Nickel continues trading either side $21,000 as LME inventories continue to creep lower towards 37,000 tonnes despite talk of large surpluses.  China saw inflow of Russian cathode – 7,000-8,000 tonnes – will be see how this flows through Chinese market or ends up overhanging Chinese market.

Debt deal helped put bounce back in copper and floor under nickel prices.  Given global slowdown, still think test of $20,000 possible before we trend higher by year-end. 

Battery restocking – lithium prices up 13% week-over-week as seeing restock well underway.  As I’ve said before, collapse in lithium caused destocking and drop in battery demand through first half and that we’ll see an aggressive restocking which looks like is now well underway.

“Great convergence” continues – discounts narrowed again with nickel prices lower and sulphate prices higher – sulphate discounts now less than half of what they were 6 weeks ago.  NPI discounts also narrowed slightly.

Indonesia – part of conference and series of site visits

Key takeaways:

Nickel price index – government not going to put export tax on NPI, but establish Indonesia reference price – think this is the way government will extract additional value for Indonesia. Important as no floor price for limonite (HPAL) unlike saprolite (NPI) – part of reason building MHP capacity. There will be ONEC – way for Indonesia capture

Focus on growing battery supply chain volumes starting with HPAL/MHP, matte.  No further talk of more stainlesss capacity – good for US/European stainless producers who have healthy price premiums. Taking advantage of limonite being mined to get to saprolite

Lots of capacity coming – 4 million tonnes approved through 2030 (we’ll need all of it as no western supply growth coming yet).  But will need 500 million tonnes – presenter from Indonesia government bureau doubtful that can supply that much. 

Ore grades definitely the risk – some of plants we went already using 1.5%, most using 1.6-1.65%.  Was 1.8% 2 years ago – don’t think people factoring in derating of plant.  33 MW furnace used to 8ktpa, at 1.6% is 7ktpa

Lots of open property – don’t seem to be rushing to reclaim – not good for runoff

Brimob – Indonesia special forces at each facility