The Ministry of Energy and Mineral Resources of Indonesia (ESDM) stated that Indonesia has revised the mineral benchmark price (HPM) mechanism for nickel ores and bauxite, which will come into effect on April 15th.
According to the ministerial decree No. 144.K/MB.01/MEM.B/2026 issued by ESDM today, the revised formula for nickel ore HPM will increase the correction factor (CF) for 1.6% grade nickel ore to 30%, while the CF for 1.9% grade nickel ore was previously 20%. The new mechanism stipulates that for every 0.1% increase or decrease in nickel grade, the CF will be adjusted by 1 percentage point.
This means that the CF for 1.9% grade nickel ore will be raised to 33%.
In addition, ESDM has for the first time introduced correction factors for cobalt, iron, and chromium, meaning that these metals are included in the nickel ore pricing system and subject to taxation. The CF for cobalt is set at 30%, applicable to nickel ores with a cobalt content of no less than 0.05%; the CF for iron is 10%, applicable to nickel ores with an iron content of no more than 35%; and the CF for chromium is also set at 10%.
The department maintains that the reference price used in the HPM calculation - the Mineral Acuan Price (HMA) - remains unchanged.
Market participants are closely monitoring how the revised HPM framework will affect nickel ore prices and downstream costs. For nickel ores used in the RKEF (Rotary Kiln-Electric Furnace) process, the spot transaction price is still approximately twice the level of the HPM, and the immediate impact of the new formula on the actual transaction price is limited.
However, for nickel ores used in the HPAL (High Pressure Acid Leaching) process, there is usually no premium, and market participants say that their transaction prices may increase by more than one-third. The increase in nickel ore prices and tax burdens may push the production cost of nickel metal equivalent in mixed hydroxide precipitation (MHP) to increase by more than $1,000/t.
The Shanghai Futures Exchange (SHFE) nickel futures closed at 136,900 yuan/ton on April 13th, higher than 133,010 yuan/ton on April 3rd. Market participants said that the adjustment of the HMA-linked pricing framework in Indonesia provides support for nickel prices.
