【Weekly Review of the Nickel Ore Market】Indonesian Ore Supply Remains Tight, Prices Hold Up Well

Philippine Nickel Ore Fundamentals Bearish but Prices Remain High

Philippine nickel ore prices remained stable this week. From a supply and demand perspective, the rainy season in the southern Philippines has basically ended,Surigaoregion mines are expected to increase shipments of medium-grade nickel ore. On the demand side, domesticNPIprices continued to decline during the week, and domestic smelters' acceptance of high-priced nickel ore decreased. From an inventory perspective, domestic nickel pig iron plant inventories remain relatively low, just-in-time procurement demand still exists, but acceptance of nickel ore prices is limited. In terms of ocean freight rates, the rates remained stable overall during the week, with the rate from Surigao to Lianyungang, China, at around$10-10.5perwmt. For exports from the Philippines to Indonesia, the volume is still increasing. Indonesian nickel ore prices remained stable and strong during the month, providing some support to Philippine nickel ore prices. Overall,SMMexpects that due to the combined impact of increased supply and declining downstreamNPIprices, Philippine nickel ore prices may trend weaker in the future.

Indonesian Ore Supply Tightness Remains the Main Theme Prices Hold Up Well

Indonesian ore prices remained stable and strong this week. Nickel prices saw a correction this week, and the expected implementation of thePNBPpolicy provided some macro support to prices. Transaction prices remained stable overall this week. In the Indonesian market, the mainstream premium for pyrometallurgical ore continued at$24-26, with the1.6%delivery-to-factory price at$51.5-53.5perwmt. For hydrometallurgical ore, the1.3%delivery-to-factory price for Indonesia's local ore was around$25-26perwmt.

From a supply and demand perspective, for pyrometallurgical ore: on the supply side, the prolonged rainy season in the largeKisland continued to affect nickel ore mining and transportation, but overall, precipitation is expected to gradually decrease fromApril, and nickel ore supply is expected to increase. On the demand side, downstreamNPIprices were impacted by the decline in nickel prices due to Trump's tariff policy, withNPIprices falling significantly during the week, weakening support for nickel ore prices. However, the April premium has been set, and any further adjustments will need to wait until the end of April for negotiations on the May premium. From an inventoryperspective: raw material inventories at Indonesian nickel pig iron smelters are generally low, and just-in-time restocking demand still exists. Combined with a slight increase in IndonesianNPIproduction during the month, demand support remains. Overall,SMMexpects that the supply of pyrometallurgical ore in Indonesia may continue to be tight. For hydrometallurgical ore: on the supply side, the tight supply situation was not significant during the week. On the demand side, an accident at a hydrometallurgical project in the largeKindustrial park affectedAprildemand forMHP. Overall, the hydrometallurgical ore market supply is relatively sufficient. On the policy front, the IndonesianPNBPpolicy was implemented this week, tentatively starting on the26th. The increase in royalties has raised the cost of nickel ore sales, but the significant increase in the premium at the beginning of April has already factored in the impact of thePNBPpolicy. Going forward, this policy is unlikely to further drive up nickel ore prices.

Overall, the nickel ore market is currently mixed with both bullish and bearish factors, but the main theme of tight supply remains. Future price trends will need to focus on the rainy season situation in the largeKand smallKislands in April.SMMexpects that Indonesian local nickel ore prices will remain stable and strong in the short term.

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