By Madelaine B. Miraflor
The Philippines, one of the most highly mineralized countries in the world, may see a further decline in nickel production this year amid a possible global recession due to COVID-19 pandemic.
In a text exchange, Dante Bravo, president of Philippine Nickel Industry Association (PNIA), said that while it is hard to make forecasts in numbers for the country’s nickel industry, uncertainties clearly loom for the industry “given the possible global recession and less exports of stainless steel coming from China.”
“We cannot expect much on the prices of ore to go up further,” Bravo said.
China is currently the Philippines’ top market for nickel ore, which is used in the production of stainless steel.
Bravo, who also serves as the president of Global Ferronickel Holdings Inc. (FNI), the third largest nickel ore producer in the Philippines and the largest single lateritic mine exporter in the world, said that with less demand, the country’s nickel output will also likely be down.
Nevertheless, Bravo said that the nickel miners were already able to adjust to the new normal and resume operations.
“Generally, the industry is profitable,” he said, adding that the current demand for nickel ore in China is still quite good, hence, prices of ore are better than last year.
“In addition, oil prices have gone down and this helped our contractors,” Bravo said.
“But the LME [London Metal Exchange] price for pure nickel has remained relatively steady at above US$12,000 per ton. This means the overall sentiment is still not so optimistic because of this pandemic,” he added.
The Philippines largely sells raw nickel ore due to the lack of processing facilities.
The Philippines’ total metals output and its value fell during the first quarter of this year – the first time it did in the span of two years – as COVID-19 pandemic restricted both the movement of workers and commodities in the highly scrutinized mining sector.
Data from the Mines and Geosciences Bureau (MGB) showed that the country’s metallic production value dropped by 10.69 percent to P24.86 billion during the first quarter of this year from P27.84 billion recorded in the same period in 2019.
The last time the value of the country’s mineral production went down was during the first quarter of 2018 when lower mineral commodities dragged its total worth by 6.05 percent to P22.51 billion from P23.96 billion.
To be specific, nickel direct shipping ore’s production, which is 41 percent of the country’s total metals output, declined by 27 percent from 38,146 metric tons (MT) to 28,006 MT year-on-year.
MGB said that out of the 29 listed operating nickel mines in the country, only 11 reported their metallic production while all the remaining 18 were either under Care and Maintenance Program or reported zero production due to unfavorable weather conditions particularly in Region XIII.
As early as March, Bravo already predicted a slowdown on FNI’s nickel ore shipments, particularly to China, because of the COVID-19 lockdown.
The same thing goes for the country’s entire nickel industry, he said.