Metal Mining

Nickel Ore Premium Might be Here to Stay; Tin Price Rebound on Supply Tightness

• Jan25 tin exports declined -67% mom due to a delay in export permits, supporting tin price, though exports are back on track by mid-Feb.
• Ni ore premium rises on a strong restocking phase, whilst NPI rose to US$12k/ton after Gunbuster downsized its operations.
• We reiterate our Neutral rating on the sector, with TINS, NCKL, and ANTM as our top picks and winners from this situation.

Tin prices cooled down, but we see a potential for a rebound

Indonesia’s Tin exports declined -67% mom in Jan25, though exports have resumed in mid-Feb25. Based on a survey by SMM, tin concentrate treatment charge (TC) in China has been dropping below the cost level, which forced several smelters to suspend production. This was driven by the declining rate of ore imports by China from Myanmar and DRC. On the other hand, demand in Jan-Feb25 has been slow due to the CNY holiday and a quiet electronic manufacturing sector. Thus, the current high tin price has dampened downstream demand to restock, and producers tend to take the wait and see approach.

Ore premium is here to stay, solid NPI price is expected after GNI’s closure

Minister Bahlil reiterated that the MEMR will cut nickel ore quota in 2025, which added fuel to the fire on ore premiums that rebounded to US$18/wmt in Feb25 following poor weather in Sulawesi that delayed ore shipments, and a restocking feud post CNY holiday. On the other hand, we expect NPI prices to remain strong after it reached US$12k/ton as the closure of Gunbuster (GNI) will decrease annual NPI output by c.151ktpa and c.12.8mn wmt of saprolite ore, which represents c.10% and c.5.8% of Indonesia’s annual output respectively.

Maintain Neutral on the sector with unchanged top picks of TINS/NCKL

We believe ANTM, MBMA, and INCO are beneficiaries of rising ore premiums based on their FY25 sales target. Meanwhile, we see NCKL as the clear winner from the rising NPI prices as it is the largest producers amongst its peers, and gains tailwind from the commencement of KPS in 1Q25 while also being the lowest cost producer. Therefore, our pecking order in the sector are TINS> NCKL> ANTM> MBMA> INCO> MDKA.   

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