Nickel mine output forecast up 25% in 2020
Credit to Author: Eireene Jairee Gomez| Date: Mon, 25 Nov 2019 17:08:29 +0000
AMID the expected ban on Indonesian ore exports, the country’s production of nickel may increase by 25 percent next year with growth coming faster upon the government’s approval for suspended mines to resume operations, Fitch Solutions Macro Research said.
“We currently forecast Philippine mined nickel production to rise by 25 percent in 2020, although growth could come in faster if an unexpectedly high number of currently suspended mines gain approval from the government to resume operations,” Fitch Solutions said in its latest industry report.
The international research group said Indonesia’s planned ban from 2020 to 2022 will likely increase demand for Philippine nickel ore, creating opportunity for nickel miners to alleviate the impending supply shortfall from Indonesia.
“[W]e believe Indonesia’s export ban will tighten the nickel market further in 2020 by constraining refined nickel production in China, which depends heavily on raw material imports from Indonesia. However, higher than expected mined output and exports from other major producers (primarily the Philippines) could serve to minimize the positive impact of the Indonesian ore export ban on global nickel prices,” it said.
Fitch Solutions said that “the overall impact of the ban will be minimized by rising mined output in major producer the Philippines, as previously suspended mines resume operations there.”
Currently, the Philippines is the second largest nickel producer in the world, next to Indonesia that exported 600,000 metric tons (MT) in 2018.
Fitch Solutions earlier projected the country’s nickel production may grow at an annual average rate of 2.5 percent over the next ten years.
For 2019, nickel mine production may increase by 2 percent to 346,800 MT, which is expected to sustain growth by 1.5 percent to 352,000 MT in 2020. By 2028, total nickel mine produced in the Philippines would reach 402,420 MT.
Meanwhile, global nickel prices are expected to gradually increase over the next three years “as the global market remains in a deficit during that period,” Fitch Solutions said.
Nickel prices will be on a gradual uptrend over 2020 to 2022, which will remain relatively stable between $14,000 per ton and $15,500 per ton over the coming months, it added.
Clarence Pimentel Jr., chairman emeritus of the Philippine Nickel Industry Association (PNIA), recently said the country was expecting a “stronger year” after suffering from volatile nickel prices at the global market in early 2019.
“It was a decent year. Prices are tough in the beginning but we saw an increase in prices at the end of the year so we’re looking forward to stronger year next year,” Pimentel told reporters at the sidelines of a mining event in Baguio City.
He also said PNIA was hopeful the government will soon lift the moratorium on new mining projects to allow the industry to “move forward.”