Indonesia’s Ministry of Energy and Mineral Resources (ESDM) has reduced its mineral reference price (HMA) for nickel and cobalt for October’s first pricing period. Consequently, the benchmark price (HPM) for nickel ore fell to $56.22 per wet metric tonne (wmt). This marks its lowest level in five months following formula updates that account for cobalt, iron, and chromium content.
Falling LME Benchmarks Pressures Domestic Ore Pricing
The October nickel HMA was set at $16,322.67 per tonne, dropping $375.33 per tonne from late September. This decline directly mirrors ongoing weakness on the London Metal Exchange, where nickel prices traded around annual lows of $16,000–$16,700 per tonne. Furthermore, expanding domestic ore availability and sluggish downstream demand continue to weigh on market sentiment.
Similarly, the cobalt benchmark price dropped sharply by $11,657 per tonne to $41,047.33 per tonne. Meanwhile, LME cobalt cash prices fell below $40,000 per tonne, reflecting persistent oversupply across global battery materials supply chains. Consequently, market participants remain cautious, maintaining short positions in anticipation of softer pricing.
Sluggish Stainless Steel and Battery Demand Weighs on Market
The drop in benchmark prices underscores broader headwinds across Asia’s nickel processing sectors. Specifically, weak stainless steel mill consumption and slower EV battery material uptake have capped demand for intermediate nickel products like NPI and MHP. Meanwhile, domestic Indonesian ore supply continues to expand as mining approvals advance.
In response, Indonesian smelters face squeezed margins despite lower official ore input costs. As a result, market participants expect regional nickel ore prices to remain subdued through the final quarter of the year.
Market Impact
○ Impacted Metals: Nickel Ore, Nickel Pig Iron, Mixed Hydroxide Precipitate, Refined Nickel, Cobalt Sulfate
○ Direction: Bearish
○ Time Horizon: Near-term
○ Affected Industries: Stainless Steel, Electric Vehicle Batteries, Energy Storage, Chemical Processing
○ Related Price Reports: Nickel Alloy Weekly Price Report
○ Watch Item: Battery material buyers should track LME nickel price movements and Indonesian NPI production margins following the October HPM benchmark drop.
SuperMetalPrice Commentary:
The drop in Indonesia’s October nickel HPM to a five-month low highlights persistent softness across the nickel and cobalt value chains. With LME nickel prices testing multi-month lows around $16,000/t, reduced ore benchmark prices offer cost relief to domestic NPI and HPAL processors. However, weak end-use demand from stainless steel mills and battery makers continues to cap upside momentum.
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