Indonesia raised the floor price of nickel ore, combined with the increase in sulfur prices, impacting the nickel processing sector.

Indonesia will raise the benchmark price for nickel ore, which will further exacerbate the cost pressure faced by local processors due to the Middle East war. According to a report from the Indonesian Ministry of Energy and Mineral Resources, the new pricing formula will take effect on Wednesday, when the minimum prices for all grades of nickel ore will be raised. The costs of by-product metals (including cobalt) in the ore will also be included in the benchmark price. The Indonesian Energy Minister stated last month that the government plans to raise the benchmark price. With the rising oil prices due to the Iran war, this resource-rich country is facing increasingly severe financial pressures and has been seeking to increase national revenue. This move will hit the extensive processing industry of this world's largest nickel producer, which accounts for over half of global nickel production. Although stricter mining quotas have already pushed the price of high-grade nickel ore well above the government benchmark price, the price increase for low-grade nickel ore may be even greater. These low-grade nickel ores are typically purchased by high-pressure acid leaching plants, which process them into nickel needed by electric vehicle battery manufacturers. Due to interruptions in sulfur supply in the Persian Gulf region due to the Iran war, these smelters have already been hit by soaring prices of sulfur (a key reagent). Indonesia's benchmark prices stipulate the minimum price that smelters must pay to miners for ore. These prices fluctuate according to the London Metal Exchange prices, adjusted twice a month.