Lower nickel exports expected this year

The Philippines is expected to see lower shipments of nickel ore this year amid weak global prices and Indonesia’s easing up on its own export ban.

The Philippine Nickel Industry Association (PNIA) said nickel direct shipping ore may range from 30 to 35 million wet metric tons (WMT) this year lower than the 36 million million WMT recorded in 2017.

“We are expecting less (export) as prices of low-grade ores are down right now. Plus we still have the moratorium and the expected limitation in mining areas,” PNIA president Dante Bravo said in a weekly forum on Tuesday.

Last year, global prices reached up to $16 per WMT but they have now dipped to a low of $10 per WMT.

As of the first quarter, exported nickel reached to 2.57 million WMT, three percent lower than the 2.65 million WMT in the same period last year.

Mining companies are now slowly shifting to the export of medium-grade ores amid declining prices of the usual low-grade.

More than 50 percent of nickel exported are medium grade but the huge percentage of low-grade of 40 percent might still pull down shipments.

“For the long term, this would mean that some mines might slowdown in their production in the coming years depending on the areas being mined. The shift would have to make adjustments depending on mineralization,” Bravo said.

Approximately 90 percent of nickel exports goes to China while the remaining 10 percent goes to Japan.

Despite the expected lower exports this year, the industry remains optimistic there will be a brighter spot for nickel in the next few years.

“Nickel is basically a consumer good. Nickel consumption is still increasing globally, particularly in China with their booming electronic vehicle industry, as well as increasing public expenditures on construction,” Bravo said.

Currently only theree companies have financial or technical assistance agreements with the government while the rest are just under mineral production sharing agreements.

“Foreign investors have the capital, technology and manpower since mining is a capital intensive industry. It is hard to borrow from local banks, but foreign investors are very willing to shell out,” he said.