Indonesia: Will Ensure Ample Nickel Supply

According to foreign news on February 28th, Indonesia, the world’s largest nickel exporter, sent a thought-provoking message to other struggling battery metal producers: do not expect any significant rebound in nickel prices. Septian Hario Seto, Deputy Minister of Maritime Affairs and Investment Coordination overseeing the nickel processing industry in Indonesia, stated that LME nickel prices are unlikely to rise above $18,000 per ton (85,842 Malaysian Ringgit). He mentioned that Indonesia would ensure ample market supply to lower the costs for electric vehicle manufacturers. During an interview, he said, “All nickel producers elsewhere must understand this concept well. The Indonesian government’s aim is to find a balance so that nickel demand, especially for electric vehicles, can be adequately supplied.” Nickel prices plummeted about 45% in 2023, with prices dropping below $16,000 per ton earlier this month due to weak demand and a surge in Indonesian supply to more than 50% of the global total. Nearly half of the global nickel business is unprofitable at recent price levels, forcing miners in Australia and New Caledonia to consider shutting down nickel projects.

He claimed that nickel prices should remain above $15,000 per ton, as Indonesian smelters would be forced to cut production if prices fall below this level. Despite the ongoing decline in battery metal prices, nickel demand is still expected to rise in the long term due to the increasing popularity of electric vehicles. Indonesia has already begun producing Mixed Hydroxide Precipitate (MHP), a nickel product aimed directly at automakers. The Indonesian government expects the country’s total MHP production capacity to double in the next three years, which should suffice to meet the growing demand of the electric vehicle industry. Indonesia believes controlling the prices in the electric vehicle industry is key to ensuring nickel-based batteries remain competitive with low-cost alternatives, including lithium iron phosphate. “We know what happened with cobalt three or four years ago,” he referred to the cobalt price spike, which prompted buyers to consider other options. “We must ensure everyone in the ecosystem has a good profitability, not excessive profitability,” he stated, adding that Indonesian MHP production is increasingly linked to purchasing deals. The carbon intensity of producing this chemical is much lower than producing battery-grade nickel, as the latter consumes coal in its production process.

Several European automakers have been actively engaging Indonesian mining companies to secure nickel supplies. Indonesia has been seeking to reach a critical minerals agreement with the United States to ensure nickel products from Indonesia play a key role in the U.S. electric vehicle supply chain.

[Source- 上海有色网] 印尼:将确保镍供应充裕

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