Indonesia, a country with the largest nickel reserves in the world, is currently facing the challenge of a downward trend in nickel prices on the world market. As reported by CNBC Indonesia on Monday (22/1), the world nickel price for a three-month contract was recorded at 16,036 US dollars per ton. This position is said to be the lowest since April 2021. The media wrote that the decline in world nickel prices is partly due to the world being flooded with nickel supplies. This excess supply is predicted to occur over the next few years.
It’s important to note that not all electric vehicles use nickel as the raw material for their batteries. Car manufacturer Tesla, for example, switched from nickel to lithium ferrophosphate (LFP) for the batteries of their new types of vehicles, because LFP is considered to have several advantages over nickel. However, according to The Wall Street Journal, Lithium prices have suffered a similar fate, plummeting due to an overabundance of supply, and at their lowest point in two years. Cobalt, another battery raw material, is at its lowest price in the last four years. Together, these three make up the materials usually processed into lithium-ion batteries.
However, falling prices do not necessarily indicate the future of Indonesian nickel is dark. Nickel is not only used as a basic material for electric vehicle batteries. It also plays an important role in human life. These natural materials are the basic ingredients for thousands of industrial, military, transportation, aviation, marine, architectural, health products, and even household utensils such as pans and cutlery. Therefore, the Indonesian government’s nickel downstream policy should continue, albeit with various adjustments. This aligns with the government’s policy of downstreaming other natural resources, which is encouraged for the welfare of the people. Downstreaming is a process and method for processing raw materials into ready-to-use products. The process is carried out to leverage more value from products, as well as increase their overall value, and strengthen industries while also creating more jobs.
