[Weekly Review of the Nickel Ore Market] Indonesian Policies Continue to Cause Disturbances, Premiums Slightly Increase

After Surging, Philippine Nickel Ore Prices Pulled Back and Fluctuated Downward

During the week, FOB prices of medium- to high-grade nickel ore from the Philippines pulled back after surging. In the low-nickel, high-iron market, the rainy season in the Philippines is ending, and mines have gradually started offering quotes for March shipments. Currently, FOB transaction prices have eased compared to pre-rainy season levels. For medium- to high-grade nickel ore, influenced by rising Indonesian ore prices and the continuous increase in downstream nickel pig iron (NPI) prices, Philippine mines still show a sentiment to stand firm on quotes. However, constrained by the limited acceptance of high-priced nickel ore by domestic NPI plants, tender prices for medium-grade nickel ore from the Philippines were slightly lowered during the week. In terms of supply: The rainy season in major southern mining areas is gradually ending, and Philippine shipments are expected to increase. On the demand side: The continuous rise in downstream NPI prices has brought some profit recovery, but NPI plants are still experiencing losses, limiting their acceptance of high-priced nickel ore. Currently, restocking is mainly just-in-time procurement. Regarding port inventory, nickel ore inventory at ports continued to decline. As for ocean freight rates, some rates have reached $11/mt. With the end of the rainy season in major southern mining areas, the shift in shipment origins may lead to an increase in ocean freight rates. Overall, influenced by multiple factors, Philippine nickel ore prices are expected to pull back after surging in previous weeks and fluctuate downward.

Frequent Indonesian Policy Changes Slightly Push Up Premiums

Current market transaction prices: For pyrometallurgical ore, the mainstream premium price for Indonesian nickel ore in March at major K Island is $19-20/wmt. The SMM Indonesian domestic trade laterite nickel ore (1.2%, delivery-to-factory price) ranged from $25.5 to $27.5/wmt, up $0.5/wmt WoW and up 1.8% MoM. The SMM Indonesian domestic trade laterite nickel ore (1.6%, delivery-to-factory price) ranged from $46.5 to $51.5/wmt, up $0.4/wmt WoW and up 0.9% MoM. The upward trend in pyrometallurgical ore prices continued, but the increase narrowed compared to February. Supply: The rainy season in major mining areas in Sulawesi, Indonesia, is expected to end gradually in March, with an anticipated increase in Indonesian nickel ore supply. However, downstream smelters still have just-in-time procurement needs, and during March, the Ramadan period may slightly impact supply around Eid al-Fitr. On the demand side: Mid-tier smelters have just-in-time procurement needs this month, providing demand support. Regarding inventory, mid-tier pyrometallurgical enterprises generally maintain inventory levels below two months, and the sentiment for procurement and restocking in March remains high, boosting market transaction activity. For hydrometallurgical ore, the tight supply rhythm continues this year. Currently, the delivery-to-factory price for major K hydrometallurgical ore is approximately $26/wmt. With the ramp-up and commissioning of MHP projects this year, downstream demand is expected to increase. However, due to limited quotas, mines tend to prioritize the more profitable pyrometallurgical ore, actively reducing the sale of hydrometallurgical ore. This has led to a faster price increase for hydrometallurgical ore compared to pyrometallurgical ore. Moving forward, attention should be paid to the impact of the March HPM price, to be announced on the 15th of this month, on Indonesian nickel ore prices, as well as the actual circulation of domestic trade ore after the rainy season ends. Additionally, a new policy issued this week by Indonesia's Ministry of Energy and Mineral Resources adjusted the pricing method for HPM. Although this policy does not directly affect nickel smelting enterprises, it has caused some market sentiment disturbances. Overall, Indonesian domestic trade ore prices in March are expected to remain stable and slightly strong. Upstream shipments are anticipated to increase, coupled with sustained demand. However, due to the overall tight supply rhythm of nickel ore, the absolute price of Indonesian nickel ore is expected to rise, though the pace of increase may slow.

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