Jakarta, April 14, 2026 – Indonesia's Ministry of Energy and Mineral Resources (ESDM) officially issued Ministerial Decree No. 144.K/MB.01/MEM.B/2026, revising the calculation formula for the Nickel Ore Benchmark Price (HPM). The regulation will officially take effect on April 15, 2026, marking a significant shift in resource valuation policy for Indonesia, the world's largest nickel producer. The new decree revised the previous Decree No. 268.K/2025, with core changes aimed at reflecting the true commercial value of nickel ore and its associated minerals: 1. Adjustment of the Correction Factor (CF): · The correction factor for 1.6% grade nickel ore was significantly raised from the original 17% to 30%. · For every 0.1% increase or decrease in nickel grade, the correction factor will be adjusted inversely by 1%. 2. Inclusion of Associated Mineral Value: · The new formula for the first time explicitly incorporated associated minerals such as cobalt (Co), iron (Fe), and chromium (Cr) into the HPM calculation. · Cobalt: Included when content >= 0.05%, with the correction factor (CF) set at 30%. · Iron: Included when content <= 35%, with the correction factor (CF) set at 30%. · Chromium: The correction factor set at 10%. 3. New Pricing Formula: HPM Nickel Ore = [(Nickel HMA * %Ni * CF) + (Cobalt HMA * %Co * CF) + (Iron HMA * %Fe * CF * 100) + (Chromium HMA * %Cr * CF * 100)] * (1-MC) (Note: MC refers to moisture content) Assumptions: · Average grade: moisture content 35-40%, cobalt content 0.07% (HPAL ore), iron content 25% (saprolite ore), chromium content 3%. Based on SMM's estimates, HPM prices have the most obvious room for upward movement. · Here, HPAL ore refers to nickel ore with a grade of 1.3% and below, while saprolite ore refers to nickel ore with a grade above 1.3%.Since HPAL ore has a higher cobalt grade and iron content generally above 35%, the HPM formula for HPAL ore here only considers nickel, cobalt, and chromium, with iron not priced in. · Since saprolite ore has a lower cobalt grade and iron content generally below 35%, the HPM formula for saprolite ore here only considers nickel, iron, and chromium, with cobalt not priced in. Note: This is only a scenario assumption based on publicly available information and does not constitute actual market action advice. Please refer to actual conditions. Driven by the dynamic adjustment mechanism of the benchmark price, the nickel ore benchmark price center shifted significantly upward, providing a higher pricing anchor for mine-side sales. Overall, the CF (adjustment coefficient) for 1.6% grade nickel ore increased from 17% to 30%, driving a significant rise in the benchmark price, reflecting a policy and market reassessment of the value of medium-to-high-grade ore. As the CF increased, the linkage between ore prices and nickel content further strengthened, and price elasticity amplified accordingly. On the other hand, under the current pricing system, by-product value has been fully incorporated into consideration. In particular, the cobalt pricing mechanism provided significant support for low-grade ore (such as limonite). Benefiting from the increase in cobalt prices and its recovery value, the economics of limonite improved notably, and its price performance showed a more prominent upward trend compared to the past, gradually changing the market's traditional perception of it as a "low-value resource." Based on SMM prices, Indonesia's local laterite nickel ore at 1.2% grade (delivered price) averaged $30.5/wmt, far below the new HPM benchmark price of $40.18/wmt. The CIF price of 1.2% grade HPAL nickel ore may subsequently rise to $48.18 (40.18+8)/wmt. Indonesia's local laterite nickel ore at 1.5% grade (delivered price) averaged $70.7/wmt, above the new HPM benchmark price of $57.13/wmt, so theoretically absolute price fluctuations would not be as drastic. Assuming the tax cost increase driven by the HPM benchmark price rise is fully passed through to downstream, the absolute price of saprolite nickel ore may rise to $72.47/wmt after the new HPM benchmark price takes effect. **MHP** According to SMM estimates, taking 1.2% grade nickel ore as an example, based on the benchmark price as of April 1, the new nickel ore HPM is expected to be raised to $40.18/wmt, compared with the previous nickel ore HPM of $16/wmt. Currently, SMM's latest Indonesia's local laterite nickel ore 1.2% (port arrival price) average price is $30.5/wmt, lower than the new HPM. Assuming the HPM benchmark price serves as the minimum price floor for mines, after factoring in freight costs, the selling price of 1.2% grade HPAL ore after April 15 would be $48.18/wmt. Based on this estimate, the cost of producing MHP from externally purchased HPAL ore (after cobalt credit) will rise to approximately $17,760/mt Ni, an increase of approximately $2,600/mt Ni. **NPI** According to SMM estimates, based on the benchmark price as of April 1, taking 1.5% grade nickel ore price as an example, the nickel ore HPM price under the old formula was $26.66/wmt, while the nickel ore HPM price calculated under the new formula is $57.13/wmt, still lower than the current 1.5% Indonesia's local port arrivals under domestic trade price of $70.7/wmt. Assuming the tax cost increase resulting from the HPM price hike is fully passed through to downstream, the absolute nickel ore price is forecast to rise to approximately $72.47/wmt after the new policy is implemented. Based on this estimate, this adjustment will push the full cost of NPI up to $15,741.51/mt Ni, an increase of $570.48/mt Ni from the current level, representing a rise of approximately 3.76%, which is expected to provide further upward support for NPI prices. **Refined Nickel** On the basis of the above-mentioned increases in MHP and high-grade nickel matte raw material costs, the cost of producing refined nickel from integrated high-grade nickel matte is estimated at approximately $21,773/mt Ni, an increase of $622/mt Ni compared with before the HPM formula adjustment; the cost of producing refined nickel from integrated MHP (after cobalt credit) is estimated at approximately $20,560/mt Ni, an increase of $2,652/mt Ni compared with before the HPM formula adjustment. In addition, based on the LME spot settlement price on April 14 and the nickel intermediate product transaction coefficients (91.5% for MHP and 92.5% for high-grade nickel matte), the spot cost of producing refined nickel from externally purchased high-grade nickel matte is $18,705/mt Ni, and the spot cost of producing refined nickel from externally purchased MHP is $19,378/mt Ni. Both costs are higher than the current LME nickel prices, indicating relatively strong cost support. In summary, Indonesia's ESDM reform of the HPM benchmark price formula represents a systematic restructuring of the pricing system, upgrading nickel ore pricing from "single nickel element pricing" to "nickel + cobalt + iron + chromium multi-element comprehensive pricing," reshaping the nickel ore cost basis from multiple dimensions. In the short term, the policy landing beyond expectations has already driven nickel prices to rise significantly, with market sentiment leaning bullish; however, medium and long-term impacts depend on cost pass-through efficiency, the pace of high inventory digestion, and downstream demand absorption capacity. Going forward, close attention is still needed on the actual implementation by Indonesian mine enterprises, smelter procurement price negotiation outcomes, and the substantive magnitude of price increases for intermediate products such as MHP and NPI. Risk warning: According to ESDM Ministerial Decree NO.144.K/MB.01/MEM.B/2026, the benchmark ore price (HPM) is the minimum selling price for metal mineral sales. If metal minerals are sold below the HPM price, the HPM must still be used as the basis for calculating tax obligations and as the benchmark price for levying production fees (royalties). Therefore, the above costs are calculated based on the assumption that the wet-process ore selling price is no lower than the new HPM benchmark price. The resulting integrated MHP (after cobalt credit) production cost of refined nickel is relatively high. However, the actual selling price of nickel ore will need to be negotiated between mines and smelters, and there is a possibility that the final transaction price may be lower than the new HPM benchmark price.

According to an SMM survey, steel semi-finished product export orders have recently surged, with slab export orders seeing particularly significant growth. SMM believes two major factors contributed to this round of growth: "Demand" Provides the Necessary Condition for the Surge in Semi-Finished Product Export Orders On one hand, benefiting from the spillover effect of export demand caused by the US-Iran conflict, infrastructure and manufacturing in Southeast Asia have grown rapidly. However, the region only has rolling capacity and lacks steelmaking capacity, necessitating large imports of steel billet. According to data compiled by SMM, Southeast Asia imported approximately 2.31 million mt of steel from the Middle East in 2025, of which a staggering 97% was semi-finished steel billet. Therefore, when passage through the Strait of Hormuz was restricted, the Southeast Asian market was instantly exposed to a rigid shortfall of over 2 million mt. For detailed analysis, please refer to the article "Sudden Shift in Middle East Situation Triggers 'Mismatch,' China Accelerates to Fill Approximately 2.3 Million mt Supply Vacuum in Southeast Asia." The existence of this gap provides an excellent window for China's semi-finished product exports. "Price Advantage" Provides the Sufficient Condition for the Surge in Semi-Finished Product Export Orders On the other hand, price increases outside China far exceeded those in China. During this period, the FOB price of Dexin slabs in Indonesia rose from $470/mt to $540/mt, an increase of 14.89%, while the FOB price of slabs in China rose from $455/mt to $480/mt, an increase of only 5.49%. The huge price difference made buyers outside China particularly favour semi-finished products from China. SMM surveyed some recent slab transaction details from domestic sellers, as shown in the table below. Survey Records: Enterprise A: At the current price, they are willing to take slab orders, but orders have already been booked through August, with an estimated volume of 80,000 mt per month. Enterprise B: They started taking slab orders from April. They take orders when the price is right. The current price is only 20-30 yuan/mt lower than HRC. Enterprise C: They can only accept exporting slabs at HRC prices now. If overseas buyers don't want them, then forget it. Enterprise D: They haven't been in contact with new slab orders recently. Their last order was in March. However, if there is subsequent demand, they may have new resources available for export by June. Enterprise E: Their orders were all taken earlier. Previously, they were selling at over 100 yuan below HRC, but now the quoted price is only a few dozen yuan below HRC. However, transactions have clearly slowed down. The current ex-factory price is approximately 3,120. The surge in demand has driven prices higher. As shown in the chart below, normally the price spread between slabs and HRC stays around $20-30, which aligns with normal rolling costs. However, since April, this spread has narrowed to around $10, and has recently further narrowed to single digits. This is mainly because as steel mills' shipping schedules have gradually been pushed back, their willingness to hold prices firm has also strengthened. Some steel mills are even exporting slabs at prices equivalent to domestic HRC trade prices, which provides them with significant export motivation. Chart 1 - SMM China HRC & Slab Export FOB Price Trend SMM Expects Slab Exports to Rise Significantly, April-August In January-February this year, total steel billet exports were 1.7746 million mt, of which slabs accounted for 232,600 mt, square billets for 1.5196 million mt, and slabs made up 13.11%. Chart 2 - China Steel Billet Exports by Product, January-February 2026 Based on the survey, the increase in slab export orders was more of a March-April phenomenon. Considering the time interval from order placement to shipping schedule, SMM expects slab exports to show a relatively significant upward trend from April to August. Surge in Slab Orders May Improve HRC Fundamentals In April, the daily average production schedule for commercial HR products at 39 mills was 448,300 mt, up 8.5% MoM from actual daily average production. The daily average production schedule for commercial HR products at 54 steel mills was 581,100 mt, up 9.2% MoM from actual daily average production. HR supply pressure increased MoM, but the peak season performance of China's manufacturing sector during the "Golden March, Silver April" period was overall satisfactory. According to SMM data, as of April 9, total HRC inventory was 6.6556 million mt, down 111,100 mt WoW. Destocking is expected to maintain a healthy pace going forward. However, when the spot-futures price spread was at suitable levels before the Chinese New Year, traders engaged in futures-spot arbitrage were particularly active in North China and other regions, accelerating social inventory accumulation. Current social inventory is up 34.93% YoY. If steel mills' semi-finished product export orders perform well, this could create opportunities for subsequent reductions in commercial product supply, while also providing support for current prices.

According to an official press release, PT Gunbuster Nickel Industry (GNI) has firmly denied rumors of an impending company collapse, stating that its operations are proceeding according to strategic plans. The company clarified that recent workforce adjustments (layoffs) are a temporary measure due to a major overhaul of its furnace facilities, which is expected to take several months. This decision prioritizes workplace safety and long-term operational stability. PT GNI is coordinating with the Manpower Department to ensure affected workers receive their rightful benefits, including the Job Loss Guarantee (JKP), and has promised priority re-hiring for well-performing employees once operations return to normal.

[SMM Aluminum Express News] Imerys announced on April 10, 2026, a binding agreement to acquire Great Lakes Minerals, a major U.S. processor and distributor of calcined bauxite, mullite, and fused alumina for the refractory and abrasive industries. The acquisition strengthens Imerys’ position in North America, supported by strategic assets along the Ohio River in Kentucky with efficient barge-to-plant logistics. It is expected to generate approximately $80 million in annual revenue post-integration and benefit from ongoing industrial reshoring in the USA. The deal is expected to close in the first half of 2026, subject to standard conditions.

【SMM Steel】Alleima's Kanthal opened a new service center in Concord, NC, to meet rising US demand for high-temperature heating solutions. The facility expands Globar® SiC heating element production, supporting electronics, glass, and steel manufacturers to replace fossil fuels with electric alternatives. The elements operate up to 2,950°F, cutting CO₂ and improving efficiency. The Concord site is part of an $11m global investment, increasing capacity 40%. US customers now benefit from local production of metallic and SiC elements.

RENOVA, Inc. has secured approximately ¥6.0 billion in project financing to develop a 90 MW/270 MWh lithium-ion battery energy storage system (BESS) in Kikugawa City, Shizuoka Prefecture. The facility, designed to stabilize the power grid without relying on subsidy schemes like feed‑in tariffs, is one of the largest of its kind in Japan and aims to support the country’s growing electricity demand tied to data centers and other infrastructure. Construction is planned to start soon, with operations expected to benefit grid balancing and renewable integration.