[SMM Analysis] New Developments in Indonesia's RKAB Nickel Ore Quota Realized: How Will Nickel Ore Prices Respond?

SMM reported on October 18 that the Indonesian domestic trade laterite nickel ore market has seen significant new developments recently. According to the latest news from the Indonesian Ministry of Mines, PT.WBN has received an adjustment to its laterite nickel ore sales quota for the period from 2024 to 2026. This quota allows the company to increase its annual sales volume to 32 million wmt. This news has garnered widespread attention in the market and has led to bearish expectations for the premium prices of Indonesian domestic trade laterite nickel ore. However, since the approval of this quota was only recently announced, the purchase orders signed earlier this month are still being executed, so the prices of Indonesian domestic trade laterite nickel ore have remained stable without significant fluctuations.

Looking ahead, as the impact of the quota policy gradually becomes apparent, the market expects that in the latter part of this month, Indonesian smelters may see a noticeable downward trend in the premium prices when negotiating next month's nickel ore purchases with suppliers.

Meanwhile, in the Philippines, the nickel ore market prices are unlikely to see significant declines in the short term. Influenced by the rebound in domestic NPI prices, some Philippine nickel ore traders have shown an intention to raise CIF prices. Additionally, with the rainy season approaching, the actual shipments of Philippine laterite nickel ore are expected to be limited, increasing the likelihood of upstream price adjustments in the short term.

From the demand perspective, although domestic smelters still have restocking needs in the fourth quarter, they have shown almost no signs of compromising on the high prices of medium-grade Philippine nickel ore. This means that the price game in the Philippine nickel ore market is expected to continue for some time.

Overall, the nickel ore markets in Indonesia and the Philippines are currently at a critical turning point. The quota adjustment in Indonesia may have a profound impact on the global nickel ore supply, while the market trends in the Philippines, influenced by seasonal and price factors, also require close attention. All participants need to flexibly adjust their strategies based on market dynamics to cope with potential changes and challenges.