PH nickel miners to gain  from improved prices

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    Nickel ore stockpiles at a port in Zambales. (Reuters photo)

    Nickel miners in the Philippines are poised to benefit from the improving nickel prices in the international market, stockbroker Colfin Colfinancial.com said.

    Following the slump due to the escalation of the coronavirus disease 2019 (COVID-19), nickel prices in the London Metal Exchange (LME) have bounced backed to $6.8 per pound, from a low of $5 per pound at the start of the COVID-19 scare. Nickel prices opened that year at $6.40 per pound.

    “This was primarily due to the loosening of monetary policy by the US Fed and other central banks, which led to the decline in interest rates and ignited a rally in commodity prices,” Colfinancial.com said.

    “Furthermore, despite the impact on COVID-19 on Indonesia’s economy, its government maintained the nickel ore export ban (which is needed to encourage investments in the downstream nickel processing sector), which help support the prices of LME and nickel ore prices,” it added.

    Colfinancial.com expects the selling price of nickel in the LME to average at $6.3 per pound.

    In a prior study, Abacus Securities Corp. noted that future prospects of nickels were quite optimistic given the projected demand for electric vehicles.

    It said based on estimates, electric vehicles will comprise 10 percent of global passenger car sales by 2025.

    This could result in demand for nickel rising “close to ten-fold over the next decade,” Abacus added.

    “There are obviously environmental issues surrounding the production of such quantities of nickel which leaves a large carbon footprint. Competing technologies like hydrogen-powered cars may also accelerate which would negate such projections,” Abacus said.

    “Nevertheless, the Philippines is next only to Indonesia as a potential source of nickel and even if only half of the long term demand estimates come true, it should redound to the benefit of companies,” it added.