Japan’s Iron Ore Imports Drop in March Amid Weak Steel Demand

Iron Ore

March Iron Ore Imports Dip Despite Monthly Rebound

Japan's iron ore imports declined by 1.2pc year-on-year in March, reflecting weak steel demand and lower shipments from Brazil. The country imported 8.1mn tonnes of iron ore, although this marked a 28pc rise from February, according to preliminary finance ministry data.

The average import price was $102.20/t, down 17pc from the same month last year.

In yen terms, the price averaged ¥15,283, also a 17pc year-on-year decline, underscoring a softer raw materials market.

Brazil Shipments Fall Amid Weather and Maintenance Disruptions

Shipments from Brazil—Japan’s second-largest iron ore supplier—were disrupted by heavy rainfall and terminal maintenance. Brazil’s overall iron ore exports fell by 10pc year-on-year in February, reaching 24.5mn tonnes, the lowest level for that month since 2023.

Japan reportedly imported around 2.6mn tonnes from Brazil in March, but country-specific data will be confirmed later in April. The shortfall in Brazilian supply likely contributed to Japan’s reduced overall iron ore intake.

Domestic Steel Output Outlook Remains Sluggish

Japan's steel production is expected to fall by 4.9pc year-on-year in the April–June quarter. The trade and industry ministry (METI) projects steel output at 20.2mn tonnes, reflecting sluggish domestic demand in construction and manufacturing.

Lower steel production directly impacts iron ore requirements, weakening import volumes and softening global iron ore prices.

The Metalnomist Commentary

Japan's lower iron ore imports in March reflect a broader industrial slowdown and disrupted raw material flows. As steel production forecasts weaken, pressure mounts on iron ore prices and global supply chain predictability.

Brazil Mineral Exports Rise as Imports Climb on Fertilizer Feedstock Demand

Brazil Mining

Brazil mineral exports increased in the first quarter of 2026, while imports rose more sharply as the country continued to rely on overseas supply for fertilizer-related minerals. National mining institute Ibram reported that mineral exports rose by nearly 1% from a year earlier, while imports increased by 15%.

Brazil mineral exports reached around 87.9mn t in the quarter, with China remaining the main destination. Iron ore accounted for nearly 54% of total shipments, reinforcing its central role in Brazil’s mining trade balance.

Brazil mineral exports continued to support a large sectoral surplus. The mineral trade surplus reached around $9.3bn in the first quarter, up 20% from the same period in 2025, supported by exports of iron ore, gold and copper.

Iron Ore, Gold and Copper Anchor Brazil’s Mining Surplus

Iron ore remained Brazil’s dominant mineral export in the first quarter. This reflects the country’s established role as one of the world’s key suppliers to steelmaking markets, especially China.

Gold and copper also contributed to export value. These metals are strategically important because gold supports financial and industrial demand, while copper is increasingly tied to grids, electrification, construction and manufacturing.

The rise in the mining trade surplus shows that Brazil’s mineral sector remains a strong foreign-exchange earner. Even modest export volume growth can generate a larger surplus when high-value commodities and stronger pricing conditions support trade values.

China’s role remains especially important. Brazilian iron ore exports depend heavily on Chinese steel demand, infrastructure activity and industrial production. Any slowdown in China can therefore affect Brazil’s mining revenue outlook.

Imports Highlight Fertilizer and Industrial Supply Dependence

Brazil imported 10mn t of mineral products in the first quarter. The US was the largest supplier, accounting for 19% of mineral imports, while Colombia and Canada each supplied about 13%.

Potassium, coal and sulphur led import flows. These materials are important for fertilizer supply and industrial activity, showing that Brazil’s mineral strength does not remove its dependence on imported inputs.

Potassium is especially important for Brazil’s agricultural sector. The country is a major global food producer, but fertilizer supply remains exposed to international trade flows and geopolitical risk.

Sulphur imports also matter because sulphur is used to produce sulphuric acid, a critical input for fertilizers, chemical processing and some mining operations. Coal imports continue to support industrial and energy-related demand.

Ibram projects mining sector investment to rise by 12.5% by 2030, reaching $76.9bn. Critical minerals could account for almost 28% of that total, or $21.3bn.

This investment outlook points to a broader shift in Brazil’s mining strategy. Iron ore will remain the export backbone, but copper, nickel, lithium, rare earths, graphite and other critical minerals could gain strategic importance as global supply chains diversify.

The Metalnomist Commentary

Brazil’s first-quarter trade data show a mining sector that remains strong in exports but still dependent on imported fertilizer and industrial inputs. The next opportunity lies in converting critical minerals investment into higher-value production beyond the country’s traditional iron ore base.

China’s Carbon Neutrality Push Expected to Reduce Demand for Raw Materials

China recently unveiled a "Special Action Plan for Carbon Reduction" aimed at enhancing carbon neutrality, energy efficiency, and reducing emissions. This initiative is anticipated to shift the steel industry towards electric arc furnace (EAF) production, thereby decreasing the demand for iron ore and coal.

The plan, announced by the National Development and Reform Commission (NDRC), emphasizes upgrading existing equipment and increasing the use of EAFs to significantly reduce the consumption of raw materials and emissions by 2030.

Although the immediate impact of this policy may be limited, market participants foresee a long-term negative effect on the demand for iron ore and coal. In June, the NDRC outlined specific goals to reduce energy consumption and emissions in the steel industry by the end of 2030. These include reducing per-ton energy consumption for blast furnace and converter processes by more than 1% from 2023 levels by 2025, and reducing energy consumption per ton of steel production by over 2% from 2023 levels, along with increasing the use of waste heat and pressure by at least 3%.

To achieve these objectives, the NDRC and related agencies plan to encourage the increased use of EAFs and accelerate upgrades of energy-intensive equipment. Industry insiders predict that while the visible impact may be minimal in 2024, the long-term demand for iron ore and coking coal will decline.

A representative from a steel company in northern China noted that the short-term impact on coking coal demand might be minor, but the long-term demand is likely to decrease. Similarly, a raw material supplier in Shanxi Province pointed out that the demand for iron ore and coking coal will diminish as EAF production replaces some blast furnace output.

In light of these policies, the proportion of EAF production is expected to rise, and the Chinese government and steel industry are likely to push for increased self-sufficiency in iron ore. According to the China Iron and Steel Association (CISA), Chinese mining companies plan to increase domestic iron ore concentrate production by 5-10 million tons in 2024 compared to 2023. CISA projects that domestic iron ore concentrate production will reach 370 million tons annually by 2025, aided by new iron ore projects.

Mysteel estimates that by 2025, total iron ore production from Chinese companies' overseas holdings will exceed 70 million tons per year, a more than 60% increase from 2020. As a result, with overall iron ore demand declining, iron ore production expansion projects are expected to continue, gradually reducing dependence on iron ore imports from this year onwards.

Vale iron ore exports to India set to rise

Vale iron ore production

Vale targets new demand as India opens to imports

Vale iron ore exports to India will increase as the market opens to imports. The miner plans to sell over 10mn t. Vale iron ore exports to India align with its strategy to diversify customers. However, the company did not disclose a timeline or contract structure.

Lower prices, higher output support competitive positioning

Vale iron ore exports to India gain support from falling delivered costs and rising output. Average iron ore prices fell 13pc year on year to $85/t. All-in prices to China slipped 10pc to $61.20/t. Meanwhile, production improved at Brucutu and hit records at Carajás. As a result, Vale expects higher volumes from Vargem Grande and Capanema. Each asset has 15mn t/yr capacity and continues ramp-up.

Trade backdrop and base metals trends shape margins

US tariff relief for Brazilian steel eased market anxiety, Vale said. That backdrop helps downstream demand visibility in Asia. Meanwhile, Vale lifted copper output 18pc to 92,600t on higher processing rates. Guidance implies lower copper all-in prices next quarter. Nickel averaged $12,396/t, down 30pc year on year. Canadian nickel production reached 21,300t, the highest since 2021.

The Metalnomist Commentary

Vale iron ore exports to India reflect shifting trade routes as India’s mills seek quality fines and blends. Capacity adds at Carajás, Vargem Grande, and Capanema underpin reliable supply. Watch delivered spreads and Indian port constraints, which will influence pricing and cadence.

Dry Bulk Growth to Stall in 2025 Amid Chinese Supply Glut, Star Bulk Warns

Star Bulk

Dry bulk shipowner Star Bulk projects that global dry bulk tonne-mile demand will grow by only 0.9% in 2025, a significant deceleration from previous years. This slowdown reflects weakening demand for coal and iron ore shipping—two pillars of the sector.

Chinese Supply Surplus Signals Lower Import Volumes

Throughout 2024, China ramped up domestic production of coal, iron ore, and grains. As a result, import demand is expected to drop in 2025. Despite Beijing's stimulus efforts in late 2024, Star Bulk believes they are insufficient to shift dry bulk trade flows meaningfully in the short term. High stockpiles and oversupply remain the key headwinds.

Additionally, Chinese dry bulk exports have surged by 19.5% over the past two years, but this increase doesn't fully offset the slowdown in inbound volumes, particularly for raw materials.

Coal Tonne-Miles Set to Contract After Record Growth

In 2024, global tonne-mile demand for coal grew by 6.5%, spurred by increased thermal electricity generation and strategic stockpiling in China. However, Star Bulk expects a 2.7% contraction in 2025, as domestic coal production outpaces consumption in recent quarters.

This shift will likely depress seaborne coal trade, especially to Asia, further impacting the Capesize and Panamax segments.

Iron Ore Imports Face Growth Ceiling Amid Inventory Buildup

Likewise, iron ore tonne-mile demand, which grew 5.3% in 2024, is projected to rise only 1% in 2025. Chinese iron ore stockpiles and domestic production have both increased significantly, curbing demand for imports.

However, Star Bulk anticipates some relief by late 2025 as new high-grade Atlantic mines begin production. These sources could eventually replace low-quality Chinese supply, thereby enhancing tonne-mile figures in the long run.

Despite the softer macro outlook, Star Bulk's financial performance remains strong. The company reported a Q4 2024 net profit of $42.4 million, compared to $39.7 million in Q4 2023. Its diverse fleet of 151 bulk carriers—including Newcastlemaxes, Capesizes, Kamsarmaxes, and Ultramaxes—positions the firm to respond dynamically to evolving global trade flows.

Indonesian Nickel Ore Prices Surge Amid Tight Supply

Indonesian Nickel

Weather Disruptions and Mine Closures Drive Market Shift

Indonesian nickel ore prices have risen sharply in 2025 as domestic supply constraints tighten. Prices for 1.6pc nickel content ore with 35pc moisture reached $53/wet metric tonne (wmt) in May, up from $44/wmt in January, driven by stronger premiums. The surge is linked to extended heavy rains on Sulawesi Island since November 2024, which disrupted operations in key hubs such as the Morowali Industrial Park. Sulawesi holds about 70pc of Indonesia’s total nickel ore resources.

The government’s order for state-owned PT Aneka Tambang (Antam) to halt mining in West Papua’s Raja Ampat — a marine protected area — further tightened supply. The site, with a 3mn wmt/yr quota, produces high-grade nickel ore. Limited availability has shifted mining firms toward tender-based sales rather than bilateral deals, while large buyers offer $1–2/wmt premiums to secure volumes over 100,000wmt.

Upstream-Downstream Price Divergence

Despite the rise in nickel ore prices, downstream products have seen declines. China’s stainless steel 304 cold-rolled coil prices fell to 13,250 yuan/t in May from 13,650 yuan/t in March. Indonesia’s nickel pig iron (NPI) export prices dropped to $116/metric tonne unit (mtu) in June from $124.50/mtu in March. This divergence stems from the upstream market remaining a seller’s market since 2023, as ore supply growth lags behind expanding nickel products capacity.

Indonesia’s nickel products output — including NPI, ferronickel, mixed hydroxide precipitate, and matte — is projected to rise to 2.49mn t in nickel metal equivalent in 2025, up from 1.83mn t in 2023. Consequently, ore demand could increase from 200mn wmt to 280mn wmt in the same period.

Rising Imports from the Philippines

With local ore insufficient, Indonesian producers have increased nickel ore imports from the Philippines since mid-2023. Imports surged to nearly 10mn t in 2024, representing around 6pc of total demand, and are on track for another increase in 2025. Shipments in January–April already exceeded imports in the first half of 2024.

Philippine ore is essential for blending with Indonesian ore to achieve the required silicon and magnesium ratios for different processing technologies, including RKEF and HPAL. Changing ore specifications after 15 years of intense mining in Indonesia have made such blending critical to meet production needs.

The Metalnomist Commentary

Indonesia’s nickel ore market illustrates how environmental conditions and policy decisions can shift global supply chains. As upstream prices climb despite downstream weakness, reliance on Philippine imports will likely deepen, reshaping trade flows and influencing pricing power in the nickel sector.

Increased Supplies and Weak Demand Pressure Chinese Rare Earths

As global supplies continue to rise and demand from downstream industries slows, market participants anticipate short-term downward pressure on Chinese rare earth markets. Consecutive output increases, driven by higher ore feedstock supplies from China’s mining quotas and imports from major supplier countries, coupled with reduced capacity utilization in the magnet industry, have resulted in elevated inventories across many rare earth companies. This has prompted suppliers to destock materials at comparatively lower prices. Pessimism regarding short-term demand outlooks is growing, particularly in light of the global economic downturn.

China's rare earth output has steadily increased over recent years, supported by higher mining quotas and ore feedstock imports. Metalnomist projects that China’s total quotas for rare earth mining products in 2024 will rise by 10-15% compared to the previous year, reaching 280,000-290,000 tons. The production of praseodymium-neodymium oxide from these quotas is expected to reach approximately 44,500-45,500 tons this year, up from around 40,000 tons in 2023.

Imports of ore feedstock from Southeast Asian countries, including Myanmar (Burma), Laos, and Malaysia, are projected to increase by 3-5% in 2024, reaching around 60,000 tons of rare earth oxide (REO), as rising shipments from Laos outweigh declines from Myanmar and Malaysia. Conversely, China’s rare earth metal ore imports from the US are likely to decrease by over 30% from the previous year, falling below 28,000 tons of REO, due to increased domestic consumption in the US. US-based rare earth producer MP Materials more than doubled its praseodymium-neodymium oxide production during April-June and expects a further 50% increase in the third quarter, further reducing its exports to China.

Metalnomist forecasts China’s production of praseodymium-neodymium oxide using ore feedstock imports from Southeast Asia and the US to reach around 20,000-21,000 tons in 2024. Overall, China’s praseodymium-neodymium oxide output is expected to rise to approximately 92,000-95,000 tons this year, representing a 10% increase from 2023.

China's total production of dysprosium oxide in 2024 is expected to increase to around 3,600-3,700 tons, including approximately 400 tons from domestic mining quotas, 2,000 tons from ore feedstock imports, and around 1,000 tons from neodymium-iron-boron (NdFeB) magnet scraps. Terbium oxide production is also projected to rise to around 650 tons, with around 75 tons produced from China’s mining quotas, 390 tons from ore feedstock imports, and 180 tons from NdFeB magnet scraps.

Over the past decade, many magnet plants have reduced their consumption of ferro-dysprosium and terbium metal by more than 70% to cut production costs. Market participants warn that this could lead to a surplus of over 1,000 tons of dysprosium oxide and more than 200 tons of terbium oxide this year, unless China’s State Reserve Bureau intervenes with stockpiling efforts to alleviate inventory pressures on rare earth separation plants.

Expansion Slows Amidst Growing Competition

The average operating rates at most of China’s magnet plants have declined to around 60% over the past two months, driven by falling magnet prices and reduced consumer orders during the traditional off-season. China’s rough NdFeB magnet output reached 270,000-280,000 tons in 2023, an 8% increase from the previous year. Some market participants expect production to rise to around 300,000 tons in 2024, as large-scale magnet plants boost operations to secure more market share and consumer orders. However, medium and small magnet plants have been forced to reduce their operating rates to below 50% or suspend operations entirely due to profitability and cash flow challenges.

Major Chinese magnet manufacturer Jinli Magnet aims to increase its production capacity to 38,000 tons per year for rough NdFeB magnets by the end of 2024, and to 40,000 tons per year for high-performance rare earth permanent magnets and advanced magnetic components by 2025. Currently, the company’s output capacity stands at 23,000 tons per year. Meanwhile, Yantai Zhenghai Magnetic Material plans to reach an output capacity of 36,000 tons per year for permanent magnetic materials by 2026.

A few magnet plants have slowed their output expansions, as fierce price competition in downstream applications, particularly in the new energy vehicle (NEV) industry, has severely squeezed profit margins. "I heard that major Chinese NEV manufacturer BYD was required to use cerium-iron-boron (CeFeB) magnets instead of NdFeB in a bid to reduce its production costs and enhance global competitiveness," a source from a magnet plant revealed.

China's production of CeFeB magnets is forecast to rise to over 100,000 tons this year, up from approximately 70,000 tons in 2023, the source added.

Japan's Iron Ore Imports Decline in July Amidst Weak Steel Demand

Decrease in Australian Supplies and Rising Concerns Over Steel Imports

Japan imported approximately 8.4 million tons of iron ore in July, marking an 8.6% decrease compared to the previous year due to reduced steel demand. Imports from Australia, Japan’s largest supplier, fell by 13.6% to 4.6 million tons, while shipments from Brazil increased by 8.9% to 3.1 million tons.

The decline in imports is attributed to weakened steel demand, particularly from the automotive sector. In June, orders for ordinary steel used in automobiles dropped by 10.4%, as reported by the Japan Iron and Steel Federation (JISF). This downturn is expected to persist through September due to ongoing production suspensions by some manufacturers, including Toyota.

Japanese steel producers are concerned about an influx of foreign steel, particularly from China. Imports of ordinary steel products from China surged by 43% from April to June, exacerbating worries about a demand-supply imbalance. Despite these concerns, Japan's Ministry of Economy, Trade, and Industry (Meti) is currently monitoring the situation without immediate plans for intervention.

LKAB Begins Construction of Swedish REE Processing Demo Plant

LKAB

LKAB has initiated construction of a demonstration plant in Lulea, Sweden, to process rare earth elements (REEs) from iron ore mining waste. This effort marks a significant step towards European REE independence.

Demonstration Plant to Validate Extraction Processes

LKAB is investing 800mn kronor ($72.65mn) in the plant, aiming for a 2026 startup at a new Lulea industrial park. The demonstration plant will validate and refine extraction processes for a future full-scale facility. The company plans to produce REEs, phosphorus, and gypsum from its Gallivare iron ore mine by processing apatite concentrate, utilizing current waste streams. Operations will scale up with additional processing over time, targeting full operation in the 2030s. The permit process for LKAB's full operation, including the Gallivare apatite plant, anticipates a decision by late 2025.

Strategic Expansion and European REE Independence

Furthermore, LKAB intends to extract REEs from other mineralizations. Future scale-up decisions hinge on the demonstration plant's results and industrial park environmental permits. LKAB's Per Geijer iron deposit in Kiruna, estimated at 1.7mn t of REEs, stands as one of Europe's largest. Europe currently lacks REE extraction capacity, relying on Chinese imports. REEs are crucial for electric vehicle motors, wind turbines, and various electronic and military applications. LKAB has applied for Strategic Project classification under the EU's Critical Raw Materials Act for its Gallivare iron ore mine, Lulea industrial park, and REE-rich Per Geijer iron ore deposit.

China Titanium Ore Prices Fall Amid Weak Dioxide Demand and Rising Supply

Titanium Ore

Titanium Dioxide Sector Contraction Drives Down Concentrate Prices

China titanium ore prices have hit a four-year low as demand from the titanium dioxide (TiO₂) sector weakens. Since 11 March, prices for 46% titanium concentrate dropped by 13% to 1,800–1,830 yuan/t ($249–253/t), ex-works, excluding VAT. The decline follows reduced feedstock purchasing by TiO₂ producers and rising spot availability of medium-grade ore.

Dioxide Producers Cut Output Amid Global Pressure

Anti-dumping measures targeting Chinese TiO₂ exports have shrunk international demand and pressured margins. As a result, several Chinese dioxide producers began lowering feedstock bids or halting production. March exports fell to 185,034 tonnes, down from 196,106 tonnes a year earlier. Rutile-grade prices also dropped to their lowest level since February, ranging from 14,000–15,300 yuan/t.

Ore Production Increases Despite Downward Price Pressure

Meanwhile, domestic supply surged. Sichuan Anning Steel and Titanium raised output using ultra-fine ore recovery tech. Water beneficiation plants also ramped up operations due to strong iron ore prices, boosting titanium ore co-production. Imports rose to 1.37 million tonnes in Q1 2024, further pressuring prices. Sellers are offering discounts, anticipating continued weakness.

The Metalnomist Commentary

China’s titanium ore market is under dual pressure from weakening TiO₂ demand and rising ore output. Unless export demand recovers or domestic production slows, concentrate prices may remain under strain through mid-2025.

NPI–Class I Nickel Spread Narrows as Metal Oversupply Pressures Prices

Nickel cathode

NPI–class I nickel spread narrowed sharply in March as persistent oversupply in the class I nickel market pushed metal prices lower, while nickel pig iron prices stayed supported by elevated production costs. The average spread fell to $2,975/t in March, down from the 2025 annual average of $3,696/t.

The narrower NPI–class I nickel spread shows how differently the two nickel markets are behaving. Class I nickel remains under pressure from high exchange stocks and weak absorption from battery and alloy users. NPI, by contrast, is being held up by Indonesian ore costs and a firmer production cost floor.

The current spread also discourages additional class I output from NPI conversion. Estimated conversion costs from NPI to class I nickel remain around $4,000/t, meaning producers using NPI as feedstock would face negative margins at current price levels.

This creates an important signal for the nickel supply chain. Oversupply is still weighing on refined metal, but high feedstock and processing costs are preventing prices from falling evenly across all nickel products.

Class I Nickel Oversupply Keeps Metal Prices Under Pressure

Class I nickel oversupply remains the main reason behind the compressed spread. London Metal Exchange nickel stocks reached 289,506t on 26 February, the highest level since May 2018.

Ample exchange inventory has pressured class I nickel prices and opened an import arbitrage window into China. China’s nickel imports rose by 18% in January-February as lower overseas prices made imported metal more attractive.

However, end-user demand has not been strong enough to absorb the surplus. Battery and alloy-sector consumption remained insufficient to clear the additional metal units, pushing Shanghai Futures Exchange nickel stocks higher.

SHFE nickel inventories rose to 65,764t on 10 April from 45,544t on 9 January. This inventory build shows that imports and domestic availability are running ahead of immediate consumption.

The oversupply problem is structural in the near term. New class I capacity has continued to emerge, while demand from stainless steel, batteries and specialty alloys has not grown fast enough to rebalance the market.

The NPI conversion route is therefore unattractive. When the NPI–class I nickel spread sits below conversion cost, producers have little incentive to turn NPI into refined metal. This helps prevent additional supply from that route, but it does not immediately remove existing class I oversupply.

NPI prices have been more resilient because they are tied closely to Indonesian ore economics. Indonesian nickel ore prices remain elevated and continue to trade above the government-mandated price floor.

Concerns over tight ore availability have supported feedstock values. This has limited NPI producers’ willingness to cut prices, even though stainless steel demand remains only average.

That cost floor is important. NPI is not rising because downstream demand is exceptionally strong. It is holding because ore, mining quotas and Indonesian pricing policy are preventing a deeper fall.

The result is a distorted market structure. Class I nickel is being pulled down by inventory pressure, while NPI is being supported by feedstock costs. This explains why the spread has narrowed despite weak overall nickel sentiment.

MHP and HPAL Costs Could Rebuild the Spread Over Time

Mixed hydroxide precipitate is becoming the more important cost driver for future class I nickel production. Much of the newly added class I capacity relies on MHP feedstock rather than NPI.

Integrated producers with their own Indonesian MHP capacity have a cost advantage. Their MHP production costs are estimated at around $13,000/t in nickel metal equivalent, with conversion costs from MHP to metal at roughly $3,000/t.

This places the total cost of class I production through the MHP route at about $16,000/t. That cost base can still support production for integrated operators, but it leaves less room for producers relying on third-party MHP.

The market problem is that MHP supply is not sufficient to meet all feedstock requirements for new class I capacity. This creates competition for MHP units and limits how much low-cost refined nickel can be produced through this route.

Cost pressure is also rising across HPAL operations. Middle East tensions have tightened sulphur availability and lifted sulphur prices, which directly affects MHP producers that rely on sulphuric acid-intensive processing.

Sulphur and sulphuric acid are central to HPAL economics. Any disruption to sulphur flows can raise operating costs, reduce margins or force producers to curtail output if acid availability becomes constrained.

Indonesia’s revised nickel ore pricing formula adds another layer of pressure. The new formula is expected to have a greater impact on ore consumed by HPAL projects than on ore used by rotary kiln electric furnace operations.

This is because HPAL ore often trades closer to official pricing levels, while RKEF ore used for NPI already trades at premiums well above the benchmark. As a result, HPAL producers may feel the revised HPM framework more directly.

Higher ore prices and higher taxes could lift MHP production costs. That would eventually raise the cost floor for class I nickel produced through the MHP route, especially for integrated producers that had previously enjoyed lower feedstock costs.

This cost inflation may support class I nickel prices over time. While current oversupply is weighing on metal values, producers cannot keep adding supply indefinitely if feedstock and conversion costs rise.

NPI prices are also likely to remain anchored by costs. Indonesian ore tightness, quota uncertainty and pricing reforms should continue to support NPI even if stainless steel demand stays moderate.

As MHP costs rise and NPI prices remain cost-supported, the NPI–class I nickel spread may widen back toward the $3,500-4,000/t range over time. That would restore a more normal relationship between feedstock products and refined metal.

However, the timing depends on inventory absorption. Class I nickel prices will struggle to recover strongly until exchange stocks stop rising and downstream demand improves.

For battery supply chains, the key issue is cost pass-through. If MHP and HPAL costs rise while class I prices remain weak, margins across nickel sulphate and cathode material chains could tighten.

For stainless steel producers, NPI resilience means raw material costs may remain sticky even without strong demand. This could limit margin recovery if finished stainless prices do not rise in parallel.

The nickel market is therefore entering a complex adjustment phase. Oversupply is pushing refined metal lower, while policy, ore availability, sulphur costs and HPAL economics are raising the cost floor beneath intermediate products.

The Metalnomist Commentary

The narrowing NPI–class I nickel spread is not a sign of healthy convergence. It reflects class I oversupply on one side and cost-protected NPI on the other. The next shift will likely come from rising HPAL and MHP costs, not from a sudden recovery in nickel demand.

South Africa’s Mineral Exports to the US Mostly Exempt from Tariffs

South Africa Minerals

Key South African Minerals, Including PGMs, Escape New US Tariffs Amid Trade Tensions

South Africa’s mineral exports to the United States, including valuable platinum group metals (PGMs), have been largely exempted from the latest round of US import tariffs. President Donald Trump's announcement on April 2, 2025, introduced reciprocal tariffs on a variety of goods, but crucial mineral exports such as PGMs, gold, manganese, titanium, chrome, and coal will not be subject to additional duties. However, some South African exports, such as iron ore and diamonds, will face a 30% tariff.

Impact of Tariffs on South Africa’s Economy

In 2024, South Africa exported 65.3 billion rand ($3.4 billion) worth of mineral products and precious metals to the US, with PGMs accounting for 76% of the total value. Despite the tariff exclusions on key minerals, other sectors, particularly the automotive industry, are expected to face significant economic impacts. The Minerals Council South Africa (MCSA) has warned that the new tariffs on iron ore and diamonds will hurt the country’s economy, particularly its automotive manufacturing sector.

Additionally, a separate 25% tariff on all US imports of cars and trucks, which took effect on March 26, 2025, is expected to reduce demand for automobiles in the US. This, in turn, will affect PGMs, as platinum, palladium, and rhodium are critical for the production of autocatalysts used to reduce vehicle exhaust emissions. Slowing car sales will result in reduced demand for PGMs, leading to potential price volatility in the near term.

Long-Term Outlook for PGMs

Despite these short-term concerns, the MCSA remains optimistic about the long-term outlook for PGMs. Although current market conditions may cause fluctuations in prices, the demand for PGMs is expected to remain strong over time. However, the broader economic challenges posed by these tariffs—particularly their potential impact on global growth—are concerning for the entire South African mining industry.

South Africa exports 7% of its goods to the US, a relatively small share in terms of total US imports (0.25%). Despite this, the country has limited capacity to retaliate against these tariffs. Experts suggest that South African exporters will need to explore alternative markets and enhance collaborative efforts to mitigate the impact of these tariffs.

Indonesia Nickel Mining Quota Approval Raises Ore Supply Uncertainty

ESDM

Indonesia nickel mining quota approvals for 2026 have reached only 190mn-200mn t so far, leaving the market below the government’s earlier signalled target of 260mn-270mn t. The slower approval process has increased uncertainty over nickel ore availability and future smelter operating rates.

The approved volume remains far below the 379mn t quota granted for 2025. Indonesia had already been expected to cut this year’s RKAB quota by about one-third, but the current approved level is still tighter than many market participants expected.

Indonesia nickel mining quota uncertainty matters because the country remains the world’s dominant nickel supply hub. Any shortage of approved mining volumes could raise ore prices, reduce feedstock availability and pressure nickel pig iron, ferronickel and HPAL operations.

RKAB Delays Could Tighten Nickel Ore Availability

The RKAB approval process is moving more slowly than expected, creating operational uncertainty for miners and smelters. Companies without confirmed 2026 RKAB approvals must halt mining after the 31 March cut-off, unless new approvals are granted.

The ESDM previously allowed nickel firms to continue mining using up to 25% of their 2026 production plan until 31 March. That temporary mechanism helped avoid an immediate supply shock, but the expiration of the allowance now increases pressure on companies still waiting for approval.

Several mining firms plan to submit fresh applications for higher quotas, with reviews expected in July. This means Indonesia nickel mining quota volumes could still rise later in the year, but near-term ore availability remains exposed to administrative timing.

Sulphur and Fuel Risks Add Pressure to HPAL Operations

Indonesia’s nickel industry also faces external supply risks from fuel oil and sulphur disruptions linked to Middle East instability. The issue is especially important for HPAL plants, which rely heavily on sulphuric acid production and energy-intensive processing.

The Middle East supplies about 75% of Indonesia’s sulphur imports. If sulphur or fuel oil availability tightens, HPAL producers may face higher operating costs or even output curtailments.

Imports may offset part of the nickel ore quota shortfall, but market participants do not expect overseas material to fully meet smelter demand. Some producers may therefore face reduced operating rates if domestic quota approvals remain limited.

Indonesia is also considering tighter compliance rules. Tax compliance may become a requirement for RKAB submissions from 2027, although it remains unclear whether this will affect the 2026 process.

The Metalnomist Commentary

Indonesia nickel mining quota delays show that policy administration can become a direct supply risk in the nickel market. The bigger issue is whether Indonesia can balance resource control, smelter demand and HPAL feedstock security without creating avoidable price volatility.

China’s Predatory Steel Exports : A Threat to Latin America

The Latin American steel industry is grappling with a severe crisis precipitated by China’s predatory trade practices. The influx of cheap Chinese steel has flooded the market, imperiling local producers' livelihoods. Gabriela Fajardo Mejia, an expert in international relations at the University of Navarra, highlighted in her interview with Diálogo Américas that China’s steel overproduction endangers 1.4 million jobs across Latin America’s steel sector, compelling numerous companies to cease operations and lay off workers. Furthermore, Chinese steel production often bypasses established environmental and quality standards, with transparency regulations being routinely ignored.

Henry Ziemer, a researcher at the Center for Strategic and International Studies (CSIS), pointed out that China's slowdown in real estate and construction has diminished domestic steel demand. Consequently, Chinese producers are compensating for reduced domestic sales through aggressive export strategies. With the U.S. market becoming increasingly inhospitable for Chinese steelmakers, they are now targeting Latin American countries, which present fewer trade barriers, to dispose of their surplus inventory.

The Chinese government's subsidies for steel production and exports during the pandemic exacerbated the issue, leading to a global proliferation of low-cost Chinese steel. In retaliation, Mexico, Chile, and Brazil have significantly raised tariffs on Chinese steel imports to safeguard their domestic industries, and other nations are expected to follow suit. Alejandro Wagner, the former Secretary-General of the Latin American Steel Association (Alacero), indicated in a BBC interview that the influx of inexpensive Chinese steel has caused significant damage to Latin American steel industries, forcing several major companies to halt their operations.

In March, Chilean steelmaker CAP suspended operations at its Huachipato plant due to the unsustainable business environment created by dumped Chinese steel. Operations resumed only after the Chilean government imposed substantial tariffs on Chinese steel. Similarly, Fabio Galan, president of Colombian steelmaker Acerías Pazdelrio, remarked on the devastating economic impact of cheap Chinese steel imports and called for fair competition.

Reports also suggest that Mexico’s iron ore mines, previously plundered by organized crime cartels, were pivotal in transporting stolen ore to China, highlighting the detrimental effects of China’s opaque and unfair trade practices.

Brazilian steel producer Gerdau temporarily laid off workers at its São José dos Campos plant in response to the unfair competition from Chinese steel. CEO Gustavo Werneck emphasized that this action was merely the initial step in tackling the surge of cheap Chinese steel imports.

Fajardo Mejia underscored the subsidies Chinese steel companies receive, enabling them to lower costs without adhering to quality and environmental standards. She also noted the considerable environmental impact, revealing that Chinese steel production emits 45% more CO2 per ton than Latin American production.

As a countermeasure, imposing tariffs on Chinese steel could escalate trade tensions between Latin American countries and China, with potential retaliatory actions from China, known for its coercive diplomacy. Historical instances, such as China’s bans on Argentine soybean products and Canadian canola seeds, exemplify possible consequences.

CSIS researcher Ziemer highlighted that China, the world’s largest steel producer, generates more steel than the combined output of the next nine largest producers, influencing international prices and destabilizing Latin American economies through dumping practices. He proposed that the current scenario offers an opportunity for the U.S. to collaborate with Latin American countries to counteract China’s unfair trade practices and safeguard domestic industries.

Australia Criticizes U.S. Tariff on Imports: A Growing Global Trade Concern

Imports

Australia has voiced strong opposition to the U.S. decision to impose a 10% tariff on its imports, a move that could further disrupt global trade. The Australian government and industry groups have expressed concerns over the tariff's lack of rationale, with industry leaders warning of retaliatory measures that may harm economic stability worldwide.

Prime Minister Albanese Denounces U.S. Tariff Decision

Australian Prime Minister Anthony Albanese described the U.S. tariff as "unwarranted" and emphasized that the decision lacked logical grounds. He argued that a truly reciprocal tariff would be zero, highlighting that the tariff would only add to global economic uncertainty. Despite these concerns, Australia has refrained from imposing trade barriers on the U.S. and instead seeks to resolve the issue through existing dispute resolution mechanisms outlined in their free trade agreement.

Impact on Australian Exports and Global Trade Relations

The new tariff has the potential to significantly affect Australia’s export economy, particularly in sectors like advanced metals, chemicals, and engineering products. Australia exported goods worth $16.7 billion to the U.S. in 2024 while importing $34.6 billion in U.S. products, resulting in a $17.9 billion trade surplus for the U.S. Although products like copper, pharmaceuticals, semiconductors, and certain critical minerals are unaffected, the 25% tariff on Australia's steel and aluminum exports is already in place, with over 100,000 tons per year impacted.

The Australian Industry Group (Ai Group) warned that the tariff signals growing trade barriers and higher costs for businesses, threatening to destabilize established trading relationships. While Australia's direct exposure remains low, the nation's reliance on raw material exports such as coal and iron ore to China, a country facing its own tariff issues, may further complicate matters.

The Path Forward for Trade Policy Reform

As Australia braces for the potential fallout from the U.S. tariff, the Ai Group has urged the government to reform its taxation system, deregulate where necessary, and provide greater policy certainty, especially on energy issues. With expectations of a potential trade war rising, businesses are facing heightened uncertainty, and the government is under pressure to adapt its policies to remain internationally competitive.

Conclusion: A Shifting Global Trade Landscape

The recent U.S. tariff decision adds another layer of complexity to global trade relations. While the immediate impact on Australia may be limited, the ripple effects are being felt worldwide. As the situation unfolds, the need for diplomatic dialogue and policy reform becomes increasingly critical in maintaining stable international trade relations.

Most South African Mineral Exports to US Avoid Tariff Impact

South African Mineral Mining

PGMs, Gold, and Titanium Spared in Latest US Tariff Round

Most of South Africa’s mineral exports to the US, including platinum group metals (PGMs), have been exempted from new US tariffs. US President Donald Trump’s 2 April tariff announcement excluded PGMs, gold, manganese, titanium, chrome, and coal from the list of affected imports.

These exemptions are significant, as PGMs accounted for 76% of the R65.3 billion ($3.4 billion) in mineral and precious metal exports from South Africa to the US in 2024. However, iron ore and diamonds from South Africa will be subject to a 30% tariff, potentially straining trade ties and impacting specific sectors.

Auto Tariffs Threaten Downstream PGM Demand

A separate 25% tariff on US vehicle imports came into effect on 6 June, with auto parts tariffs set for 3 May. According to the Minerals Council South Africa (MCSA), these tariffs may reduce US auto demand, which in turn could lower PGM consumption.

PGMs—especially platinum, palladium, and rhodium—are essential in autocatalysts that reduce vehicle emissions. Lower car production would decrease catalyst demand, causing short-term price volatility in these critical metals.

Still, the MCSA remains optimistic about the long-term demand outlook for PGMs, citing structural demand drivers in clean mobility and hydrogen.

Limited Retaliation Options for South Africa

Despite the exemptions, broader trade tensions could still hurt South Africa’s mining sector. South Africa ships 7% of its total exports to the US, while accounting for just 0.25% of US imports—a disparity that limits its ability to retaliate.

Think tank Trade and Industrial Policy Strategies emphasized the need for diversification, urging South African exporters to find alternative markets. With the global economy under pressure from rising trade barriers, the ripple effect could dampen overall commodity demand and GDP growth.

The Metalnomist Commentary

The exemptions granted to South Africa’s key mineral exports show strategic prioritization by the US to maintain critical supply chains. Yet, the indirect consequences—especially in sectors like automotive and high-tech—may eventually flow back to impact even exempted metals. The situation reinforces the need for South Africa to accelerate market diversification and downstream value-add strategies in mining.

China's Lithium Prices Fall to 4-Year Low Amid Oversupply and Trade Tensions

China's Lithium

Oversupply and weaker export demand push lithium carbonate prices to multi-year lows in China

Chinese Lithium Carbonate Prices Plunge on Oversupply

Chinese lithium carbonate prices have dropped to a four-year low due to rising supply and weaker global demand. Prices started declining after CATL resumed its Jianxiawo lithium lepidolite concentrate operation in early February 2025. This facility contributes 6% of China’s total LCE capacity, but the mine itself remains offline as CATL sources ore locally.

At the same time, China’s lithium carbonate imports surged by 48% year-on-year to 32,450 tonnes in January–February 2025. Chile accounted for 62% of these imports, followed by Argentina at 34% and South Korea at 3.2%. Chilean producers like SQM and US-based Albemarle are ramping up output, further intensifying supply pressure.

Demand Weakens Under Policy Shifts and Tariffs

Demand for lithium has softened after China revoked energy storage installation mandates for new energy projects in February 2025. This particularly affected lithium-iron-phosphate batteries, which rely heavily on lithium carbonate. Additionally, US import tariffs on Chinese lithium-ion batteries will hit 48.4% by January 2026, impacting export potential.

Despite a 59% year-on-year surge in lithium-ion battery exports in early 2025, much of it was front-loaded. Exporters rushed to ship products before anticipated US tariff hikes, with 26% of shipments headed to the US. However, market participants believe Chinese battery exports may decline sharply in the coming months.

Market Outlook and Price Forecast

As global supply continues to rise and demand remains subdued, prices are expected to dip further. Some analysts predict prices may hover around Yn70,000/tonne ex-works, unless a major inventory restock occurs. Producers are closely monitoring both tariff developments and restocking trends among downstream battery manufacturers.

The Metalnomist Commentary

China’s lithium market is entering a new phase where global trade dynamics now rival domestic supply in pricing power. With inventory levels rising and policy uncertainty in key export markets, stakeholders must recalibrate demand forecasts and sourcing strategies.