Nickel prices surge after Philippines shuts down mines

Photo via financial times.com

By Neil HumeNickel/financialtimes – rose on Thursday, outpacing other industrial metals, as speculators rushed to close bearish bets after the Philippines pressed ahead with an environmental crackdown on domestic producers.

Nickel for delivery in three months on the London Metal Exchange rose as much as $250 to $10,500 tonne after Manila ordered the permanent closure of mines that produce about 8 per cent of the world’s nickel supply. The metal is used to make stainless steel.

“Shorts have been covering,” said Marex Spectron, a commodity broker, which reckons bearish bets in nickel account for 11 per cent of open interest — the total number of outstanding derivative contracts.

Nickel came under pressure last month after Indonesia, another major supplier of ore, announced a potential resumption of exports. Analysts said Thursday’s news from the Philippines would offset any increased supplies from its rival producer.

“We regard any supply-side shift of more than 5 per cent as sufficient to alter the short-term price,” said Tom Price, analyst at Morgan Stanley. “So this potential 8 per cent event is significant.”

The decision to close the mines comes after an audit of the mining industry that started shortly after the Philippines’ tough-talking President Rodrigo Duterte took office in June. The inspections were overseen by Mr Duterte’s environment secretary Gina Lopez, a fierce critic of the industry.

The Department of Environment and Natural Resources said a total of 23 mines, mainly nickel producers, would be closed and five suspended, including the country’s biggest gold mine.

“I visited the mines and I made my own judgment based on my own observations,” said Ms Lopez, a stanch environmentalist, during a televised briefing.

The Philippines is one of the world’s biggest sources of unprocessed nickel ore and a major supplier to China. The ore is prized by Chinese mills which use it to produce nickel pig iron, a cheap alternative to refined nickel.

Full details of the audit, which has the full backing of Mr Duterte, have yet to be released and it is not clear how the companies affected can appeal against it.

Supply-side issues are emerging as one of the most important issues for the mining industry in 2017. This is partly because workers are pushing for higher pay deals after years of relentless cost-cutting. This week workers at Escondida, the world’s biggest copper mine, rejected a pay deal and are expected to take industrial action.

At the same time, some resource-rich countries are changing their mining laws or reviewing activities by big players. In January, Indonesia told foreign miners that they would not be allowed to export copper concentrate — a dry feed stock used to make the metal — until they signed up to new mining licences.

Also caught up in the fallout from Thursday’s closures was Australian mining company OceanaGold, which operates the biggest gold miner in the Philippines. It shares fell 15 per cent after Ms Lopez ordered the suspension of operations at its Didipio mine even though it had won many environmental awards.

Find more like this: News

  • Philippines Orders Deporatation Of Sister Patricia Fox
  • New York-famed burger joint coming to Manila
  • AirAsia now flies from Clark to Taipei
  • Manny Pacquiao KO’s Luccas Matthysse in 7th round to claim WBA welterweight title
  • The Philippines is the inspiration for this new Uniqlo collection
  • Page 1 | 2 | 3 | 4 | 5 | 6 | 7

    Entertainment

  • Jose Rizal manga to be released in time for his birthday
  • A New Netflix Series Tells the Story of the Philippines’ Drug War. But Its Critics Are Condemning Amo as Propaganda
  • Where in the Philippines was a scene from ‘Avengers: Infinity War’ shot?
  • CLOSEUP: ‘Lion King’ to include Pinoy flavor in world-class show
  • ‘Riverdale’ stars call out PH magazine for ‘disrespectful’ photoshop editing
  • MORE...

    Features

  • US and Philippines: Friends, Partners, and Allies
  • A Transgender Paradox, and Platform, in the Philippines
  • The Box That Brings Christmas to the Philippines
  • ‘Pinoy Aquaman’ swims 23 kilometers for peace in Mindanao
  • Former Pinoy dishwasher now owner of pizzeria in Italy
  • MORE...

    Tourism

  • Philippines closes ‘cesspool’ tourist island of Boracay
  • Boracay Set to Ban Tourists for Six Months During Island ‘Rehabilitation’
  • Boracay: the good, bad and ugly sides to Philippine island for tourists
  • El Nido to impose daily visitor limits in 3 iconic tourist sites
  • Philippines starts building world’s first resort airport
  • MORE...

    Sports

  • Manny Pacquiao KO’s Luccas Matthysse in 7th round to claim WBA welterweight title
  • Philippines basketballer Troy Rike gets cash reward for protecting Boomer Chris Goulding during brawl
  • Brawl Mars FIBA Qualifier Between the Philippines and Australia
  • Manny Pacquiao v Lucas Matthysse: Filipino’s career ‘not over’
  • ABL: Justin Brownlee is getting more Pinoy by the day
  • MORE...

    OFW News

  • DOLE suspends OFW deployment to Kuwait
  • Some OFWs turn to vlogging to beat loneliness, share life abroad
  • Overseas Filipino Bank to serve immigrants, workers
  • The ‘bagong bayani’ of the Philippines
  • Which countries pay OFWs the highest?
  • MORE...

    Environment

  • Boracay Set to Ban Tourists for Six Months During Island ‘Rehabilitation’
  • Boracay: the good, bad and ugly sides to Philippine island for tourists
  • Luzon has greatest concentration of unique mammals
  • Mindanao plants 3M trees in an hour, challenges world record
  • Fighting for sharks in the Philippines
  • MORE...

    Pinoy Places
    and Faces