[SMM Analysis] Nickel Ore Prices Held Steady This Week, While Indonesian Smelter Procurement Volume Increased

Philippine Nickel Ore CIF China Prices Flat WoW; Philippine Nickel Ore CIF Indonesia Prices Down WoW

Philippine nickel ore CIF China prices were flat WoW. The price for Philippine laterite nickel ore with 1.3% Ni CIF China was $41-43/wmt, the price for 1.4% Ni was $49-51/wmt, and the price for 1.5% Ni was $56-58/wmt. Prices for Philippine laterite nickel ore to Indonesia weakened recently. The average transaction price for 1.3% nickel ore was $43/wmt, and for 1.4% nickel ore was $50/wmt.

Supply and demand side, rainfall intensified across the Philippines WoW. Tawi and South Surigao recorded cumulative rainfall exceeding 50mm, while all other loading points saw weekly cumulative rainfall of 80mm. The main production areas are expected to enter the rainy season, which will further impact mining and shipments. Philippine exports in September decreased 12.34% MoM but increased 5.95% YoY. Exports are expected to decrease further in October. Port inventory side, as of Friday, October 31, national port nickel ore inventory stood at 10.06 million mt, down 180,000 mt WoW. This equates to a metal content of approximately 79,000 mt Ni. Demand side, NPI prices continued their downward trend this week, and losses at NPI smelters intensified again. Acceptance of high-priced nickel ore remained limited. Ocean freight side, ocean freight rates held steady WoW, with the average rate from the Philippines to Lianyungang at $11.5/mt. Looking ahead, as mid-to-late October progresses, the peak procurement period for domestic smelters has passed, and trading volume is expected to remain low in the second half of Q4. Prices are expected to hold steady overall.

Indonesian Nickel Ore Prices Hold Steady Recently; Smelter Procurement Volume Increases

Indonesian nickel ore prices held steady WoW. For the benchmark price, Indonesia's local nickel ore benchmark price for the second half of October was $15,142/dmt, up 0.27% from the previous period. Regarding premiums, according to SMM's Indonesia local laterite nickel ore premium data, the average premium for 1.4% grade was $22, for 1.5% grade was $25.5, and for 1.6% grade was $26, flat WoW. SMM's Indonesia local laterite nickel ore with 1.6% Ni delivery-to-factory price was $51.8-53.8/wmt, flat WoW. For limonite ore prices, SMM's Indonesia local laterite nickel ore with 1.3% Ni delivery-to-factory price held steady at $24-26/wmt, flat WoW.

Saprolite ore supply side, the rainy season in Sulawesi and Halmahera Islands, Indonesia, has basically ended, with occasional light rain occurring, but this has not hindered overall mining operations. Most mines are planning to increase sales volume to fully utilize approved quotas, leading to a relative increase in nickel ore output. However, transportation challenges persist. Due to a surge in road transport activities, mines face logistical bottlenecks; meanwhile, ongoing reviews by certain forestry working groups continue to hinder overall transport efficiency and cause delays. On the demand side, some Indonesian smelters are maintaining high ore procurement volumes to prepare for potential raw material shortages in the next RKAB cycle. However, as NPI prices trend downward, smelters' tolerance for high ore prices is nearing its limit. Additionally, the new regulation shortening the RKAB approval cycle from three years to one has further intensified market expectations of future "tight ore supply." Looking ahead to next month, premiums for saprolite ore are expected to fluctuate at highs.

In terms of limonite ore, overall market transactions have not shown significant growth. Supply is relatively ample. On the demand side, some HPAL smelters have slightly increased raw material procurement in anticipation of next year's new RKAB policy, but this has not exceeded market supply. Overall, with demand lagging behind supply, limonite ore prices face downward pressure; however, potential supply chain disruptions from the RKAB policy, combined with strong reluctance among mines to sell at low prices, are jointly providing phased support for prices. In the short term, prices are expected to remain in the doldrums, with limited downside room.