Investment Rating - The report provides a "Recommended" investment rating for the industry [5]. Core Insights - The RKEF project produced 31,561 tons of nickel pig iron (NPI) in Q4 2025, reflecting a 1% increase quarter-on-quarter but a 4% decrease year-on-year [1]. - NPI sales reached 31,429 tons in Q4 2025, marking a 3% increase from the previous quarter and a 2% decrease from the same quarter last year [1]. - The contract price for NPI in Q4 2025 was $11,100 per ton, remaining stable quarter-on-quarter but down 7% year-on-year [1]. - The adjusted EBITDA for NPI in Q4 2025 was $35 million, a 13% decrease from the previous quarter [1]. Summary by Sections RKEF Project - The RKEF project, in which the company holds an 80% indirect interest, reported a total NPI production of 31,561 tons in Q4 2025, with a quarter-on-quarter increase of 1% and a year-on-year decrease of 4% [1]. - The unit cash cost for NPI was $10,088 per ton, reflecting a 2% increase quarter-on-quarter but a 5% decrease year-on-year [1]. HPAL Project - The Huayue nickel-cobalt project produced 21,441 tons of nickel and 2,301 tons of cobalt in Q4 2025, exceeding the rated capacity by 43% [3]. - The adjusted EBITDA for the MHP process was $8,012 per ton of nickel, a 32% increase from the previous quarter [3]. Mining Operations - The Hengjaya mine, in which the company holds an 80% interest, faced delays due to RKAB approval, resulting in a loss of $14.9 million in adjusted EBITDA for Q4 2025 [7]. - The Sampala project is progressing well, with plans to submit a feasibility study report by the end of Q1 2026 [8]. Financial Situation - In Q4 2025, the company issued $400 million in senior unsecured bonds and repaid $183 million in existing bank loans, resulting in total debt of $800 million in bonds and $423 million in bank loans [11].

Group 1 - Nornickel reports that the global nickel market will experience a surplus for the fourth consecutive year in 2025, with a surplus of approximately 240,000 tons, primarily due to continuous supply growth, especially from Indonesia, which accounts for 66% of global supply [1] - Nickel consumption is expected to increase by 6% year-on-year to 3.62 million tons in 2025, driven by the stainless steel (4% growth), alloys (5% growth), specialty steel (2% growth), and battery (2% growth) industries [1] - Nickel supply is projected to grow by 6% year-on-year to 3.86 million tons, reflecting ongoing capacity expansion in Indonesia, with NPI production in Indonesia expected to rise by 15% [1] Group 2 - The nickel market outlook for 2026 is cautiously optimistic, with high uncertainty regarding supply-demand balance depending on the implementation of Indonesia's production cut plans [2] - If the situation develops according to the most aggressive scenario, the market may achieve balance or face a supply gap, while maintaining the status quo could increase the surplus to 275,000 tons [2] - Nickel demand is expected to continue steady growth, increasing by 6% year-on-year to 3.83 million tons, driven by stainless steel production and supported by other industries [2] Group 3 - Indonesia's government has been taking measures since August 2025 to curb supply surplus and improve industry governance, including strengthening licensing regulations and adjusting mining quotas [3] - Reports suggest that Indonesia may reduce nickel mining quotas to 250-260 million tons by December 2025, which could lead to market balance or a supply gap [3] - Only Indonesia can bring the nickel market closer to balance through strategic production control and a more value-focused policy framework [3]

1. Report Industry Investment Rating No information provided in the document. 2. Core Viewpoints of the Report - The news from Indonesia has caused new disturbances in the nickel market, and the departure of funds before the holiday restricts the price elasticity of nickel. In the stainless - steel market, there are frequent maintenance and production cuts in February, and the cost support has shifted the price center upwards [1]. - The trend strength of nickel and stainless steel is both rated as 1, indicating a neutral outlook [7]. 3. Summary by Relevant Catalogs 3.1 Fundamental Tracking - **Futures Data**: - The closing price of the Shanghai Nickel main contract is 133,350, down 1,170 from the previous day. The closing price of the stainless - steel main contract is 13,740, up 5 from the previous day [1]. - The trading volume of the Shanghai Nickel main contract is 281,436, a decrease of 135,669 from the previous day. The trading volume of the stainless - steel main contract is 140,567, a decrease of 61,676 from the previous day [1]. - **Industrial Chain Data**: - The price of 1 imported nickel is 134,000, down 600 from the previous day. The Russian nickel premium is - 100, unchanged from the previous day [1]. - The price of 8 - 12% high - nickel pig iron (ex - factory price) is 1,041, up 1 from the previous day. The price difference between nickel plate and high - nickel iron is 299, down 7 from the previous day [1]. - The price of 304/2B coil - rough edge (Wuxi) Hongwang/Beibuwan is 14,100, unchanged from the previous day. The price of 304/2B coil - trimmed edge (Wuxi) Taiyuan Iron and Steel/Zhangpu is 14,650, unchanged from the previous day [1]. - The price of battery - grade nickel sulfate is 31,950, unchanged from the previous day. The nickel sulfate premium is 2,470, up 132 from the previous day [1]. 3.2 Macro and Industry News - Indonesia has suspended issuing new smelting licenses through the OSS platform, targeting projects producing "restricted products" such as Nickel matte, MHP, FeNi, and NPI [1]. - China's Ministry of Commerce and General Administration of Customs have decided to implement export license management for some steel products starting from January 1, 2026 [2]. - Indonesia's Ministry of Energy and Mineral Resources will revise the benchmark price formula for nickel ore commodities in early 2026, including treating cobalt as an independent commodity and levying royalties [2]. - Indonesia plans to significantly reduce the 2026 nickel ore production target from 379 million tons to 250 million tons [4]. - Some Indonesian mines are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land, and the final fine may be lower [4]. - Indonesia will adjust the 2026 nickel production quota according to industry demand, with the production likely to be around 250 - 260 million tons [4]. - The KPPU found monopoly behavior in the port storage and logistics of the IMIP park in Indonesia, and the park is in negotiation with the KPPU [4]. - A Singapore - flagged bulk carrier carrying about 50,000 tons of nickel ore sank on its way from the Philippines to Yangjiang, China [5]. - Indonesia's Ministry of Energy and Mineral Resources has started approving the 2026 mining work plans and budgets (RKAB) [5]. - The Solway Investment Group plans to restart its nickel mine business in Guatemala in a few months due to the rebound of nickel prices and the lifting of restrictions [5]. - Indonesia's BKPM disclosed that ITSS, a subsidiary of Tsingshan Holding Group, has never submitted an investment activity report, and its actual investment amount is not registered [6].

1. Report Industry Investment Rating - No relevant information provided 2. Core View of the Report - The situation of nickel - related events in Indonesia is uncertain, and there is a game between hedging and speculative positions in the nickel market. The concerns about nickel mines in Indonesia have intensified, and the rising price of nickel - iron supports the center of the stainless - steel market [2] 3. Summary by Related Catalogs 3.1 Fundamental Tracking - **Futures Data**: The closing price of the Shanghai Nickel main contract was 144,370, down 1,740 from T - 1; the closing price of the stainless - steel main contract was 14,465, down 75 from T - 1. The trading volume of the Shanghai Nickel main contract was 404,592, a decrease of 118,804 from T - 1, and that of the stainless - steel main contract was 454,242, a decrease of 25,750 from T - 1 [2] - **Industrial Chain Data**: The price of 1 imported nickel was 142,900, down 2,050 from T - 1; the ex - factory price of 8 - 12% high - nickel pig iron was 1,054, up 1 from T - 1; the price of red clay nickel ore 1.5% (Philippines CIF) was 59, unchanged from T - 1 [2] 3.2 Macro and Industry News - Indonesia has suspended issuing new smelting licenses through the OSS platform for projects producing Nickel matte, MHP, FeNi, and NPI [2] - China's Ministry of Commerce and General Administration of Customs have decided to implement export license management for some steel products from January 1, 2026 [3] - Indonesia's energy and mineral resources department will revise the benchmark price formula for nickel ore products in early 2026, and will levy royalties on cobalt as an independent commodity [3] - Indonesia plans to cut the 2026 nickel ore production target from 379 million tons to 250 million tons [5] - Some Indonesian mines may face fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land, and are negotiating with the government [5] - Indonesian officials said that nickel production in 2026 will be adjusted according to industry demand and smelter production capacity, possibly around 250 - 260 million tons [5] - The KPPU found monopoly behavior in the port storage and logistics of the IMIP park in Indonesia, and the park is negotiating with the KPPU [5] - A Singapore - flagged bulk carrier carrying about 50,000 tons of nickel ore sank on its way to Yangjiang, China [6] - Indonesia's energy and mineral resources department has started to approve the 2026 mining work plan and budget (RKAB) [6] 3.3 Trend Intensity - The trend intensity of nickel is 0, and that of stainless steel is 0, indicating a neutral outlook for both [7]

1. Report Industry Investment Rating - No relevant information provided 2. Core Viewpoints - The situation of the Indonesian nickel - related events is undetermined, with a game between hedging and speculative positions in the nickel market. The concerns about nickel ore in Indonesia have intensified, and the rising price of ferronickel supports the center of the stainless - steel market [2] 3. Summary by Directory 3.1 Fundamental Tracking - **Futures Data**: The closing price of the Shanghai nickel main contract was 145,380, down 2,630 compared to T - 1; the closing price of the stainless - steel main contract was 14,645, down 80 compared to T - 1. The trading volume of the Shanghai nickel main contract was 718,003, down 34,837 compared to T - 1; the trading volume of the stainless - steel main contract was 555,399, up 67,119 compared to T - 1 [2] - **Industrial Chain Data**: The price of 1 imported nickel was 150,800, up 6,000 compared to T - 1; the ex - factory price of 8 - 12% high - nickel pig iron was 1,050, up 8 compared to T - 1. The price of 304/2B coil - rough edge (Wuxi) Hongwang/Beibuwan was 14,550, up 100 compared to T - 1; the price of 304/2B coil - trimmed edge (Wuxi) Taigang/Zhangpu was 15,050, up 100 compared to T - 1 [2] 3.2 Macro and Industry News - The Indonesian government has suspended issuing new smelting licenses through the OSS platform, targeting projects producing "restricted products" such as Nickel matte, MHP, FeNi, and NPI [2] - China's Ministry of Commerce and General Administration of Customs have decided to implement export license management for some steel products, effective from January 1, 2026 [3] - The Indonesian government plans to revise the benchmark price formula for nickel ore products in early 2026, and will start treating cobalt as an independent commodity and levy royalties [3] - The Indonesian government plans to significantly reduce the 2026 nickel ore production target from 379 million tons to 250 million tons [5] - Some Indonesian mines are facing potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land, and are negotiating with the government [5] - The Indonesian energy and mineral resources minister said that the 2026 nickel production quota will be adjusted according to industry demand, and the output may be around 250 - 260 million tons [5] - The KPPU found monopoly behavior in the port storage and logistics of the IMIP park in Indonesia, and the park is negotiating with the KPPU [5] - A Singapore - flagged bulk carrier carrying about 50,000 tons of nickel ore sank on its way from the Philippines to Yangjiang, Guangdong, China [6] 3.3 Trend Intensity - The trend intensity of nickel is 0, and the trend intensity of stainless steel is 0, both indicating a neutral state [7]

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The situation in Indonesia regarding nickel is uncertain, with a game between hedging and speculative positions in the nickel market; concerns about nickel ore in Indonesia are intensifying, and the rising price of nickel iron is supporting the center of the stainless - steel market [1] Summary by Relevant Catalogs Fundamental Tracking - Nickel and stainless - steel futures: The closing price of the Shanghai Nickel main contract is 148,010, the stainless - steel main contract is 14,725; the trading volume of the Shanghai Nickel main contract is 752,840, and the stainless - steel main contract is 488,280 [1] - Nickel industry chain: The price of 1 imported nickel is 144,800, the price of 8 - 12% high - nickel pig iron is 1,043; in the stainless - steel sector, the 304/2B roll - rough edge (Wuxi) is 14,450, and battery - grade nickel sulfate is 32,800 [1] Macro and Industry News - Indonesia has suspended issuing new smelting licenses for certain nickel - related products through the OSS platform [1] - China's Ministry of Commerce and General Administration of Customs will implement export license management for some steel products starting from January 1, 2026 [2] - Indonesia plans to revise the benchmark price formula for nickel ore products and levy royalties on cobalt [2] - Indonesia may significantly reduce the 2026 nickel ore production target from 3.79 billion tons to 2.5 billion tons [4] - Some Indonesian mining companies may face fines of about 80.2 trillion Indonesian rupiah for illegal land occupation [4] - Indonesian officials said they will adjust nickel production according to industry demand and smelter capacity, with production likely between 250 million and 260 million tons [4] - The KPPU found monopoly behavior in the port storage and logistics of the IMIP park in Indonesia, and the park is in negotiation [4] - A ship carrying about 50,000 tons of nickel ore sank on the way from the Philippines to Guangdong, China [5] Trend Intensity - The trend intensity of nickel is 0, and that of stainless steel is 0, indicating a neutral outlook [6]

Report Summary 1. Report Industry Investment Rating No industry investment rating is provided in the report. 2. Core View The nickel market is in a game between the burden of real - world pressure and the narrative of cyclical transformation, with wide - range fluctuations. The stainless - steel market is dragged down by the real fundamentals, and the disk mainly plays on Indonesian policies [1]. 3. Summary According to Relevant Catalogs 3.1. Fundamental Tracking - **Futures Data**: - For nickel futures, the closing price of the Shanghai nickel main contract is 147,720, the trading volume is 1,132,256. For stainless - steel futures, the closing price of the main contract is 13,885, and the trading volume is 547,902 [1]. - **Industrial Chain Data**: - In the nickel industry chain, the price of 1 imported nickel is 145,850, the price of 8 - 12% high - nickel pig iron (ex - factory price) is 948, and the price of red clay nickel ore 1.5% (Philippines CIF) is 55. In the stainless - steel aspect, the price of 304/2B roll - rough edge (Wuxi) is 13,900, and the price of high - carbon ferrochrome (FeCr55 Inner Mongolia) is 8,200 [1]. 3.2. Macro and Industry News - Indonesia has suspended issuing new smelting licenses through the OSS platform for projects producing "restricted products" such as Nickel matte, MHP, FeNi, and NPI [1]. - China's Ministry of Commerce and General Administration of Customs will implement export license management for some steel products starting from January 1, 2026 [2]. - Indonesia's ESDM will revise the benchmark price formula for nickel ore commodities in early 2026, and will treat cobalt as an independent commodity and levy royalties [2]. - Indonesia plans to significantly reduce the 2026 nickel ore production target from 3.79 billion tons to 2.5 billion tons [4]. - Some Indonesian mining companies may face potential fines of about 80.2 trillion Indonesian rupiah for illegal occupation of forest land, and are negotiating with the government to reduce the fines [4]. 3.3. Trend Intensity The trend intensity of nickel is 0, and that of stainless - steel is 0, with the range of trend intensity being integers in the [-2, 2] interval [4].

Core Viewpoint - The global nickel market is entering 2026 with mixed signals, as prices remain firm due to anticipated supply tightening from Indonesia, but broader industry forecasts indicate structural oversupply that may limit sustained price increases [1] Group 1: Supply and Demand Dynamics - Nickel futures prices reached $16,765 per ton as of the week ending January 2, marking a nearly 7% weekly increase, driven more by policy sentiment than changes in demand fundamentals [1] - A key question remains whether global nickel supply and demand can achieve balance as the market moves forward into 2026 [1] Group 2: Indonesian Policy Uncertainty - Indonesia is considering reducing its 2026 nickel ore production quota to approximately 250 million wet tons, significantly lower than the 379 million wet tons target for 2025, which has boosted recent price sentiment [2] - However, market participants note that the finalization of these quotas may take time, and the implementation risks remain high, viewing the proposed cuts as more of a sentiment support rather than a substantial tightening of supply [2] Group 3: Supply Overhang from NPI Expansion - Despite policy discussions, Indonesia's nickel supply surplus is primarily supported by rapid capacity expansion in nickel pig iron (NPI) and intermediate products [3] - Industrial centers like Morowali and Weda Bay continue to expand and optimize existing smelting capacities, ensuring ample nickel supply and exacerbating the structural oversupply situation [3] Group 4: Price Outlook and Forecasts - Major financial institutions maintain a cautious outlook on nickel prices amid oversupply conditions [4] - The World Bank forecasts nickel prices to be around $15,500 per ton in 2026, with a slight increase to $16,000 per ton in 2027 [5] - Goldman Sachs emphasizes that profits of Indonesian producers are a key volatility factor, predicting prices will drop to $14,500 per ton by the end of 2026 [6] - Nornickel predicts a surplus of approximately 275,000 tons in 2026, reinforcing expectations of continued price pressure, while ING forecasts average prices to remain around $15,250 per ton due to high inventories and sluggish demand [7] Group 5: Overall Market Outlook - Although discussions around Indonesian policies inject volatility and short-term support for nickel prices, the overall outlook for 2026 remains influenced by structural oversupply [8] - Unless there is a significant slowdown in supply growth or an acceleration in demand from the stainless steel and battery sectors, nickel prices are likely to remain range-bound with limited upside potential [8]

Core Viewpoint - Indonesia's nickel industry is experiencing a profound internal contradiction, with nickel exports surpassing coal for the first time, marking a peak in the country's mineral downstream integration strategy initiated in 2014. However, the world's largest nickel producer, Tsingshan Holding, has paused some nickel smelting lines due to global oversupply and profit pressure, indicating structural risks in Indonesia's nickel-centric industrial strategy [2][3][4][5]. Group 1: Nickel Industry Dynamics - In H1 2025, Indonesia's nickel export value reached $16.5 billion, exceeding coal's $14.4 billion, making nickel the largest export commodity [3]. - The success of Indonesia's nickel industry, driven by a decade-long integration strategy, has led to a saturation point in value growth, prompting the government to accelerate a complex industrial transformation towards a complete new energy industry chain [4][6]. - The government plans to reduce nickel ore production quotas from 272 million tons to 150 million tons by 2025 to stabilize prices and encourage investment in high-value products like nickel hydroxide and nickel sulfate [16]. Group 2: Manufacturing and Economic Transition - Indonesia's manufacturing sector has been underperforming, contributing only 19% to employment in 2023, significantly lower than manufacturing-led countries like Vietnam, raising concerns about falling into a "middle-income trap" [9][10]. - The "Making Indonesia 4.0" strategy aims to increase manufacturing's GDP contribution from under 20% to 25% by 2030, focusing on automotive, electronics, chemicals, textiles, and food and beverage sectors [11]. - The strategy seeks to replicate and upgrade the successful model established in the nickel industry, leveraging Indonesia's resource advantages to attract foreign investment in downstream processing [12][14]. Group 3: Electric Vehicle Market Growth - The electric vehicle market in Indonesia is experiencing explosive growth, with domestic EV sales soaring by 215.2% in H1 2025, and BYD leading with a market share of nearly 39% [23][24]. - The government aims to have 1.3 million electric two-wheelers on the road by 2030, contributing 5-8 GWh of battery demand annually [28]. - The RUPTL plan outlines a target of adding 10.3 GW of battery storage capacity, creating a significant market for energy storage solutions [29]. Group 4: Infrastructure and Investment Challenges - Indonesia's aging infrastructure poses significant challenges, with the national grid unable to effectively absorb renewable energy from remote areas, necessitating the construction of nearly 48,000 kilometers of new transmission lines [37]. - The unique "Indonesian model" requires companies bringing foreign capital to also build infrastructure, leading to high upfront capital expenditures and creating barriers for smaller participants [38]. - The establishment of the INA sovereign wealth fund is seen as a key player in reducing project risks for foreign investments, signaling a shift towards a more favorable financing environment for emerging industries [39]. Group 5: ESG Considerations and Future Outlook - Indonesia's green energy transition heavily relies on high-carbon coal power, raising significant ESG risks that could impact product marketability in regions with strict carbon footprint regulations [46]. - Collaborative projects, such as the one between Greeenme and Vale, aim to establish environmentally friendly nickel processing facilities, aligning with global ESG standards [47]. - Despite challenges, Indonesia is on track to create a complete lithium battery ecosystem, encompassing upstream resource extraction, midstream material refining, and downstream battery manufacturing, positioning itself as a critical player in the global battery industry [40][49].

Investment Rating - The report recommends the industry [4] Core Insights - The RKEF project produced 30,463 tons of nickel pig iron (NPI) in Q2 2025, a decrease of 5% year-on-year and 4% quarter-on-quarter, primarily due to adjustments made to the ONI furnace [1][2] - The unit cash cost for NPI increased by 4% year-on-year to $10,348 per ton, driven by maintenance costs and rising electricity expenses [2] - The sales revenue for NPI in Q2 2025 was $346 million, reflecting a 6% decrease year-on-year [2] RKEF Project Summary - NPI production in Q2 2025 was 30,463 tons, with a contract price of $11,449 per ton, showing a 1% increase from the previous quarter [1][2] - The adjusted EBITDA for NPI was $33.7 million, down 24% from the previous quarter, with an adjusted EBITDA per ton of $1,107, a decrease of 20% [2][12] HPAL Project Summary - The Huayue nickel-cobalt project produced 20,750 tons of nickel and 1,877 tons of cobalt in Q2 2025, exceeding the rated capacity by 38% [3] - The unit EBITDA for HNC was $4,819 per ton, up 12% quarter-on-quarter, supported by rising MHP prices [5] Mining Operations Summary - The Hengjaya mine produced 5.92 million wet tons of nickel ore in Q2 2025, a 99% increase year-on-year [7] - The adjusted EBITDA for the Hengjaya mine was $41.4 million, a 33% increase from the previous quarter, driven by rising nickel ore prices [7] Financial Overview - Nickel Industries received $34.4 million in shareholder loan repayments in Q2 2025 [10] - The company also received $8.1 million in dividends from the Oracle Nickel project and $8 million from the Hengjaya mine [10][11]