[SMM Daily Review of Indonesia's Nickel Ores] Prices of Indonesia's pyrometallurgical and hydrometallurgical laterite nickel ores continue to diverge

SMM News on May 13:

This week, the mainstream premium for Indonesia's local laterite nickel ore remained at $26-30/wmt. In terms of ore used for pyrometallurgy prices, the SMM delivery-to-factory price for 1.6% Indonesia's local laterite nickel ore stood at $52.6-56.6/wmt, up $1 from last week, representing an increase of approximately 1.87% YoY. For ore used for hydrometallurgy prices, the SMM delivery-to-factory price for 1.3% Indonesia's local laterite nickel ore was adjusted down to $23-25/wmt, a decrease of $2 YoY, equivalent to a drop of 7.69%.

Regarding ore used for pyrometallurgy, the supply from Sulawesi Island continues to be disrupted by persistent rainfall. Meanwhile, Halmahera Island entered the rainy season starting in May. Overall, the supply of nickel ore in Indonesia remains relatively tight due to weather impacts. Additionally, the PNBP policy has been officially implemented, leading to an increase in the sales cost of nickel ore. Furthermore, some Indonesian mines have had their mining activities under IUP licenses restricted due to not yet obtaining RKAB quotas, further exacerbating the tight supply situation. On the demand side, the NPI price has continued to decline, and the cost of Indonesian pyrometallurgy smelters has been breached, limiting their acceptance of further nickel ore price increases. Taking everything into account, the nickel ore prices in Indonesia are currently influenced by both bullish and bearish factors. Although there are many disruptive factors on the supply side, due to the drag from the downstream sector, prices are unlikely to see significant increases in the short term.

For ore used for hydrometallurgy, there has been no significant tightening on the supply side so far. However, the MHP production in April was affected by the accident at the MHP project in the MOROWALI Industrial Park, leading to a decrease in the local demand for ore used for hydrometallurgy in Indonesia. Overall, ore used for hydrometallurgy prices have weakened. The relevant production lines in the park are expected to resume production gradually in May. SMM anticipates that ore used for hydrometallurgy prices may be more likely to rise than fall in the future.

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