At the beginning of the year,the market was still worried about a oversupply during the year,as about 2500 million tonnes of nickel was expected to import from Indonesian in 2018.But in the second half of the year, high prices of high and medium nickel showed that the supply of nickel was not as high as expected.
The supply of nickel has not increased as scheduled. There are three reasons mainly: 1. The progress of mining production in Indonesia that have obtained quotas is not as expected.The total quota of the four mines of Genba, Integra, Modern, and Blackspace has reached 6.25 million WMT.It accounted for 19 % of the total quota(32.38 million WMT), but the total production was only 220,000 WMT.2. The new quotas have become more difficult to approve in Indonesia.No new quotas have been approved since March 2018. According to SMM, currently the mining companies which is applying for quotas must not only have the corresponding smelter production capacity,but also the mines applied for must have corresponding nickel reserves.3. The importation of Indonesian medium and high nickel mines took up the demand for nickel mines in which nickel is below 1.5 % from Philippines, resulting in a significant reduction in production of medium nickel mines in Philippines during the year.By July of this year, domestic imported nickel mines from Philippines were 10.63 million WMT, compared with 13.13 million WMT in the same period last year, a decrease of 19 % over the same period last year.
In addition, policy in Philippines and Indonesia has become stricter.Philippine Ministry of Environment and Energy recently issued two policies on the Environmental Protection of nickel mines. The main content is as follows:
The mining for new areas needs to be reported one year in advance and mine is forbidden until you meet the requirements.2. Mining area is defined according to the mining capacity, and the area which excess its mining area needs to be restored to vegetation. According to SMM research, there are compliance procedures in the mines currently and there has been a tradition of vegetation restoration.Therefore the policy has not yet had a significant impact on the current mine, but it has limited the future increase in nickel supply.It is known the Indonesian government had withdrawn 4.2 million WMT from Blackspace, Integra and Modern mines, which had negligible production. Quota withdrawal has not had much effect on current supply,but the remaining enterprises that have not yet recovered but the smelting progress is not up to standard have the risk of quota recovery later .
Based on this,SMM reduced the imports of medium and high nickel mines from Philippines and Indonesia during the year. By the end of July 2018, domestic imports nickel mines 13.51 million WMT from Philippine; It can ship normally in August, September, and October, the average monthly shipments was about 2.5 million WMT. After October, Suli highland will be in the rainy season in Philippines,and the average monthly shipments dropped to 1.5 million WMT. In 2018, domestic imported about 24 million WMT of nickel ore from Philippines. By the end of July, domestic imported nickel ore 10.14 million WMT from Indonesian.On the basis of 1.4 million WMT of average monthly shipments, it is estimated that domestic imports nickel mines from Indonesia were about 17 million WMT during the year.
Contact Person: Mrs. Yana Dong
Tel: 13661003712, 86-10-5712 1108, 5718 5998