Indonesia's nickel ore imports from the Philippines have been rising since March due to slow RKAB approval (a designated process for Indonesia's mining companies to gain mining quotas) as well as the onset of the rainy season.
Mysteel tracking showed that around 11 ships arrived in Indonesia carrying nickel ore from the Philippines in May with a volume of around 0.55 million tonnes (wet) in May, up 65% month on month (MoM) and taking up around 3% of Indonesia's nickel ore consumption in the month.
Source: Mysteel
Though the nickel ore from the Philippines was way less cost effective than those produced in Indonesia, the extending supply crunch in Indonesia was among the major causes.
Currently, the RKAB approval in Indonesia has been slow. As of the time of this writing, a total of 217.6 million tonnes (wet) quotas have been approved with a validity of three years, while most of which shall be consumed this year. There were still 259 applications awaiting approval, apart from 92 that have gone through the process.
Some companies imported nickel ore from the Philippines to address the tax stamp problem, as they have difficulty exporting NPI when their nickel ore suppliers were unable to provide the Indonesian resource tax stamps.
In addition, the quality of nickel ore produced in Indonesian has been inconsistent, and the silicon-magnesium ratio of some nickel ore was relatively high, reducing the quality of NPI. The nickel ore imported by Indonesia from the Philippines was blended with local resources to meet the NPI production requirements.
Mysteel research showed that, since April, the premium for Indonesian nickel ore has remained at US$10-14/tonne (wet), with little change.
Written by Aggie Hu, huchenying@mysteel.com
