMM maintains a strong nickel refining presence in Japan with its Niihama Nickel Refinery and Harima Refinery. The move to fully own CBNC reflects SMM's commitment to securing its nickel supply chain and strengthening its position as a key player in the global nickel market. Details regarding the transaction price and timeline have not yet been disclosed.

China's Weiming Advances Nickel Matte Project in Indonesia

Chinese environmental protection equipment manufacturer Weiming made significant progress on August 25 in its Jiaman high nickel matte project, located in the north Maluku province of Wedabay, Indonesia. The company began preheating the first side-blown converter, a critical step toward moving the equipment into the linkage debugging phase before full-scale production begins.

Jiaman, a joint venture between Weiming and Merit International Capital, has a nameplate capacity of 40,000 tons per year in nickel metal equivalent. The facility features four production lines, each capable of producing 10,000 tons of nickel metal equivalent annually.

The Jiaman project is notable for being the second in Indonesia to adopt the oxygen-enriched side-blowing furnace (OESBF) process, following a similar initiative by Chinese nickel and lithium-ion battery cathode active material (CAM) precursor producer CNGR in 2022. The OESBF process is considered cost-effective, utilizing ores with low nickel content and enabling the recovery of cobalt metal, according to CNGR.

Market observers are closely watching the development and feasibility of the OESBF process, as it remains an emerging technology.

In addition to the Jiaman project, Weiming is involved in two other high nickel matte projects in Indonesia, with production capacities of 40,000 tons and 50,000 tons per year, respectively. These ventures will bring Weiming's total nickel metal production capacity in Indonesia to 130,000 tons annually.

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.

Chinese Cobalt Prices Expected to Decline Further in 2025 Amid Rising Supply and Weak Demand

Chinese Cobalt Manufacturing

Oversupply and Weak Demand to Push Cobalt Prices Lower

The Chinese cobalt market is set to experience further price declines in 2025, as increasing nickel and copper production, from which cobalt is a by-product, leads to an oversupply that buyers are struggling to absorb.

Currently, Chinese-origin cobalt metal traded in Europe has already seen significant pressure due to a lack of floor pricing on raw materials, a trend expected to persist into the new year. Market insiders suggest that cobalt prices could drop below $9/lb, as fully integrated Chinese producers view cobalt as a credit to their primary metal production, particularly nickel and copper.

For these refiners, cobalt is a secondary concern. As one trading firm explained, some Chinese producers operate with production costs as low as $4,000 per ton while selling at $9,000 per ton. Even if they incur a $50 million loss on cobalt, they may still profit significantly from copper production, which can generate up to $700 million in gains.

Chinese Refiners Likely to Continue Production at a Loss

Unlike non-Chinese refiners, which may curtail supply if cobalt prices fall below $9/lb, some Chinese integrated mining firms and refiners could continue refining hydroxide into metal at a loss-making $7-8/lb.

While there is speculation that some Chinese metal producers may attempt to negotiate floor prices in their contracts, it remains uncertain whether these efforts will succeed. Market participants are closely watching how these negotiations unfold, as they could provide some level of price support if successful.

Global Nickel and Copper Growth to Sustain Cobalt Oversupply

The primary factor driving cobalt’s oversupply is the continued expansion of nickel and copper production, as cobalt is a by-product of both metals.

• Nickel production is set to rise again in 2025 with the launch of new Class 1 nickel refineries in China and Indonesia. This will likely keep London Metal Exchange (LME) three-month official nickel prices within the $15,000-17,000 per ton range, significantly lower than the $30,000 per ton peak in early 2023.

• Copper production is also projected to increase due to expansions at mines such as Kamoa-Kakula in the Democratic Republic of Congo (DRC). Although cobalt sales represent only a minor portion of copper mining revenues, producers still aim to extract value from it as a credit.

Weakened Demand from EV and Chemicals Sectors Further Pressures Prices

While cobalt demand in China has surged by 40%, this has not been enough to counteract weakening demand in other regions, particularly in Europe:

• The electric vehicle (EV) sector in Europe has slowed down, leading to reduced demand for cathode active materials like cobalt.

• The European chemicals industry, particularly in Germany, has struggled due to rising energy costs and broader economic challenges.

Even if prices do increase, China has ample spare refining capacity and could use third-party tolling arrangements to process hydroxide into metal, further maintaining downward price pressure.

Peak Oversupply May Be Near, But Price Recovery Remains Uncertain

Some market participants believe that cobalt hydroxide oversupply may have already peaked. The shift towards lithium iron phosphate (LFP) batteries, which do not use cobalt, has significantly impacted the demand for nickel-cobalt-manganese (NCM) battery chemistries, leading to lower demand for cobalt sulfate and cobalt hydroxide.

However, despite this potential supply peak, weak demand across key industrial sectors suggests that cobalt prices are unlikely to see a strong recovery in the near term.

Conclusion

In 2025, Chinese cobalt prices are expected to remain under pressure due to rising nickel and copper production, ongoing oversupply, and weak demand from the European EV and chemicals sectors. While some believe that the cobalt market may be nearing peak oversupply, prices are unlikely to experience significant upward momentum unless demand rebounds sharply or supply reductions occur.

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.