Nickel Ore Prices Fall as Philippine Supply Recovery Eases Feedstock Tightness

Philippine Nickel ore

Nickel ore prices have fallen as Philippine supply recovered after the monsoon season, while a correction in London Metal Exchange nickel weakened sentiment across the value chain. The decline shows how quickly seasonal ore flows can pressure feedstock markets when Indonesian buyers slow procurement.

Nickel ore prices for 1.3% grade material on a cif China basis dropped to 55-57 yuan/wmt on 14 May from 65-66 yuan/wmt on 26 March. The fall came even though LME nickel remained above late-March levels after briefly touching almost two-year highs earlier in May.

Nickel ore prices are important because ore often gives the earliest physical signal in the nickel chain. Unlike LME nickel, ore prices are less driven by financial flows and more directly tied to mine supply, port congestion, smelter demand and buyer inventories.

The current weakness reflects three forces moving together: Philippine mine supply is recovering, Indonesia is slowing purchases, and LME nickel has corrected after earlier policy-driven gains.

Philippine Supply Recovery Changes the Regional Ore Balance

The Philippines is entering its seasonal production recovery after monsoon-related disruptions. Mining activity in Surigao, the country’s main nickel ore hub, usually slows from November to March and rebounds from May.

Surigao accounts for around half of Philippine nickel ore output. As shipments recover, buyers have more nearby feedstock options, reducing the urgency that supported prices earlier in the year.

This seasonal pattern has become more important since Indonesia emerged as a major Philippine ore importer. Historically, Chinese buyers stocked up ahead of the rainy season and drew down inventories until supply returned. But Indonesia’s rising demand has added a second major pull on Philippine material.

The Philippines exported 55.22mn t of nickel ore in 2025. China took 72% of that volume, while Indonesia accounted for 18%.

Indonesia’s imports from the Philippines rose to 15.48mn t in 2025 from 9.55mn t in 2024. That growth was driven by tight domestic ore controls under Indonesia’s RKAB quota system.

Indonesia imported 1.41mn t of Philippine nickel ore in March, up sharply from both a year earlier and the previous month. But that buying momentum has now slowed as port bottlenecks and price uncertainty weigh on procurement.

Indonesia Bottlenecks and NPI Margins Pressure Demand

Most Philippine ore shipped to Indonesia moves to the Weda Bay industrial park. The site produced around one third of Indonesia’s total nickel supply in 2025, making it a major feedstock demand centre.

But Weda Bay has limited unloading capacity. Only two major berths handle nickel ore discharge, creating recurring congestion.

Some vessels that would normally unload within two days are waiting up to two weeks. That congestion reduces buyers’ willingness to secure additional cargoes, especially when prices are falling.

Indonesia’s revised ore pricing formula has also changed buyer behaviour. The new formula includes cobalt, iron and chromium values, raising raw material costs and adding uncertainty to procurement decisions.

Meanwhile, LME nickel’s pullback has started to pressure nickel pig iron prices. NPI prices had been relatively steady, supported by stainless steel demand, but softer benchmark prices are now weakening producer margins.

Lower margins can reduce production incentives for Chinese NPI producers. That, in turn, may reduce demand for nickel ore and extend downward pressure on feedstock prices.

Nickel sulphate prices have remained stable because tight supply has offset weak demand from the nickel-cobalt-manganese battery sector. But the ore market is moving faster because supply is returning and buyers are stepping back.

The short-term outlook remains soft. Rising Philippine availability, weaker LME sentiment and slower Indonesian buying are likely to keep nickel ore under pressure until the market finds a new floor.

The Metalnomist Commentary

Nickel ore prices are showing that Indonesia’s downstream expansion has made Philippine supply more strategically important. But when port bottlenecks, weaker NPI margins and seasonal supply recovery hit together, even tight Indonesian ore controls cannot prevent a feedstock correction.