Proposed nickel ore export ban may affect global supply – BMI

MANILA, Philippines — The proposed export ban on the country’s nickel ore may have an implication on global supply of the green metal, particularly on Indonesia’s requirements, according to BMI, a unit of Fitch Solutions.

BMI flagged the plans to ban the Philippines’ nickel ore exports as one of the risks that Indonesian nickel production may face this year.

In particular, BMI pointed out that the Philippines’ proposed ore export ban will “heighten” the ore supply risks of Indonesia, which imported more ores from the Philippines last year due to delays in its mine quota approvals and adverse weather conditions.

Indonesia imported 10.2 million metric tons of nickel ore from the Philippines last year to ease its supply woes, according to BMI. The volume was much bigger than the 347,000 MT that Indonesia imported from the Philippines in 2023, BMI noted.

“In the event that the ban goes through, this could pose additional raw material supply challenges for refiners,” BMI said in a report yesterday.

Indonesia is the world’s top nickel producer followed by the Philippines.

In February, the Philippine Nickel Industry Association (PNIA) warned that several mine operations nationwide would shut down, resulting in job displacements, if the ban on ore exports was imposed by the government.

PNIA argued that the proposed five-year raw ore export ban contained in Senate Bill 2826 is not the solution to encourage miners to put up value-added processing facilities in the country.

The proposed export ban comes at a worse time since global geopolitical dynamics are shifting while trade tensions are persisting, threatening the competitiveness of the country’s nickel exports, PNIA also said.

BMI noted that the other risks to Indonesia’s nickel production this year involve the uncertainty over its government’s plans to cut production quotas as well as proposed increases in its nickel ore royalty rates.

Nonetheless, BMI expects Indonesian nickel production to remain resilient, lifting global supplies this year to end with an estimated surplus of 164,000 MT.

Because of this, BMI revised downward its nickel price forecast this year to an average of $15,000 per MT from an earlier projection of $17,000 MT.

The projected average nickel price this year is about 12 percent lower than last year’s $17,052 per MT, according to BMI.

“We anticipate that the market will remain in surplus in 2025, buoyed by resilient Indonesian production growth,” it said.

“Although we maintain our bearish outlook for 2025 nickel prices, tighter market conditions are expected to place a floor under prices in 2025,” it added.