- Indonesia partners with China on nickel processing hub
- Market likely to remain volatile amid subdued demand
Nickel prices on the London Metal Exchange (LME) inched up by 1.7% w-o-w, with the three-month contract closing at $15,420/tonne (t) from last week’s $15,161/t. LME nickel stocks remained steady at 209,544 t against 209,748 t a week earlier.
The increase was driven by a weaker US dollar against Indonesian currency, which offset the impact of a recent Indonesian policy change that removed the obligation for miners to use government benchmark rates as the floor price in minerals and coal sales.
Market updates
Indonesia strengthens nickel processing with policy shifts
Indonesia’s energy transition strategy has accelerated through a deepening partnership with China, focusing on nickel as a critical resource for electric vehicle batteries and clean energy. The country is boosting its nickel industry, as sovereign wealth fund Danantara and China’s GEM have partnered to develop a major nickel processing hub, targeting higher value in the electric vehicle supply chain.
The government also dropped requirements for official benchmark mineral pricing, opting for market-driven rates while keeping tax rules unchanged. Despite these policy shifts and new investments, global nickel prices remain under pressure amid persistent oversupply and weak demand, limiting gains from Indonesia’s structural changes.
China’s nickel stockpiling reshapes global market dynamics
China has doubled its reserves of high-purity Class 1 nickel since late 2024, dramatically shifting global supply-demand balances. This strategic move creates buffers against price volatility and tightens resource control amid persistent oversupply and weak electric vehicle sector growth.
With LME nickel trades heard in the range of $15,000-15,400/t, risking the viability of half the world’s producers, China’s accumulation signals confidence in nickel’s long-term value and sets the stage for future pricing influence, making non-Indonesian sources and Western projects increasingly important.
TGEM targets US supply chain with green nickel
Trinitan Green Energy Metals (TGEM) is advancing its environmentally friendly nickel production for the US supply chain, leveraging modular plants and proprietary STAL technology to process lower-grade ores. TGEM’s compliance with US foreign entity of concern rules, excluding links to China, positions it as a strategic supplier for clean energy and EV markets. Although oversupply and policy changes challenge global nickel demand, TGEM’s flexible production and green credentials drive optimism for broader battery and industrial applications.
Eramet sets ambitious nickel ore production target in Indonesia
French mining company Eramet Indonesia plans to produce 42 million tonnes (mnt) of nickel ore in 2025 at Weda Bay Industrial Park, North Maluku. Approval increased from 32 mnt to 42 mnt this year. The plan includes 30 mnt of high-grade saprolite for nickel pig iron and 12 mnt of low-grade limonite for HPAL smelters, supporting Indonesia’s expanding nickel processing capacity.
Outlook
In the near term, nickel prices are expected to remain volatile, tempered by persistent oversupply and subdued demand in global markets. Policy shifts in Indonesia and China’s strategic stockpiling offer some support, yet fundamentals suggest ongoing market uncertainty, slow recovery, and pressure on many producers despite recent upside in LME contracts.
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