[SMM Nickel Flash] This week, auxiliary material prices were generally stable with slight rise, while market sentiment in the coking coal and coke markets improved, and coke producers showed a stronger willingness to increase prices. Ore side, Philippine ore prices edged lower, while Indonesian nickel ore prices continued to rise. Meanwhile, downstream high-grade NPI prices remained under pressure, and amid cost uncertainties caused by high freight rates and geopolitical conflicts, smelter profit margins were squeezed.

[SMM Nickel Flash] In China, disruptions in nickel ore-related news continued. Supported by costs, upstream quotations were firm for a time, but steel scrap supply in the market increased significantly. Under the dual pressure from end-users and the cost advantage of steel scrap, upstream quotations for high-grade NPI gradually showed signs of weakening.

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 Flash] March 13 News: Supply side, as rising ore prices provided strong cost support, upstream offer prices remained firm. Demand side, as market activity gradually rebounded, steel mills' indicative prices also saw some increases. Overall, market trading activity gradually recovered, and high-grade NPI prices were supported.

[SMM Nickel Flash] March 12 News: Supply side, upstream quotations remained at elevated levels. Demand side, transaction prices and indicative prices at most steel mills stayed below 1,100 yuan/nickel unit, but market activity recovered to some extent, and procurement volume gradually increased. Overall, the market price center was still moving upward slowly.

Nickel Ore "Tight Supply-Demand Balance Drives Premiums; Government Clarifies RKAB Mechanism " 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 $17.104/dmt, a month-on-month decrease of 3.21%. However, according to SMM data, average premiums has increased for 1.4%, 1.5%, and 1.6% grade laterite nickel ore were reported at $34, $38, and $38.5/wmt, respectively, with 1.6% grade reaching a delivered price of $65.2–$72.2/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 fundamental perspective, as of March 6, Sulawesi and Halmahera are in a volatile transition at the tail end of the rainy season, where intermittent heavy rainfall continues to obstruct mining logistics. Morowali is currently overcast with high humidity (94%), and while immediate rain is light, a heavy precipitation system is expected around March 13 with up to 48mm of rain; Konawe remains cloudy with daily thundershowers. Halmahera also faces a high-precipitation weekend with a 65% chance of thunderstorms on March 7-8. Despite BMKG's forecast of an early dry season in April, saturated soil and local wind gusts currently prevent these regions from reaching full mining and loading capacity. Under the dual pressure of scarce tradable supply and RKAB uncertainty, some NPI smelters have been forced to ramp up procurement to secure raw materials. Hydrometallurgical Ore While spot supply of limonite is relatively sufficient, a tailings dam landslide at an MHP project has forced related production lines to operate at low utilization, causing temporary demand weakness. However, due to concerns over RKAB approvals, stockpiling for new projects, and growing demand from outer islands, limonite prices are expected to shadow saprolite prices and remain high. On the policy side, Director General Tri Winarno of the ESDM clarified on March 3, 2026, that any RKAB increases will be based on individual company assessments of capacity and compliance rather than a universal percentage hike, with the approval process slated for the second half of 2026. The government emphasized that this is a routine regulatory procedure to optimize resources, not a reactive measure against the previously set annual production cap of 260–270 million tons. Nickel Pig Iron " Strong Cost Support Drives High-Grade NPI Prices Upward " The average price of SMM 10-12% NPI average price rose by RMB 21.1 per nickel unit week-on-week to RMB 1092.6 per nickel unit (ex-works, tax included), while the Indonesia NPI FOB index increased by USD 2.22 per nickel unit to an average of USD 138.54 per nickel unit. This rally is primarily fueled by a "scarcity of high-nickel-content units" and firm offers from smelters facing intense cost pressure from rising ore prices. While downstream stainless steel mills remain reluctant to accept these peak prices due to limited gains in finished products, the overall market remains supported by tight tradable supply and the post-holiday resumption of production. The surge in nickel ore costs has significantly squeezed smelter margins, with many producers now facing contracting profits as NPI price growth lags behind feedstock inflation. Looking ahead, it is expected that NPI prices to maintain their upward momentum as raw material costs remain "easy to rise but hard to fall" and seasonal demand begins to recover.

Intermediate Product Nickel Market Trading Was Sluggish, Awaiting Guidance From Papua New Guinea Tender Results

Over the past few days, the Indonesian nickel market has reacted to the government’s announcement of a restricted 2026 RKAB production quota, set at approximately 260–270 million tons. This reduction has sent shockwaves through the industry, sparking widespread concern among both operational and upcoming smelters. Stakeholders are increasingly worried that these tightened supply levels will be insufficient to sustain their long-term production requirements. For the first one, The Indonesian Nickel Miners Association (APNI) has stated that the Ministry of Energy and Mineral Resources (ESDM) has agreed to consider revisions to the 2026 Work Plan and Budget (RKAB) starting in July. It is believed that the RKAB revisions could increase nickel production quotas by 25% to 30%. According to APNI, the domestic smelter demand based on the capacity is around 380-400 million tons, With the existing RKAB quota at 270 million tons and projected imports from the Philippines at 23 million tons, this 30% adjustment is critical to meeting the national ore deficit. This potential for more quota provides some relief to the market, but there is a second, more pressing issue to consider Another media also stated that The Indonesian Ministry of Energy and Mineral Resources (ESDM) has set a conservative nickel ore production target of 209.08 million tons for 2026, a figure notably lower than the approved RKAB quota of 260–270 million tons. According to Siti Sumilah Rita Susilawati of the Directorate General of Minerals and Coal, this strategic reduction is intended to preserve national reserves and stabilize global commodity prices As a result, the sudden perception of even deeper quota cuts has fueled confusion across the Indonesian market, which might further intensifying the pressure from already spiking nickel ore prices. I. Indonesia’s Calculated Nickel Ore Demand in 2026 According to SMM’s latest calculations, the total nickel ore requirement for 2026, which includes the demand from NPI, FeNi, Nickel Matte, and MHP, is estimated at approximately 334 million tons, based on the production estimates of smelter's current condition. This sharp increase is primarily driven by the rapid expansion of MHP production, which utilizes higher volumes of limonite ore. This surge in consumption has intensified the pressure on smelters to secure significantly higher mining quotas. II. Current Update and Understanding The Quota Revision? According to current understanding from the Regulation of the Minister of Energy and Mineral Resources Number 17 of 2025, citing the 11 th Article Regarding the Amendment of Work Approved Quotas in ESDM, it is stated that: Article 11 (1) Holders of an IUP (Mining Business License) for the Exploration stage, holders of an IUPK (Special Mining Business License) for the Exploration stage, holders of an IUP for the Production Operation stage, holders of an IUPK for the Production Operation stage, or holders of an IUPK as a Continuation of Contract/Agreement Operations may submit one (1) application for an amendment to the Exploration stage RKAB or the Production Operation stage RKAB in each current year. (2) The application for the RKAB Amendment as referred to in paragraph (1) shall be submitted after the holders of the Exploration stage IUP, Exploration stage IUPK, Production Operation stage IUP, Production Operation stage IUPK, or IUPK as a Continuation of Contract/Agreement Operations have submitted periodic reports up to the second quarter or no later than July 31st of the current year. SMM observes that RKAB revisions and amendments are standard procedure, as seen in both 2024 and 2025. This year, however, the submission window for revisions is expected to open after June, with a final deadline of July 31st. While the ESDM has not clarified whether the 260–270 million ton target already accounts for these mid-year adjustments, it remains highly likely that these revisions will be sufficient to meet domestic smelter demand. Another Potential Cuts? According to SMM’s further communication with ESDM, the predicted quota for 2026 still remains on 260-270 million tons estimate. Since the further production cuts rumor by ESDM is not in an official setting announcement, it is hereby confirmed that the quota approved of 2026 will not be lower than ESDM’s initial estimate of 260-270 million tons. From SMM's understanding, the target number to be lower than the quota is merely just an estimate of the production target, not necessarily reflecting the actual production numbers. III. Nickel Ore Supply and Demand Given the government’s push to tighten annual quotas, SMM expects this year’s revisions to land at approximately 20%, a more conservative number. Furthermore, nickel ore imports from the Philippines are unlikely to see significant growth compared to 2025, with estimates holding at approximately 19 million tons. This stagnant growth is due to the heavy concentration of Philippine exports to China, coupled with limited domestic mining capacity and a lack of new mining companies . After factoring in import volumes from the Philippines, the nickel ore market is likely to remain in a tight supply-demand balance, especially with potential hurdles like the rainy season slowing down mining operations. Nonetheless, this scenario is much more realistic than the alternative: a massive 50+ million ton deficit that would occur if the total quota were strictly capped at 270 million tons. IV. Conclusion Overall, the signal for significant quota cuts at the start of the year has already triggered a sharp rally in nickel ore prices, which could be seen from the substantial rise in premiums, largely driven by quota reductions at major mining companies and persistent uncertainty among small-to-mid-scale operators. Looking ahead, if the government maintains these restricted levels and fails to approve adequate supplemental quotas, domestic ore prices are poised for further upward momentum, potentially intensifying the cost burden on the downstream smelting sector.

[SMM Nickel Flash] On March 2, from the supply side, most upstream quotes remained flat MoM, with the bottom still supported by costs. From the demand side, as the Lantern Festival has not yet passed, there has been no significant release of procurement demand downstream, and the market only saw a small amount of restocking for essential needs. Overall, trading volume remains low, and the gap between upstream and downstream is gradually narrowing, but the market is still waiting to see the sales situation of finished stainless steel products after the Lantern Festival.

[SMM Nickel Flash] February 24 – Supply side, on the first trading day after the holiday, some upstream enterprises began to test the waters with offers. Supported by cost increases from nickel ore, market quotations remained firm. Demand side, post-holiday demand recovery remains unclear, downstream procurement has not yet resumed, and the market lacks actual concluded transactions. Overall, trading on the first day after the holiday was still relatively sluggish, but supported by rising nickel ore prices, the price center for high-grade NPI continued to rise.