Indonesia Nickel Hits 2026 Low as Cobalt Breaks Below $40,000

Indonesia’s nickel benchmark fell to its lowest reading of 2026 at 16,322.67 USD/t for the first half of October, while LME cobalt dropped below 40,000 USD/t for the first time since October 2025, both confirmed in the pricing announcements published on 1 October 2026.

The twin declines come from Indonesia’s Ministry of Energy and Mineral Resources (ESDM), whose fortnightly mineral reference price (HMA) feeds directly into royalty calculations and ore transaction pricing for one of the world’s dominant nickel-producing nations.

Both metals are being pulled lower by the same two forces: soft demand from the stainless steel sector and weak appetite from the battery supply chain.

What these simultaneous benchmark lows signal is a critical mineral market entering the final quarter of 2026 without an obvious catalyst to arrest the slide. For anyone tracking Indonesian mining revenues or battery supply chain input costs, the October numbers set a concrete reference point and raise a sharper question about whether this is a floor or a trend with further to run.

Indonesia’s nickel benchmark falls to its lowest point of 2026

The current reading did not arrive out of nowhere. It is the low point of a descent that has been building through the second half of the year.

The HMA and HPM pricing mechanics that feed royalty calculations and ore transaction pricing in Indonesia have come under sustained scrutiny this year, with fortnightly publication delays creating downstream uncertainty for contract counterparties reliant on timely benchmark data.

Nickel’s HMA peaked at 17,774 USD/dmt in February 2026 during the year’s first pricing period. By the first half of September it had eased to 16,733.33 USD/t, then slipped again to 16,698.00 USD/t in the second half of the month, a modest drop of 35.33 USD/t.

October is where the move accelerated. The first-half October HMA of 16,322.67 USD/t represents a single-period fall of 375.33 USD/t, more than ten times the prior period’s decline.

A 2.25% single-period drop The move into October was the steepest in the recent sequence, a 2.25% fall from the second half of September and the sharpest single-period decline shown here.

The acceleration matters more than the level alone. The 2026 year-to-date average sits at 16,822.29 USD/dmt, well above the current October print, which tells you nickel has not simply drifted lower through the year but has quickened its decline heading into the fourth quarter.

That read-through is concrete for anyone calculating Indonesian miner revenues. The HMA determines royalty payments and ore contract pricing, so October’s reading now sets a lower floor for the period ahead.

The spot market confirms the direction. LME nickel cash buyer and seller prices sat at 15,860 USD/t and 16,060 USD/t respectively on 30 September 2026, according to Westmetall. The standard ore benchmark (HPM) for 1.5% nickel ore came in at 56.22 USD/wmt for first-half October, down 2.28 USD/wmt from the prior period.

Cobalt breaks below $40,000 as bearish positioning takes hold

The cobalt move was larger in magnitude and carried a clearer signal about where traders think prices are going.

The cobalt HMA for first-half October was set at 41,047.33 USD/t, a drop of 11,657 USD/t from the prior pricing period. During the same window, LME cobalt fell below 40,000 USD/t, breaching a level it had held since October 2025.

A threshold breach on its own is just a number crossing a line. What gives this one weight is the market behaviour behind it. According to reporting from Argus Media, three bearish conditions were present at the time the benchmark was set:

• Limited buying activity across the market
• Increased feedstock availability
• Traders holding short positions in anticipation of further price declines

The short positioning is the point to watch. Limited buying and ample feedstock describe soft fundamentals, but traders actively betting on further downside is observable behaviour, not sentiment. It tells you professional participants are positioned for continued weakness rather than a bounce.

That distinction matters for anyone weighing whether cobalt at current levels is value or a trend still unwinding. The combination of a feedstock surplus and active short positioning suggests the bearish case has not yet run its course, which argues against treating the $40,000 breach as an automatic buying signal.

The $40,000 level has functioned as a watched reference point for the cobalt market. Its breach resets expectations for battery supply chain buyers, cobalt-exposed miners, and downstream processors who now have to recalibrate around a lower floor than has held for the past twelve months.

Cobalt supply chain risks extend well beyond benchmark price levels, with chemistry substitution trends and feedstock concentration in specific geographies creating structural vulnerabilities that amplify the significance of any sustained price decline for battery manufacturers and downstream EV producers.

A 12-month low LME cobalt’s fall below 40,000 USD/t was the first time the level had been breached since October 2025.

Dual demand weakness and what to watch heading into Q4 2026

The reason both metals are falling at once is that the demand pressure is closing from two directions simultaneously.

Nickel faces weak appetite from stainless steel and battery end-users at the same time, with expectations of improved ore supply availability adding to the downward pull. LME nickel traded in a range of roughly 16,000 to 16,700 USD/t across the September to October window, confirming the softness was broad rather than confined to a single session.

Cobalt’s weakness ties directly to the battery side of that equation. As a battery input, cobalt is sensitive to EV demand signals and to chemistry substitution trends, and the limited buying reported this period reflects that end-market caution.

A regulatory link that connects the two declines

There is now a structural thread binding the two stories together, not just a thematic one.

Since 15 April 2026, under Kepmen ESDM No.363.K/MB.01/MEM.B/2026 signed by Minister Bahlil Lahadalia, cobalt and iron content have been incorporated into the nickel ore valuation methodology (HPM).

The April 2026 regulatory update that incorporated cobalt and iron content into the nickel ore pricing formula under Kepmen ESDM No.363.K was part of a broader restructuring of how Indonesia values ore at the point of transaction, shifting from single-metal benchmarking toward a multi-component calculation that ties producer revenues to a wider basket of mineral outputs.

A structural, not cyclical, change From 15 April 2026, cobalt and iron content feed directly into the nickel ore HPM calculation. Cobalt’s price weakness now mechanically reduces what Indonesian miners are paid for nickel ore.

That changes the read-through. Cobalt’s slide is no longer a parallel story running alongside the nickel narrative for battery investors. It now reduces the price Indonesian producers receive for nickel ore through the pricing formula itself, which links the two benchmark declines in a concrete, practical way.

For the period ahead, three observable indicators will shape whether October marks a trough or the continuation of the trend:

1. Demand signals from battery and stainless steel end-users, the two sectors driving the current weakness
2. Cobalt feedstock supply conditions, given the surplus cited as a bearish factor this period
3. Any shift in trader positioning from short toward neutral, which would signal the bearish conviction is easing

These are indicators to monitor rather than a forecast. The available research does not include named analyst projections, quantified supply surplus figures, or company-level production responses, so the sensible frame is to watch confirmed market conditions as they develop.

What October’s dual lows tell investors about the road ahead

Both benchmarks now sit at multi-month lows at the same time, and the April 2026 regulatory change means cobalt’s decline no longer runs separately from nickel. It feeds mechanically into what Indonesian miners are paid for ore.

One figure keeps the decline in proportion. Even at its 2026 low of 16,322.67 USD/t, nickel remains above the full-year 2025 average of 15,177.12 USD/dmt, which frames October as a correction within a higher-range year rather than a collapse to prior-year levels.

The price story is not resolved. With traders holding short positions and demand soft on both fronts, the signals identified above give observers a concrete set of indicators to track as the quarter develops.

For investors tracking whether the nickel and cobalt benchmark declines are already reflected in miner valuations, our deep-dive into battery metals equity valuation examines why share prices in the sector have historically lagged commodity price movements and what that lag implies for positioning.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results. Financial projections are subject to market conditions and various risk factors.