[SMM Analysis] Is the Nickel Ore Market Changing Rapidly Within the Week?

SMM, December 20th:

Recently, the global nickel ore market has experienced some significant changes, particularly in Indonesia and the Philippines, where industry dynamics in these two major nickel ore-producing countries have drawn considerable attention.

Firstly, the monthly benchmark price of Indonesian domestic trade laterite nickel ore saw a slight decline in January 2025, down approximately 1.03% MoM compared to December 2024. This trend was mainly influenced by the weak performance of LME nickel prices. Additionally, although the premium price of Indonesian domestic trade laterite nickel ore remained between $15-$16/wmt, a small portion of medium-grade or impure nickel ore has started to trade at a lower price of $14/wmt. This indicates a divergence in demand for nickel ore of different grades in the market and suggests that the CIF price of Indonesian domestic trade laterite nickel ore in January may experience slight fluctuations.

Notably, foreign media reported yesterday that the Indonesian government is considering significantly reducing nickel ore mining quotas to support the market price of the metal. The Ministry of Energy and Mineral Resources is expected to lower next year's mining quota to 150 million mt, a sharp reduction from this year's 272 million mt. According to SMM's understanding, this information is currently unverified. However, SMM will continue to monitor updates regarding the RKAB quotas and related supply-side changes for Indonesian domestic trade laterite nickel ore. Additionally, regarding the market's high concern over whether there are any additional administrative procedures for the transition of RKAB quotas at the turn of this year and next, feedback from some miners suggests that a formal application report for quota usage may need to be submitted to the government via the MOS system starting January 1st next year.

Meanwhile, the Philippine nickel ore market is also showing subtle changes. Recently, the FOB and CIF prices of Philippine laterite nickel ore have slightly weakened. This adjustment is primarily due to a significant decline in the actual shipping volume available for loading during the month, which has reduced shipping pressure and subsequently led to a decrease in ocean freight rates. Furthermore, the FOB price of medium-grade laterite nickel ore from northern mines has dropped, with 1.3% grade laterite nickel ore now trading at $28/wmt. These signs indicate that the Philippine nickel ore market is facing certain downward pressure.

Looking ahead, Philippine nickel ore supply is expected to remain low in January, and mines are likely to maintain a firm pricing strategy. Therefore, FOB prices are expected to exhibit some fluctuation in the near term.

In summary, as key global suppliers of nickel ore, the market price fluctuations and policy changes in Indonesia and the Philippines will have a profound impact on the global nickel industry. Industry participants should closely monitor market dynamics and adjust their strategies promptly to address potential market challenges and opportunities.