Government Lowers Nickel Reference Price by 7.31% at the End of 2024

The Indonesian Ministry of Energy and Mineral Resources (ESDM) set the benchmark price for Indonesian nickel at US$15,822.95 per dry metric tonne (dmt) in December 2024.

This benchmark is down 7.31% from November 2024, which was US$16,175.23 per dmt.

Compared to the beginning of the year (year-to-date/ytd), the December 2024 benchmark price also fell by 2.17% from January 2024, which was US$16,368.86 per dmt.

A decrease also occurred compared to the same period last year (year-on-year/yoy) by 10.36% from December 2023, which was US$17,653.33 per dmt.

This benchmark price was set through Indonesian Ministry of Energy and Mineral Resources Regulation (Kepmen ESDM) Number 339.K/MB.01/MEM.S/2024 concerning the Benchmark Price of Metal Minerals and the Benchmark Price of Coal for November 2024, on December 20, 2024.

Indonesia Plans to Cut Nickel Production Next Year

The Ministry of Energy and Mineral Resources is reportedly considering cutting the amount of nickel ore that can be mined or produced in 2025. According to a Bloomberg source, next year's nickel production will be only 150 million tons, a decrease of 44.85% from 272 million tons this year.

Another report states that this production reduction aims to boost prices. Quoting Bloomberg, this plan may be one of the government's efforts to conserve Indonesia's dwindling nickel reserves.

Energy Economics Observer from Padjadjaran University, Yayan Satyaki, hopes that the planned reduction in nickel production will achieve its intended goal of increasing nickel prices. The current downward trend in nickel prices is due to oversupply in Indonesia.

"There is an oversupply of 253,000 tons in the global market. Indonesia produces more than 50% of the supply, with nickel production increasing from 24.7% to 383,000 tons from 307,000 tons compared to last year in the third quarter," said Yayan when contacted by Katadata.co.id on Tuesday (December 24, 2024).

(Read Katadata: Indonesia Plans to Cut Nickel Production Next Year)