NEWS

Reporting by Enrico dela Cruz; Editing by Dale Hudson

MANILA – Nickel ore sales by the Philippines’ two biggest producers of the raw material for stainless steel dropped more than 1% in the first nine months of the year, they said, despite the country’s shipments to China hitting a 13-month high in September.

Nickel Asia Corp and Global Ferronickel Holdings Corp are upbeat about earnings prospects in the last quarter, however, as prices have surged this year ahead of an Indonesian ban on ore exports.

The companies’ combined ore output accounts for more than half of the Philippines’ production.

Global Ferronickel said its January-September shipment, sold solely to Chinese customers, was 1.5% lower at 4.642 million wet metric tonnes versus 4.711 million wmt a year earlier.

“This is due to management’s decision to ship more higher-grade nickel ore to take advantage of better prices,” it said on Wednesday in a statement accompanying its quarterly financial results.

Nickel prices have been pushed higher by Indonesia’s move to stop exporting unprocessed ore from 2020, two years earlier than originally planned.

Benchmark nickel on the London Metal Exchange has gained 44% since the start of the year, while the most-traded nickel contract on the Shanghai Futures Exchange has climbed about 48%.

Despite lower shipments, Global Ferronickel said its nine-month net income jumped 35%, thanks to higher prices.

“We are counting on the price of nickel to continue its upward momentum, especially with the Indonesian government’s recent decision to ban the export of nickel ore from next year,” Global Ferronickel President Dante Bravo said.

Nickel Asia’s nine-month sales fell 1.7% to 15.29 million wmt. Its net income dropped 43%, partly due to losses at the two local processing plants it partly owns.

“The company was not able to fully benefit from the effect of higher prices,” Nickel Asia President Martin Antonio Zamora said.

“However, the company expects a strong performance for the remainder of the year due to the higher prices contracted on its remaining shipments, coupled with the return to profitability for the two processing plants,” he said in a statement.

Philippine miners are likely to ramp up nickel ore output by next year, although their production capacity is limited by a number of factors, including government-imposed mining curbs.

Nickel ore shipments to China from the Philippines, an alternative supply source to No. 1 producer Indonesia, but with lower-grade material, hit a 13-month high of 4.39 million tonnes in September.

Source: Reuters