Tight supply pushes higher nickel ore prices, shipping rates unlikely to fall in short-term

The average cif price of 1.5% nickel ore stood at $73.5/wmt last Friday, an increase of $4.5/wmt from a week earlier. Supply has been tight. Cargoes scheduled for the first half of August have been sold. Some shipments that were expected to be loaded in late June were delayed to mid-July due to the adverse weather in the Philippines. Delays in shipments have caused tight inventory of nickel ore at most NPI plants which stepped up production amid high profits.

Nickel ore prices surged amid supply shortages. Mainstream traded cif prices of 1.5% nickel ore rose to $72-75/wmt last week, with the high-end of quotations of $78/wmt. However, most of the NPI plans would return to losses at the current nickel ore prices, limiting their acceptance. A few plants would accept the high prices. Ni 1.5% ore prices are expected to stand at $73-78/wmt this week on a cif basis.

Shipping rates from the Philippines to China on July 2 stood at $21.75-22.05/wmt (the Philippines to southern Chinese ports-the Philippines to northern Chinese ports), flat from a week earlier. The BDI remained high and stood at 3,338. Shipping rates are unlikely to fall in the short term amid tight shipping capacity.