Philippine Nickel Ore Market Remains Generally Stable, with Slight Decline in CIF Prices for Medium-Grade Ores
This week, the Philippine nickel ore market remained generally stable with slight declines. The CIF price of Philippine laterite nickel ore (NI1.3%) shipped to China was in the range of $43.5-45/wmt, unchanged WoW. The FOB price of NI1.3% was in the range of $32-35/wmt, also unchanged WoW. The CIF price of NI1.5% was in the range of $58-59/wmt, down by $1/wmt, while the FOB price of NI1.5% was in the range of $47-50/wmt, unchanged WoW. In terms of supply and demand, on the supply side, although there was 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 decreased compared to previous weeks. Overall, with the decrease in rainfall in Surigao, the supply of Philippine nickel ore is still expected to increase. On the demand side, as the downstream NPI prices continued to decline, and the losses deepened, the sentiment of domestic NPI smelters for raw material procurement was dampened, and the support for nickel ore prices from the demand side continued to weaken. Regarding shipments from the Philippines to Indonesia, as of mid-May, the volume of nickel ore shipped from the Philippines to Indonesia exceeded 3 million wmt, up by more than 200% YoY. The increase in Indonesia's imports of Philippine nickel ore further strengthened the sentiment of Philippine mines to stand firm on quotes. Looking ahead, the domestic transaction prices of Philippine nickel ore may be dragged down by the downstream sector and operate under pressure, but the influence of the Indonesian side on Philippine ore prices is significant.
Indonesian Ore HPM Increases, but Pyrometallurgical Ore Premiums Struggle to Rise Due to Fundamentals
The transaction prices of Indonesian ore increased slightly this week, mainly due to a slight increase in the HPM in the second half of May. For pyrometallurgical ore, the mainstream premium for Indonesia's local ore in May remained in the range of $26-28/wmt, unchanged WoW. The delivery-to-factory price of SMM Indonesia's local ore (1.6%) was in the range of $53.3-57.3/wmt, up by $0.7/wmt or 1.28% WoW. For hydrometallurgical ore, the transaction price remained unchanged during the week, with the delivery-to-factory price of SMM Indonesia's local ore (1.3%) being in the range of $23-25/wmt.
Pyrometallurgical Ore: On the supply side, weather still disrupts the nickel ore supply. Frequent rainfall continues in Sulawesi, and Halmahera also entered the rainy season in May. The frequent rainfall has affected the shippable volume of mines. On the demand side, NPI prices have stopped falling at low levels, and there is a strong wait-and-see sentiment. Based on current ore prices, both domestic and Indonesian NPI smelters are in a state of losses, limiting their acceptance of high-priced nickel ore. In terms of inventory: After experiencing low inventory levels and ore stockpiling in April, the inventory levels of Indonesian pyrometallurgical smelters have improved, and their willingness to compete for ore at prices above the market level has decreased. Overall, despite ongoing supply-side disruptions caused by weather conditions and the possibility that the approval progress of RKAB may fall short of expectations, the current prices of ore used for pyrometallurgy in Indonesia's domestic trade are unlikely to see significant upward movement in the short term due to the drag from weak downstream prices.
For ore used for hydrometallurgy, affected by the reduced production schedule of MHP in Indonesia in April, downstream smelters pushed down the prices of ore used for hydrometallurgy. After the Labour Day holiday, the market transaction prices of ore used for hydrometallurgy fell, while MHP profits remained favorable. SMM expects 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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![[SMM Analysis] Influenced by macro sentiment, MHP and high-grade nickel matte prices declined this week.](https://imgqn.smm.cn/usercenter/CWsEw20251217171732.jpeg)