Roskill view: Nickel prices continued their rapid rebound after a drop in prices in December and January, when prices briefly fell to US$9,430/t. The main driver for the recovery in prices continues to be the ongoing turmoil in the Philippines, where the decision by the environment ministry to close 23 mines and suspend production at a further five has sparked concerns of a supply disruption in the world’s largest exporter of unprocessed nickel ores and concentrates. These have been an essential feedstock for the Chinese nickel pig iron industry, particularly following the ban on shipments out of Indonesia in 2014. Miners in the Philippines, including Marcventures, have announced legal action in an attempt to overturn the ministry’s decision, but it is unclear whether such action has any chance of succeeding, and has thus done little to halt the further recovery in nickel prices, which hit US$10,950/t on Friday. However, Roskill notes that with the lifting of Indonesia’s ban on concentrate exports, the resumption of shipments from this country may soon hit the market and provide some downward pressure on prices. As such, although prices may continue their upwards momentum this week, some rationalisation may be expected in the near term.
To discuss the nickel market with Roskill, contact Thomas Höhne-Sparborth: email@example.com