Philippine market: Zambales and Northern Luzon officially entered the rainy season. A low-pressure system may make landfall on Monday, and CIF prices followed Indonesian procurement prices lower. Overall CIF China offers fell this week: 1.3% at $45.5–47/wmt, 1.4% at $56–57/wmt, 1.5% at $64–65/wmt, and 1.8% at $91–94/wmt. CIF Indonesia offers held flat, with 1.3% at $45–46/wmt and 1.4% at $55–56/wmt, largely aligning with smelter tender prices. Freight rates eased notably this week: Surigao–Lianyungang around $13.25/wmt, Surigao–Indonesia around $11/wmt. Overall freight rates dropped by around $0.5/wmt WoW, significantly easing the situation where “freight rates stayed high.” FOB prices also moved lower, with 1.3% at $33–35/wmt, 1.4% at $41.5–43.5/wmt, and 1.8% at $76–78/wmt, confirming the earlier view that FOB would follow CIF’s pullback. Supply side, Zambales and Northern Luzon officially entered the rainy season, worsening mine roads, disrupting shipments, and leading to low outbound volumes. In terms of weather, the Philippines is expected to see continuous rainfall for the first five days of next week, shifting to mainly showers in the last two days, with total weekly rainfall surging across the country. Meanwhile, a low-pressure system is forming in the eastern waters; though not expected to intensify into a tropical depression or storm, it is forecast to make landfall in the central-southern Philippines next Monday and move northwestward across land, affecting Luzon, Visayas, and Mindanao. In major producing areas, cumulative weekly rainfall next week around the Manicani-Homonhon-Dinagat-Surigao belt is expected to more than double WoW, with the Homonhon area likely to be impacted by swells for 2–3 days. Dinapigue’s rainfall is forecast to be about six times this week’s level, with wave heights reaching around 1.7 meters on Wednesday and Thursday. RTN, Ipilan, and Berong loading points in Palawan are all expected to see higher rainfall next week compared to this week. In Zambales, cumulative weekly rainfall is forecast to be about 2.5 times this week’s level. Despite sustained weather disruptions, Chinese port inventories are already high, so weather’s support to prices remains very limited. Cost side, international oil prices pulled back slightly, alleviating mining and transportation cost pressures, but spot freight rates remained at relatively high levels, with the easing not yet fully materialized. Demand side, smelters in both China and Indonesia held dual-high inventories, with limited near-term restocking appetite. The buyer-dominated pattern persisted, and spot trading stayed sluggish. On inventories, as of June 26, Philippine nickel ore stocks at Chinese ports stood at around 6.44 million wmt (approximately 51,000 mt in nickel metal content), sustaining the ample supply picture. Indonesian market: HMA dropped sharply MoM—down 7.6% to a new low; RKAB revision window opened; heavy rainfall continued to disrupt shipments in Halmahera and Obi. Indonesia’s Ministry of Energy and Mineral Resources published the HMA nickel reference price for the first half of July at $17,225.67/dmt, a significant drop of about 7.6% from $18,642.33/dmt in the second half of June. Based on this, the theoretical HPM price for Ni 1.6% saprolite ore is around $66.6/wmt, and for Ni 1.2% limonite ore around $47.4/wmt. Premiums: premiums for 1.6% material remained stable; premiums for 1.4% material were around $1.3/wmt; for 1.5% and 1.6%, around $3/wmt—overall limited movement. In spot trading, 1.2% limonite ore was offered at around $30/wmt, and 1.5% saprolite ore at around $65/wmt, with both declining by about $5.5/wmt in total this week, mainly driven by the sharp fall in the HMA reference price. Supply side, the impact of the rainy season on Sulawesi production areas remained relatively mild in some regions, with limited disruption to overall shipments. However, weather conditions in Halmahera and Obi Island were generally severe, with persistent heavy rainfall and deteriorating sea conditions already causing some restrictions on mine production. Despite shipment disruptions, overall smelter inventory levels remained relatively adequate, limiting the near-term influence on procurement pace. Meanwhile, smelters continued to demand higher ore grades; low-grade ore (1.3–1.4%) supply was largely filled by Philippine cargoes, and multiple smelters turned to actively seeking high-grade ore (≥1.45%). Yet domestic high-grade ore supply remained scarce, with circulating grades concentrated in the 1.45–1.50% Ni range, intensifying procurement competition. Spot transaction prices for 1.2% limonite ore stayed stable this week; smelter procurement stayed low, with general reluctance to transact at HPM theoretical prices, deep discounts persisted, and low HPAL operating rates continued to weigh on purchasing prices. On the policy front, on Thursday, June 25, Tri Winarno, Director-General of Mineral and Coal at Indonesia’s Ministry of Energy and Mineral Resources, clarified that the total RKAB quota for nickel ore in 2026 has not yet been finalized. The government is still evaluating companies’ revision applications through the official review mechanism, with no specific figure set, focusing on assessing actual industry demand rather than relaxing restrictions. The RKAB revision window officially opened on July 1 and runs until July 31, with mining companies already initiating preparation work for revision applications and submitting production quota adjustment materials intensively; all adjustments are subject to full review.

[SMM Nickel Flash] This week, smelting costs for nickel pig iron in and outside China both improved. China's factories mainly purchased Philippine nickel ore, and ore prices continued to decline, maintaining stable profitability for China's nickel pig iron enterprises. In Indonesia, local nickel ore prices also declined, and coupled with the use of low-priced Philippine nickel ore, ore procurement costs significantly pulled back, noticeably easing overall comprehensive production cost pressure.

[7.3 Morning Meeting Minutes] US June ADP employment increased by 98,000, the smallest gain since March and below market expectations of 118,000. The most-traded SHFE nickel 2609 contract moved sideways in morning trading, closing the session at 125,880 yuan/mt, down 0.41%. A stronger US dollar and a shift in market expectations toward a more "hawkish" US Fed policy stance kept the macro environment challenging. Markets turned their attention to this week's US ADP and non-farm payrolls data. In the short term, nickel prices are expected to trade in the doldrums within the range of 125,000-135,000 yuan/mt.

According to SMM, Philippine nickel ore freight rates fell sharply this week, with Surigao-to-Lianyungang freight dropping to $13.5-14/wmt and Surigao-to-IWIP freight in Indonesia at around $11-12/wmt.

The SMM 10-12% high-grade NPI average price rose WoW by 0.87 yuan/nickel unit to 1,147 yuan/nickel unit (ex-factory, tax included), while the Indonesian NPI FOB index average price fell WoW by $0.06/nickel unit to $147/nickel unit.

[SMM Nickel Flash] This week, the cost trends of high-grade NPI in and outside China diverged once again, with the profitability gap continuing to widen. The cash cost of high-grade NPI in China extended its downward trend, primarily driven by increased arrivals of Philippine nickel ore and persistently weakening prices, directly reducing smelting’s core raw material costs, while overall production costs pulled back in tandem.

In H1 2026, the Indonesian 10-12% high-grade NPI (delivered to port, tax inclusive) market trended steadily upward, with the SMM average price rising 12% compared to the same period in 2025. Price movements were characterized by “stepwise increases and fluctuations at highs.” Each round of supply-demand imbalance and policy disruption pushed prices onto a higher level.

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.

The SMM 10-12% high-grade NPI average price fell 5.7 yuan/nickel unit WoW to 1,140.3 yuan/nickel unit (ex-factory, tax included), while the Indonesian NPI FOB index average price fell 1.23 $/nickel unit WoW to 146.52 $/nickel unit. Downstream purchasing sentiment saw a more pronounced decline, with the divergence in mindset between upstream and downstream intensifying.

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.