Indonesia’s revised nickel ore pricing to lift benchmark, reshape market dynamics

By Romel S. Gurky

Indonesia will implement a revised benchmark price for nickel ore from April 15, a move expected to lift minimum selling prices and reshape market dynamics, according to analysts.

The benchmark, known as HPM (Harga Patokan Mineral), sets the minimum price at which miners can sell ore to domestic smelters.

Alina Zhunussova, base metals research at Wood Mackenzie, said the current HPM has not reflected market conditions, with nickel ore trading at significant premiums, particularly after the government reintroduced annual mining quotas in 2025.

The revised pricing formula introduces additional components linked to cobalt, iron and chromium content, while also increasing the correction factor applied to nickel grade.

Read also: Indonesia miners welcome new nickel pricing decree

She said the changes would have a notable impact on pricing.

For saprolite ore with 1.6% nickel content, the benchmark price could rise from about $32 per tonne to $56 per tonne at a nickel price of $18,000 per tonne.

For lower-grade limonite ore with 1.2% nickel, the benchmark could increase from around $17 per tonne to $46 per tonne, supported partly by higher valuation of cobalt by-products.

The changes are expected to be particularly relevant for mixed hydroxide precipitate (MHP) production, where cobalt content contributes to additional revenue streams.

Zhunussova said the key uncertainty is how market premiums over the benchmark will adjust, noting that while premiums may decline, they are unlikely to disappear entirely due to continued tight supply of nickel ore.

The revised formula is also expected to affect cost structures, royalty calculations and competition between integrated and non-integrated producers in Indonesia’s nickel industry.

Edirting by Alexander Ginting