Chinese Nickel ore imports account for approximately 90-95% of total nickel ore shipments. China imported 43.5 MMT in 2021 (+4.4 MMT/+11% y-o-y) and has historically sourced over 95% of its ore from only two countries, Indonesia, and the Philippines, together with a further 2.5 MMT sourced from New Caledonia.

The Indonesia government two years ago renewed its efforts to slow the depletion of its raw material reserves and promote the development of its domestic smelting industry by issuing a ban on nickel ore exports effective January 2020. This is only the most recent of bans of varying lengths and restrictiveness since this policy shift began in 2014. Regardless, Indonesia’s nickel ore exports to China fell below 0.9 MMT in 2021 vs 3.4 MMT in 2020, and far south of the 24 MMT exported in 2019. As this ban effectively excludes Indonesia from the global supply mix, China sourced around 90% of its nickel ore imports from the Philippines in 2021. Thus, China’s annual imports of nickel ore from the Philippines alone currently represent over 85% of total seaborne nickel ore trade.

As China, the world’s largest producer of stainless steel, of which nickel is a key ingredient, has become increasingly reliant upon the Philippines for its foreign supply of nickel ore, the Duterte administration in the Philippines has worked to relax its country’s mining restrictions. In 2021, following almost a decade of nearly static growth in export capacity, Philippines’ mining expansions allowed exports to China to increase to a record 39 MMT (+7.1 MMT/+22% y-o-y). This figure looks set to rise further in coming years as a Philippines’ industry regulator reported only last week that 12 new metal mines, most of them nickel projects, would begin commercial operations this year.