Philippine Nickel Has Affected the Global Nickel Market

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Nickel is mainly used to produce stainless steel in industry and a vital material of the electric vehicle battery. With the rise of the electric vehicle, nickel producers tend to expand their production to meet the increasing market demand. Philippines, the world’s largest nickel producer, whose nickel resource and related policy have deeply affected the global nickel market. According to the Philippines Mines and Geosciences Bureau, of the total 44 operating metallic mines in the country, 27 are of nickel. The abundant resource of the Philippines arouses the world’s attention.

11 2 - Philippine Nickel Has Affected the Global Nickel Market

Price of nickel is influenced by Philippine policy. The Philippine government had closed 23 mines in early 2017, which made nickel price climbed due to the production reduction. However, the main purpose for mines shut down is environment protection. In fact, nickel industry had polluted habitat of Zambales residents for years. Mining companies like Benguet Nickel Mines Inc. (BNMI), Zambales Diversified Metals Corp. (ZDMC), LNL Archipelago Minerals Inc. (LAMI) and Eramen Minerals Inc. (EMI) had been involved in the incident and were required to adjust their strategy and improve technology to relieve nickel pollution. The policy shift led to dramatic output cut and layoffs, which caused nickel producers’ dissatisfaction.

The main trade partners are also affected by Philippines nickel market. For example, Philippines is one of China’s most significant nickel import countries. However, due to the lower production of Philippine nickel, China has to rely more on Indonesia to import, and some Chinese nickel pig iron plants are set up in Indonesia.

While to review the year of 2017, Philippines played a less important role in nickel market, but its policy could still influence the market. “A majority of the MICC, which is co-chaired by the Philippines Department of Finance and the DENR, had voted to remove the ban on open-pit mining”. Such decision would be related to the nickel export in the Philippines and the price in the market. And the developments in the countries’ mining industry imply its policy remains unpredictable. Additionally, a report from BMI predicted that the nickel price would fall in the near future because China’s demand had declined and demand expectations from electric vehicle production is overly-optimistic. Under such circumstance, influence from the Philippine nickel production will not be so obvious.

Both the production and policy of Nickel in Philippines affect the whole market in the world. 2018 is another year of change, we’ll see it together.

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