[SMM Analysis] The Return of the Philippine Mining Season Faces Freight Cost Pressure, While Indonesian Supply Is Constrained by the Progress of RKAB Approvals

Philippine Market: Mining Season Began, with NPI Prices Losing Upward Momentum and Freight Pressure Coexisting

Philippine nickel ore prices were flat this week. In terms of prices, Philippine nickel ore CIF China quotations were $64-68/wmt for Ni 1.3% grade, $71-75/wmt for Ni 1.4% grade, and $78-82/wmt for Ni 1.5% grade, up $6 WoW. The average CIF price from the Philippines to Indonesia was $65.5/wmt for 1.3% grade and $72.5/wmt for 1.4% grade. On the weather side, weather conditions in the Philippines improved significantly this week from last week. Rainfall in major mining areas such as Surigao, Homonhon, and Tawi-Tawi showed a declining trend, while Zambales and Palawan remained relatively dry. This shift marked that major mining areas had gradually entered the mining season, releasing room for nickel ore supply. On the demand side, despite elevated freight costs, several Chinese smelters had already started procurement. As of March 20 (Friday), nickel ore inventory at Chinese ports stood at 4.82 million mt, down 430,000 mt WoW. Current total port inventory was equivalent to about 38,000 mt Ni in metal content. On the demand side, China’s NPI prices were basically flat this week, while spot transaction prices rose by about 1,090.2 yuan per nickel unit. Squeezed by both NPI prices losing upward momentum and expectations of high freight rates, nickel ore FOB prices are expected to be more likely to fall than rise in the short term.

Indonesia Market: Slow RKAB Approval Pace Left Upside Room for Nickel Ore Prices

Indonesia's local nickel ore prices rose this week. Indonesia’s benchmark nickel ore price (HPM) for the second half of March was set at $17,329/dmt, up 1.32% MoM. According to SMM Indonesia nickel ore premium data, the average premiums for laterite nickel ore with grades of 1.4%, 1.5%, and 1.6% were quoted at $35, $39, and $39.5/wmt, respectively. Among them, the port arrivals under domestic trade price for 1.6% grade was $65.6-74.6/wmt. This month’s dual strengthening in premiums reflected the release of smelter restocking demand and pessimistic expectations for RKAB quota cuts, while the delivered price of 1.2% grade limonite ore also edged up in tandem to $24-26/wmt. From supply and demand fundamentals, in mid-March 2026, nickel ore operations on Sulawesi were gradually shifting into the dry season, with the Konawe area reaching optimal production levels, while Morowali was recovering from earlier flood damage. By contrast, Halmahera remained affected by persistent thundershowers, keeping ore moisture content high and weighing on mining operations. The market was currently facing a clear trend of declining grades. Although some NPI smelters had started accepting ore with grades of 1.45% and below, supply of saprolite nickel ore remained tight in March. At present, as of mid-March, ESDM had approved RKAB quotas for about 100 million mt of nickel ore, and the remaining 160 million-170 million mt were expected to complete approval by the end of March. However, affected by the Eid al-Fitr holiday from March 18 to 24, the approval process may be delayed, making it difficult for the tight supply situation to ease in the short term. Demand side, as some Indonesian smelters faced resource uncertainty and had difficulty obtaining high-grade nickel ore, prices remained strong. To secure raw material supply, some smelters even raised trading premiums. In addition, some transactions in low-grade saprolite ore also emerged in the market, with fixed prices relatively lower than those of high-grade ore. Limonite prices were still at low levels, mainly due to the tailings dam landslide accident at an MHP project in a certain industrial park, which kept related production lines operating at low utilization rates and hindered the demand rebound. However, considering the uncertainty surrounding RKAB, the stockpiling demand from new projects, and growing demand from outer islands, limonite prices were expected to follow saprolite ore and remain at high levels going forward. Policy side, Tri Winarno, Director General of Indonesia's Minerals and Coal Bureau, clarified on March 3, 2026, that the rumor of a "uniform 25%-30% increase in RKAB quotas" was untrue. Any quota additions will be based on individual assessments of enterprise capacity and compliance, and the approval process is expected to begin only in H2 2026. Given the overall delay in RKAB approvals, nickel ore prices were expected to remain firm in April, more likely to rise than fall.