Philippine nickel ore prices remain high; domestic enterprises may be forced to choose between high-priced procurement or production cuts
This week, Philippine nickel ore prices held steady. The CIF prices of Philippine laterite nickel ore (NI1.3%) shipped to China were $44-45/wmt, while the FOB prices were $34-36/wmt. The CIF prices of NI1.5% were $59-60/wmt, and the FOB prices were $49-51/wmt. In terms of supply and demand, on the supply side, although there was precipitation at major nickel ore loading points in the Philippines, the continuous rainfall during the week significantly impacted the loading progress at nickel mines, leading to widespread delays compared to expectations. On the demand side, the price of downstream NPI fell again, and domestic NPI smelters continued to face severe losses. The sentiment for raw material procurement was dampened, and the support for nickel ore prices from the demand side continued to weaken. Regarding exports to Indonesia, Indonesia's demand for Philippine nickel ore increased, and the high nickel ore prices in Indonesia continued to strengthen the reluctance of Philippine mines to budge on prices. Looking ahead, the current tug-of-war between upstream and downstream players over prices, combined with the price disturbances from the Indonesian side, suggests that Philippine nickel ore prices may continue to hold up well in the short term. Domestic enterprises may be forced to choose between high-priced procurement or production cuts.
Indonesia's local limonite ore prices rose this week, while saprolite ore prices held steady
Indonesia's local limonite ore prices rose this week, while saprolite ore prices held steady. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore remained at $26-28/wmt this week.
For saprolite ore, the SMM delivery-to-factory price of Indonesia's local laterite nickel ore (1.6%) was $54.3-57.3/wmt, unchanged from the previous week. For limonite ore prices, the SMM delivery-to-factory price of Indonesia's local laterite nickel ore (1.3%) rose to $26-28/wmt, up $1/wmt or 3.8% WoW. On the supply side of saprolite ore, the rainy season remains the primary factor contributing to the insufficient supply of saprolite ore, adversely affecting ore production and transportation activities. According to feedback from multiple Indonesian mining companies, the continuous heavy rainfall has severely disrupted operations, leading to a persistent tight supply of ore. Additionally, the supplementary RKAB quotas for some miners have not yet been approved, partially limiting nickel ore sales in the market. On the demand side, according to the SMM Indonesia Saprolite Inventory Cycle Index, the average inventory of pyrometallurgical smelters in May increased compared to April, with an average inventory of 2.2 months. Market procurement sentiment has weakened somewhat. Meanwhile, Indonesia's NPI smelters are still facing the dilemma of operating at a loss, making it difficult for them to withstand further increases in nickel ore prices. Therefore, it is expected that there will be limited room for nickel ore prices to rise in June.
On the supply side of limonite ore, the recent supply of limonite ore has been stable, but the upcoming rainy season in the Halmahera region may affect the shipment of low-grade laterite nickel ore in the future. On the demand side, the MOROWALI Industrial Park, which had halted production due to an earlier accident, has now largely resumed production. Demand has strengthened, driving up the prices of limonite ore this week. Looking ahead, with two large-capacity limonite ore projects expected to commence production in H2, the demand for limonite ore is anticipated to continue increasing. Meanwhile, the demand for cross-island procurement remains, which may further exacerbate the upward pressure on ore prices. Overall, the prices of limonite ore in Indonesia are likely to hold up well.
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