[SMM Weekly Review of Nickel Ore Market] Demand for Philippine nickel ore remains weak. Will Indonesia's local nickel ore prices fall further?

Weak demand persists; Philippine nickel ore prices expected to continue falling

This week, Philippine nickel ore prices remained stable. The CIF price for Philippine laterite nickel ore with 1.3% NI content shipped to China was $44-46/wmt, and the FOB price was $35-37/wmt. The CIF price for ore with 1.5% NI content was $57-60/wmt, and the FOB price was $50-52/wmt.

Supply and demand side, in the past week, rainfall intensified across the Philippines, primarily affecting the central region. Heavy rainfall was observed across Palawan, Zamboanga, and from Tubay north to Manicani. Relatively less rainfall was recorded in Southern Surigao, Davao, Tawitawi, and Zambales. However, looking ahead to Q3, the impact of precipitation is expected to be limited, with shipment volumes maintaining high levels and ore port arrivals continuing to increase, ensuring ample supply. As of Friday, July 18th, nickel ore inventory at Chinese ports stood at 7.15 million wmt, with a total metal content equivalent of 56,160 mt (metal content). With the arrival of previously shipped vessels, inventory levels have risen. On the demand side, NPI prices continued to decline this week. Domestic NPI smelters continue to face significant losses. Operating rates remain low. Acceptance of high-priced raw materials is severely constrained. Meanwhile, some NPI smelters in Indonesia have halted production for maintenance, weakening demand-side support. In terms of ocean freight rates, prices remained stable this week. As of Friday, July 18th, the average ocean freight rate from the Philippines to Tianjin Port was $12.5/mt. It is expected that in the short term, with shipment volumes entering peak periods and vessel availability tightening, ocean freight rates are likely to continue rising. Looking ahead, under the influence of multiple factors such as continued losses at downstream smelters, limited willingness to purchase at high prices, and increasing port inventory, Philippine nickel ore prices still have downside room.

Indonesia's 2025 RKAB quota reaches 364 million; nickel ore prices more likely to fall than rise

This week, Indonesian nickel ore prices remained flat. In terms of benchmark prices, the HMA price for the second half of July remained stable with a slight decline, at $14,926/mt, down 0.11% MoM from the previous period. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore remained at $24-26/wmt. The SMM delivery-to-factory price for Indonesia's local laterite nickel ore with 1.6% NI content was $50.4-53.9/wmt, unchanged from last week. In terms of limonite ore prices, the SMM delivery-to-factory price for Indonesia's local laterite nickel ore with 1.3% NI content remained stable at $26-28/wmt, unchanged from last week.

For saprolite ore, on the supply side, the rainy season in Sulawesi and Halmahera continues, affecting mining operations and transportation routes. Despite this, the RKAB quota for Indonesian nickel ore in 2025 has reached 364 million, with an expected increase in supply. Demand side, the price of Indonesia's NPI remains relatively weak, with some smelters having halted production or implemented production cuts due to losses. Smelters have reduced their procurement volume of nickel ore, leading to low demand for pyrometallurgical nickel ore. Overall, despite some mining and transportation activities being hindered by rainfall, with the subsequent approval of additional RKAB quotas in Indonesia and smelters experiencing losses, purchasing power for current nickel ore prices is weak. Looking ahead, the price of saprolite ore is still more likely to fall than rise.

Regarding limonite ore, supply side, the current supply has stabilized again, meeting current market demand. Additionally, significant progress in the approval of additional RKAB quotas will drive an increase in supply. Demand side, downstream production is normal, with MHP producers experiencing a steady to slight increase in their procurement volume of nickel ore. Looking ahead, with the progress in the approval of additional RKAB quotas, there may be downside room for limonite ore prices.