[SMM Weekly Review of Nickel Ore Market] Philippine nickel ore prices continue to decline; Indonesia's local saprolite ore prices fall

Philippine nickel ore prices continue to decline; NPI smelters still face losses

This week, Philippine nickel ore prices continued to decline. The CIF prices for Philippine laterite nickel ore with NI1.3% from the Philippines to China were $42-44/wmt, those for NI1.4% were $50-52/wmt, and those for NI1.5% were $57-59/wmt. Supply and demand side, this week, there was less precipitation in the main producing areas, having a relatively small impact on production. The overall shipment volume remained high. It is expected that in Q3, the impact of precipitation will be limited, and shipment volumes will remain at a relatively high level. The volume of ore arrivals at ports will continue to increase, ensuring sufficient supply. As of Friday, July 25th, the nickel ore port inventory in China was 7.47 million wmt, up 320,000 wmt WoW. The total equivalent metal content was 58,700 mt in metal content. Ships that had been dispatched earlier have been arriving at ports one after another, leading to an increase in port inventory. On the demand side, NPI prices stopped falling and rose this week. Although the prices of Philippine nickel ore have recently declined, domestic NPI smelters still face losses. The operating rate remains low. Faced with the recent decline in nickel ore prices, some traders have chosen to wait and see. Overall demand remains weak. In terms of ocean freight rates, this week, ocean freight rates remained stable, with the average ocean freight rate from the Philippines to Tianjin Port being $12.5/mt. It is expected that in the short term, with shipment volumes entering a peak period, ocean freight rates are expected to remain high in the short term. Looking ahead, under the influence of multiple factors such as the continued losses of downstream smelters, the limited willingness to purchase at high prices, and the increase in port inventory, there is still downside room for Philippine nickel ore prices in the short term.

Indonesia's local saprolite ore prices fall; downside room still exists; mines actively ship

This week, Indonesian nickel ore prices experienced a slight decline. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore with 1.6% grade remained at $24-26/wmt this week. The delivery-to-factory price for SMM's Indonesia's local laterite nickel ore with 1.6% grade was $50.4-53.7/wmt, a decrease of $0.1 or 0.2% from last week. In terms of limonite ore prices, the delivery-to-factory price for SMM's Indonesia's local laterite nickel ore with 1.3% grade remained stable at $26-28/wmt, unchanged from last week.

On the saprolite ore supply side, the rainy season in Sulawesi has basically improved, while rainfall in Halmahera continues. Secondly, some mine companies actively shipped ore this week. As a result, there was a slight rebound in production. According to SMM, the currently approved quotas are approximately between 290 million and 300 million mt. On the demand side, although Indonesian NPI prices have slightly rebounded, the production cuts or shutdowns of some smelters due to cost losses still result in relatively low demand for saprolite ore procurement. Overall, as the RKAB approval process continues to advance and the rainy season weather improves in some regions, the tight supply situation of nickel ore in Indonesia has eased somewhat. Meanwhile, due to production cuts at some smelters, demand has also declined. Looking ahead, the prices of saprolite ore are still more likely to fall than rise.

Regarding limonite ore, the supply and demand situation is relatively stable. From a profit perspective, the profitability of limonite ore is lower than that of saprolite ore, which has limited the availability of limonite ore in the market, thereby supporting prices to remain high and relatively stable this week. However, with the continuous approval of RKAB quotas expected to extend until August and the improvement of weather conditions in some parts of Sulawesi, there is still downside room for limonite ore prices in the future.