Freight rates, purchases support nickel ore prices despite easing nickel prices

SHANGHAI, Jul 26 (SMM) – Rising freight rates prevented traded prices of seaborne nickel ore from falling this week while Shanghai nickel prices gave up gains from the previous two weeks. Despite easing from above a-year high, current nickel prices remained far above the previous trading range, and this also supported ore prices.

SMM assessment showed that offers of nickel ore with 1.8% Ni climbed to $54-55/wmt cif as of Friday July 26, with actual trades occurring at $52-53/wmt, up $2/wmt from the traded prices a week ago. 

Sea freight charges from Pomalaa to Lianyungang port increased from the start of July, to $12.5-13/wmt as of Friday July 26, up $2.5/wmt from the start of last week, SMM learned. 

Nickel ore prices could also be supported as nickel ore supply increased slower than expected and demand grew significantly. 

Domestic producers of nickel pig iron (NPI) accelerated stockpiling of nickel ore as they bet on higher prices of ore. This is expected to drive the nickel ore market into shortage in the third quarter and narrow its price spread with nickel. 

We still see plentiful supplies of medium- to high- grade nickel ore after the third quarter.