Nickel Asia anticipates rebound in nickel prices

NICKEL ASIA Corp. is hoping to continue its strong first quarter performance for the rest of the year, as it anticipates a rebound in nickel prices happening “sooner or later.”

“We had a very good first quarter. Hopefully (we can sustain it for the rest of the year). I think we can. But then again, we have to see what happens to the prices in the market,” Nickel Asia President Gerard H. Brimo earlier told reporters at the headquarters of the Mines and Geosciences Bureau.

In the first three months of the year, the country’s top nickel supplier, backed by a stronger dollar and higher ore prices, posted a profit of P377.5 million, a turnaround from a P300.8- million loss in the same period last year.

Mr. Brimo noted nickel prices are not going up despite the strong demand due to high levels of nickel inventory in the world market.

“Although, it has gone down from the high, it still has to go down further before we can see prices shooting up. When that will happen? I have no idea but it will happen sooner or later,” Mr. Brimo said.

A BMI Research report on Feb. 15 noted that the Philippine nickel industry will not suffer “a significant decrease” in output this year from 2016, with a forecast nickel price recovery for this year. The government’s mine closure and suspension orders is also seen to put small players rather than the big ones at a disadvantage.

The Fitch unit projects nickel prices to average $10,500/ton this year, edging up to $13,500/ton by 2021. Prices fell to $9,647/ton last year from $11,877/ton in 2015.

Earlier this year, the government ordered 22 mines to close, while suspending four others due to alleged environmental violations.

Asked on the possible impact of Indonesia’s move to ease its ban on mineral exports, the Nickel Asia executive said this does not raise any concerns.

“We’re not worried because we don’t think a lot of tonnage will come out of Indonesia. So far the approvals of their shipments have been on the small side. So long as it remains in the small side, it won’t make too much of an impact,” Mr. Brimo said.

“But it’s something we are keeping an eye on. But we have good relationship with our buyers,” he added.

The Philippines became the top supplier of nickel ore to China which has the biggest demand for the ore after Indonesia banned exports of unprocessed minerals in 2014.

However, Indonesia earlier expressed plans to ease its blanket ban in allowing the shipment of excess nickel ores, among other minerals, by miners that build processing plants.