According to a recent report from Bloomberg, President-elect Rodrigo Duterte is prioritizing the nation’s stance on mining by appointing a new head for its environment department. This maneuver has the potential to disrupt supplies to buyers in China.
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The London Metal Exchange echoed those concerns as nickel closed up nearly half a percent this week, indicating this new government will limit nickel ore exports.
“We might see an imminent crackdown on the Philippines’ small mines,” said Sam Xia, an analyst at China Merchants Futures Ltd. “This will reduce its nickel ore exports, including to China.”
The Philippines is now a key supplier of nickel ore to Asia’s leading economy after Indonesia stopped shipments in January 2014. Meanwhile, China’s nickel ore imports from the Philippines increased to 3 million metric tons this May, its highest point in seven months. That figure accounted for 97% of its total purchases.
Nickel Hits Six-Week High This Week
Our own Raul de Frutos recently highlighted that nickel prices hit a six-week high following a notable recovery from May’s price sell-off.
de Frutos wrote: “The metal benefited from a positive swing in investor sentiment toward commodities in June, stemming from a weaker dollar and the ongoing recovery in oil prices. Nickel has climbed steadily after hitting multiyear lows in February, but the move isn’t big enough to impress the market yet.”
You can find a more in-depth nickel price forecast and outlook in our brand new Monthly Metal Buying Outlook report. Check it out to receive short- and long-term buying strategies with specific price thresholds.
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