Philippine nickel ore prices remain firm amid precipitation and multiple factors in Indonesia
This week, Philippine nickel ore prices held steady. The CIF prices of Philippine laterite nickel ore (NI1.3%) shipped from the Philippines to China were in the range of $43.5-45/wmt, and the FOB prices were in the range of $32-35/wmt, unchanged WoW. The CIF prices of NI1.5% were in the range of $58-59/wmt, and the FOB prices were in the range of $47-50/wmt, also unchanged WoW. In terms of supply and demand, on the supply side, although precipitation occurred at major nickel ore loading points in the Philippines, the continuous rainfall during the week significantly impacted the loading progress at nickel mines, with loading progress generally delayed compared to expectations. On the demand side, although downstream NPI prices have stabilized after halting their decline, domestic NPI smelters are still experiencing severe losses, dampening sentiment for raw material procurement. Support for nickel ore prices from the demand side continues to weaken. Regarding shipments from the Philippines to Indonesia, as of mid-May, the volume of nickel ore shipped from the Philippines to Indonesia exceeded 4 million wmt. The increase in Indonesia's imports of Philippine nickel ore has further fueled the reluctance of Philippine mines to budge on prices. Looking ahead, with significant price negotiations between upstream and downstream players, coupled with price disruptions from the Indonesian side, there is likely limited room for a substantial decline in Philippine nickel ore prices in the short term.
Indonesian ore premiums remain stable in June; Indonesian high-grade NPI producers continue to face losses
This week, prices of Indonesia's local ore held steady. In terms of premiums, the mainstream premiums for Indonesia's local laterite nickel ore remained in the range of $26-28/wmt this week. Regarding benchmark prices, the HMA price for the first half of June held steady with a slight decline, at $15,405/mt, down 0.06% MoM. Overall, prices of pyrometallurgy ore remained stable this week. The SMM delivery-to-factory price of Indonesia's local laterite nickel ore (1.6%) was in the range of $53.3-57.3/wmt, unchanged WoW. In terms of limonite ore prices, the SMM delivery-to-factory price of Indonesia's local laterite nickel ore (1.3%) held steady at $23-25/wmt, the same as last week.
On the supply side of pyrometallurgy ore, Sulawesi and Halmahera, as major nickel ore mining regions, continued to face supply disruptions due to frequent precipitation during the week, impeding mining and transportation processes at some mines. Additionally, the slow progress of RKAB approvals continues to affect supply. It is understood that the subsequent supplementary quotas for RKAB are expected to enter the approval process in June and July of H2, but the market remains concerned about the speed of approval for these supplementary quotas. Recently, rumors have circulated in the market about a large number of RKAB quotas being approved in the past few weeks. However, after verification with the Indonesian Ministry of Energy and Mineral Resources (ESDM), these rumors may not be true, and the tight supply of nickel ore has not yet been alleviated. Demand side, despite the slow rebound in NPI prices this week, Indonesian NPI smelters are still experiencing losses as of now, and their ability to accept further increases in nickel ore prices is relatively limited. Overall, although Indonesia is still facing supply-side disruptions such as the rainy season and the slow approval progress of RKAB quotas, due to the drag from downstream demand, the upside room for Indonesia's local pyrometallurgy ore prices in the short term may be limited, with pyrometallurgy ore prices holding steady in June.
In terms of limonite ore, in terms of supply, there have been no significant changes in the supply of limonite ore recently. According to SMM, a major mine in Indonesia has applied for supplementary limonite ore quotas, but these have not yet been approved. In terms of demand, most of the HPAL projects in the MOROWALI Industrial Park that were affected by floods in May have resumed production, and market demand for limonite ore has rebounded somewhat. Additionally, there are expectations for the commissioning of two HPAL smelting projects with relatively large capacities in H2, and subsequent demand for limonite ore may increase significantly. Looking ahead, SMM expects that limonite ore prices may hold up well.
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