Nickel Ore Prices Fall as Philippine Supply Recovery Eases Feedstock Tightness

Philippine Nickel ore

Nickel ore prices have fallen as Philippine supply recovered after the monsoon season, while a correction in London Metal Exchange nickel weakened sentiment across the value chain. The decline shows how quickly seasonal ore flows can pressure feedstock markets when Indonesian buyers slow procurement.

Nickel ore prices for 1.3% grade material on a cif China basis dropped to 55-57 yuan/wmt on 14 May from 65-66 yuan/wmt on 26 March. The fall came even though LME nickel remained above late-March levels after briefly touching almost two-year highs earlier in May.

Nickel ore prices are important because ore often gives the earliest physical signal in the nickel chain. Unlike LME nickel, ore prices are less driven by financial flows and more directly tied to mine supply, port congestion, smelter demand and buyer inventories.

The current weakness reflects three forces moving together: Philippine mine supply is recovering, Indonesia is slowing purchases, and LME nickel has corrected after earlier policy-driven gains.

Philippine Supply Recovery Changes the Regional Ore Balance

The Philippines is entering its seasonal production recovery after monsoon-related disruptions. Mining activity in Surigao, the country’s main nickel ore hub, usually slows from November to March and rebounds from May.

Surigao accounts for around half of Philippine nickel ore output. As shipments recover, buyers have more nearby feedstock options, reducing the urgency that supported prices earlier in the year.

This seasonal pattern has become more important since Indonesia emerged as a major Philippine ore importer. Historically, Chinese buyers stocked up ahead of the rainy season and drew down inventories until supply returned. But Indonesia’s rising demand has added a second major pull on Philippine material.

The Philippines exported 55.22mn t of nickel ore in 2025. China took 72% of that volume, while Indonesia accounted for 18%.

Indonesia’s imports from the Philippines rose to 15.48mn t in 2025 from 9.55mn t in 2024. That growth was driven by tight domestic ore controls under Indonesia’s RKAB quota system.

Indonesia imported 1.41mn t of Philippine nickel ore in March, up sharply from both a year earlier and the previous month. But that buying momentum has now slowed as port bottlenecks and price uncertainty weigh on procurement.

Indonesia Bottlenecks and NPI Margins Pressure Demand

Most Philippine ore shipped to Indonesia moves to the Weda Bay industrial park. The site produced around one third of Indonesia’s total nickel supply in 2025, making it a major feedstock demand centre.

But Weda Bay has limited unloading capacity. Only two major berths handle nickel ore discharge, creating recurring congestion.

Some vessels that would normally unload within two days are waiting up to two weeks. That congestion reduces buyers’ willingness to secure additional cargoes, especially when prices are falling.

Indonesia’s revised ore pricing formula has also changed buyer behaviour. The new formula includes cobalt, iron and chromium values, raising raw material costs and adding uncertainty to procurement decisions.

Meanwhile, LME nickel’s pullback has started to pressure nickel pig iron prices. NPI prices had been relatively steady, supported by stainless steel demand, but softer benchmark prices are now weakening producer margins.

Lower margins can reduce production incentives for Chinese NPI producers. That, in turn, may reduce demand for nickel ore and extend downward pressure on feedstock prices.

Nickel sulphate prices have remained stable because tight supply has offset weak demand from the nickel-cobalt-manganese battery sector. But the ore market is moving faster because supply is returning and buyers are stepping back.

The short-term outlook remains soft. Rising Philippine availability, weaker LME sentiment and slower Indonesian buying are likely to keep nickel ore under pressure until the market finds a new floor.

The Metalnomist Commentary

Nickel ore prices are showing that Indonesia’s downstream expansion has made Philippine supply more strategically important. But when port bottlenecks, weaker NPI margins and seasonal supply recovery hit together, even tight Indonesian ore controls cannot prevent a feedstock correction.

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.

Indonesia Nickel Ore Quotas Risk Tightening Feedstock Without Fixing Oversupply

Indonesia Nickel

Indonesia nickel ore quotas are becoming a more powerful market signal in 2026. Jakarta is expected to cut RKAB approvals to around 250mn–260mn t. That looks like a strong intervention on paper. However, Indonesia nickel ore quotas may tighten feedstock without solving Indonesian nickel oversupply in downstream products.

The core imbalance is no longer in ore. The real surplus sits in nickel pig iron, matte, and mixed hydroxide precipitate. Domestic ore prices remain elevated, which suggests ore availability is still tight. Therefore, Indonesia nickel ore quotas may create upstream stress while leaving downstream nickel products oversupplied.

This matters because policy and market structure are moving in opposite directions. Indonesia continues to expand smelting and HPAL capacity aggressively. At the same time, ore quotas are becoming harder to secure in full. As a result, the market may move toward feedstock shortages rather than a true rebalancing of refined nickel supply.

Indonesia Nickel Ore Quotas Could Create an Upstream Bottleneck

Indonesia nickel ore quotas appear lower than expected ore demand for 2026. The approved ceiling now looks below estimated domestic ore requirements. That gap raises the risk of feedstock shortages for smelters. Consequently, nickel ore supply tightness may become the market’s next major problem.

Vale Indonesia shows how this pressure is already emerging. Market participants say its approved RKAB is only a fraction of requested volume. Yet the company is developing multiple HPAL projects that will require large limonite ore volumes. Therefore, limited quota approvals could constrain new downstream capacity before it reaches full utilisation.

The ore issue is also more complex than headline tonnage suggests. RKAB quotas are issued in wet tons, not uniform recoverable nickel units. Moisture content and ore grade can vary significantly. As a result, nominal quota levels may overstate real usable feedstock availability.

Regulatory uncertainty adds another layer of risk. Indonesia’s forestry crackdown has targeted a large area of mining land without valid permits. Nickel operations could be affected, especially smaller miners or forest-zone projects. Meanwhile, quota delays themselves can disrupt ore availability even before formal supply cuts take full effect.

Indonesian Nickel Oversupply Will Persist Unless Smelter Output Is Also Disciplined

Indonesian nickel oversupply is still concentrated in processed products, not in ore. Cutting ore quotas alone does not automatically solve NPI, matte, or MHP oversupply. Smelters can still try to secure imported feedstock from the Philippines or New Caledonia. However, those alternative sources remain limited and unreliable.

That means imported ore is a cost issue, not a structural solution. Greater reliance on foreign ore would lift smelter input costs and compress margins. It would not remove the global glut in downstream nickel products. Therefore, the policy may shift pressure upstream while preserving the same downstream oversupply.

Royalties could deepen that squeeze further. Higher nickel prices may trigger increased royalty rates on ore and processed products. That would raise costs across the chain at a time when refined markets remain weak. As a result, profitability could deteriorate even if LME prices stay temporarily supported.

The government may still adjust course later in the year. Producers can use part of earlier three-year approvals through the end of March, and market participants expect later reviews. That suggests the headline RKAB figure may not be a fixed ceiling. Even so, policy uncertainty is already becoming a stronger driver of nickel prices than actual market healing.

The Metalnomist Commentary

Indonesia is trying to influence prices through ore control, but the real surplus remains downstream. That mismatch could turn a refined nickel glut into an upstream bottleneck without delivering true market balance. Unless ore discipline is matched by smelter discipline, volatility will remain the defining feature of the nickel market.

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

Nickel ore

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

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

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

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

Limonite Ore Repricing Raises MHP Cost Pressure

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

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

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

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

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

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

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

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

Sulphuric Acid Tightness Adds a Second Cost Shock

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

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

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

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

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

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

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

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

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

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

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

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

The Metalnomist Commentary

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

Antam Nickel Ore Output Surges as Indonesia’s Domestic Demand Drives Growth

Antam Nickel

Antam nickel ore output surged in 2025 to its highest level in more than a decade. The state-controlled miner produced 16.1mn wet metric tonnes of nickel ore. That was up 62pc from the previous year. As a result, Antam nickel ore output now reflects the strength of Indonesian domestic nickel demand.

The company’s sales performance was even stronger. Nickel ore sales rose 75pc year on year to 14.6mn wet metric tonnes. This shows that domestic downstream buyers absorbed much of the additional supply. Therefore, Indonesia nickel ore production continues to benefit from the country’s internal processing expansion.

This matters because Antam’s ore supports more than one value chain. Its nickel ore feeds domestic class two nickel production and the company’s own ferronickel operations at Kolaka. Consequently, Antam nickel ore output remains important to both external downstream users and its internal processing strategy.

Indonesian Domestic Nickel Demand Is Reshaping Antam’s Business Mix

Indonesian domestic nickel demand is clearly driving Antam’s ore growth. The company’s production surge shows how strongly local processors continue to pull feedstock into the domestic market. This supports Indonesia’s long-term policy of deeper downstream integration. As a result, ore production is becoming more strategically valuable than before.

However, Antam’s ferronickel business moved in the opposite direction. Ferronickel output fell 20pc to 16,064t in nickel metal equivalent. Sales almost halved to 10,528t in nickel over the same period. Therefore, Antam is seeing a widening gap between ore strength and ferronickel weakness.

The company said rule changes in minimum sales pricing largely caused that decline. That means the problem was not simply demand destruction. Instead, market rules affected the economics of ferronickel sales more directly. Meanwhile, all ferronickel sales were exported, mainly to South Korea, India, and China.

Antam Battery Ecosystem Project Adds a New Strategic Layer

The Antam battery ecosystem project gives the company a stronger long-term growth story. Its joint venture with CATL began construction in the fourth quarter of 2025. That project aligns with Indonesia’s ambition to build a full downstream EV battery chain. Consequently, Antam is linking ore production more directly to higher-value battery materials.

This development matters because it expands Antam’s role beyond mining and traditional nickel products. The company is now tied more closely to Indonesia’s battery industrialization strategy. That could improve its strategic relevance even if ferronickel remains under pressure. Therefore, the Antam battery ecosystem project may become more important than short-term alloy sales.

The broader message is clear. Antam nickel ore output is rising because Indonesia’s downstream nickel model still demands more feedstock. At the same time, product mix and pricing rules are shifting value across the chain. As a result, Antam’s future may depend more on ore and battery exposure than on ferronickel alone.

The Metalnomist Commentary

Antam’s results show how Indonesia’s nickel strategy is rewarding upstream ore suppliers tied to domestic processing. The weakness in ferronickel also shows that not every downstream segment benefits equally. If the battery ecosystem expands as planned, Antam could become even more central to Indonesia’s next nickel phase.

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.

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.

Indonesian Nickel Ore Prices Surge Amid Tight Supply

Indonesian Nickel

Weather Disruptions and Mine Closures Drive Market Shift

Indonesian nickel ore prices have risen sharply in 2025 as domestic supply constraints tighten. Prices for 1.6pc nickel content ore with 35pc moisture reached $53/wet metric tonne (wmt) in May, up from $44/wmt in January, driven by stronger premiums. The surge is linked to extended heavy rains on Sulawesi Island since November 2024, which disrupted operations in key hubs such as the Morowali Industrial Park. Sulawesi holds about 70pc of Indonesia’s total nickel ore resources.

The government’s order for state-owned PT Aneka Tambang (Antam) to halt mining in West Papua’s Raja Ampat — a marine protected area — further tightened supply. The site, with a 3mn wmt/yr quota, produces high-grade nickel ore. Limited availability has shifted mining firms toward tender-based sales rather than bilateral deals, while large buyers offer $1–2/wmt premiums to secure volumes over 100,000wmt.

Upstream-Downstream Price Divergence

Despite the rise in nickel ore prices, downstream products have seen declines. China’s stainless steel 304 cold-rolled coil prices fell to 13,250 yuan/t in May from 13,650 yuan/t in March. Indonesia’s nickel pig iron (NPI) export prices dropped to $116/metric tonne unit (mtu) in June from $124.50/mtu in March. This divergence stems from the upstream market remaining a seller’s market since 2023, as ore supply growth lags behind expanding nickel products capacity.

Indonesia’s nickel products output — including NPI, ferronickel, mixed hydroxide precipitate, and matte — is projected to rise to 2.49mn t in nickel metal equivalent in 2025, up from 1.83mn t in 2023. Consequently, ore demand could increase from 200mn wmt to 280mn wmt in the same period.

Rising Imports from the Philippines

With local ore insufficient, Indonesian producers have increased nickel ore imports from the Philippines since mid-2023. Imports surged to nearly 10mn t in 2024, representing around 6pc of total demand, and are on track for another increase in 2025. Shipments in January–April already exceeded imports in the first half of 2024.

Philippine ore is essential for blending with Indonesian ore to achieve the required silicon and magnesium ratios for different processing technologies, including RKEF and HPAL. Changing ore specifications after 15 years of intense mining in Indonesia have made such blending critical to meet production needs.

The Metalnomist Commentary

Indonesia’s nickel ore market illustrates how environmental conditions and policy decisions can shift global supply chains. As upstream prices climb despite downstream weakness, reliance on Philippine imports will likely deepen, reshaping trade flows and influencing pricing power in the nickel sector.

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.

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.

Nickel Deficit Forecast Emerges as Indonesia Tightens Ore Supply

Nickel manufacturing

Nickel deficit conditions are expected to return in 2026 as Indonesia tightens ore supply controls and stainless steel demand continues to grow. The International Nickel Study Group forecasts global primary nickel production of 3.715mn t against usage of 3.747mn t, implying a deficit of 32,000t.

The nickel deficit would mark a sharp change after three consecutive years of surplus. The market recorded surpluses of 175,000t in 2023, 116,000t in 2024 and 283,000t in 2025.

The nickel deficit forecast remains modest, but it carries strategic significance because it depends heavily on Indonesian policy. Indonesia has been the main driver of global nickel supply growth, and tighter controls on ore mining could slow the expansion that previously pushed the market into surplus.

The Middle East conflict is adding another layer of uncertainty. Higher energy prices, inflation pressure and disrupted sulphur flows could affect nickel production costs, especially for high-pressure acid leach operations in Indonesia.

Indonesia Ore Controls Reshape Nickel Supply Growth

Indonesia’s approved nickel ore mining quota for 2026 has been set significantly lower than in 2025. The quota can still be revised, but the initial reduction has already changed market expectations.

The country’s revised mineral benchmark pricing mechanism also took effect on 15 April. The new HPM formula raises base prices for all nickel ore grades and includes cobalt, iron and chromium in the valuation for the first time.

This matters because Indonesian nickel supply is no longer expanding under the same low-cost conditions that drove rapid output growth. Ore access, ore pricing, royalties and contained metal values are all becoming more tightly managed.

The policy impact is not evenly distributed. Eramet’s PT Weda Bay Nickel mine is preparing to enter care and maintenance in May after receiving an initial ore quota of just 12mn wet metric tonnes. This is far below last year’s final permit of up to 42mn wmt.

In contrast, Nickel Industries received quota approvals of 14.3mn wmt, up from 10.5mn wmt in 2025. This shows that Indonesia’s controls are not simply cutting all supply. They are also reshaping which operators receive ore access.

The quota system could therefore become a major competitive factor. Producers with larger approved volumes may gain stronger operating flexibility, while others face lower utilisation, higher costs or temporary shutdowns.

HPAL producers are especially exposed. These plants require steady limonite ore supply and large volumes of sulphuric acid or sulphur-linked feedstock. Tighter ore availability and higher reagent costs can quickly pressure margins.

Disrupted sulphur flows from the Middle East conflict have raised concern over HPAL feedstock availability. This is important because Indonesian HPAL projects have become key suppliers of mixed hydroxide precipitate for battery material production.

If sulphur costs remain elevated and ore prices rise under the new HPM formula, HPAL production costs could increase materially. That would weaken the low-cost supply advantage that helped Indonesia dominate battery-linked nickel intermediates.

Stainless Steel Supports Demand as Batteries Disappoint

Stainless steel remains the main support for nickel demand. INSG said the stainless steel sector grew in 2025 and is expected to expand further in 2026.

This is important because stainless steel still consumes far more nickel than the battery sector. Demand from stainless steel, alloys and industrial uses continues to anchor the primary nickel market.

Battery demand has grown more slowly than earlier expectations. Lithium iron phosphate chemistries have gained market share, reducing nickel intensity in parts of the electric vehicle market.

Plug-in hybrid electric vehicle demand has also outpaced fully battery-electric vehicle demand in some markets. This has limited the speed at which nickel-rich battery chemistries absorb new supply.

The result is a market caught between two forces. Supply growth is slowing because of Indonesian ore controls and higher input costs. However, battery demand is not rising fast enough to create a large structural shortage.

This makes the 2026 nickel deficit highly sensitive to policy and disruption. If Indonesia raises quotas, supply could recover. If sulphur, energy or ore costs worsen, the deficit could deepen.

The forecast also changes the market narrative. Nickel has spent recent years under pressure from surplus supply and rising inventories. A move into deficit, even a small one, could stabilise sentiment and support prices.

Still, the deficit is not yet a sign of broad scarcity. It is a warning that Indonesia’s supply discipline, not battery demand alone, is now determining the market balance.

For producers, cost control and ore access will become more important. For buyers, the focus will shift toward supplier reliability, feedstock route and exposure to Indonesian policy.

The Metalnomist Commentary

The nickel market is not tightening because batteries suddenly absorbed the surplus. It is tightening because Indonesia is putting discipline into ore supply while HPAL costs rise. That makes the nickel deficit more policy-driven than demand-driven.

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.

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.

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

Antam

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

MHP growth reshapes Indonesia’s nickel feedstock flows

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

Ferronickel softens while export channels stay active

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

EV supply chain momentum supports long-term strategy

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

The Metalnomist Commentary

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

Indonesia 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 Mining Quota Cut Could Tighten Ore Supply in 2026

ESDM

Indonesia nickel mining quota cut is emerging as one of the most important supply-side developments in the 2026 nickel market. Indonesia’s energy ministry is expected to reduce the 2026 RKAB quota to around 260mn-270mn tonnes. That is far below the 2025 approved quota of 379mn tonnes. As a result, Indonesia nickel mining quota cut is raising concerns about ore availability for the country’s smelter network.

This matters because Indonesia remains the center of global nickel supply growth. A lower RKAB nickel quota could leave ore availability well below expected domestic consumption in 2026. That gap may force smelters to cut output or search for imported material. Therefore, Indonesia nickel ore supply is becoming the main issue behind the market’s next move.

The timing also matters for sentiment. Nickel prices have already reacted to tighter supply expectations, policy shifts, and geopolitical risk. Market participants now see the quota cut as part of a broader government effort to manage ore prices and supply discipline. Consequently, the 2026 nickel market outlook is becoming more supportive for prices than before.

RKAB Nickel Quota May Tighten Supply Faster Than Smelters Can Adjust

RKAB nickel quota levels now look lower than expected ore consumption for 2026. That creates a structural mismatch between mine output approvals and downstream processing demand. Some market participants believe imports may cover part of the shortfall. However, imports alone are unlikely to fill the full gap.

This is why Indonesia nickel mining quota cut matters beyond headline tonnage. The country’s smelters depend on large and stable ore flows to maintain NPI, matte, and HPAL production. If ore supply tightens meaningfully, the pressure will move quickly into refined nickel and battery material output. As a result, the quota decision could influence the entire downstream chain.

There is still uncertainty around timing. The new quota is expected to take full effect only from April. That leaves room for short-term adjustments and market positioning before the cut fully hits physical flows. Meanwhile, producers and traders are watching closely for any sign of softer enforcement or later policy revision.

2026 Nickel Market Outlook Depends on Policy Flexibility and Ore Availability

2026 nickel market outlook now depends on whether Indonesia keeps supply tight or allows more quota later. Some market participants still expect another round of RKAB applications and approvals in the next quarter. That possibility is keeping part of the market cautious about calling a full supply squeeze. Therefore, policy flexibility remains a major variable.

Even so, the direction of travel is clear. Indonesia wants greater control over nickel pricing and ore market behavior. A lower mining quota supports that goal by reducing available feedstock and tightening domestic supply conditions. As a result, Indonesia nickel mining quota cut may act as both an industrial policy tool and a price-support mechanism.

This shift also changes how the market sees Indonesia. For years, the country was treated mainly as a volume maximizer. Now it is increasingly acting like a swing supplier with more active control over ore release. Consequently, the 2026 nickel market outlook may be shaped less by endless Indonesian growth and more by managed constraint.

The Metalnomist Commentary

This quota cut matters because it challenges one of the market’s biggest assumptions: that Indonesian ore supply will always expand fast enough to feed new smelters. That may no longer be true. If Jakarta keeps tighter control over RKAB approvals, nickel prices could find firmer support than the market has seen in recent years.