[SMM Weekly Review of Nickel Ore Market] New Year's RKAB Quotas to Open in October; Philippine Nickel Ore Prices Remain Stable

Philippine Nickel Ore Prices Steady This Week, NPI Prices Continue to Rise

This week, Philippine nickel ore prices remained stable. The CIF prices of Philippine laterite nickel ore (NI1.3%) shipped to China were $41-43/wmt, those of NI1.4% were $49-51/wmt, and those of NI1.5% were $56-58/wmt. On the supply and demand side, there was rainfall across the Philippines this week, and shipping conditions were worse than in the past two weeks. In terms of port inventory, as of August 15th (Friday) this week, the nickel ore inventory at ports nationwide was 7.76 million mt, up 60,000 mt MoM, equivalent to approximately 60,900 mt Ni. With shipments entering a peak period, port inventory continued to increase, indicating sufficient supply. On the demand side, NPI prices continued to rise this week. Under the expectation of the "September-October peak season," market sentiment was positive. Although Philippine nickel ore prices have slightly decreased from their peak recently, domestic NPI smelters still face losses. It is expected that the overall operating rate of domestic NPI smelters in August will increase but remain low. In terms of ocean freight rates, they have slightly decreased recently, with the average ocean freight rate from the Philippines to Tianjin Port being $12/mt. It is expected that although ocean freight rates will decline in the short term due to shipments entering a peak period, they will still remain high. Looking ahead, under the influence of 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 be in the doldrums in the short term.

Indonesian Nickel Ore Market Sees Steady Trading This Week, New Annual RKAB Quotas to Open in October

This week, Indonesian nickel ore prices remained flat. In terms of benchmark prices, the benchmark price of Indonesia's local laterite nickel ore slightly decreased to $15,013/dmt, a drop of 0.1%. In terms of premiums, the mainstream premium for Indonesia's local laterite nickel ore remained at $24-26/wmt this week. The SMM delivery-to-factory price of Indonesia's local laterite nickel ore (1.6%) was $50.6-53.9/wmt, unchanged from last week. In terms of limonite ore prices, the SMM delivery-to-factory price of Indonesia's local laterite nickel ore (1.3%) remained stable at $25.5-27.5/wmt, a decrease of $0.3 from the previous week. On the supply side of saprolite ore, the rainy season in most areas of Sulawesi, Indonesia, has basically ended this week, with occasional scattered rainfall still occurring, while some areas of Halmahera still experience rainfall. Overall, the improvement in the rainy season across Indonesia has led to improvements in mining and transportation in some areas, with nickel ore production and supply potentially rebounding. On the demand side, the profit margins of Indonesian smelters continue to slightly improve, but the situation of losses still exists. In terms of quotas, the Indonesian Ministry of Energy and Mineral Resources (ESDM) plans to issue formal regulations in early September this year, stating that the RKAB quota period will be shortened from three years to one year, and will initiate the submission and approval process for the new annual RKAB in early October 2025. Currently, the approval process for most supplementary RKAB quotas is nearly completed, with only about a dozen mines remaining unfinished. According to the SMM survey, the approved nickel ore RKAB quotas are approximately 300-310 million mt. This week, there was no significant increase in the purchasing activities of smelters, as smelters and mining companies are still negotiating the next round of prices. Overall, with the improvement in the rainy season in some areas of Indonesia and the progress of supplementary RKAB quotas, there may be downside room for saprolite ore prices in Indonesia. In terms of limonite ore, the market remained relatively stable this week, with relatively sufficient supply, leading to a decline in limonite ore prices. With the issuance of additional RKAB quotas, the supply of limonite ore in Indonesia may increase. On the demand side, there has been no growth in demand for limonite ore from Indonesia's HPAL smelters, resulting in a temporary oversupply situation. As of now, Indonesian smelters generally maintain an inventory level of about one month. According to Indonesia's upcoming HPAL projects, short-term nickel ore procurement has not yet commenced, and thus cannot drive up prices. Looking ahead, with the gradual approval of RKAB quotas this year, limonite ore prices may remain in the doldrums