[SMM Daily Nickel Ore Review] Philippine nickel ore prices are under pressure due to downstream drag, with a divergence in prices between Indonesia's local ore for pyrometallurgy and hydrometallurgy

SMM News on May 13:

Philippine nickel ore: Today, the prices of Philippine laterite nickel ore remained stable, with transaction prices continuing at the level after a slight drop last week. The CIF price of Philippine laterite nickel ore NI1.3% today is $43.5-45/wmt, down $0.25/wmt; the FOB price is $32-35/wmt, down $1.5/wmt. The CIF price of NI1.5% is $59-60/wmt, down $1/wmt, and the FOB price is $47-50/wmt, down $2.5/wmt.

Supply and demand side, in terms of supply, although there has been precipitation at major nickel ore loading points in the Philippines, with heavier rainfall in areas such as Sta Cruz, Eastern Davao, and Tawi Tawi, the rainfall in Surigao has relatively decreased compared to the past few weeks. Overall, despite the reduced rainfall in Surigao, the supply of Philippine nickel ore is still expected to increase. On the demand side, with the continuous decline in downstream NPI prices and the deepening of the inverted margin, the sentiment of domestic NPI smelters for raw material procurement has been frustrated, and the support for nickel ore prices from the demand side continues to weaken. Looking ahead, the domestic transaction prices of Philippine nickel ore may be dragged down by the downstream sector and operate under pressure.

Indonesia's local laterite nickel ore: This week, the SMM Indonesia's local laterite nickel ore 1.3% (delivery-to-factory price) is $23-25/wmt, down $2/wmt WoW; the SMM Indonesia's local laterite nickel ore 1.6% (delivery-to-factory price) is $52.6-56.6/wmt, up $1/wmt WoW.

Pyrometallurgical ore prices: On the supply side, the rainy season has lasted longer this year. Although the rainfall in Sulawesi has improved, it is still continuing. Meanwhile, Halmahera Island also entered the rainy season in May. Frequent rainfall has affected the shipments of mines. Coupled with the increased sales costs of nickel ore after the implementation of the PNBP policy, mines have a strong sentiment to stand firm on quotes. On the demand side, despite the continuous decline in NPI prices, the nickel ore inventory of downstream smelters remains relatively low, and there is still demand for just-in-time procurement. Additionally, concerns about the approval of subsequent supplementary quotas for RKAB in the market have kept the sentiment for nickel ore procurement high. After the price increase, downstream NPI enterprises are facing difficulties. On the hydrometallurgical ore side, affected by the reduction in MHP production schedules in Indonesia in April, downstream smelters have attempted to push down the prices of hydrometallurgical ore. After the Labour Day holiday, the market transaction prices of hydrometallurgical ore have fallen, while MHP profits remain favorable. SMM expects that with the gradual resumption of production of MHP projects in the MOROWALI Industrial Park in May and the construction of new hydrometallurgical projects in H2, the prices of hydrometallurgical ore may rebound.

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