Medium-grade nickel ore prices to rise in Q3 on slight supply shortage

SHANGHAI, Aug 13 (SMM) – Imported medium-grade nickel ore prices are likely to climb up in the third quarter as shipments from the Philippines and Indonesia may fail to meet demand, SMM expects.

Such rebound in prices is earlier than our previous expectation, which was estimated in late September, as a lack of export quota at Indonesian miners Ceria and Ifishdeco would shrink overall shipments from the country. The two miners have yet to obtain new export quota after their quota ran out at the end of June.

Average monthly shipments of medium- and high-grade nickel ore from Indonesia are now estimated at less than 30 vessels, or 1.65 million wmt, in July-September. This compared to our previous forecast of close to 2 million wmt per month.

Besides, shipments from the Philippines also came in smaller than the same period last year. In June-July, monthly shipments of medium- and high-grade nickel ore from the Philippines averaged at some 50 vessels, compared to over 70 vessels seen in the same period last year.

Meanwhile, Chinese buyers started to stockpile for the upcoming rainy season. From end-October to March, rainy season in Surigao, the Philippines, would hinder shipments.

As demand is set to slightly exceed supply, medium-grade nickel ore prices are likely to rebound in the third quarter.