Nickel Dashboard: Benchmark recalibration - positive for all parties

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

16 September 2026

Nickel Dashboard

Benchmark recalibration - positive for all parties

LME nickel prices trended lower in September, currently trading at a YTD low of

US$15,977/t as of this writing. We attribute the weakness in refined prices to both

geopolitical events and rising yields, potentially hampering the near-term demand

outlook. At the same time, Indonesian production is seeing multiple developments,

including: (1) drought in industrial park due to a lack of rainfall, impacting both

RKEF and HPAL production; and (2) changes in benchmark pricing for limonite

ores (<1.3% Ni content). NPI prices, which have been strong throughout the year,

have started to see some cracks. NPI prices have declined 5% in September alone,

as stainless steel mills are sitting with ample inventory with limited appetite to

restock. HPAL operators, on the other hand, should start to see improvement in unit

economics, as sulfur prices have started to retreat and the new benchmark price for

limonite should result in lower cash costs. Within our coverage, this recent

development is positive for both INCO and MDKA. ANTM is unaffected, as all

of its ore sales are saprolite, which is seeing no change in benchmark pricing. For

more nickel and metal-related research, see Greg Shearer and team’s report here.

Changes to limonite HPM: Indonesia’s ESDM has revised the HPM

calculation for low-grade limonite ore, delivering long-awaited relief to nickel

miners and HPAL players. Based on a US$17,000/t LME price and 35%

moisture content, the HPM for 1.2% grade limonite has changed to US$19/t vs.

US$34/t previously (-46%), driven by the nickel correction factor (CF)

revision to 14% from 26% and the cobalt coefficient to 17% from 30%. We read

this as a partial rollback, rather than a full restoration, as the CF stays above the

pre-April 13% level. We expect miners to capture the most direct benefit, as

HPAL players were unwilling to transact at the old benchmark, forcing miners

to sell ore at market prices while still paying royalties and taxes on the higher

benchmark. HPAL plants should see some raw material relief, as well, though

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