Philippine Nickel Ore Overseas Offer Prices Rise Prices Remain Stable with Upward Bias
During the week, in the Philippine low-nickel high-iron ore market, prices overall remained stable, with weak overall demand from domestic factories. Under losses, the acceptance of price increases was limited. For low-grade nickel ore, there were few transactions this week, and prices remained stable overall. For medium- and high-grade nickel ore, influenced by the rising prices of Indonesian ore, Philippine mines maintained a sentiment to stand firm on quotes, and offer prices from mines increased. In terms of supply: The southern major mining areas are at the end of the rainy season, but the impact still exists. Looking ahead, Philippine shipments are expected to increase. In terms of demand: The continuous rise in downstream NPI prices has boosted nickel ore prices, and smelters' inventories of medium- and high-grade nickel ore are at low levels, leading to strong restocking demand from factories. Regarding ocean freight rates, there are currently some rates at $11/mt. As the rainy season in the southern major mining areas ends, the shift in shipping origins may lead to an increase in ocean freight rates. In summary, under strong supply and demand, SMM expects Philippine prices to fluctuate upward in the future.
Frequent Policy Changes in Indonesian Ore Market Costs and Sentiment Likely to Strengthen
Currently, market transaction prices: For pyrometallurgical ore, the mainstream premium price of Indonesian nickel ore in March for K Island is $19-21/wmt. SMM laterite nickel ore in Indonesian market with 1.2% grade (delivery-to-factory price) is priced at $25.5-27.5/wmt; SMM laterite nickel ore in Indonesian market with 1.6% grade (delivery-to-factory price) is priced at $46.5-51.5/wmt. In the first half of March, 1.2 grade nickel ore HPM was priced at $15.49/wmt, and 1.6% grade nickel ore HPM was priced at $27.01/wmt. The HPM for the second half of March will be announced around March 15. In terms of supply and demand, there were no significant changes in the supply-demand structure compared to last week. On the supply side, as the rainy season gradually ends, supply is expected to improve. On the demand side, smelters continued to make just-in-time procurement, and shipment activity during the week continued to recover. Regarding inventory, downstream smelters' inventory levels remain low, and procurement demand persists. While the supply side has slightly loosened, market concerns about nickel ore supply due to policy uncertainties remain. With downstream smelters maintaining a slow increase in nickel ore demand and inventory levels still relatively low, SMM expects that despite the anticipated increase in supply, price support will persist under the continuation of strong supply and demand. In terms of policy: Following changes to the HPM pricing logic formula and foreign exchange control policies, the nickel ore royalty increase currently under discussion is expected to be implemented within the year. If implemented, it will directly lead to a significant increase in mining costs. With strong bargaining power on the seller's side of the nickel ore market, the cost increase caused by the royalty is likely to be largely passed on to downstream buyers, resulting in higher nickel ore prices.
