[Nickel Ore Market Weekly Review] Premiums for Indonesian Domestic Trade Laterite Nickel Ore Continue to Rise, Price Increase Trend Persists

The price of Philippine nickel ore has been influenced by the rising prices of Indonesian nickel ore, with mines showing stronger sentiment to stand firm on quotes. During the week, FOB prices of medium- to high-grade Philippine nickel ore continued to rise after the Chinese New Year, while the low-nickel high-iron market saw no transactions. For medium- to high-grade nickel ore, after the Chinese New Year, the sentiment to stand firm on quotes among Philippine mines became more evident due to the continuous increase in premiums for Indonesian domestic ore and speculative sentiment surrounding Philippine nickel ore policies. FOB quotes for 1.4% grade nickel ore reached $43-45/wmt. In terms of supply, major mining areas in the southern Philippines remain in the rainy season, leading to off-season supply and fewer mine tenders in the Philippine nickel ore market. Domestic port arrivals of Philippine nickel ore were limited, and port inventories continued destocking. The persistently sluggish supply during the rainy season further strengthened the sentiment among mines to raise prices. On the demand side, post-holiday price increases in downstream nickel pig iron (NPI) brought some profit recovery, but the increase was smaller than that of raw material prices. Domestic NPI plants continued to face losses and primarily maintained just-in-time procurement, with limited acceptance of high-priced nickel ore. Regarding ocean freight rates, the freight rate for nickel ore from the Philippines to Lianyungang was $7-8/mt, while the rate from the Philippines to Tianjin Port was $8-9/mt. Overall, due to the combined influence of various factors, Philippine nickel ore prices are expected to fluctuate upward in the future. The premiums for Indonesian laterite domestic ore continued to rise, with the upward trend persisting. Regarding current transaction prices in the market: for pyrometallurgical ore, premiums for nickel ore in the industrial park of Indonesia's large K Island increased to $18-19 in February, while premiums for other islands, affected by freight costs, mostly exceeded $22. The SMM price for 1.6% grade Indonesian domestic ore on a CIF basis was $39/wmt. For hydrometallurgical ore, mainstream CIF quotes in the market were above $25. In terms of supply, although nickel ore supply was slightly more abundant compared to the same period last year, the rainy season in Sulawesi and the upcoming Ramadan significantly affected the supply rhythm. The SIMBARA system's crackdown on "non-compliant" nickel ore further exacerbated the supply challenges in Q1. Additionally, rising local fuel costs in Indonesia increased land transportation costs. On the demand side, after February restocking, downstream pyrometallurgical smelters managed to move away from the pre-holiday risk of having less than a month's inventory, but restocking was still incomplete. Active raw material procurement to some extent drove up premiums. For hydrometallurgical ore, the continuous ramp-up of MHP projects in H1, along with the commissioning of new projects in Q3 and Q4, created a mismatch between downstream demand for hydrometallurgical ore and the insufficient market circulation, leading to faster price increases for hydrometallurgical ore compared to pyrometallurgical ore. Additionally, the market remained cautious about the uncertainty of the annual RKAB policy. In summary, SMM expects Indonesian ore prices to fluctuate upward in the short term, with domestic premiums on large K Island exceeding $20 in March. In the medium and long-term, the tight supply rhythm of nickel ore is likely to persist throughout the year. 》Subscribe to view SMM historical spot metal prices.

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[Nickel Ore Market Weekly Review] Premiums for Indonesian Domestic Trade Laterite Nickel Ore Continue to Rise, Price Increase Trend Persists

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