On May 19, 2026, the market reported that a nickel pig iron (NPI) project at an industrial park in Indonesia is expected to see significant production cuts, as electricity will be diverted from the nickel project to an upcoming aluminum smelting facility within the same park. According to Mysteel survey, power plant maintenance at the park, which lasted through the first quarter of 2026, largely concluded by the end of Q2.
Since the beginning of the year, nickel pyrometallurgy production at the park has been operating at reduced capacity and lower loads, with active production lines already down 10-15% compared to the same period last year. The planned commissioning of a new aluminum smelting project in June is limiting any increase in capacity utilization for the nickel pyrometallurgy project. Against the backdrop of falling nickel ore grades in Indonesia, the park's monthly pyrometallurgical nickel output is expected to decline by up to 3,000 tonnes. Currently, some domestic Chinese nickel pig iron producers have lower costs than their Indonesian counterparts. While Chinese and Indonesian NPI producers (excluding the affected park) are expected to increase output by 2,000 tonnes month-on-month in May, this will not reverse the tight supply situation for NPI across China and Indonesia.
Written by Cora Ji, jiruyan@mysteel.com
