New Filipino President Rodrigo Duterte is cracking down not only on drug dealers but also has warned the illicit mining sector in that nation to stop sending unrefined or semirefined nickel ore to China.
The stern message reportedly has been heard by the mining sector, with ore shipments quickly decreasing and the global market responding with higher nickel prices on the potential supply shortfall.
As summarized in report by EconomicCalendar.com, President Duterte has told mining firms he wants them to “comply with international environmental standards or shut down,” and “a massive audit of mines is currently underway, with six nickel miners already shut by the [Philippines] Environment Department.”
Since Indonesia enacted a similar clampdown on low-grade nickel ore exports in 2015, the
Philippines has become the foremost supplier of nickel ore to the Chinese nickel and stainless steel production sectors.
The use of the Indonesian and Filipino ores by Chinese stainless steel producers has had a negative impact on the demand for and price of stainless steel scrap for several years.
Monday, 1 August 2016 London Metal Exchange (LME) nickel traded in the $10,680 to $10,860 per tonne price range. That represents about a 23.5% increase from its May 2016 average LME cash settlement price of $8,682.50 per tonne.