New Formula in Place, Business Owners Say Nickel Reference Price Could Rise 140%
The government has officially implemented a new formula for the Mineral Reference Price (HPM) for nickel ore starting 15 April 2026. This policy is outlined in Ministerial Decree No. 144.K/MB.01/MEM.B/2026, which revises Ministerial Decree No. 266 of 2025 on guidelines for determining reference prices for metallic minerals and coal.
Secretary General of the Indonesian Nickel Mining Association (APNI), Meidy Katrin Lengkey, views this policy as emerging amid ongoing short-term oversupply pressures in the global nickel market, particularly in China.
According to her, this pressure is evident in the decline of prices at the upstream level, such as nickel ore, Nickel Pig Iron (NPI), and nickel sulphate, while demand has not fully recovered, especially from the battery sector.
However, on the other hand, she sees a major structural change from Indonesia through the Work Plan and Budget (RKAB) policy and the HPM reform that takes effect this April.
“This serves as a signal that Indonesia is no longer merely following the market but is beginning to actively regulate supply and pricing balance,” Meidy stated in a written release on Wednesday (15/4/2026).
Meidy considers this HPM reform to be quite significant. In addition to driving an increase in the reference price of up to 100% to 140%, the new formula no longer relies solely on nickel content but also incorporates other elements such as cobalt, iron, and chromium in the valuation calculation.
The impact of this policy is immediately felt in the global market. Nickel prices on the London Metal Exchange (LME) were recorded to rise within hours after the new HPM announcement, from around US$17,090 per tonne to US$17,680 per tonne.
“For miners, this strengthens the price floor. But for smelters, especially HPAL, it adds pressure on production costs,” she said.
She then noted at least three main challenges facing the national nickel industry. First, production cost pressures. Sulphur prices have reportedly risen above US$900 per tonne, which has a significant impact on HPAL smelter operations. This increase is estimated to add production costs of around US$4,000 per tonne of nickel.
Second, demand imbalance. The stainless steel sector still shows relatively strong demand, but demand from the battery industry has not recovered optimally.
Third, supply chain risks. Indonesia still relies on sulphur imports, so geopolitical disruptions could directly affect domestic production continuity.