PHILIPPINE nickel ore shipments this year could decline by a fourth to at least 30 million wet metric tons from last year’s 40 million WMT owing to lower global prices and tighter competition posed by Indonesian exports.
Philippine Nickel Industry Association (PNIA) President Dante R. Bravo said his group projects total ore exports for the mineral this year settling at between 30 million WMT and 35 million WMT, from the recorded 35 million WMT to 40 million WMT last year.
“I think we will be exporting lower [volume this year] due to lower prices, especially for low-grade [ores],” Bravo, who is also the president of Global Ferronickel Holdings Inc., said in a news briefing in Quezon City on Tuesday.
“A lot of local nickel companies are exporting low-grade ores, so that could result in lower total volume of exports this year,” Bravo added.
Global nickel prices have been declining for the past month due to trade tensions between Beijing, top consumer of the metal and Washington, according to Bravo. Furthermore, the situation is worsened by higher shipments being made by Jakarta outpacing Manila’s nickel ore exports, Bravo added.
“Hopefully, [prices] would recover next month,” he said. “But it depends on how much Indonesia is exporting. So, far they are exporting more than us.”
Higher demand by China
Furthermore, Bravo said nickel miners remain optimistic that global prices would recover on the back of higher demand for the metal by China and world markets due to declining inventories.
Nickel prices at benchmark London Metal Exchange on July 9 closed at $13,970 per MT, recovering 1.52 percent, from a $13,760 per MT settlement offer on July 6. However, on a monthly basis, the July 9 settlement offer was 8.33 percent lower than the $15,240 per MT recorded on June 8 at LME.
Data from the Mines and Geosciences Bureau (MGB) of the Department of Environment and Natural Resources showed that the country in 2017 exported 23.351 million dry MT or nearly 36 million WMT of nickel ore, which was 6 percent lower than the 24.951 million DMT recorded volume in 2016.
MGB data also showed total ore shipment last year translated into a total nickel ore content of about 315,428 MT, or 5 percent higher than the 300,506 MT recorded in 2016.
Philippine nickel mine output this year could rise by 17.14 percent to a three-year high of 410,000 MT driven by favorable weather conditions, according to London-based brokerage Sucden Financial Ltd. (Sucden Financial).
Sucden Financial Head of Research Geordie Wilkes said they forecast a 60,000-MT increase in the Philippines’s total nickel mine output this year from 2017’s 350,000 MT. The brokerage firm’s figures represent how much ore could be mined in the country without any bans on the industry, according to Wilkes.
“Mine output was lower in 2017 predominantly due to weather in the Philippines. While the ban had an impact, there is evidence to suggest that the prevailing reason for the decline was the poor weather and technical issues,” he told the BusinessMirror in an e-mail exchange.
“Therefore, with better weather we would expect to see an improved mine output. This is because the ban only impacts new projects,” he added.
The Philippines produces nickel in the form of nickel ore or nickel-in-intermediate, according to Wilkes.