Nickel price squeeze

Indonesia raised its nickel ore benchmark price on April 13, pushing up the minimum price local smelters must pay for feedstock starting Wednesday. (bloomberg.com) The Energy and Mineral Resources Ministry’s new formula lifts price floors for every grade of nickel ore and adds the value of byproduct metals such as cobalt. Bloomberg reported the change will add to cost pressure already facing processors. (bloomberg.com) Energy Minister Bahlil Lahadalia had signaled the move on March 26, saying a higher benchmark would raise state revenue after direction from President Prabowo Subianto. Industry reports before the change said the old formula no longer matched actual transaction prices and ignored premiums paid in the market. (tempo.co) (news.metal.com) The benchmark matters because Indonesia is the center of the global nickel trade. Fastmarkets said the country accounts for about 60 percent of world nickel supply, and its domestic ore price has become a reference point for the battery and stainless steel chains. (fastmarkets.com) The squeeze comes after Indonesia spent years forcing more ore to be processed at home instead of exported raw. That policy built a large smelting and refining base, but it also tied more of the industry to domestic ore rules, mining quotas and royalty changes. (spglobal.com) (woodmac.com) Nickel is used in stainless steel and in some electric-vehicle batteries, but turning Indonesian laterite ore into battery material takes heavy industrial processing. High-pressure acid leach plants use acid and heat to turn low-grade ore into mixed hydroxide precipitate, an intermediate product for battery chemicals. (springer.com) (miningsee.eu) That refining buildout has drawn scrutiny because much of it runs on captive coal plants built for smelters. World Resources Institute said Indonesia produced 2.2 million tons of nickel in 2023 and that nickel accounted for 22 percent of emissions from the country’s energy and industrial sectors that year. (wri.org) Channel NewsAsia reported from Sulawesi that communities near nickel hubs have raised concerns about dust, water quality and the environmental cost of powering the electric-vehicle supply chain with coal. A Jakarta Post opinion piece published April 13 described the contradiction as a “clean nickel paradox.” (channelnewsasia.com) (thejakartapost.com) Industry and government have argued the downstream push creates jobs, export value and leverage over global buyers, while critics want faster moves away from captive coal and tighter waste controls. New waste-management concerns also resurfaced this week after Mongabay reported a deadly 2026 landslide in Morowali linked to nickel waste storage. (sdsg.org) (mongabay.com) Indonesia’s latest price change shows how tightly it now controls both the ore and the refining system: miners get a higher floor, the state seeks more revenue, and processors face another cost increase in a market already under pressure. (bloomberg.com) (tempo.co)