In 2014, Indonesia's nickel exports were valued at approximately IDR 17 trillion or around USD 1.1 billion. By 2022, this figure had surged dramatically to USD 33.8 billion or about IDR 510 trillion. The collaboration between Indonesia and China has significantly altered the global nickel market dynamics, leading to the lowest nickel prices in three years. According to TIMENEWS.co.id via the Daily Taujih YouTube channel on Monday, July 22, 2024, nickel is a crucial metal across various industries due to its corrosion-resistant properties, playing essential roles in electronics, automotive, and kitchen appliances. With the world's largest nickel reserves, Indonesia, paired with China's massive manufacturing industry, forms a strategic partnership in the nickel industry. In 2020, Indonesia banned the export of raw nickel ore, prompting China to establish nickel processing facilities in Indonesia. This led to a significant increase in nickel trade between the two countries, growing by 47% in 2023 compared to the previous year.
International studies indicate that Indonesia now accounts for over half of global nickel production, up from one-third in 2019. Despite the drop in nickel prices, Indonesia continues to boost its production. This is part of a predator pricing strategy employed by major companies to eliminate competitors by temporarily lowering product prices drastically. Glencore, a multinational corporation, has closed its mines, which could strengthen Indonesia's position in the global nickel market and potentially raise prices in the future. The closure of mines and job reductions in other countries might drive smelter development in Indonesia. Indonesia's advantages as a host for smelters include abundant nickel reserves, government policies supporting smelter construction, and relatively low labor costs compared to other countries. Although the European Union has filed a complaint against Indonesia over this strategy, the potential to dominate future manufacturing industry needs remains substantial. With the rapid growth of smelters in Indonesia from 27 units in 2018 to 116 units in 2023, the country is on track to dominate the global nickel market with higher-value-added products. Consequently, the surge in Indonesia's nickel exports is not only reshaping current global market trends but also creating a bright outlook for the future of the nickel industry.
