[7.8 Morning Meeting Minutes] US President Trump stated on the Ukraine issue that he was in consultations with Russian President Putin to see if the Russia-Ukraine conflict could be ended. Trump said they had a "very good call." The most-traded SHFE nickel contract (2609) edged higher early before pulling back to close the morning session at 126,290 yuan/mt, down 0.03%. July is within the submission window for Indonesia's nickel ore RKAB, and the final approval outcome will determine the supply-demand pattern for H2, making it the most critical uncertain variable at present. In the short term, nickel prices are expected to remain in the doldrums within the 125,000-135,000 yuan/mt range.

Philippine Market: Port inventories continued to accumulate, high freight costs coupled with smelters pushing for lower prices, ore prices faced increasing downside risks This week, CIF China quotes for Philippine nickel ore were generally flat WoW, with no significant loosening or increases across various grades. Specific quotes were: CIF China: Ni 1.3% at $49–52/wmt, 1.4% at $57–60/wmt, 1.5% at $65–67/wmt; CIF Indonesia: 1.3% at approximately $48–50/wmt, 1.4% at approximately $56–58/wmt. Supply and Weather As of June 12, Philippine nickel ore inventory at Chinese ports totaled approximately 5.77 million wmt, equivalent to around 45,300 mt in nickel metal content, up WoW as supply remained ample. Weather conditions at mining areas were relatively manageable, with no major typhoons or heavy rainfall disrupting supply chains recently. However, spot freight rates stayed high, providing minimal support for miners' FOB prices, intensifying cost pressure on miners' shipments. Some mines opted to hold off on shipments, awaiting next week's new round of bidding results before making decisions. Demand and Inventory Demand side, smelters' desire to bargain down prices remained strong, continuing to pressure miners with ample inventories, while the buyer-dominant landscape persisted. Smelters in both China and Indonesia held inventories that fluctuated at highs, with weak short-term restocking willingness and sluggish trading in the market. Considering the continued accumulation of port inventories, high freight costs squeezing miner margins, coordinated price pushing by smelters, and rising wait-and-see sentiment among miners, ore prices could edge down further in the coming weeks. Indonesian Market: Smelters' High Inventories Continued to Weigh on Prices, Premiums Showed a Narrowing Trend The HMA was unchanged at $18,799.29/mt. Theoretical HPM prices were: Ni 1.6% at approximately $70.75/wmt, 1.2% at approximately $49.84/wmt. The delivery-to-factory price for 1.6% ore was $73.8–78.8/wmt, with premiums at +3 to +8 dollars, flat WoW and significantly narrower than earlier highs. Looking ahead, with ore supply continuing to be ample and smelters' willingness to bargain down prices increasing, premiums are expected to have room to decline further. Indonesia's local ore supply was relatively abundant, with some mines taking advantage of weather windows to maximize production. According to BMKG: Sulawesi (Morowali Utara) experienced relatively dry weather with calm seas and smooth shipping; East Halmahera saw persistent rainfall with wave heights of 1.4–2.0 m; Obi had light rain with wave heights of 1.3–1.6 m, with shipment efficiency affected in both areas. This week, the saprolite ore market saw ample cargo availability and relatively active trading volumes. However, with inventories at many smelters staying at sufficient levels, the desire to push for lower prices strengthened noticeably. In some industrial parks, unloading vehicle queues appeared this week, directly reflecting the market reality of loose ore supply and persistently high delivery-to-factory volumes. Traded grades were concentrated at 1.45–1.50% Ni, while high-grade ore (≥1.6%) remained scarce. In addition, spot limonite ore was priced at approximately $26–34/wmt, with the price range widening. The market exhibited some divergence, with select transactions at lower prices and a few at higher levels, as the overall center shifted slightly lower WoW, mainly dragged down by high freight costs. The discount to the theoretical HPM price remained deep and detached. Sulphuric acid supply stayed relatively tight, HPAL operating rates were low, and purchasing prices for limonite ore remained under pressure. Policy Developments Newly approved RKAB for nickel ore were relatively rare this week, with the market widely expecting more approvals to be released in July. Meanwhile, Indonesian Energy and Mineral Resources Minister Bahlil Lahadalia stated that the government would implement an "orderly and flexible" policy for 2026 mineral and coal RKAB, where production quota adjustments would be linked to global commodity price trends and domestic industrial demand—moderately expanding production when prices rise and tightening promptly when prices are under pressure to maintain supply-demand balance. This statement reserved policy space for within-year quota revisions, warranting ongoing market attention to the release periods of subsequent official documents. The DSI takeover mechanism for ferroalloy exports entered a transition period on June 1, with NPI (HS 7202.60.00) highly likely to be included; Harita’s PT Trimegah had already completed the first DSI single-window export declaration, with smooth operations. The government was simultaneously pushing forward a strict crackdown on under-invoiced contracts, with relevant departments set to consult with industry associations to close loopholes.

Philippine ore quotes flat MoM, market awaits new pricing window This week, nickel ore prices in the Philippine market were basically stable compared to last week. CIF China quotes: Ni 1.3% at $49-52/wmt, 1.4% at $57-60, and 1.5% at $65-67; quotes for shipment to Indonesia were 1.3% at around $48-50 and 1.4% at around $56-58. No obvious loosening or upward adjustment was seen across grades for either CIF China or CIF Indonesia quotes, with miners tending towards conservative quotation intentions. Supply side, Philippine shipments were relatively ample overall this week, with no noticeable tightening in market cargo supply. Mines maintained normal loading pace, and no major weather disruptions interfered with the supply chain. Market participants generally expect new rounds of price announcements in the coming weeks, and the near-term ore price direction awaits clearer signals from these pricing markers before further assessment. Demand side, large smelters in China and Indonesia jointly pushed for lower prices, leveraging ample inventory. Shipping volumes to Indonesia were somewhat lower than last month, with buyers clearly dominating price negotiations. As of June 5, nickel ore inventory at Chinese ports reached 5.36 million mt, up 110,000 mt MoM, equivalent to approximately 42,100 mt Ni in metal content; Indonesian smelter inventory continued to accumulate simultaneously. Rising inventory levels at both locations indicate that the demand side is unlikely to provide effective support in the near term. Divergence between sellers and buyers was significant, and the price center edged lower amid a tug-of-war between cost support and weak demand, with overall market sentiment subdued. Continued pushback on raw material prices by smelters caused the price center for nickel ore CIF to shift further downwards, providing extremely weak support for Philippine ore FOB prices. Indonesian nickel ore market: Indonesian ore prices under downward pressure, persistently low grades constrain supply quality This week, Indonesian nickel ore market prices came under downward pressure overall, with the official reference price recording a slight correction, as cost tug-of-war across the industry chain persisted. Indonesia's Ministry of Energy and Mineral Resources (ESDM) officially released the HMA for the first half of June 2026: nickel price at $18,799.29/mt (down $50 from $18,849.29/mt in the second half of May 2026); cobalt price at $55,851.43/mt; iron ore price at $1.58/mt; chrome ore price at $6.37/mt. Based on SMM's internal calculation model, simulations for saprolite ore (Fe 20%, Cr 1%, Co 0.05%) show theoretical HPM prices for all grades slightly lower from the previous period. The theoretical HPM price for Ni 1.6% grade was approximately $70.75/wmt (down $0.08 MoM), and for Ni 1.2% grade was approximately $49.84/wmt (down $0.10 MoM). In terms of transaction prices, this week, delivery-to-factory prices for 1.6% grade saprolite ore were quoted at $73.8–78.8/wmt, down MoM, representing a premium range of +$3 to +$8/mt over the theoretical HPM price of $70.75/wmt. The premium narrowed significantly from earlier highs, reflecting the combined impact of sustained smelter pushback on prices and ample supply, and significantly squeezing miners' profit margins. This week, actual spot prices for 1.2% grade limonite ore were around $28–33/wmt, representing a discount of approximately $17–22 against the theoretical HPM calculated price of $49.84/wmt, with the discount depth remaining severe. Despite the slight adjustment in the HMA reference price, spot limonite ore prices failed to follow at all, heavily constrained by low downstream HPAL capacity utilization rates and tight sulphuric acid supply, with a serious disconnect between the two. Supply side, domestic ore supply in Indonesia improved this week, with overall supply relatively loose. However, ore grades remained persistently low, with mainstream circulated grades in the market around 1.45%–1.50% Ni range. High-grade saprolite ore (≥1.6%) remained a scarce resource, and some smelters faced difficulties supplementing high-grade ore sources, compelling increased blending operations with lower grades. According to the latest BMKG maritime meteorological data, weather conditions in the Morowali waters were good this week, with wave heights of 0.4–0.5 meters (low waves) and stable winds, leaving vessel operations unaffected; weather turned somewhat adverse in the East Halmahera waters, experiencing light rain, northeast winds at 9–10 knots, and wave heights reaching 1.4–2.0 meters (moderate waves), with BMKG issuing a wave alert, requiring heightened attention to shipping operations; the Obi waters also experienced light rain, southeast winds at 13–14 knots, and wave heights of 1.3–1.6 meters (moderate waves), with BMKG also issuing a wave height alert, somewhat impacting ore shipment efficiency. Demand side, overall raw ore inventory at smelters remained at relatively sufficient levels. SMM data shows that in May, the nickel ore inventory coverage index for pyrometallurgy smelters was about 2 months, and the cycle inventory index for HPAL hydrometallurgy plants was about 1.7 months, leaving little appetite for near-term restocking and a clear inclination to push for lower ore prices. In the limonite ore market, the tight supply of sulphuric acid had yet to fundamentally improve, with pressure on MHP production persisting. Operating rates at some hydrometallurgy producers remained low, and purchasing prices for limonite ore came under pressure. Policy level, Indonesia's Coordinating Minister for Economic Affairs confirmed at a meeting yesterday that the DSI ferroalloy export takeover mechanism would formally enter a transition period starting June 1, 2026 (through August), with full implementation required by January 1, 2027, at the latest. The minister confirmed at the meeting the HS codes for ferroalloys included in the takeover scope. Given that nearly all Indonesian NPI exports are declared under HS code 7202.60.00, and this code has been confirmed as included within the DSI takeover scope, NPI is highly likely to be covered by the DSI export takeover. The complete official regulatory text has yet to be officially released, and final confirmation remains subject to official announcement. However, Chinese-invested smelters should begin assessing the potential impact of the transition period on export logistics and compliance costs. In addition, while reiterating its commitment to honoring existing valid long-term contract commercial credit, the government will strictly investigate contracts suspected of "low-price customs declarations." Relevant authorities will soon commence consultations with major industry associations to close loopholes causing tax revenue losses from low pricing. According to markets outside China, Harita Nickel's PT Trimegah Bangun Persada has taken the lead in submitting a ferronickel export report through the DSI "single window" system. CEO Roy Arman Arfandy stated that the export process has been operating normally since June 2, progressing relatively smoothly overall.

Philippine Nickel Ore Market: Ample Inventories at Chinese and Indonesian Smelters, Tug-of-War between Sellers and Buyers Driving Nickel Ore Prices Under Pressure Philippine nickel ore prices declined this week. Price-wise, Philippine nickel ore CIF China quotes: Ni 1.3% grade at $53-56/wmt, Ni 1.4% grade at $61-64/wmt, Ni 1.5% grade at $68-71/wmt. In addition, the 1.3% grade CIF average price from the Philippines to Indonesia was quoted at $48-50/wmt, and the 1.4% grade CIF average price at $56-58/wmt. Recently, Philippine nickel ore prices have generally faced downward pressure. In terms of supply, as the rainy season ended in major producing areas, shipments of Philippine nickel ore increased significantly. Most mines resumed normal shipping, effectively easing the previously tight supply situation. Meanwhile, demand side, large smelters from China and Indonesia were leveraging ample inventories and favorable supply availability in the market to push for lower prices. As buyers on both sides only accepted lower prices, miners had to compromise. In terms of export flows, nickel ore shipments to Indonesia were relatively low this week, indicating a slow procurement pace in the Indonesian market. Given the still-weak recovery in nickel ore shipments to Indonesia, bearish market sentiment is expected to drag nickel ore prices further down. Inventory side, as of May 8 (Friday), nickel ore inventory at Chinese ports stood at 4.55 million mt, up 150,000 mt WoW, with total port inventory equivalent to approximately 35,700 mt Ni in metal content. Demand side, China's NPI prices continued to rise overall this week, while spot transaction prices edged down to 1,146 yuan/nickel unit. The high-grade NPI market overall hovered at highs this week, with significant divergence between sellers and buyers. The price center shifted slightly lower amid the tug-of-war between cost support and weak demand, and overall market sentiment remained subdued. Smelters' continued push for lower prices on the raw material side caused the nickel ore CIF price center to shift further downward. As a result, Philippine ore FOB price support was extremely lacking. Considering destocking and maintaining trade turnover, miners are expected to make concessions in subsequent quotes. Currently, bearish sentiment dominates the market, and there remains room for further downside in prices in the short term. Prices are expected to maintain a downward trend in May. Indonesian Nickel Ore Market: Indonesian Nickel Benchmark Price Breaks Through $18,000, Extreme Weather and Policy Dynamics Intensify Price Divergence Indonesian nickel ore market prices fluctuated overall this week. Indonesia's Ministry of Energy and Mineral Resources (ESDM) officially released the nickel mineral benchmark price (HMA) for the second half of May 2026. The HMA for the first half of May was: nickel at $18,849.3/mt (up $1,047.15 from the first period of May 2026 at $17,802.14, a 5.88% increase); cobalt at $55,854/mt; iron ore at $1.58/mt; chrome ore at $6.37/mt. Currently, the CIF price of 1.6%-grade saprolite ore reached $77.8–80.8/wmt, up $3.3 from last week. The price of 1.2%-grade limonite ore was approximately $28.33/wmt, flat from last week. 2. Supply-Demand Fundamentals and Weather Impact Saprolite ore: Production from major mines is expected to edge up in May. Although Indonesia has largely entered the dry season, abnormally heavy rainfall hit the central and southern Sulawesi region mid-week. As a result, land transportation and barge transshipment plans at some small and medium-sized mines were forced to halt. Despite RKAB approval progress reaching 90%, spot supply of high-grade saprolite ore remains tight; nevertheless, market expectations for easing supply have strengthened notably compared to earlier periods. Notably, the average grade of ore accepted by smelters has begun to trend downward. Although the decline is not yet significant, some smelters have started blending low-grade ore into their raw materials to alleviate the pressure from high-grade ore shortages and surging costs. Pricing side, smelters currently primarily adopt fixed pricing or a "HPM + $7–10 premium" model. Additionally, some smelters have begun implementing uniform saprolite ore benchmark specifications (cobalt 0.05%, iron 20%, chromium 1%), regardless of differences in actual ore output from individual mines. Furthermore, composition bonuses in the market have been reduced to minimal levels, as most bonuses are already incorporated into the fixed premium. Overall, as HMA has already breached the $18,000/mt threshold and the nickel ore royalty has risen to 15%, downside room for Indonesian nickel ore prices is limited in the short term. Limonite ore: Limonite ore prices declined and did not follow the increase in the new HPM. Affected by a potential sulphuric acid supply deficit in May that could lead to MHP production cuts, limonite ore demand was under pressure. Against a backdrop of relatively stable inventory, smelters continued to push for lower prices aggressively. 3. SMM Internal Estimates: The new formula led to ore price divergence and amplified fluctuations (particularly affected by the relatively high associated cobalt content in certain ores). SMM estimates showed that the new HPM for 1.2%-grade limonite ore was approximately $49.95, already significantly higher than actual market assessed prices; the new HPM for 1.6%-grade saprolite ore was $70.83, and under the new pricing formula, price fluctuations were notably amplified due to the higher cobalt content in certain ores. Although current actual market transaction prices remain above this benchmark, the gap between the two is steadily narrowing. 4. Regulatory Quota (RKAB) and Market Outlook: Indonesia's ESDM indicated that the 2026 RKAB approval progress has reached approximately 90%. According to SMM statistics, the cumulative approved RKAB quota for Indonesian nickel ore totalled approximately 230–240 million wmt. The market widely expects the final quota to be officially finalised by month-end of April. Affected by the combined impact of expectations of RKAB quota reductions, resource uncertainty, and the shortage of high-grade ore, some smelters have already begun raising trade premiums and surcharges to secure supply sources. The market has recently been closely watching the announcement by Indonesia's Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia on Monday (May 11, 2026) that the government will postpone its plan to impose export duties (bea keluar) on nickel downstream products in order to formulate a reasonable pricing formula that is a "win-win" for both the country and enterprises. Although this tariff is intended to drive the transformation of the nickel industry, which currently achieves only 40% deep processing, toward higher value-added products (such as moving beyond merely producing NPI), the government decided to temporarily "shelve" the proposal after hearing industry opinions.

The Full End of the Philippines' Rainy Season, Coupled With the Fuel Emergency, May Put Downward Pressure on Nickel Ore Prices The Full End of the Philippines' Rainy Season, Coupled With the Fuel Emergency, May Put Downward Pressure on Nickel Ore Prices This week, Philippine nickel ore prices edged down. In terms of prices, Philippine nickel ore CIF China quotations were $64-67/wmt for Ni 1.3% grade, $71-74/wmt for Ni 1.4% grade, and $78-81/wmt for Ni 1.5% grade. The average CIF price from the Philippines to Indonesia was $65.5/wmt for 1.3% grade and $72.5/wmt for 1.4% grade. Weather side, weather conditions in the Philippines improved significantly this week WoW. Rainfall in major mining areas such as Surigao, Homonhon, and Tawi-Tawi trended lower, while Zambales and Palawan remained relatively dry. This shift indicated that major mining areas had gradually entered the mining season, releasing room for nickel ore supply. Demand side, despite elevated freight costs, several Chinese smelters had already started procurement. As of Friday, March 27, nickel ore inventory at Chinese ports stood at 4.63 million mt, down 190,000 mt WoW. Current total port inventory was equivalent to about 36,400 mt Ni in metal content. Demand side, domestic NPI prices were basically flat this week, while spot transaction prices fell by about 1,083.5 yuan per nickel unit. Smelters' acceptance of high-priced raw materials had peaked, which may prompt slight concessions in CIF prices, and nickel ore FOB and CIF prices are expected to be more likely to fall than rise in the short term. Indonesia Market: Delayed RKAB Approval Progress, Coupled With Expectations for Policy Transition, Is Expected to Further Lift the Price Center of Nickel Ore This week, prices of Indonesia's local nickel ore rose. Indonesia's nickel ore benchmark price (HPM) for the second half of March was set at $17,329/dmt, up 1.32% MoM. According to SMM's Indonesia nickel ore premium data, average premiums for 1.4%, 1.5%, and 1.6% grade laterite nickel ore were quoted at $36, $40, and $40.5/wmt, respectively. Among them, the domestic-trade port-arrival price for 1.6% grade was $67.6-74.6/wmt. The simultaneous strengthening of both premiums this month reflected the release of smelters' restocking demand and pessimistic expectations over RKAB quota cuts, while the delivered price of 1.2% grade limonite ore also edged up in tandem to $25-27/wmt. From supply and demand fundamentals, as of March 27, 2026, weather conditions across Indonesia's nickel mining areas were as follows: Morowali was expected to see cumulative rainfall of 0.065-0.08 this week, and strong thunderstorms would severely affect open-pit mining and ore transportation; Konawe had scattered showers, with rainfall of about 0.03-0.045 this week; Halmahera was the most stable, mainly cloudy with light rain. The market is currently facing a clear trend of declining grades. Although some NPI smelters had begun accepting nickel ore with grades of 1.45% and below, saprolite ore remained tight in March. At present, as of mid-March, ESDM had approved about 100 million mt of RKAB nickel ore quotas, and the remaining 160 million-170 million mt is expected to complete approval before month-end. However, due to the Eid al-Fitr holiday from March 18 to 24, approval progress may be delayed, making it difficult for the tight supply situation to ease in the short term. Demand side, as some Indonesian smelters faced resource uncertainty and had difficulty obtaining high-grade nickel ore, prices remained strong. To secure raw material supply, some smelters even raised trading bonuses. In addition, some transactions of low-grade humic soil ore also emerged in the market, with fixed prices relatively lower than those of high-grade ore. Limonite ore prices remained at low levels, mainly due to the tailings dam landslide accident at an MHP project in a certain industrial park, which kept related production lines running at low operating rates and hindered the rebound in demand. However, considering RKAB uncertainty, stockpiling demand from new projects, and growing demand from outer islands, limonite ore prices are expected to stay high later by following saprolite ore. Policy side, although rumors about the implementation and delayed release of the new tax regime continued, the specific implementation rules were still under internal review by relevant ministries. Although execution details for specific products such as NPI and MHP still awaited finalisation across ministries, current policy signals may indicate that the era of tax-free exports for Indonesia's nickel intermediate products is about to come to an end. Looking ahead, Indonesia's continued policy tightening is expected to open upside room for nickel ore prices and have a profound impact on the cost structure of the global nickel supply chain.

Philippine Market: Mining Season Began, with NPI Prices Losing Upward Momentum and Freight Pressure Coexisting Philippine nickel ore prices were flat this week. In terms of prices, Philippine nickel ore CIF China quotations were $64-68/wmt for Ni 1.3% grade, $71-75/wmt for Ni 1.4% grade, and $78-82/wmt for Ni 1.5% grade, up $6 WoW. The average CIF price from the Philippines to Indonesia was $65.5/wmt for 1.3% grade and $72.5/wmt for 1.4% grade. On the weather side, weather conditions in the Philippines improved significantly this week from last week. Rainfall in major mining areas such as Surigao, Homonhon, and Tawi-Tawi showed a declining trend, while Zambales and Palawan remained relatively dry. This shift marked that major mining areas had gradually entered the mining season, releasing room for nickel ore supply. On the demand side, despite elevated freight costs, several Chinese smelters had already started procurement. As of March 20 (Friday), nickel ore inventory at Chinese ports stood at 4.82 million mt, down 430,000 mt WoW. Current total port inventory was equivalent to about 38,000 mt Ni in metal content. On the demand side, China’s NPI prices were basically flat this week, while spot transaction prices rose by about 1,090.2 yuan per nickel unit. Squeezed by both NPI prices losing upward momentum and expectations of high freight rates, nickel ore FOB prices are expected to be more likely to fall than rise in the short term. Indonesia Market: Slow RKAB Approval Pace Left Upside Room for Nickel Ore Prices Indonesia's local nickel ore prices rose this week. Indonesia’s benchmark nickel ore price (HPM) for the second half of March was set at $17,329/dmt, up 1.32% MoM. According to SMM Indonesia nickel ore premium data, the average premiums for laterite nickel ore with grades of 1.4%, 1.5%, and 1.6% were quoted at $35, $39, and $39.5/wmt, respectively. Among them, the port arrivals under domestic trade price for 1.6% grade was $65.6-74.6/wmt. This month’s dual strengthening in premiums reflected the release of smelter restocking demand and pessimistic expectations for RKAB quota cuts, while the delivered price of 1.2% grade limonite ore also edged up in tandem to $24-26/wmt. From supply and demand fundamentals, in mid-March 2026, nickel ore operations on Sulawesi were gradually shifting into the dry season, with the Konawe area reaching optimal production levels, while Morowali was recovering from earlier flood damage. By contrast, Halmahera remained affected by persistent thundershowers, keeping ore moisture content high and weighing on mining operations. The market was currently facing a clear trend of declining grades. Although some NPI smelters had started accepting ore with grades of 1.45% and below, supply of saprolite nickel ore remained tight in March. At present, as of mid-March, ESDM had approved RKAB quotas for about 100 million mt of nickel ore, and the remaining 160 million-170 million mt were expected to complete approval by the end of March. However, affected by the Eid al-Fitr holiday from March 18 to 24, the approval process may be delayed, making it difficult for the tight supply situation to ease in the short term. Demand side, as some Indonesian smelters faced resource uncertainty and had difficulty obtaining high-grade nickel ore, prices remained strong. To secure raw material supply, some smelters even raised trading premiums. In addition, some transactions in low-grade saprolite ore also emerged in the market, with fixed prices relatively lower than those of high-grade ore. Limonite prices were still at low levels, mainly due to the tailings dam landslide accident at an MHP project in a certain industrial park, which kept related production lines operating at low utilization rates and hindered the demand rebound. However, considering the uncertainty surrounding RKAB, the stockpiling demand from new projects, and growing demand from outer islands, limonite prices were expected to follow saprolite ore and remain at high levels going forward. Policy side, Tri Winarno, Director General of Indonesia's Minerals and Coal Bureau, clarified on March 3, 2026, that the rumor of a "uniform 25%-30% increase in RKAB quotas" was untrue. Any quota additions will be based on individual assessments of enterprise capacity and compliance, and the approval process is expected to begin only in H2 2026. Given the overall delay in RKAB approvals, nickel ore prices were expected to remain firm in April, more likely to rise than fall.