Most base metals will finish the first quarter up, but nickel is one of those exceptions to the rule.
The metal has traded up and down to finish the first quarter close to flat. Nickel prices are significantly higher than they were one year ago and traders are now finding little reason to be any more bullish than bearish due to a mix of news that helps both positions.
Philippines Threatens to Stop All Mining
On March 13, The Philippines’ president Rodrigo Duterte, threatened to stop all mining in the country while reiterating his support for Department of the Environment and Natural Resources Secretary Regina Lopez. Philippine lawmakers recently opted to postpone a decision to confirm or reject the ardent environmentalist as the head of the department. Further confirmation hearings are expected to take place in May. The country’s miners hope Duterte won’t reappoint Lopez and instead find someone more moderate.
Indonesia to Restart Exports
Despite additional closures last month and the potential for more, nickel prices fell this month. It could be that traders doubt that Duterte will enforce such strict regulations, but it also has to do with fears that the resumption of exports from Indonesia will compensate for any supply shortfall in The Philippines.
It’s still uncertain how much nickel ore Indonesia may export. While the country has relaxed its ban, and now allows smelters to export surplus ore with less than 1.7% nickel, shipments have yet to restart.
Suspended Mines to Ship Out Stockpiled Nickel Ore
On Friday, Lopez allowed eight suspended nickel ore miners to ship out stockpiles of mined ore. Prices fell following the announcement. However, this doesn’t remove the long-term issues that the supply chain is facing due to closures of operations.
Indeed, the government hasn’t really tonnes down its campaign. Allowing these mines to sell their inventory of nickel ore has the purpose of limiting the potential build up of silt in nearby waters.
What This Means For Metal Buyers
Nickel is in need of new fundamental price drivers one way or the other. With all of this uncertainty, industrial buyers might want to wait for new clues before making purchasing decisions.