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Philippine miners to cut nickel ore output, exports

Posted on March 10, 2016

NICKEL ORE producers in the Philippines have agreed to slash output and shipments this year by as much as 20%, responding to a slide in the price of the metal to its lowest in over a decade on weak Chinese demand.

The Philippines became the top supplier of nickel ore to China, the world’s biggest consumer of the metal used in stainless steel, after Indonesia banned exports of unprocessed minerals in 2014.

But slumping prices have meant the Philippines has not fully benefited from the increased sales volumes.

The Philippine Nickel Miners Association, which accounts for 60% of domestic nickel ore output, has agreed to reduce ore output this year by as much as 20% over 2015 volumes, Ramon Peter E. Adviento, senior vice-president for investor relations at Global Ferronickel Holdings Inc., told Reuters.

Combined exports of group members, including Global Ferronickel, are also expected to drop by 20%, Mr. Adviento said. “Miners are slowing down or delaying production. Some have even implemented retrenchment programs to reduce costs.”

Global Ferronickel itself is looking at exporting close to 5 million wet metric tons (wmt) this year, down from 5.4 million wmt in 2015, said Mr. Adviento.

The group does not include top producer Nickel Asia Corp., which accounts for more than 25% of ore exports from the country.

There are 27 nickel mines in the Philippines, including Nickel Asia’s four.

Emmanuel L. Samson, chief financial officer of Nickel Asia, told Reuters the company has “no plans” to limit exports this year.

Benchmark nickel on the London Metal Exchange tumbled to $7,550 a ton on Feb. 11, its lowest since 2003, as China’s demand slows with its economy and the global outlook for stainless steel consumption remains weak.

Nickel miners from Australia to Brazil have shut operations, cutting nearly 33,000 tons of mine supply and 105,000 tons of nickel and nickel pig iron supply. -- Reuters