Philippines’ top nickel ore producer sees flat shipments, better prices this year

NICKEL Asia Corp., the Philippines’ top nickel ore producer, said on Tuesday it expected shipments this year to match last year’s record-high level despite the still depressed prices of the raw material in stainless steel.

The company, which shipped 19.7 million wet metric tonnes last year from its four operating mines, however, believes the worst is over for nickel and prices are expected to improve in the second half of the year.

“We think the worst of the downturn has passed, as we are now seeing some production cut backs and closures by refiners,” Nickel Asia CEO Gerard H. Brimo said in a statement.

First-quarter shipment by the company, which is partly owned by Japan’s Sumitomo Metal Mining Co. Ltd., to its Chinese and Japanese customers totalled 3.49 million WMT, similar to the volume shipped in the same period last year.

“Despite continuing weak nickel prices, we expect to deliver the same level of shipments this year as compared to 2015,” Mr. Brimo said.

Philippine nickel ore producers have been the biggest suppliers to top consumer China since 2014 when Indonesia imposed a ban on metal ore exports.

A group of Philippine nickel ore producers, which does not include Nickel Asia, have agreed to slash output and shipments this year by as much as 20% in response to a slide in prices to the lowest in over a decade on weak Chinese demand.

The benchmark nickel on the London Metal Exchange was trading at $ 8,950 per tonne on Tuesday. It had tumbled to $7,550 on Feb. 11, its lowest since 2003, due to weak Chinese demand and a weak global outlook for stainless steel consumption.

Latest data showed China’s imports of nickel ores and concentrate from Philippines totaled 1.5 million tonnes in the first two months of the year, accounting for 90% of the total and down 24% from a year earlier. —