Vinnilya, Jakarta – Indonesian miners are grappling with the decreasing nickel prices, approaching their lowest level since 2021.
According to Stockbit data, as of Jan. 22, 2024, nickel prices have dropped by 44.64 percent year on year, reaching $15,799 (Rp 247.52 million) per ton.
Meidy Katrin Lengkey, the Secretary-General of the Indonesian Nickel Miners Association (APNI), said that Indonesia is adding to the drop in nickel prices because there's too much supply of Indonesian nickel products.
Meidy pointed out that the decline in nickel prices has been happening since the beginning of 2023, particularly in February and March of that year.
"We're worried that if it falls below 15,000, we'll be in real trouble, unable to cover our production expenses. Right now, many APNI members are only producing to break even," Meidy Katrin told Beritasatu.com, a sister publication of the Jakarta Globe, on Tuesday.
To address this, APNI has taken several measures, including the establishment of the Indonesia Nickel Price Index in collaboration with the Shanghai Metals Market (SMM) in November 2023. This emergency index is expected to at least slightly boost nickel prices in the future and help reduce illegal mining.
"It's more than just setting a price; it's about pride. We take pride in adopting Indonesian prices. The progress is promising; it's already in motion, even if it's only for a specific type of nickel, known as MHP (mixed hydroxide precipitate) nickel," Meidy said.
Additionally, Meidy said that three years ago, APNI had established a benchmark mineral price (HPM) used for all domestic nickel ore transactions.
APNI has proposed several recommendations to the government to prevent further corrections in nickel prices. One of the suggestions is urging the government to halt or impose a moratorium on the construction of new nickel smelters.
"Let's support existing smelters so that our reserves won't deplete," she said.
Furthermore, Meidy conveyed the grievances of global nickel industry players, who seem to harbor jealousy towards Indonesia's nickel production, which is considered one of the lowest among other countries.
Indonesia and Australia hold the world's largest nickel reserves, each boasting a substantial 21 million metric tons. In 2022, Indonesia's nickel mines produced an estimated 1.6 million metric tons, as reported by the US Geological Survey.