The Nickel Asia Corporation (NAC) and the Global Ferronickel Holdings Corporation disclosed that nickel ore sales dropped by more than one percent in the first nine months of 2019 despite the country’s shipments to China hitting a 13-month high in September.
According to a Reuters report, Global Ferronickel’s January to September shipment, primarily sold to Chinese customers, was 1.5 percent lower than last year, amounting to 4.642-M wet metric tonnes (wmt) compared to the 4.711-M wmt the previous year.
“This is due to management’s decision to ship more higher-grade nickel ore to take advantage of better prices,” the company was quoted in a statement from the report on Wednesday.
Moreover, nickel prices rose following Indonesia’s implementation of the export ban, two years earlier than originally planned. Benchmark nickel on the London Metal Exchange (LME) revealed a 44 percent increase since the start of 2019, while the most traded nickel contract on the Shanghai Futures Exchange increased by 48 percent.
Despite lower shipments, Global Ferronickel expressed that its nine-month net income increased by 35 percent due to the higher metal price.
“We are counting on the price of nickel to continue its upward movement, especially with the Indonesian government’s recent decision to ban the export of nickel ore from next year,” Global Ferronickel President Dante Bravo said according to the report.
Nickel Asia’s nine-month sales, on the other hand, decreased by 1.7 percent, amounting to 15.29-M wmt. Its net income dropped by 43 percent partly due to losses at the two local processing plants it partly owns.
“The company was not able to fully benefit from the effect of higher prices. However, the company expects a strong performance for the remainder of the year due to the higher prices contracted on its remaining shipments, coupled with the return to profitability for the two processing plants,” Nickel Asia President Martin Antonio Zamora said in a statement from Reuters.
It was projected that Philippine miners are likely to increase nickel ore output by next year despite limitations in production capacity.
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