Soaring nickel prices cause Indonesia to rake in 100 trillion rupiahs

Nickel prices hit a record high this year, making Indonesia's nickel export profits more than Rp 100 trillion since the beginning of the year. London Metal Exchange data show that as of the close of trading on May 16, 2024, the 3-month contract nickel price was at $200,054 per ton, up 2.50% in a single day, up for two consecutive days. Over the past month, nickel prices have consistently trended upward by nearly 101 TP3T. Prices have now reached the highest level in 2024 and are approaching the mid-September 2023 high. As nickel prices have risen this year, Indonesia has profited handsomely from the commodity's exports. According to the Central Statistics Agency (BPS), cumulative exports of nickel ore, ferronickel, and their products from January to April 2024 amounted to US$6.34 billion, equivalent to Rp 101.44 trillion. In the first four months of this year, total nickel exports equaled 28.71 TP3T of 2023 exports of US$22.1 billion, equivalent to Rp 353.69 trillion.

The nickel industry has been growing rapidly, especially since 2020, when the government strictly banned the export of raw minerals, especially nickel ore, to encourage the development of the downstream industry. President Joko admitted at the time that the policy of banning the export of raw minerals was indeed difficult for raw ore exporters, although he believed that this downstream program would eventually boost socio-economic development. More than three years have passed and the program is finally bearing fruit. This can be seen in the faster development of nickel exports, especially for products that have been processed into ferronickel and its derivatives. nickel ore exports reached US$1.1 billion in 2019, shrinking sharply to just US$117 in 2020, and the lowest nickel ore exports in 2022, at just US$29. The sharp decline in nickel ore exports stands in stark contrast to nickel processed products (i.e., ferronickel and other nickel derivatives), which have since boomed. In five years, ferronickel exports soared nearly 600%, from $2.59 billion to $15.29 billion. The nickel and its derivatives segment soared more than seven-fold to $6.81 billion. 2023 nickel exports also reached their highest level in nearly a decade as they jumped ten-fold. The rapid growth in exports has become one of Indonesia's gems, valuable in the eyes of the world, so downstream projects must continue to ramp up to give higher value to domestic nickel processed products.