Nickel and Manganese Supply Chains
Publish Date
Nickel markets are balancing on the dual currents of supply policy in Indonesia and flat-to-modest demand. Indonesian reforms (shorter quota periods) and steady output have kept nickel pig iron (NPI) and ore prices high, but Chinese stainless and battery demand remains sluggish. For example, August first-period Indonesian ore benchmark hit ~$15,208/dmt (up ~0.7% WoW) as rainfall eased, yet many downstream buyers resist paying more. Shanghai nickel futures (Sep’25 contract) recently traded around ¥121,000/mt (≈$15,150), barely above early-week levels. Domestic Chinese refined nickel mirrored that stability (spot Ni at ~¥121,870/mt). Low inventories and cost-driven buying by loss-making smelters have underpinned this mild rebound. In manganese, prices remain near recent highs but activity is subdued: Chinese port manganese ore prices held steady (most grades unchanged vs. prior week), as miners refuse to cut prices and alloy producers refuse to pay more. Crucially, battery technology trends – notably new “manganese-rich” chemistries (LMFP/LMR) by GM, Ford, etc. – point to much higher manganese demand in coming years. Western firms are already investing in non-Chinese manganese supply: GM is backing a U.S. manganese sulfate plant (LOI for 32,500 t/yr from Australia), Stellantis has similar off-take deals. For now, however, manganese markets consolidate: tight global supply (post-Cyclone Megan disruptions) and major strategic initiatives promise long-term strength, but current spot prices are range-bound near multi-year highs.
Nickel Supply and Prices
Indonesia remains the key bellwether. This week’s benchmark for 1.3% nickel ore was raised slightly (first period Aug: $15,208/dmt), reflecting improving weather in Sulawesi, though smelters still push for lower grades. Notably, Indonesia’s government is poised to cut mining quota validity from three years to one, forcing companies to reapply annually. This regulatory uncertainty has traders cautious and likely exerts downward pressure on pyrometallurgical nickel ore prices in the near term. Domestically, Indonesian nickel pig iron (NPI) prices have crept higher: we report ~¥917/Ni-point for 8–12% NPI (ex-works, inc. tax), up ~¥10.8 from last week. The corresponding Indonesian FOB index rose to $111.84 per Ni-point. Higher NPI quotes reflect rising smelter operating costs (and ongoing losses), but demand remains weak: Chinese stainless and NPI buyers largely reference landed costs and have limited appetite. The price gap between Chinese NPI and Indonesia origin is widening, keeping actual trading volumes low.
Nickel metal futures and benchmarks also nudged up on macro cues. These represent minor weekly gains (+1%) amid mixed signals. In particular, weak U.S. jobs data and dovish Fed commentary pushed the dollar down and gave nickel a slight lift. At the same time, Chinese nickel stocks are modest: Shanghai Bonded stocks fell ~500 mt, while on-exchange inventories ticked up only ~1,086 mt (to ~40,600 mt). With low inventory overhang and cost pressures, smelters supported prices by holding shipments. Forecasts suggest Ni prices may oscillate in a range (e.g. ¥119k–123k) in the short term. Traders should watch Indonesian policy announcements and Chinese stainless production plans: any sign of easing quota rules or summer steel cutbacks could swing the balance.
Manganese Market Dynamics
Chinese manganese ore prices have largely plateaued at high levels. As of early August, prices for Australian lump (36% Mn) and Gabonese ore were around ¥40–41/mtu, with only minor adjustments. South African medium-grade ore even inched up ~1–1.4% WoW. Crucially, market participants describe a “mindset game” – miners “unwilling to sell low” while steelmakers “unwilling to buy high”. Short-term forecasts see prices staying firm: with tight raw material supply and SiMn alloy tenders creeping up (Aug SiMn at ¥6,000/mt vs. ¥5,850 in July), manganese ore spot offers should hold steady.
Longer term, the manganese outlook hinges on new demand from EV batteries. In 2024–25 automakers have embraced manganese-rich chemistries (LMFP/LMR) to reduce reliance on nickel/cobalt. GM’s and Ford’s announcements of high-Mn cathode programs (targeting 60–70% Mn) imply a potential surge in manganese demand later this decade. In response, Western supply chains are emerging: GM has struck a deal to supply up to 32,500 t/yr of battery-grade Mn sulphate from a new U.S. plant (via a joint venture with Element 25, using Australian concentrate), and Stellantis is funding a similar Louisiana facility. These shifts indicate increasing market attention to manganese as a critical battery metal. For now, however, oversupply of refined manganese (China still refines ~90% of world output) keeps spot prices under control. Traders should monitor any new production (e.g. South32’s GX mines recovering after Cyclone Megan) and end-use uptake in the battery sector.