[SMM Weekly Review of Nickel Ore Market] Offer Prices from Philippine Mines Increase; Premiums for Indonesia's Saprolite Ore Remain High

Philippine Mine Offer Prices Rose, Domestic Companies' Losses Further Widened

This week, Philippine nickel ore FOB prices rose slightly, while domestic transaction prices remained stable. The CIF price for Philippine laterite nickel ore with 1.3% Ni to China was $46-47/wmt, and the FOB price for 1.3% Ni ore was $37-38/wmt. The CIF price for 1.5% Ni ore was $59-61/wmt, and the FOB price for 1.5% Ni ore was $52-53/wmt. Supply and demand side: Supply side, although major nickel ore loading points in the Philippines experienced rainfall, persistent rainy weather during the week significantly impacted loading progress at mines, with delays widespread compared to expectations. Demand side, downstream NPI prices fell again, and domestic NPI smelters remained severely inverted, dampening raw material procurement sentiment. Demand-side support for nickel ore prices continued to weaken. For exports to Indonesia, Indonesia's demand for Philippine nickel ore increased, and persistently high Indonesian ore prices further reinforced Philippine mines' reluctance to budge on prices. Looking ahead, the current price tug-of-war between upstream and downstream is evident, compounded by price disruptions from Indonesia. In the short term, Philippine nickel ore prices may remain high, while domestic companies' losses continue to widen, potentially forcing them to either purchase at high prices or cut production.

HPM Prices Continued to Decline, Indonesian Prices Fluctuated This Week but Premiums Remained High

Indonesia's local ore prices changed this week. For premiums, the mainstream premium for Indonesia's local laterite nickel ore remained at $26-28/wmt. For benchmark prices, the HMA price for the second half of June stabilized with a slight decline at $15,221/mt, down 1.19% MoM from the previous period. Overall, pyrometallurgy ore prices decreased this week. SMM's delivery-to-factory price for Indonesia's local laterite nickel ore with 1.6% Ni was $53.9-56.9/wmt, up $0.4/wmt WoW. For limonite ore, SMM's delivery-to-factory price for Indonesia's local laterite nickel ore with 1.3% Ni remained stable at $26-28/wmt, unchanged WoW.

Pyrometallurgy ore side: Supply side, the ongoing rainy season in Sulawesi and Halmahera remains a key constraint for mining and transportation activities. Additionally, although Indonesia's RKAB supplementary quotas began to be approved in H2, no significant quota increases have emerged yet. Thus, slow approval progress has exacerbated the tight supply of pyrometallurgy ore. Demand side, SMM's Indonesian NPI prices fell again this week, and Indonesian NPI smelters remained in a cost-inverted state. Moreover, stainless steel market procurement sentiment weakened as some smelters cut production. However, given the aforementioned ore supply shortage, Indonesian smelters, despite operating at a loss, had to passively accept current high prices to maintain raw material supply for production.

In terms of limonite ore supply, despite the ongoing rainy season in Indonesia, there has been no significant tightness in the supply of limonite ore recently. On the demand side, most of the HPAL projects in the MOROWALI Industrial Park have resumed production, leading to an increase in market demand for limonite ore. In addition, with the expected commissioning of larger HPAL smelting projects in H2, there may be a notable increase in the demand for limonite ore in the future. Looking ahead, limonite ore prices in Indonesia may hold up well.