According to SMM, driven by changes in upstream raw material policies and strong cost support, mainstream Indonesian stainless steel mills have significantly raised their prices by $55/mt today. The core reason for this major price adjustment is the recent announcement by the Indonesian Ministry of Energy and Mineral Resources (ESDM) to increase the benchmark price of nickel ore (HPM) and implement a completely new pricing formula. The execution of this new pricing mechanism has directly driven up procurement costs for nickel smelting. Under immense cost pressure, mainstream stainless steel mills have strongly pushed up their offers.

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.

As of now, the FOB price of nickel in Indonesian MHP was $15,383/mt Ni, and the FOB price of cobalt in Indonesian MHP was $51,364/mt Co. MHP payables (against the SMM battery-grade nickel sulphate index) were 86.5-87.5, and the payable indicator for cobalt element in MHP (against SMM refined cobalt (Rotterdam warehouse)) was 94. The FOB price of Indonesian high-grade nickel matte was $15,666/mt Ni.

On March 2, the average price of SMM battery-grade nickel sulphate slightly declined compared to yesterday.

Recycling: This week, the price of cobalt sulphate continued to decline, while the price of nickel salts remained stable, and the price of lithium chemicals saw a slight decrease. This week, the coefficients for ternary black mass, LCO black mass, and others continued to fall, while the prices per % lithium for LFP remained temporarily stable. Taking ternary black mass as an example: Currently, due to the prolonged low prices of lithium carbonate, the revenue generated by lithium chemicals is lower than that of nickel sulphate and cobalt sulphate. Therefore, most ternary wet-process enterprises price the nickel-cobalt and lithium coefficients of ternary black mass separately. Taking the coefficient of ternary pole piece black mass as an example: Currently, the nickel-cobalt coefficient of pole piece black mass ranges from 74-76%, and the lithium coefficient of pole piece black mass ranges from 71-74%.

This week, the average price of SMM8-12% high-nickel pig iron was 953.3 yuan per nickel point (including tax, ex-factory), marking an increase of 6 yuan per nickel point compared to last week. Overall, the price of high-nickel pig iron has shown a slight upward trend this week.

Introduction: Starting from last Friday, the market began to receive news of the relaxation of Indonesia's RKAB approvals. This news began to spread widely in the market this week. Although the news has not yet been officially confirmed, it has already affected market sentiment and the trend of nickel prices to a certain extent. It is worth noting that this week coincides with the month-end, a period when Indonesian smelters and local nickel ore mines negotiate the nickel ore premiums for June. According to SMM, the news of "RKAB approval relaxation" has not led to a significant easing or decline in the prices of Indonesia's local ore. The mainstream premium for Indonesia's local pyrometallurgy ore in June is likely to remain stable compared to May. This may also indicate, from a side perspective, that currently, there has been no structural change in the supply and demand situation of Indonesia's local domestic trade nickel ore, and the tight supply of nickel ore has not shown significant improvement. Recently, SMM inquired with ESDM about such issues, and an official from ESDM stated that no large-scale approvals for supplementary quotas have been granted in the past two weeks.

[Benchmark Price of Indonesia's Local Ore] SMM expects the HPM of Indonesia's local ore to remain stable or slightly decline in the first half of June, with an estimated MoM decrease of 0.06%. The HMA in the first half of June is $15,405/mt, a decrease of $10/mt. SMM expects the benchmark price of Indonesia's HPM local ore (MC35%) in the first half of June to be as follows: - The HPM price of nickel ore with 1.2% Ni grade is $15.62/wmt, a decrease of $0.01/wmt compared to the HPM in the second half of May. - The HPM price of nickel ore with 1.6% Ni grade is $27.24/wmt, a decrease of $0.02/wmt compared to the HPM in the second half of May. - The HPM price of nickel ore with 1.7% Ni grade is $30.64/wmt, a decrease of $0.02/wmt compared to the HPM in the second half of May. - The HPM price of nickel ore with 1.8% Ni grade is $34.25/wmt, a decrease of $0.02/wmt compared to the HPM in the second half of May. - The HPM price of nickel ore with 2.0% Ni grade is $42.06/wmt, a decrease of $0.03/wmt compared to the HPM in the second half of May. The overall HPM prices remain stable this period. Despite supply-side disruptions such as the continuation of the rainy season and market concerns about the progress of RKAB approvals, prices are dragged down by weak downstream demand. Looking ahead, SMM expects that the premium in June is unlikely to rise and may even see a slight decrease. The market anticipates subsequent transactions.

After the Indonesian government increased taxes and fees in the mining sector, mining companies warned of declining profits, which could lead to production cuts. The Indonesian government announced last weekend that it would raise royalty rates for minerals such as nickel, coal, copper, and gold. Among them, nickel saw the largest increase, with rates rising from a fixed 10% to a range of 14% to 19%, depending on the market price of nickel. Nickel is a crucial raw material for lithium-ion batteries and one of the essential green metals for achieving the global energy transition. It is also an important raw material for stainless steel production. Indonesia is the world's largest nickel producer, currently accounting for over half of the global supply. With the Indonesian authorities increasing mining taxes and fees, several mining giants, including Vale and Freeport-McMoRan, will be affected. "This is an additional burden, especially during a period of low commodity prices," said Hendra Sinadia, executive director of the Indonesia Mining Association, commenting on the government's new policy. Sinadia pointed out that operating costs would rise, and profits would be impacted. He added, "Some companies may have to reduce production or even close mines." As a pillar of Indonesia's economy, commodities are a significant driver of economic growth. In particular, the nickel industry has seen rapid development in recent years, attracting record foreign investment. However, Indonesian nickel producers are facing challenges due to persistently low nickel prices, caused by slowing global demand for electric vehicles and an oversupply of nickel in Indonesia. In addition, nickel producers must also cope with rising costs from other recent regulations in Indonesia. According to mining companies, this year's cost increases have also been influenced by higher VAT rates and the requirement to use more biodiesel as fuel. Since March this year, Indonesia has also required natural resource exporters to retain more overseas earnings in the country for at least one year to boost foreign exchange reserves and stabilize the rupiah's exchange rate, which is currently near historic lows. The Indonesian Nickel Miners Association stated that raising taxes and fees amid falling nickel prices and escalating global trade wars is "extremely ill-timed." In a statement, the association said, "Increasing royalties may weaken investor interest in the upstream and downstream nickel industries, reduce the competitiveness of Indonesian nickel products in the global market, compress profits, and lead to significant layoffs." A senior nickel industry executive pointed out that miners without their own processing facilities will be the most affected. He said they might pass on higher costs to smelters, impacting the entire supply chain.

NICKEL ORE Indonesian ore prices remained stable with a slight upward trend in pyrometallurgy, while hydrometallurgical ore prices may experience a downward adjustment. High-Grade NPI The supply-demand imbalance of high-grade NPI may emerge, and prices are likely to remain in the doldrums.