New Benchmark Price and Global Nickel Market Stability

The government continues to strive for fundamental improvements and changes in the management of strategic mineral resources. One of them for nickel, the government is attempting to transform from merely a passive commodity exporter to a more active player—with a role and influence—in determining the value (price) of these mineral resources in the international market.

This is manifested through Ministerial Decree (Kepmen) ESDM No. 144.K/MB.01/MEM.B/2026 on Guidelines for Determining Benchmark Prices for Metal Minerals and Coal, which replaces Kepmen 268/2025. In the new regulation, a new Mineral Benchmark Price (HPM) formula for nickel ore is established, applying an increase in Corrective Factors (CF), integrating CF and Reference Mineral Price (HMA) for secondary components, and changing the calculation unit to Wet Metric Ton (WMT).

New Nickel HPM

The increase in CF is achieved by changing the baseline nickel assessment to a lower content level, while also raising the percentage of the reference price (HMA) received by producers. Under the old regulation, the baseline at 1.9% Nickel (Ni) was subject to a CF of 20%.

In the new regulation, the baseline is set at 1.6% Nickel with a CF of 30%. Both regulations still use the same scaling mechanism to adjust for different nickel contents, namely a fixed scale rule of a 1% change in CF for every 0.1% change in Ni content.

However, with a higher baseline, the new regulation lifts the entire CF curve or price curve. For example, ore with 1.9% Ni content, which previously had a CF of 20%, now has a CF of 33% (baseline 30% + 3% for the 0.3% content difference).

By raising this CF, the government is effectively applying a layered cost increase (double-compounding cost increase). The government not only raises the multiplying factor but also applies it to lower-grade ore. This has the potential to significantly increase the taxable value and selling value of low-quality nickel deposits that were previously cheaper.

The new regulation introduces multi-mineral valuation that captures “accompanying minerals” not present in the previous regulation. The specific calculation limits and CF for these accompanying minerals are as follows: 1) Iron (Fe): A CF of 30% is applied if Fe content ≤ 35%, 2) Cobalt (Co): A CF of 30% is applied if Co content ≥ 0.05%, 3) Chromium (Cr): A CF of 10% is applied without regard to thresholds. This regulatory change conceptually directs the transition from simple nickel extraction to a model of fuller “value capture”.

By stipulating that HPM encompasses the entire mineral composition of the ore, not just the nickel ore value itself, the volatility effects from single-metal prices based on the LME (London Metal Exchange) nickel benchmark will be relatively dampened. This change alters the mathematical basis for ore valuation and focuses economic value and sales points from a domestic perspective.

By integrating more types of metals into the HPM calculation, the new regulation creates structural pressure on input costs and conditions smelters to internalise costs from the entire mineralogical profile of the ore used.

In turn, the new regulation indirectly has the potential to eliminate the “subsidies” previously enjoyed by global smelters receiving by-products such as iron, cobalt, and chromium relatively cost-free.

The new regulation abandons the use of Dry Metric Ton (DMT) as the standard volume unit. The new HPM uses the price per Wet Metric Ton (WMT) unit by applying a Moisture Content factor (1-MC) at the final calculation stage. This principle eliminates moisture content-based arbitrage that smelters could previously use to reduce royalty obligations and purchases.

Global Nickel Market Prices and Stocks

Currently, nickel market prices can be said to be relatively higher-stable compared to levels from the previous year. Data as of 17 April 2026 shows the LME Nickel Cash Settlement price at $18,380.00, the LME Nickel 3-month price at $18,560.00, and LME Nickel Stocks: 278,184 tonnes.

Compared to the previous period, the LME Nickel Cash Settlement price has risen about 19.16% year-on-year and about 6.86% in the last month. According to Trading Economics data, nickel prices have risen 4.81% over the last month and increased 14.23% year-on-year based on trading in contracts for difference (CFD) that track the reference market for this commodity.

Additionally, nickel stocks are at the highest level in more than four years. Stocks in LME warehouses currently stand at 278,184 tonnes (as of 17 April 2026). This figure shows a drastic increase compared to the beginning of 2024, which was only around 64,158 tonnes. This stock buildup is caused by a surplus of Class 1 nickel in the global market, specifically from excess raw materials from Indonesia and China refined into nickel cathodes and absorbed into LME warehouses.

Without these high stocks, nickel prices could potentially surge even higher due to Indonesia’s production quota tightening policies (RKAB) as well as rising input production costs from the sulphur price spike exceeding USD 800/tonne. These high LME stocks act as a buffer or balancer for global nickel prices, as they can exert downward pressure and limit price increases from becoming too extreme.

Relevance of the New Nickel HPM

With the largest reserves it possesses, Indonesia is a key player in the global upstream nickel supply chain. The impact of implementing the new HPM from the Indonesian government will effectively raise cos