Indonesia: New nickel ore HPM formula lifts pricing floor for 1.6% ore from 15 Apr

• Correction factor for 1.6% ore raised to 30%, supporting miners’ realisations
• Higher ore costs may tighten margins for NPI and stainless steel producers

Indonesia will implement a revised nickel ore Harga Patokan Mineral (HPM) formula from 15 April 2026, in a move expected to raise domestic ore benchmark prices and reshape raw material cost structures across the nickel value chain. Under the new Energy and Mineral Resources Ministry (ESDM) framework, the correction factor (CF) for 1.6% nickel grade ore will increase to 30%, with the factor declining by 1 percentage point for every 0.1% reduction in nickel content.

The revision is widely seen as supportive for higher-grade saprolite ore suppliers, particularly those feeding nickel pig iron (NPI) and ferronickel producers. A higher CF directly improves payable values, tightening ore procurement economics for downstream smelters already facing volatile alloy margins.

Byproduct values formally recognised

For the first time, the pricing formula explicitly incorporates byproduct credits. Cobalt and iron will carry a 30% CF, while chromium will be assigned 10%. However, cobalt will only be included when ore contains at least 0.05% Co, while iron will be counted only if Fe content is 35% or below.

This change may benefit selective miners with richer multi-element ore bodies, while encouraging greater grade transparency and tighter assay controls in contract settlements.

Impact on stainless steel chain

Higher domestic ore reference prices could lift feedstock costs for Indonesian NPI producers, a key supplier to the global stainless steel industry. Any sustained rise in NPI conversion costs may eventually influence stainless steel meltshop input costs, especially in Asia.

Market participants are expected to closely track whether smelters absorb the increase or pass it downstream through alloy and stainless offers.

Outlook

The revised HPM formula is likely to keep Indonesian ore prices firm in the near term. Attention will now shift to producer negotiations, NPI margins, and whether stronger ore benchmarks translate into higher nickel units pricing globally.