- Nickel prices correct after touching two-year highs
- Indonesian ore policy, regional cooperation remain key focus
London Metal Exchange (LME) nickel futures softened in the week ended 8 May after recent sharp gains, with the three-month contract closing at $19,085/t, down 1.5% w-o-w from $19,385/t. Prices had earlier touched the $20,000/t mark for the first time in nearly two years, supported by tightening Indonesian ore supply, the revised formula for the Harga Patokan Mineral (HPM) ore pricing benchmark, and elevated production costs across the nickel value chain. LME warehouse inventories remained broadly stable at 277,788 t, indicating relatively balanced exchange availability despite heightened market volatility.
Indonesia, Philippines strengthen nickel cooperation amid supply concerns
Indonesia and the Philippines have signed a memorandum of understanding (MoU) to strengthen cooperation in the nickel sector, focusing on downstream processing technology, information exchange, and human resource development to support a sustainable regional nickel industry. The agreement comes as Indonesia seeks to secure additional nickel ore supply for its expanding battery and stainless steel sectors amid tightening domestic availability.
Market participants noted that Indonesian smelters continue to rely on imported Philippine ore during periods of domestic supply shortages, particularly following recent mining quota restrictions. Indonesia’s officials indicated that discussions may include increased ore imports from the Philippines on a business-to-business basis, while both countries also plan to collaborate on nickel processing technologies and regional supply chain integration.
Indonesia plans windfall tax on nickel exports amid price surge
Indonesia is reportedly considering the introduction of a windfall tax on nickel exports as rising global prices improve profitability across the sector. Market participants noted that the move is aimed at increasing state revenue from the country’s dominant nickel industry while maintaining tighter control over ore supply and downstream development. The proposal comes amid ongoing mining quota restrictions and elevated nickel prices, which continue to support bullish sentiment in the global stainless steel and battery raw material markets.
On the demand side, China’s stainless steel sector continued to provide underlying support, although spot buying remained cautious amid volatile futures movement. Traders reported that downstream procurement remained largely requirement-based despite stronger alloy prices, while mills maintained relatively healthy operating rates.
Outlook
Nickel prices are expected to remain volatile in the near term as markets balance tightening Indonesian supply policies against stable exchange inventories and cautious downstream demand. Continued developments in Indonesia’s mining regulations, ore import discussions with the Philippines, and global macroeconomic sentiment will remain critical drivers for nickel and stainless steel markets in the coming weeks.
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