Kuya Food Express JAKARTA. The upward trend in global nickel prices doesn’t automatically guarantee smooth operations for companies within the sector. These issuers continue to face a range of significant challenges that cannot be underestimated.
According to data from Trading Economics, nickel prices stood at US$19,041 per ton on Wednesday (May 27) at 10:30 AM WIB, representing a 13.07% increase year-to-date (YTD) since the start of the year.
Muhammad Wafi, Head of Research at Korea Investment & Sekuritas Indonesia (KISI), believes that while the performance outlook for nickel miners throughout 2026 is generally attractive, it remains selective. The current increase in nickel prices during 2026 is largely supported by production tightening through the Work Plan and Budget (RKAB) framework.
However, several key challenges could significantly impact the profit margins of nickel issuers. First, rising sulfur prices are a concern, as they can elevate the Cost of Goods Sold (HPP) for High-Pressure Acid Leaching (HPAL) smelters.
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Second, the introduction of a new Mineral Reference Price (HPM) formula adds another layer of complexity. Third, there is the potential inclusion of ferronickel as a commodity that can only be exported through PT Danantara Sumberdaya Indonesia (DSI).
“LME nickel stocks also remain high, exceeding 250,000 tons, which limits the scope for further price increases,” he stated on Tuesday (May 26, 2026).
Echoing this sentiment, Harry Su, Managing Director of Research at Samuel Sekuritas Indonesia, affirmed that the nickel sector faces numerous hurdles this year. A major factor is the increase in sulfur prices, driven by geopolitical conflicts in the Middle East, which substantially impacts company profit margins, given that sulfur accounts for 40% of the total Cost of Goods Sold (HPP).
“Beyond the new export policies introduced by DSI, nickel issuers also contend with uncertainties surrounding the RKAB,” he added on Tuesday (May 26, 2026).
According to Harry, nickel producers, particularly those in the upstream segment, must actively secure their supply chains to sustain performance. This involves ensuring government-approved RKAB quotas, the consistent availability of ore supplies, and reliable sulfur provisions.
Nafan Aji Gusta, Senior Market Analyst at Mirae Asset Sekuritas, emphasized that energy efficiency is a crucial factor for nickel companies to maintain competitiveness amidst escalating operational costs.
Furthermore, product diversification is essential to prevent companies from relying solely on a single market segment. “Strengthening financial structures is also vital to maintain performance resilience against commodity price volatility,” he stated on Tuesday (May 26, 2026).
Meanwhile, Wafi suggested that upstream nickel miners should prioritize expenditure efficiency and secure definitive RKAB approvals. For companies operating nickel processing smelters, hedging sulfur procurement costs and diversifying energy supply sources are critical strategies.
Moreover, issuers with significant exports of processed nickel products need to prepare contract novation scenarios should DSI eventually include ferronickel as a commodity requiring single-channel export.
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“Vertical integration into electric vehicle battery products remains the most defensive long-term strategy,” he added.
From this perspective, Wafi identified PT Aneka Tambang Tbk (ANTM) as a nickel producer with the potential for optimal performance. ANTM benefits from increased RKAB quotas, competitive expenditure costs, and the positive sentiment from gold commodities acting as a performance buffer.
Additionally, PT Vale Indonesia Tbk (INCO) presents an attractive prospect because its nickel matte product is not yet categorized as a commodity requiring export through DSI.
PT Trimegah Bangun Persada Tbk (NCKL) also shows promise in terms of production and sales volume, despite being more vulnerable to export regulation issues.
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Wafi suggests that ANTM and INCO shares are worth considering by investors, with target prices around Rp 3,880 per share and Rp 6,050 per share, respectively.
Conversely, Harry indicated that INCO could emerge as a nickel issuer achieving optimal performance amid this year’s rising commodity prices. INCO shares warrant investor attention, with a target price set at Rp 7,500 per share.
Summary
Despite a 13.07% year-to-date increase in global nickel prices, reaching US$19,041 per ton, nickel issuers face numerous significant challenges. Key among these are rising sulfur prices, which substantially elevate the Cost of Goods Sold for HPAL smelters, and the introduction of a new Mineral Reference Price formula. High LME nickel stocks, exceeding 250,000 tons, also limit further price appreciation, alongside uncertainties surrounding Work Plan and Budget (RKAB) quotas.
Further complexities include the potential for ferronickel to be restricted to single-channel exports through PT Danantara Sumberdaya Indonesia (DSI). To navigate these hurdles, experts recommend strategies like securing supply chains, enhancing energy efficiency, and diversifying products. PT Aneka Tambang Tbk (ANTM) and PT Vale Indonesia Tbk (INCO) are identified as promising, with ANTM benefiting from RKAB increases and INCO’s nickel matte not yet subject to DSI export regulations.