Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Indonesian nickel smelters turn to Philippines for ore as local supply tightens

Published Aug 30, 2023 05:38AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Hot slag flows from trucks to the dumping site at the nickel processing plant operated by PT Vale Indonesia in Sorowako, South Sulawesi province, Indonesia July 28, 2023, in this photo taken by Antara Foto. Antara Foto/Jojon/via REUTERS
 
ANTM
+1.37%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
Nickel
+1.45%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NICKEL
-0.71%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Mai Nguyen and Siyi Liu

(Reuters) - Nickel smelters in top producer Indonesia are making rare purchases of ore from the Philippines to ease tight supplies, people familiar with the matter said, upending trade flows of the raw material and pushing up costs across the supply chain.

Jakarta recently delayed the issuing of mining quotas and suspended operations at a key site of state miner Aneka Tambang (Antam) after an investigation into corrupt practices in issuing mining allowances.

While mining at other sites continues and Indonesia, which accounts for half of global mined supply, has said there is no shortage of ore, prices have risen about 8% this week, following a 10% surge a week earlier, local buyers say.

Some firms are now buying ore from neighbouring Philippines, the world's No. 2 supplier, in the event that new mining quotas are further delayed, said three smelter managers, two nickel traders and a Chinese analyst.

All declined to be identified because they were not permitted to disclose the trade information publicly.

"(We) started imports from this month. It is economical," said an official at a major smelter in Indonesia.

The person did not specify how much the smelter is buying but said the purchases are of low-grade limonite ore.

Indonesian miners will prioritise high-grade ore for their limited production quotas, the person added.

Indonesia imported 53,864 metric tons of nickel ore in the first half of 2023, up from 22,503 tons for all of 2022, Indonesian trade data showed.

But imports from the Philippines only started in May, and all arrived at Morowali port in a huge nickel processing park run partly by Chinese nickel giant Tsingshan Group, the Indonesian data showed.

Tsingshan did not respond to a call and email seeking comment.

Volumes in the first half from the Philippines were less than 1,000 tons in nickel content compared to Indonesia's 1.6 million tons mined last year, data from the Indonesian government and the International Nickel Study Group (INSG) showed.

"The ore from the Philippines is generally lower grade than Indonesian material which will push operating costs higher due to lower production from same tonnage of ore," said Wood Mackenzie analyst Andrew Mitchell.

"But the ore is cheaper by comparison with domestic ore currently and so this will offset some of the rising costs," Mitchell said.

Indonesia exported much of its ore before a 2020 ban halted all shipments and attracted billions of dollars worth of investment in nickel smelting, mostly from Chinese companies.

Imports from the Philippines could rise to 100,000 tons for July and August combined because of the supply tightness, according to Chinese consultancy Mysteel.

The Philippines mined 360,000 tons of nickel in ore in 2022, or 11% of global supplies, according to INSG.

Rising demand for ore from the Philippines is also pushing up prices in China, as buyers stock up due to tighter Indonesian supplies and ahead of the rainy season in the Philippines starting in October, said a Chinese trader.

Philippines 1.3% grade ore landed at China's Lianyun port surged 20.6% in the past month to $41 a ton, the highest since March, Mysteel data showed.

Indonesian nickel smelters turn to Philippines for ore as local supply tightens
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email