Argus launches suite of nickel prices with Indonesia's PT IKI

Singapore, 30 October 2023

Global energy and commodity price reporting agency Argus is launching a new suite of price assessments for Indonesian nickel exports, increasing price transparency for the fastest growing region in the world for the nickel market. In collaboration with PT Indeks Komoditas Indonesia (PT IKI), Argus will publish prices for three grades of Class II nickel and intermediate products as part of the Indonesian Nickel Index (INI) series.

Nickel, most commonly used in the production of stainless steel, has acquired a new strategic significance because of the role of nickel sulphate in making batteries for electric vehicles. Indonesia is home to the world’s largest proven nickel reserves and now accounts for almost half of global nickel production and exports.

The vast majority of Indonesian production is of Class II nickel, such as ferronickel and nickel pig iron, or nickel intermediates, which typically feed into the battery supply chain. Class II nickel now accounts for most global nickel production and its share continues to grow rapidly. In recent years its prices have disconnected from the Class I nickel (high purity exceeding 99.8%) used to settle exchange traded nickel. The result has been growing demand for independent price references for Class II nickel.

Argus Media Chairman and Chief Executive Adrian Binks said: “After extensive engagement with market participants, we are pleased to partner with PT IKI to bring greater transparency to global nickel markets and address the increasing divergence between Class I and Class II nickel prices. Our new Indonesian Nickel Index (INI) prices are underpinned by our robust and transparent assessment methodology and reflect input from physical buyers and sellers from the nickel market.”

Maydin Sipayung, Chief Executive, PT IKI commented: “We are pleased to extend our longstanding partnership with Argus to bring Class II nickel market participants new assessments that reflect the specific demand and supply of the market as distinct from having to base pricing and risk management decisions on the value of Class I nickel which has different physical properties and associated fundamentals.”

The INI will initially comprise weekly outright price assessments for nickel pig iron, nickel matte, and mixed hydroxide precipitate (MHP) on an fob Indonesia basis, reflecting current market liquidity. All three INI prices will be published as an average of independent assessments for each product by Argus and PT IKI. Argus’ assessments are based on transactions, bids and offers in the spot market to ensure that they are accurate and robust representations of fair market value.

Argus publishes the widely-referenced Indonesian Coal Index (ICI) benchmarks with PT Coalindo Energy, an affiliate of PT IKI.