The Philippines is the second largest nickel-producing country in the world, with its output reaching 340,000 metric tons in 2019.
The Philippines’ Surigao del Norte province is stepping up measures to prevent the spread of the coronavirus outbreak, leading to the suspension of mining operations starting on Wednesday (April 1), two nickel miners confirmed on Tuesday (March 31).
Nickel Asia and Global Ferronickel, which account for more than half of the country’s nickel ore output, said in separate statements that they have received copies of the suspension order, dated Saturday (March 28), from the provincial government, according to Reuters.
The Philippines is the second largest nickel-producing country in the world, with its output reaching 340,000 metric tons in 2019, down from 366,000 metric tons in 2018.
“The impact of the temporary suspension of the operations of Taganito Mining and Hinatuan Mining to (Nickel Asia’s) overall business will depend on the duration of the…suspension,” Nickel Asia said. In 2019, the two units accounted for 59 percent of its total nickel ore shipments.
Meanwhile, Global Ferronickel said it is lowering its nickel ore shipment target this year to 5 million wet metric tonnes (wmt) from 6 million wmt; however, it has made an appeal to the Surigao del Norte provincial government to allow it to continue operating.
In late February, Indonesia also announced that the pandemic could have a dampening effect on billions of dollars worth of projects in the Southeast Asian country.
“It will have impacts on the projects and in turn affect exports that should have started this year … some of them will be delayed by months,” the government’s coordinating minister overseeing maritime resources and investment affairs said.
“(COVID-19) is such a rapidly changing story that we are yet to fully see the impact throughout the value chain and therefore understand how large the impact might be on demand,” Alex Laugharne of CRU Group recently told the Investing News Network.
Nickel prices also been plummeting since January, with the metal kicking off the year above US$14,000 per tonne and trading in the US$11,200 range for the past week.
Although prices have slumped recently, they are seen trending upwards this year, according to FocusEconomics‘ most recent report.
“The Indonesian export ban could tighten supply and force Chinese nickel ore processors to cut production,” analysts at the firm said. “That said, the rapid spread of the coronavirus could continue to drag on global demand and poses a major threat to the outlook.”
FocusEconomics panelists see prices averaging US$14,383 in Q4 2020 and US$14,761 in Q4 2021.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.