Philippine Nickel-Ore Shipments to China Plunge 80% in June
By Luzi Ann Javier
July 23 (Bloomberg) -- Philippine nickel ore exports to China, the world's biggest consumer of the metal, plunged 80 percent in June as lower prices of refined nickel and energy shortages cut production of nickel pig iron.
Exports to China from the southern Philippines fell to 167,389 metric tons in June from 855,171 tons a year earlier, according to Bureau of Customs data obtained today by Bloomberg News. Shipments of the ore, which can be processed into pig iron and used as a cheaper alternative to refined nickel in stainless steel, declined 70 percent in May.
Nickel prices have dropped 39 percent in the past year as oversupply discouraged buying, damping demand for nickel ore. China's nickel pig iron output growth has stalled as the government shuts small blast furnaces to save energy amid the sixth year of power shortages.
More than half of the blast furnace operators in Shandong, Henan, Shaanxi and Hebei have closed plants that produce low- grade products, lifting nickel ore stocks at Chinese ports to almost 8 million tons, compared with about 5 million tons at the end of 2007, Macquarie analysts said in June.
Demand growth for stainless steel from China is also expected to slow as projects for the Beijing Olympic Games are completed and the leasing and sale of offices in major cities eases, Jinchuan Group Ltd., the nation's biggest nickel producer, said June 3.
Indonesia is poised to overtake the Philippines as China's largest supplier of low-grade nickel ore, containing between 1 to 3 percent of the metal, Toledo Mining Corp. Chief Executive Officer George Bujtor said on June 18. Toledo's Berong Nickel Corp. supplies nickel ore to China and Australia.
Nickel prices may drop to between $18,000 and $21,000 a ton in the next three years, further damping demand for nickel ore and making it difficult for miners to make money by shipping unprocessed ore, Bujtor said.
