Because of Indonesia’s explosive nickel output, which is forcing mills in other nations to close, European producers of stainless steel are looking to the country for their nickel. According to Indonesian government data, exports of nickel pig iron from Indonesia, which is mostly used by Chinese manufacturers to make stainless steel, have increased to 87,485 tons this year from just 1,006 tons in 2023. Based on the statistics, the shipments have been accepted by the Netherlands, Italy, and the UK.
The increasing exports are a reflection of Indonesia’s increasing market domination in nickel, where its output currently makes up over half of global production. Ferronickel, a higher-purity alloy than nickel pig iron, is commonly used in European mills; but, due to competition from Indonesia, many of these operations have closed.
Among these are facilities in the Dominican Republic and New Caledonia, which were once major ferronickel exporters to Europe. Since the invasion of Ukraine in 2022, imports from Russia—which was once a significant supply of purer types of nickel also used for stainless steel—have been reduced.
For European producers of stainless steel who want to get the metal without compromising their environmental credentials, that presents a challenge. Some firms have refrained from purchasing nickel from Indonesia due to criticism leveled at the industry’s high carbon intensity, loose safety regulations, and link to environmental degradation.
According to persons familiar with the situation, two producers that carry nickel products from Indonesia to Europe are PT Trimegah Bangun Persada, also known as Harita Nickel, and Gunbuster Nickel Industry, which is controlled by the failing Jiangsu Delong Nickel Industry Co. in China. Harita Nickel’s head of investor relations, Lukito Gozali, stated that the company was always willing to consider chances to collaborate with clients throughout the world. An email request for response from Gunbuster Nickel Industry was not answered by a representative.
Due to manufacturer diversification, China’s economic problems may also be eroding demand for the metal and increasing supplies to Europe. The greatest country in Asia has long purchased the majority of Indonesia’s nickel production, but because of its faltering real estate and industrial sectors, stainless steel consumption there is declining.
