Indonesia's Ministry of Energy and Mineral Resources (ESDM) suggested on August 28 that, a smelter located in Southeast Sulawesi started to import nickel ore from the Philippines due to raw material supply shortage in Indonesia, which partly contributed to rising nickel ore prices in China, in addition to low port inventory domestically as well as robust demand ahead of the rainy season in the Philippines.
According to Indonesia's statistics bureau, its nickel ore imports from the Philippines were 38,850 tonnes and 15,000 t respectively in May and June 2023, with a CIF price of $28/wmt.
Indonesia's imports of nickel ore recorded 0.886 t, 1.185t, and 22,503 t respectively over 2020-2022, but the Philippines was not among the supplying countries. Nevertheless, Indonesia imported 169,193 t nickel ore from the Philippines back in 2019.
As of August 24, 2023, Indonesia's nickel ore imports from the Philippines are estimated at 160,000 wmt, and there is still one ship carrying nickel ore awaiting departure.
In addition, Indonesia government indicated that its anti-corruption investigation on the mining sector was still on going. The old approval procedure for mining permit has been restored, which, however, was rather complicated and slow. Therefore, there has been no new approval passed since entering August, according to local market players.
Mysteel survey showed that most Indonesia's smelters still favored local ore due to feedstock quality requirements, thus raised their offers with a premium of as much as $20 over the official HPM (Mineral Ore Benchmark Price). Some smelters already tried to source from the Philippines.
The Philippines is traditionally an important supplier of nickel ore to China, and over 80% of China's laterite nickel ore imports came from the Philippines. Therefore, Indonesia's importing nickel ore from the Philippines aggravated domestic players worries over nickel ore supply, especially when the Philippines were attacked by typhoon frequently since July, which interrupted the operation of mines.
Source: China General Administration of Customs
To sum up, nickel ore prices in China are on the rise for a combined factors, including low port inventory, upcoming rainy season of key mining areas in the Philippines starting from October, high ocean freight, as well as Indonesia's engaging in ore imports from the Philippines.
Source: Mysteel
Written by Aggie Hu, huchenying@mysteel.com