Nickel prices soft despite uncertainty over supplies
Philippines keeps changing stance on output cuts, but market is unfazed
TOKYO -- International prices of nickel have remained low even though the Philippines, a major producer of the material used to make stainless steel, has repeatedly indicated that it will slash output.
Nickel futures were trading around $10,300 a ton on the London Metal Exchange Thursday afternoon, down 8% from a recent high marked in mid-February.
In early February, Philippine Environment Secretary Gina Lopez ordered the closure of mines accounting for about half of the nation's nickel output due to their damage to the environment. This sparked an outcry from the mining industry, and even the finance secretary called for a reversal of the decision.
After Philippine President Rodrigo Duterte suggested that the policy will be reviewed, the market gained confidence that production will not fall as much as anticipated. But earlier this month, an official said ore exports will be prohibited to help nurture the domestic refining industry, fueling uncertainty over the outlook for nickel supplies from the Philippines once again.
Back in early February, many market players predicted that nickel prices could climb to $12,000 a ton due to a sharp reduction in supplies. Talk of an ore export ban would typically drive prices higher, but this has not been the case.
"Prices will likely move in a narrow band around $10,000 for the time being," said Yoshikazu Watanabe, president of Tsukushi Shigen Consul, a natural resources consultancy.