Indonesia's nickel ore benchmark price (HPM) continued to fall in the second pricing period of September because lower mineral reference prices (HMA) for several metals weighed on valuations.
Indonesia's energy and mineral resources ministry (ESDM) set the nickel HMA at $16,698/t, down by $35.33/t from the first pricing period of September. London Metal Exchange (LME) nickel prices traded at $16,300-17,000/t, lower than the range in the previous pricing period.
The cobalt benchmark price fell by $3,148.34/t to $52,704.33/t, pressured by weak downstream demand and elevated inventories.
The chromium benchmark price held steady at $6.37/t, while the iron benchmark price rose slightly by $0.04/t to $1.47/t.
Indonesia revised its HPM pricing methodology on 15 September, with the latest changes focusing on corrective factors applied to nickel and cobalt contained in nickel ore.
Under the revised mechanism, ore containing 1.2pc nickel will be assigned a nickel corrective factor (CF) of 14pc, down from 26pc previously. The nickel CF declines by 1 percentage point for every 0.1 percentage point decrease in nickel grade below 1.2pc. For ore grading above 1.2pc nickel, the CF structure remains unchanged.
The country also changed its treatment of cobalt. The cobalt CF for ore with 1.2pc nickel or less will be reduced to 17pc from 30pc. Nickel ore containing more than 1.2pc nickel will continue to receive a cobalt CF of 30pc.
Based on the revised formula, nickel ore containing 1.1pc nickel, 0.1pc cobalt, 2pc chromium and 45pc iron would have a HPM of $22.17/wet metric tonne (wmt), roughly half the $40.95/wmt value calculated under the previous mechanism.
In contrast, the benchmark price for ore containing 1.5pc nickel, 0.05pc cobalt, 1pc chromium and 20pc iron remains unchanged at $58.50/wmt compared with the previous pricing mechanism, indicating that the latest HPM revisions mainly affect lower-grade nickel ore at 1.2pc or below.
