Global Ferronickel holds ore shipments to China steady as economy cools

MANILA — Philippines nickel ore miner, Global Ferronickel Holdings, Inc., said on Thursday it aims to ship 5.7 million wet metric tons (WMT) to China this year, in line with 2018, as China’s cooling economy slows expected demand.

Global Ferronickel also said it has signed a contract to sell 1 million wmt of ore to Baosteel, a unit of top steel manufacturer China Baowu Steel Group. It is also looking to sell ore to China’s Guangdong Century Tsingshan Nickel Industry Co.

The Philippines is the world’s second-biggest supplier of nickel ore, used to make stainless steel, after Indonesia.

The deal with Baosteel, which has been a customer of the Philippines’ second-largest nickel ore producer since 2014, is the biggest so far between the two companies, said Global Ferronickel President Dante Bravo.

Mr. Bravo said the miner expected to remain profitable this year despite a loss of growth momentum in China.

“The effect of the cooling Chinese economy basically brought down the expected demand and ore prices,” he told Reuters. “But overall, we are still profitable. We will be signing new supply agreements with our buyers after the Chinese new year (next month).”

As nickel prices fell last year, Global Ferronickel opted to ship higher-grade ores to maximize profitability. Last year’s shipment volume of 5.709 million WMT was also 3.8% higher than its 5.5 million WMT target, thanks to favorable weather conditions and more efficient operations, it said.

The miner is looking to further boost sales of medium- and high-grade ores this year to 60% of total sales, with low-grade ores accounting for 40%.

Medium- and high-grade made up 53% of the sales mix last year and just 39% in 2017.

The forecast sales volume for 2019 is subject to weather conditions. —