【Weekly Review of the Nickel Ore Market】The Tight Supply of Indonesian Ore Continues, Pyrometallurgical Ore Prices May Rise Again

Philippine Nickel Ore Costs Rise Again, Prices Fluctuate Upward
This week, prices for low-grade and high-grade nickel ore in the Philippines remained stable. The FOB prices for medium and high-grade nickel ore from Philippine mines increased overall during the week, with medium and high-grade nickel ore prices rising slightly again. The main reasons are twofold: first, as an exporter, Indonesia's nickel ore prices have climbed and are still expected to rise, providing some support for the export prices of Philippine nickel ore; second, from a supply and demand perspective, the Surigao region began to offer and ship this month, but the recovery of supply has been slow due to weather conditions. On the demand side, most domestic nickel pig iron (NPI) plants still have low inventory levels, and the need for just-in-time procurement of raw materials is strong. However, although the current rise in downstream high-grade NPI prices has brought some profit recovery, domestic iron plants are still experiencing losses, limiting their ability to purchase high-priced nickel ore. In terms of ocean freight rates, rates slightly decreased during the week, with the rate from Surigao to Lianyungang, China, dropping by about $0.5/wmt. Overall, influenced by the strong supply and weak demand situation and the rise in Indonesian ore prices, Philippine prices have increased. SMM expects that Philippine ore prices may continue to fluctuate upward in the short term.

Indonesian Ore Supply Remains Tight, Pyrometallurgical Ore Prices May Rise Again
Current market transaction prices: for pyrometallurgical ore, SMM's weekly price for Indonesia's local ore at 1.6% is $51/wmt; for hydrometallurgical ore, SMM's weekly price for Indonesia's local ore at 1.2% is $26/wmt. Indonesian pyrometallurgical nickel ore may rise again in April, with current April premiums of $23-25 under negotiation, while hydrometallurgical ore CIF prices may remain stable or fluctuate downward. From a supply perspective, the prolonged rainy season in Sulawesi this year has affected nickel ore mining and transportation, with supply recovery in main mining areas like Sulawesi being relatively slow. Additionally, the Indonesian Lebaran holiday from late March to early April, during which mines and workers are on leave, will also impact nickel ore supply. On the demand side, raw material inventories at Indonesian NPI smelters are generally low, necessitating just-in-time restocking, and with expectations of NPI production increases, demand-side support remains. SMM expects that nickel ore supply may continue to be tight. In terms of policy, the expectation for the implementation of the PNBP policy remains strong. If implemented, the sales costs of nickel ore mines will increase, and with the current rise in downstream NPI and MHP prices, mines have strong bargaining power. The cost increases brought by this policy may largely be passed on to downstream enterprises, providing strong support for nickel ore prices. For hydrometallurgical ore, downstream MHP has strong expectations for short-term production cuts, with demand support significantly weakening, and prices may fluctuate downward. Overall, SMM expects that Indonesian local pyrometallurgical nickel ore prices may continue to rise, while Indonesian local hydrometallurgical ore prices may remain stable or fluctuate downward.

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