MHP and Nickel Sulphate Fuel Significant Growth in Indonesia's Nickel Exports

Indonesia has experienced a substantial increase in nickel exports during the first half of 2024, driven by a sharp rise in production capacities for mixed hydroxide precipitate (MHP) and nickel sulphate. According to research conducted by Australian bank Macquarie, Indonesia's total nickel exports reached 805,000 tonnes between January and June, reflecting a 20.7% year-on-year increase. When including stainless steel, total exports rose by 22% to 998,000 tonnes.

The growth in exports is largely attributed to the country's four high-pressure acid leach (HPAL) plants, which exported a combined 139,000 tonnes of nickel metal in the form of MHP and nickel sulphate during the first half of the year, a staggering 106% increase from the same period in 2023. The second quarter alone saw 81,000 tonnes exported. Specifically, nickel sulphate exports skyrocketed from 5,400 tonnes in the first half of 2023 to 85,400 tonnes in 2024, equivalent to 19,000 tonnes of nickel metal. Meanwhile, MHP exports grew by 80% year-on-year to 120,000 tonnes.

Nickel pig iron (NPI) remains Indonesia's largest nickel export by volume, growing by 13% year-on-year to 544,000 tonnes in the first half of 2024. However, the slower growth in NPI exports compared to MHP and nickel sulphate suggests Indonesia's increasing focus on the battery materials sector.

Despite the overall rise in exports, high-grade matte exports from Indonesia declined by 17.8% to 101,000 tonnes as more of this supply was utilized domestically for nickel metal production.

Macquarie's data also indicates that nickel ore exports increased in the second quarter of 2024, with Indonesia importing 900,000 wet metric tonnes (wmt) of nickel ore from the Philippines in June, up from 200,000 wmt in March. This increase reflects ongoing tightness in domestic supply despite the government's accelerated approval of mining quotas.

Interestingly, NPI exports to China declined in the first half of the year, with China's share of Indonesian NPI exports dropping to 74% in June, the lowest since the first quarter of 2022. Instead, more NPI is being exported to India and Europe due to cost advantages.

Additionally, Indonesian stainless steel production surged by 25% year-on-year in the first half of 2024, reversing the declines of 4% and 9% seen in 2022 and 2023, respectively.