Nickel Ore " Sluggish RKAB Approvals Drive Potential for Ore Price Hikes" Indonesian domestic nickel ore prices have risen significantly increase this week. For the first half of March, the Indonesian Nickel Ore Benchmark Price (HPM) was set at $17.329/dmt, an increase of 1.32%. However, according to SMM data, average premiums has increased for 1.4%, 1.5%, and 1.6% grade laterite nickel ore were reported at $35, $39, and $39.5/wmt, respectively, with 1.6% grade reaching a delivered price of $65.6–$74.6/wmt. This strengthening of premiums reflects both the release of restocking demand from smelters and pessimistic expectations regarding RKAB quota reductions. Simultaneously, the delivery price for 1.2% grade limonite has edged up to $24–$26/wmt. Pyrometallurgical Ore: From a supply and demand perspective, Sulawesi is transitioning into the dry season; Konawe has reached optimal production levels, while Morowali is recovering from previous floods. However, Halmahera continues to be hampered by thunderstorms, resulting in high moisture content and dragging down mining efficiency. The market is facing a clear trend of declining ore grades. While some NPI smelters have begun accepting grades of 1.45% or lower, the supply of high-grade saprolite remains tight. As of mid-March, the ESDM has approved approximately 100 million tons of RKAB quotas. The remaining 160 to 170 million tons are expected to be processed by the end of March. However, due to the Eid al-Fitr (Lebaran) holidays (March 18–24), approval progress is expected to lag, exacerbating short-term supply tightness. Faced with resource uncertainty, some smelters have increased trade bonuses to secure raw materials. Transactions for low-grade saprolite are emerging at fixed prices lower than high-grade ores. Conversely, Limonite prices remain low due to a tailings dam landslide at a major MHP project, which has forced production lines to operate at low loads, hindering demand recovery. However, Limonite prices are expected to eventually follow Saprolite upward due to new project stockpiling and external island demand. Hydrometallurgical Ore Although the spot supply of hydrometallurgical ore is relatively sufficient, a tailings dam landslide at an MHP project in a certain industrial park has forced related production lines to operate at low loads, leading to a temporary weakness in demand. However, given the concerns over RKAB approval uncertainty, the stockpiling needs of newly commissioned projects, and the growing demand from outer islands, hydrometallurgical ore prices are expected to follow the trend of pyrometallurgical ore and remain elevated. On March 3, 2026, Tri Winarno, Director General of Mineral and Coal, clarified that rumors of a "25%–30% universal increase in RKAB quotas" are false. Quota supplements will be based on individualized assessments of production capacity and compliance, with the approval process not expected to start until the second half of 2026. Market Outlook: Due to the overall delay in RKAB approvals, nickel ore prices in April are expected to remain resilient with a strong "easy to rise, hard to fall" trend. Nickel Pig Iron "NPI Prices See Periodic Retracement as Tug-of-War Intensifies Between Cost Support and Downstream Pressure​​​​​​​" The average price of SMM 10-12% NPI average price rose by RMB 0.3 per nickel unit week-on-week to RMB 1090.2 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index decreased by USD 0.65 per nickel unit to an average of USD 138.28 per nickel unit. This week, following consecutive price drops in stainless steel finished products and LME/SHFE nickel, the High-Grade NPI market experienced panic selling and low-price liquidation, entering a phase of periodic decline. From the supply side, With ore prices remaining elevated, smelter production costs continue to rise. However, triggered by the sharp decline in futures markets, some traders began offloading arbitrage stocks at low prices, leading to a general softening of upstream quotes.From the demand side, Weighed down by falling stainless steel prices and the influx of low-priced spot goods, most steel mills have lowered their bid intentions, exerting downward pressure on NPI prices. Overall, while cost support for smelters remains, downstream suppression is evident. The combination of futures-driven market sentiment and loosening upstream quotes has led to a periodic retracement in High-Grade NPI Overall outlook, market transactions will remain under pressure in the short term as the cost-tug-of-war between upstream and downstream continues. However, the downward room for NPI prices is expected to be limited.

SMM Nickel, March 20: Macro and Market News: (1) The Party Committee of the People's Bank of China held an enlarged meeting on March 18, which stated that it would continue to effectively implement a moderately accommodative monetary policy, firmly safeguard the stable operation of financial markets such as equities, bonds, and foreign exchange, and advance legislative formulation and amendments including the People's Bank of China Law and the Financial Stability Law. (2) The interest rate futures market priced in only 5.5 basis points of US Fed interest rate cuts this year, and bets on rate hikes began to emerge. Spot Market: On March 20, the SMM price of #1 refined nickel rose by 3,000 yuan/mt from the previous trading day. In terms of spot premiums, the average price of Jinchuan #1 refined nickel was 6,550 yuan/mt, down 200 yuan/mt from the previous trading day, while the mainstream China electrodeposited nickel brands were quoted at -300-400 yuan/mt. Futures Market: The most-traded SHFE nickel contract (2605) staged a sharp rebound, closing the morning session at 134,780 yuan/mt, up 1.50. Yesterday, nickel prices once fell below the 130,000 yuan mark, as trades on expectations of a global economic recession triggered by escalating geopolitical conflict in the Middle East put the metals complex under pressure overall. Nickel prices then took the lead in rebounding sharply, recovering to around 135,000 yuan/mt in the morning session. Short term, sentiment from the macro perspective may continue to dominate the market, and nickel prices may maintain wide swings.

Next week, there will be limited macroeconomic data releases, mainly including the final March University of Michigan Consumer Sentiment Index for the US and the final March one-year inflation expectations for the US. At present, key events outside China remain the geopolitical issues in the Middle East, as well as the views of representatives from various countries on global trade development at the upcoming 14th WTO Ministerial Conference (MC14). LME lead, markets outside China will continue to be affected by geopolitical issues, with damage to the economic environment and prolonged logistics cycles dragging LME lead lower consecutively to a near one-year low. However, we need to note that the SHFE/LME price ratio widened, allowing more imported lead to flow into the Chinese market, while spot cargo availability in Southeast Asia tightened and spot premiums rose, with LME Cash-3M contango narrowing to -$41.44/mt. Next week, attention should be paid to the possibility of lead prices probing lower and then rebounding after macro headwinds are fully priced in. LME lead is expected to trade at $1,840-1,930/mt next week. SHFE lead, dragged down by the decline in overseas lead prices, the SHFE/LME price ratio widened and expectations for lead ingot imports increased, especially against the backdrop of China’s lead ingot social inventory standing at a 16-month high, sending lead prices lower in succession. At the same time, we need to note that inventory at domestic smelters remained on a declining trend, losses in secondary lead widened, and the inversion between secondary lead and primary lead prices may become a factor stopping lead prices from falling. In addition, downstream enterprises purchased on dips, and attention should be paid to the subsequent decline in social inventory. If destocking materializes, lead prices may stop falling and rebound. The most-traded SHFE lead contract is expected to trade at 16,100-16,750 yuan/mt next week. Spot price forecast: 16,100-16,550 yuan/mt. For primary lead and secondary lead, supply continued to rise as smelters resumed operations after maintenance. On the demand side, downstream enterprises' short-term restocking on dips may facilitate destocking, but from April to May is the traditional off-season for the lead-acid battery market, and the sustainability of downstream enterprise procurement is limited, so spot lead premiums are expected to struggle to continue rising.

[SMM Daily Review: Low-Priced Sell-Offs Fueled Panic Sentiment, Triggering a Phased Decline in High-Grade NPI] March 20 News: SMM's upstream sentiment factor for high-grade NPI was 2.84, down 0.04 MoM, while the downstream sentiment factor for high-grade NPI was 1.63, up 0.04 MoM.

Downstream Purchasing Activity for Nickel Intermediate Products Increased, Tight Supply and Demand Drove Prices Higher

[SHFE/LME Price Ratio Rebounded and Fluctuated Around 7.4]: This week, the SHFE/LME price ratio rebounded and fluctuated around 7.4, and the zinc ingot import window remained closed. Outside China, geopolitical disruptions were frequent. After the US Fed kept interest rates unchanged, the market bet on a US Fed rate hike, and LME zinc fell below key levels. Subsequently, bearish factors were gradually digested, and LME zinc rebounded from lows.