Ding Xing New Energy, an Indonesian nickel producer, has applied to list its “DX-zwdx” brand of full-plate nickel cathode on the London Metal Exchange (LME). This marks a pivotal moment, given Indonesia’s rapid ascent as a global leader in nickel production, yet its absence from the high-purity nickel trading platforms of the LME and the Shanghai Futures Exchange until now.
The LME, aiming to revitalize its nickel contract after the 2022 market turmoil, is expediting the approval of new nickel listings. The move appears beneficial for the exchange, reflected by rising stock levels and trading volumes. However, other nickel producers view this development with trepidation, fearing Indonesia’s increasing production dominance might soon translate into significant exchange pricing power. Amid these concerns, there is a growing advocacy for the establishment of a premium “green” nickel contract, distinguishing environmentally responsible nickel production from its conventional counterparts.
Indonesia’s influence on nickel pricing is becoming increasingly evident, with the country’s mined nickel output surging to 2.03 million tonnes in 2023, claiming a 55% share of the global market. The nation’s officials openly express their intention to harness this market influence for explicit pricing power, proposing a balanced price that benefits Indonesian producers while ensuring nickel remains a viable option for electric vehicle batteries.
The introduction of Indonesian nickel into the LME could potentially reshape the market dynamics, favoring Indonesian-produced metal or, in the case of newly listed Chinese brands, metal sourced from Indonesian mines. This scenario raises concerns among non-Indonesian producers, already feeling the pressure from low prices and production cutbacks due to Indonesian supply surges.
The debate over a “green” nickel contract further complicates the market landscape, with Australian magnate Andrew Forrest advocating for such a measure to support environmentally friendly nickel production. However, the LME has stated it has no immediate plans to launch a new contract or modify the existing one, citing concerns about market fragmentation and the current insufficiency of the “green” nickel market to sustain robust trading. 
