Nickel Asia says value of nickel ore shipments drops in Q1

LISTED Nickel Asia Corp. on Tuesday said the value of nickel ore shipments fell in the first quarter as prices weakened after Indonesia relaxed its export ban in January.

In a disclosure to the Philippine Stock Exchange, the country’s biggest nickel producer said it shipped 3.09 million wet metric tons (WMT) of nickel ore during the January to March period, virtually the same level as the 3.06 million WMT shipped a year ago.

“However, weaker ore export prices due to the effect of increasing ore exports from Indonesia coupled with shipments of more lower-grade ore, resulted to a drop in the Company’s estimated value of shipments to P1.85 billion this year from P2.21 billion in 2017,” Nickel Asia said.

Indonesia relaxed its ore export ban in January, leading to a drop in prices.

In the first three months of 2018, the estimated realized nickel price, which is historically priced on a negotiated dollar per WMT basis, averaged $17.07 per WMT — lower by almost half compared to the $ 31.67 per WMT on 1.06 million WMT sold during the same period last year.

Lower ore- grade was also a factor in the drop in the average realized price of the ore shipments during the period, Nickel Asia said, noting the company’s decision to change the mix of its ore grade this year.

Last year, the company was focused on higher- grade shipments to take advantage of elevated prices during the period.

Nickel Asia said it was able to offset the impact of lower-priced shipments with higher value from its limonite ore deliveries to Taganito and Coral Bay processing plants. The operations in both plants, which are linked to London Metal Exchange prices, have done better with an average realized price of $6.02 per pound of payable nickel on 2 million WMT sold in January to March. Last year, the average price was at $ 4.66 per pound of payable nickel on roughly the same shipment volume.

Gerard H. Brimo, president and CEO of Nickel Asia, said the price improvement reflects among others, the growth in batteries for the electric vehicles (EV).

“We are fortunate that this component of our business, as well as the two processing plants where we are invested in, are benefiting from rising LME nickel prices driven by the bullish outlook on nickel used for the EV market,” he added.