[SMM Weekly Review of Nickel Ore Market] Nickel ore prices in the Philippines may continue to decline, while ore prices in Indonesia fluctuate rangebound

Philippine nickel ore prices steady this week; potential for further decline in the future

This week, Philippine nickel ore prices remained unchanged from last week. The CIF prices for Philippine laterite nickel ore (NI1.3%) shipped to China were $42-44/wmt, for NI1.4% were $50-52/wmt, and for NI1.5% were $57-59/wmt. From the supply and demand perspective, under the influence of dual atmospheric pressures this week, almost all major nickel ore-producing regions experienced short-term strong winds and surges at their anchoring areas, leading to a decrease in shipping volumes. However, there was no significant increase in precipitation in the major producing regions this week, and production remained stable. It is expected that in Q3, the impact of precipitation on the major producing regions will be limited, and shipping volumes will remain at a high level. Port arrivals of nickel ore will continue to increase, ensuring sufficient supply. As of Friday, August 1st this week, China's nickel ore port inventory stood at 7.61 million wmt, up 140,000 mt WoW. The total equivalent metal content was 59,800 mt in metal content. Shipping volumes remained high, and port inventory increased. On the demand side, NPI prices rose slightly this week. The market sentiment was positive amid expectations of the "September-October peak season". Although Philippine nickel ore prices have declined recently, domestic NPI smelters still face losses. The overall operating rate in July remained low, and overall demand was weak. Regarding ocean freight rates, they remained stable this week, 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 shipping volumes entering a peak period, ocean freight rates will remain high. Looking ahead, influenced by multiple factors such as continued losses at downstream smelters, limited purchase willingness at high prices, and an increase in port inventory, Philippine nickel ore prices may continue to weaken in the short term.

Indonesian nickel ore prices fluctuate rangebound; strong wait-and-see sentiment for saprolite ore; limonite ore under pressure and weakening

This week, Indonesian nickel ore prices experienced minor fluctuations. In terms of benchmark prices, the benchmark prices for Indonesia's local laterite nickel ore remained stable and increased, reaching $15,208/dmt, with a growth rate of 0.69%. In terms of premiums, the mainstream premiums for Indonesia's local laterite nickel ore remained stable at $24-26/wmt this week. The SMM delivery-to-factory price for Indonesia's local laterite nickel ore (1.6%) was $50.4-53.7/wmt, unchanged from last week. Regarding limonite ore prices, the SMM delivery-to-factory price for Indonesia's local laterite nickel ore (1.3%) remained stable at $26-27.5/wmt, down $0.3 from last week, with a decrease rate of 0.9%.

For saprolite ore, from the supply side, the rainy season situation in some parts of Sulawesi has eased, while rainfall continues in the Halmahera region, leading to a rebound in nickel ore production. In terms of quotas, according to SMM, the approved quotas so far are estimated to be between 300 million-310 million mt, with an expected increase in supply throughout the year. On the demand side, the price of high-grade NPI in Indonesia rebounded slightly, and the profits of some Indonesian smelters recovered WoW. However, the state of inverted cost still exists. Overall, the market remains cautious, and smelters' purchasing demand for currently high-priced raw materials has not significantly increased. Therefore, the price of saprolite nickel ore still has downside room.

In terms of limonite ore, there is a slight surplus in supply. As most of the RKAB quotas have been approved, the supply of some HPAL smelters is abundant. From the demand perspective, the demand from Indonesian smelters has not shown significant growth this week, leading to a decline in the price of limonite ore this week. From a profit perspective, the price decline is expected not to be substantial, as mines find it difficult to bear significant price reductions. Looking ahead, the demand from downstream smelters is relatively stable, and with most of the 2025 RKAB quotas being approved successively, the price of limonite ore may remain weak.