In recent years, stainless steel manufacturers and power battery manufacturers from China have increased their investment in Indonesia because of its abundant nickel resources, which has led to a sharp increase in demand for nickel ore. At present, Indonesia's main nickel products are nickel pig iron (NPI), nickel intermediate products (MHP and high ice nickel).
Demand for nickel ore has soared
According to statistics, in 2022, Indonesia's production of primary nickel will reach 1.2 million tons, intermediate products will reach 285,000 tons, and nickel ore production is expected to reach 1.56 million tons. By 2025, production of primary nickel is expected to reach 1.75 million tons, intermediates 1.43 million tons and nickel ore 3.22 million tons. The nickel output forecast is based on the fact that Indonesia has no nickel exports, which it is likely to do under a recent WTO decision. However, after years of development, the strategic industrial policies implemented by the Indonesian government have achieved considerable results. Indonesia has already formed two industrial chains of stainless steel and batteries. Even if nickel ore is again opened for export, the amount of export will be far lower than the level of the previous opening.
The race between smelting and mining
With the accumulation of construction experience, the cycle of nickel smelting projects in Indonesia is getting shorter and shorter, but the speed of nickel exploration and development lags far behind.
The cumulative demand for nickel ore from Indonesia's domestic smelting industry is forecast to reach 10.42 million tonnes from 2021 to 2025. According to the latest data released by USGS (United States Geological Survey), the reserves of nickel ore in Indonesia will be 22 million tons in 2021, which is still enough to meet the demand of the smelting industry. However, the pace of supply of nickel ore in Indonesia is not in the hands of nickel smelting enterprises. Increasing the intensity of mining or maintaining stable production will have an important impact on the supply of ore.
