[SMM Weekly Review of Nickel Ore Market] Indonesian ore and ore used for pyrometallurgy prices rise again, with ore used for hydrometallurgy and ore used for pyrometallurgy prices diverging

Philippine nickel ore prices drop slightly, but recovery of downstream profits remains distant

This week, Philippine nickel ore prices held steady with slight declines, driven by a loosening of offer prices from Philippine mines. The CIF price of Philippine laterite nickel ore (NI1.3%) delivered to China was $43.5-45/wmt, down $0.25/wmt, while the FOB price was $32-35/wmt, down $1.5/wmt. The CIF price of NI1.5% ore was $59-60/wmt, down $1/wmt, and the FOB price was $47-50/wmt, down $2.5/wmt. In terms of supply and demand, on the supply side, although precipitation affected nickel ore transportation at major loading points in the Philippines, with the main mining areas in the south entering the dry season, Philippine nickel ore supply is expected to increase. On the demand side, the tender price of downstream NPI hit a new low, and with the deepening of the inverted margin, domestic NPI smelters' sentiment towards raw material procurement was dampened, weakening demand-side support for nickel ore prices. In terms of ocean freight rates, they remained stable overall during the week, with rates from the Surigao region to Lianyungang, China, at approximately $10-11/wmt. Regarding exports from the Philippines to Indonesia, export volumes continued to rise, with Indonesian nickel ore prices remaining generally strong during the month and external purchase demand for Philippine ore increasing, providing some support to Philippine nickel ore prices. Overall, domestic transaction prices of Philippine nickel ore may be dragged down by the downstream sector, operating under pressure.

Indonesian ore prices rise again for pyrometallurgical ore, while prices diverge between hydrometallurgical and pyrometallurgical ores

Indonesian ore prices rose slightly this week. For pyrometallurgical ore, the mainstream premium for Indonesia's local ore in May was $26-30/wmt. The SMM delivery-to-factory price for Indonesia's local 1.6% ore was $52.6-56.6/wmt, up $1/wmt or 1.87% YoY. For hydrometallurgical ore, market prices fell, with the SMM delivery-to-factory price for Indonesia's local 1.3% ore at $23-25/wmt, down $2 or 7.69%.

For pyrometallurgical ore: On the supply side, the rainy season has lasted longer this year. Although precipitation in Sulawesi has improved, it continues, and Halmahera also entered the rainy season in May. Frequent precipitation has affected mine shipments. Additionally, after the implementation of the PNBP policy, nickel ore sales costs have risen, leading to strong sentiment among mines to stand firm on quotes. On the demand side, NPI prices have continued to decline, but downstream smelters' nickel ore inventories remain relatively low, and there is still demand for just-in-time procurement. Coupled with market concerns about the approval of subsequent supplementary quotas under the RKAB, sentiment towards nickel ore procurement remains high. After the price increase, downstream NPI enterprises are facing difficulties.

Regarding ore used for hydrometallurgy, affected by the reduction in MHP production schedules in Indonesia in April, downstream smelters attempted to push down the prices of ore used for hydrometallurgy. Following the Labour Day holiday, the market transaction prices of ore used for hydrometallurgy fell, while MHP profits remained favorable. SMM forecasts that with the gradual resumption of production at the MOROWALI Industrial Park's MHP projects in May and the construction of new hydrometallurgy projects in H2, the prices of ore used for hydrometallurgy may rebound.

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