Since the implementation of Indonesia's revised foreign exchange controls and revisions to metal benchmark prices on March 1, mid-March saw further reports regarding the Indonesian government's proposed adjustments to PNBP (Non-Tax State Revenue). This series of policy changes has heightened market expectations for rising nickel ore prices.
As a result, China's mainstream steel mills saw high-nickel NPI procurement transaction prices rise to Yuan 1,020/nickel unit (tax included, CIF ex ship's hold). Currently, supplier quotes generally range between Yuan 1,030-1,040/nickel unit (tax included, CIF ex ship's hold). However, there remains a price gap in negotiations between the supply and demand sides, keeping NPI prices fluctuating at high levels.
On the supply side, nickel ore supply remains tight due to the delayed rainy season. In March, the rainy season in the Surigao region of the Philippines was postponed. Although this mine has resumed shipments to a certain extent, the overall supply has yet to fully recover. At the same time, miners in the northern Philippines are showing strong price support sentiment, leading to Eramen's recent bid price increasing month-on-month. In the Chinese market, recent transactions for 1.3% nickel ore CIF have been in the $44-45 range.
In the Indonesian market, nickel ore resources have remained tight since February, mainly due to rainfall in the Sulawesi mining region. On one hand, it coincides with the Ramadan holiday in Indonesia. On the other hand, the Indonesian government's planned new pricing mechanism and tax policy fueled bullish market sentiment, which prompted some mines and traders to hold back on sales. In addition, some Indonesian NPI plants started procuring nickel ore from the Philippines. According to Mysteel, as of March 31, the Philippines shipped 12 vessels of nickel ore to Indonesia in Q1 2025, totaling approximately 6.6 million tonnes (wet).
In April, Indonesian nickel ore prices are expected to rise, further driving up NPI production costs. The first pricing period of April saw Indonesia's domestic nickel ore benchmark price increase by USD 1-1.5 compared to the previous period, with the premium rising from +USD 19-21 to +USD 23-25, leading to an overall price increase of approximately USD 5. The upward movement in nickel ore prices raised production costs for local NPI plants and squeezed profit margins. Currently, the full cash cost of Indonesian NPI has climbed to around Yuan 1,010 per nickel unit.
In the stainless steel sector, China's stainless steel production for the 300 series remained at a high level in April, with a slight recovery in the futures and spot markets. According to Mysteel, stainless steel production reached 3.4845 million tonnes in April, up 0.45% MoM. Among them, 300-series production stood at 1.9075 million tonnes, showing a slight month-on-month decrease of 0.04%. Overall, crude steel production for the 300 series is high in April.
Recently, the stainless steel market has shown a slight recovery in both the futures and spot markets, and after a continuous stock buildup since the beginning of the year, 300-series inventories have declined for the first time.
Additionally, a major steel mill in South China recently completed a high-nickel NPI procurement tender at Yuan 1,020 per nickel unit (tax-inclusive, CIF ex ship's hold), with the transaction price remaining flat compared to the previous round. The delivery is expected in mid-to-late May.