Nickel Ore " Indonesia Officially Issues Presidential Decree Requiring Designated State-Owned Enterprises to Monopolize Strategic Resource Exports Starting This June " 1. Price Dynamics and HMA Revisions The Indonesian nickel ore price remained stable this week. The Ministry of Energy and Mineral Resources (ESDM) has officially released the Nickel Mineral Benchmark Price (HMA) for the second half of May 2026. Nickel HMA: $18,849.3/dmt (up $1047.15 or 5.88% from $17,802.14 in early May). Cobalt HMA: $55,854/dmt. Iron Ore HMA: $1.58/dmt. Chrome Ore HMA: $6.37/dmt. Current port-delivered prices for 1.6% grade pyrometallurgical ore (saprolite) stand at $77.8-80.8/wmt. In contrast, 1.2% grade hydrometallurgical ore (limonite) is priced at approximately $28-33/wm.. 2. Supply-Demand Fundamentals and Weather Impacts For pyrometallurgical ore, unseasonal, abnormally heavy rainfall in the Central and South Sulawesi regions (Morowali and surrounding mining areas) has severely disrupted land transportation and barge transshipment. A series of micro-earthquakes (reaching up to magnitude M$1.9$) that occurred near Morowali between May 17 and 18 further exacerbated this impact. The combination of highly saturated soil moisture and minor crustal tremors has significantly increased the risk of landslides and slope instability, forcing mines to slow down their extraction and heavy-truck transportation pace for safety reasons. Therefore, even though the approval rate of regulatory quotas (RKAB) has reached approximately 90%, the spot supply of high-grade ore remains tight. To cope with exorbitant costs and tight supply, smelters are actively adopting cost-reduction strategies. These include blending low-grade ores into raw materials to lower the overall grade, promoting a unified premium pricing model of "HPM + USD $7–$10/wmt," and implementing standardized benchmarks for the chemical specifications of pyrometallurgical ore (Cobalt 0.05%, Iron 20%, Chrome 1%) to eliminate additional premiums for individual ore components. Meanwhile, the hydrometallurgical nickel ore market continues to suffer a severe disconnect from official pricing. The price of low-grade hydrometallurgical ore is under severe pressure and has completely failed to follow the upward trend of the new HPM. This price depression is primarily driven by the dual contraction of smelter operating rates and immediate raw material demand, with the core trigger being a potential production cut in Mixed Hydroxide Precipitate (MHP) caused by a sulfuric acid supply shortage in May. Against a backdrop of relatively stable inventory levels, MHP refineries are leveraging this low-capacity operating environment to aggressively suppress procurement bids, causing hydrometallurgical ore prices to continue hovering at low levels. 3. SMM Internal Estimates The new pricing formula has led to increased price divergence and amplified volatility, particularly influenced by higher associated cobalt content in certain ores. SMM calculations show that the new HPM for 1.2% grade limonite is approximately $49.95, significantly higher than current market assessments. The new HPM for 1.6% grade saprolite is $70.83; the inclusion of higher cobalt content in the new formula has markedly amplified price fluctuations. While actual market transaction prices currently remain above this benchmark, the gap is steadily narrowing. 4. Regulatory Quotas (RKAB) and Market Outlook According to the ESDM, RKAB approvals for 2026 have reached approximately 90%. SMM statistics indicate that the total approved quota for Indonesian nickel ore stands at roughly 240 million wmt. The macroeconomic and policy focus of the market has recently shifted, primarily concentrating on the following two major export and contract regulatory policies: DSI's Full Takeover of the Export Mechanism: The Indonesian government has confirmed that starting January 1, 2027, DSI will fully take over the export business of coal, palm oil, and ferroalloys. This policy will facilitate a smooth transition of the export mechanism in two phases. Since ferroalloys (including ferronickel, NPI, etc.) fall within the scope of this takeover, the market is closely evaluating the impact of this transition period on the export logistics and compliance costs of Chinese-funded smelters. Crackdown on Under-Invoiced Long-Term Contracts: The Indonesian government emphasized that it will honor existing, valid long-term export contracts to maintain commercial credit. However, at the same time, the government will strictly investigate and punish long-term contracts suspected of "under-invoicing" (low-price customs declarations). It is reported that relevant Indonesian departments will soon hold consultations with major industry associations to ensure a smooth policy transition while plugging loopholes that lead to tax revenue losses from underpricing. Nickel Pig Iron " Supply-Demand Price Gap Widens; Short-Term Prices to Fluctuate within a Range " The average price of SMM 10-12% NPI average price fell by RMB 5.7 per nickel unit week-on-week to RMB 1140.3 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index dipped by USD 1.37 USD per nickel unit to an average of USD 146.52 per nickel unit. Downstream purchasing sentiment dropped even more visibly, intensifying the divide in market mindsets between buyers and sellers. On the supply side, existing NPI production cutbacks, coupled with recent disruptions from Indonesian export policy updates, have gradually tightened spot availability. Consequently, upstream producers are holding back cargo to defend their asking prices, generally keeping their offers firm. Sellers only slightly softened their quotes under the weight of weak futures markets, and their willingness to offload cargo at lower price levels remains low. This expectation of tighter market supply provides a solid floor for prices. On the demand side, pressure remains acute. The stainless steel market lacks upward momentum, forcing steel mills to adopt a highly cautious procurement stance centered strictly around hand-to-mouth restocking. Furthermore, as the price-to-performance advantage of stainless steel scrap expands, downstream buyers are pushing hard for discounts. Target buying prices remain heavily clustered between RMB 1,120 and 1,130/mtu, leaving a massive spread against upstream asking prices that makes reconciling the two sides very difficult. Market Outlook: While expectations of tightening supply will support spot prices, the weak futures market and competitive pricing from alternative raw materials will continue to cap upside gains. Accordingly, high-nickel pig iron prices are expected to exhibit a high-level, range-bound volatile trend next week.

SMM data shows that overseas stainless steel prices saw their first correction after six months of gains during May 18–22. Indonesia’s leading mills cut FOB 300 series stainless steel by USD30/mt, then kept prices stable through out the week. Policy-driven supply concerns from Indonesia and IWIP NPI cuts pushed LME nickel above USD 18,800/mt. The market focus shifted from price weakness to cost support, while demand remained resistant to high prices.

[SMM Analysis] Raw Material Prices See Slight Correction, Stainless Steel Mill Profits Expand This week, both stainless steel production costs and prices pulled back slightly, and steel mill profits expanded accordingly. Using 304 cold-rolled as the calculation benchmark, the current raw material-based profit margin was 2.19%, while the low-level inventory raw material-based profit margin reached 3.67%. Overall industry profitability was moderate, and steel mills therefore maintained high production schedules. On the nickel-based raw material cost side, high-grade NPI prices first declined then rose this week, showing an overall slight pullback. During the week, news emerged that Indonesia planned to unify ferroalloy exports under state-owned enterprise operations. Although stainless steel scrap still held a notable cost-effectiveness advantage and steel mills had a strong desire to bargain down prices, supply uncertainty fueled a strong market sentiment to hold prices firm and hold back from selling, and prices ultimately stopped falling and stabilized. As of this Friday, mainstream high-grade NPI with a grade of 10-12% fell 4.5 yuan per nickel unit, closing at 1,140.5 yuan/nickel unit. Stainless steel scrap market, prices pulled back this week. The decline was driven by the combined impact of multiple bearish factors, including weak spot cargo performance in finished products, steel mills pushing for lower raw material prices, and downward adjustments in molten steel quotes. However, the decline was limited for the following reasons: the tight tax invoice situation was expected to ease, trading pain points were being gradually resolved, and steel mill purchase expectations rose accordingly. In addition, steel scrap held a greater cost-effectiveness advantage over NPI, and coupled with steel mills still being profitable and rigid demand remaining robust, prices were effectively supported. The overall pattern showed "weakening spot cargo, cost support, and recovering expectations," and short-term prices were expected to fluctuate in tandem with finished products, with limited downside room. As of this Friday, mainstream 30 in the Shanghai area...

[SMM Stainless Steel Daily Review] SS Futures Fluctuated Downward, Stainless Steel Spot Prices Held Steady SMM, May 22: SS futures were in the doldrums. The new US Fed chairman officially took office today, and combined with the continued release of hawkish remarks from the US Fed recently, non-ferrous metal futures weakened overall today. SS also pulled back slightly following the trend. As of the close, the most-traded SS contract was quoted at 14,745 yuan/mt. On the spot market side, although SS futures were weak, the overall decline was limited. Spot prices mostly remained stable, with end-users mainly making just-in-time procurement, and intraday transactions were steady. The most-traded SS futures contract pulled back. At 10:15 AM, SS2605 was quoted at 14,800 yuan/mt, down 30 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the range of 370-770 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi held steady; for cold-rolled trimmed-edge 304/2B coils, Wuxi held steady, and the average price in Foshan held steady; cold-rolled 316L/2B coils in Wuxi held steady; hot-rolled 316L/NO.1 coils were quoted steady in Wuxi; cold-rolled 430/2B coils in both Wuxi and Foshan held steady. This week, the stainless steel market saw both futures and spot prices fluctuate steadily. Futures movements were mainly driven by industry news expectations, with limited overall fluctuations. Market sentiment was divided—traders held a weak sentiment, but end-user just-in-time procurement remained resilient. Combined with active shipments from traders, market supply continued to be depleted, presenting an overall pattern of news providing a floor, rigid demand offering support, and fundamentals under pressure. On the futures side, this week SS...

Coordinating Economic Minister Airlangga Hartarto and Trade Minister Budi Santoso announced on Thursday (21/5) that the full implementation of the centralized single-window export mandate via PT Danantara Sumberdaya Indonesia (DSI) for coal, CPO, and ferroalloys has been deferred to January 1, 2027, to allow for contract adjustments and stabilize the Rupiah. A multi-stage transition begins on June 1, 2026, where private exporters continue trading but must route documentation via QQ (Qualitate Qua) proxy to DSI for three months, followed by a hybrid voluntary-migration phase from September through December 31, 2026, before DSI takes absolute control over all transactions and shipments in 2027.

May 21 — According to Indonesian Ministry of Trade meeting materials, Indonesia plans to bring ferroalloy exports under its strategic natural resources export framework. Ferroalloy exports are expected to enter a transition period from June 1 to August 31, 2026, before being handled by a designated state-owned enterprise from September 1. Ferronickel/NPI, under HS code 7202.60.00, is listed within the ferroalloy scope. SMM believes the policy, if implemented, may disrupt Indonesian NPI customs clearance, shipment schedules and trade procedures in the short term. However, the document does not directly indicate an export ban or unified pricing mechanism.

Rumored NPI production cuts at one of Indonesia's largest nickel hubs reveal a deeper structural shift — and a stark gap in per-megawatt-hour returns between aluminum and nickel.

On May 20, 2026, Indonesian President Prabowo Subianto announced during a plenary session of the National Congress that the government has officially signed a groundbreaking regulation targeting the governance of natural resource exports. This bold policy framework will establish a dedicated state-managed natural resource export agency, executing exports through State-Owned Enterprises (BUMN) acting as government-designated single exporters. According to local media disclosures and presentation slides shown during the session, this centralized mechanism will initially apply to palm oil, coal, and ferroalloys ( paduan besi ) . Under this system, direct private export transactions will be phased out, forcing overseas buyers and Indonesian producers to route contracts, logistics, and payments entirely through state-appointed BUMN nodes. 1. The Two-Phase Implementation Timeline Based on the official policy schematic diagrams disclosed on-site, the transition to a centralized BUMN-led export model will occur in two distinct regulatory phases: Phase 1 (Transition) Time : June 1, 2026 - August 31, 2026 Mechanics : Private enterprises continue to manage some internal administrative and logistics steps. However, all existing and new import-export transactions with overseas buyers must begin a step-by-step migration to BUMN entities. Phase 2 (Full Monopsony) Time : September 1, 2026, Onward Mechanics : Complete takeover. All transaction flows, sales contracts, export declarations, customs clearance, shipping arrangements, and the collection of export earnings (DHE) will be fully managed or led by designated BUMN. 2. Deep Structural Intervention: Pre- to Post-Clearance This regulatory mechanism does not simply install a government "rubber stamp." Instead, it represents a fundamental reallocation of the entire export trade chain, deeply embedding BUMN across three key logistics and financial phases: [Pre-Clearance] ──> [Clearance] ──> [Post-Clearance] (Contracts & Docs) (Customs & Loading) (Payment & FX DHE) Pre-Clearance (Contract & Goods Preparation): This covers verifying legality, IUP mining licenses, export restrictions ( Lartas ) compliance, sales contract drafting, finalizing payment terms, commercial invoicing, and vessel chartering/cabin bookings. Clearance (Customs & Physical Shipment): Includes filing export declarations (PEB), managing customs system approvals, cargo transport from smelter warehouses to port terminals, loading shipments, and issuing Bills of Lading (B/L). Post-Clearance (Documentation & Capital Flow): BUMN will act as the principal intermediary, dispatching trade documents (B/L, Commercial Invoice, Packing List, Certificate of Origin/COO) to the buyer's issuing bank and managing the repatriation of export proceeds (DHE) under strict domestic banking provisions. 3. The Billion-Dollar Question: Will NPI and FeNi be Classified as "Ferroalloys"? For the global stainless steel and electric vehicle battery supply chains, the immediate focal point is how Indonesia defines the scope of "ferroalloy" ( paduan besi ). Market consensus strongly suggests that the "ferroalloys" under discussion are highly likely targeting Nickel Pig Iron (NPI), which represents a massive trade flow of approximately 11.5 million tons of Indonesian NPI exports in 2025. However, because the official, legally binding regulation "signed" by the government has not yet been formally released to the public, further clarification is needed to verify the exact scope of affected materials. Crucially, the leaked written draft of the regulation does not actually mention "ferroalloys" at all. The term "ferroalloy" ( paduan besi ) was only verbally highlighted and presented by President Prabowo during the House of Representatives Plenary Session (Rapat Paripurna DPR) on Wednesday (20/5). According to the leaked draft text, the actual written scope of the law is structured as follows: CHAPTER II: DETERMINATION OF STRATEGIC NATURAL RESOURCE COMMODITIES Article 2 (1) Strategic Natural Resource Commodities subject to export governance include: a. coal; b. palm oil; and c. other strategic natural resource commodities. (2) The Government may amend the Strategic Natural Resource Commodities as referred to in paragraph (1) letters a and b, and establish other Strategic Natural Resource Commodities as referred to in letter c through a coordinated meeting ( rapat koordinasi ) led by: a. the minister responsible for synchronization, coordination, and control of ministerial affairs in the field of the economy ( Coordinating Minister for Economic Affairs / Menko Perekonomian ); or b. the minister responsible for synchronization, coordination, and control of ministerial affairs in the field of food ( Coordinating Minister for Food / Menko Pangan ), attended by relevant ministers/heads of non-ministerial agencies. This clause reveals a crucial legal framework: any expansion of the export control list to designate NPI, FeNi, or related ferronickel alloys under "other strategic commodities" is strictly required to be determined through a formal coordinated meeting ( rapat koordinasi ) led by either the Coordinating Minister for Economic Affairs or the Coordinating Minister for Food. Because the written regulation itself is silent on "ferroalloys," the legal scope of the policy has not been fixed yet . Until this high-level inter-ministerial coordination meeting ( rapat koordinasi ) takes place and issues a definitive annex list with matching HS codes, the practical impact on NPI trade remains pending official confirmation. Should nickel-iron intermediates formally fall under the BUMN single-exporter mandate after this meeting, SMM foresees four critical structural disruptions: I. Erosion of Direct Negotiation Flexibility Currently, Indonesian NPI is sold through a highly flexible ecosystem of steel mills, global trading desks, independent brokers, and back-to-back supply contracts. Forcing these contracts to route through a single state exporter compresses the operational room for direct price discovery, spot volume locking, and rapid high-frequency reselling. II. Absolute Export Price Transparency By funneling all sales contracts, shipping invoices, and foreign exchange collection (DHE) through state-owned channels, the Indonesian government will gain real-time, absolute transparency over actual transaction prices. This complements Indonesia's ongoing tightening of domestic mining benchmarks (HPM), the annual RKAB quota system, and the strict requirement for export proceeds to be held in domestic bank accounts. III. Disintermediation of Traders and Brokers In-transit or port-stored nickel-iron inventories have historically served as highly liquid financial assets for brokers and traders who leverage transfer orders and back-to-back contracts. Standardizing all contract entities and payment channels under BUMN will squeeze the margins of non-producing traders, rendering physical spot market quotes highly rigid. IV. Export Execution Delays Migrating long-term off-take agreements to BUMN templates will trigger significant friction during the Phase 1 transition. SMM expects delays stemming from contract re-signings, banking channel adjustments, letter of credit (L/C) re-issuances, and initial administrative coordination at port customs, temporarily disrupting short-term port-arrival schedules. 4. Market and Price Impact Analysis (If NPI were to be Involved) Short-Term Sentiment vs. Medium-Term Realities Short-Term (Sentiment-Driven): The direct impact on physical NPI shipping volumes returning to China will remain limited during the initial transition window, as private exporters continue to assist with logistics. However, given tight domestic nickel ore supplies, production cuts at several RKEF plants, and already declining NPI shipments, the market will likely digest this announcement as a fresh supply-side threat, driving up bullish sentiment. Medium-Term (Structural Shifts): If NPI is formally included in the HS code list, Chinese stainless steel mills will face centralized Indonesian state sellers. This will result in stronger payment scrutiny, fewer options for non-standard flexible transactions, and the virtual elimination of low-cost, off-market FOB deals. Transaction Costs vs. Production Costs Unlike mining-end disruptions such as rising HPM benchmarks, declining laterite ore grades, or restricted RKAB quotas, this export centralization policy does not directly raise the physical smelting cost of NPI. Instead, it functions as a tax on transaction efficiency, increasing compliance burdens, administrative delays, and state oversight on pricing. SMM concludes that the impact of this policy is an increase in "transaction-side friction" rather than raw production costs, which will ultimately support sellers' intentions to hold prices firm and reinforce the price rigidity of high-nickel pig iron. 5. SMM Outlook Indonesia’s new export regulation signals that its resource nationalism is successfully extending its reach beyond the mine gate and tax office, directly into the global sales and trading arena. However, the key takeaway is that nothing is legally set in stone for the nickel industry yet. Because the written regulation currently leaves the door open under "other strategic commodities," and the word "ferroalloy" was only delivered verbally by the President on Wednesday (20/5), the entire framework remains unfixed. The critical indicator for the nickel chain over the coming weeks is whether the upcoming inter-ministerial rapat koordinasi formally adopts the HS codes for NPI and FeNi into the final regulatory annex.

[SMM Express News] Prabowo Subianto announced a new regulation on natural resource export governance aimed at strengthening oversight and control of Indonesia’s commodity exports. Under the policy, exports must be conducted through designated state-owned enterprises acting as sole exporters, initially covering strategic commodities including palm oil, coal, and ferro alloys.

President Prabowo Subianto officially issued a Government Regulation (PP) on May 20, 2026, establishing the Natural Resources Export Management Agency to route all sales of palm oil, coal, and ferroalloys through designated State-Owned Enterprises (BUMN) acting as sole exporters. Functioning as a centralized marketing facility to strengthen state oversight, the policy implements a tight two-phase timeline: a transitional first phase from June 1 to August 31, 2026, forcing private exporters to re-route their international sales contracts through the designated SOEs, followed by full implementation on September 1, 2026, where the SOEs will take total, end-to-end control of all commercial contracts, custom clearances, shipments, and payment settlements.