[ferro-alloys.com]THE Philippine Nickel Industry Association (PNIA) is projecting a decline in nickel production of 10-20% in 2019, though companies expect to be profitable, with economic activity driven by the May elections and the ‘Build, Build, Build’ infrastructure program.

At the Pandesal Forum in Quezon City on Wednesday, Dante R. Bravo, PNIA president, said: “It’s likely that production will be reduced 10 to 20%.”

Mr. Bravo is also the president of listed nickel ore exporter Global Ferronickel Holdings Inc (FNI).

According to Mr. Bravo, nickel production will fall to 212,000 to 215,000 tons this year from 370,000 tons a year earlier.

He said that assuming a similar decline next year, nickel output will fall to 150,0000 tons “which is less than 10% of the global requirement.”

The decline in Philippine nickel production started in 2016 due to low prices and unfavorable weather. More recently, the Department of Environment and Natural Resources (DENR), led by Secretary Roy A. Cimatu, also released an order limiting production area depending on the mine’s production volume per year.

“If you limit the open areas, that means you lose certain flexibility,” Mr. Bravo said. He also noted that the Philippines exports more than 90% of its nickel to China which is the country’s biggest market.

Mr. Bravo said that the Philippines also has high power costs, while China has cheap power and many nickel processing plants.

“The other thing we have to consider, given that we have to compete with China, is where are we going to sell it? Also to China because we don’t have a local market here,” Mr. Bravo said.

“They have the technology, they have the money, they have everything. What we can do is to be part of the value chain because they don’t have the raw materials. If we’re going through from end to end of the value chain, we simply can’t compete,” Mr. Bravo explained, however noting that the comparative advantage of the Philippines is that it has a higher grade ore.

Asked for his outlook on nickel prices in 2019, Mr. Bravo said: “Overall, we will have modest growth in 2019. [There’s] elections. There’s too much money in circulation. We’re also hoping the ‘Build, Build, Build’ program will support economic growth in 2019.”

He said that if prices for low-grade ore rise, it will encourage more production.

“We’ve been shipping more medium-grade ore because of the low prices of low-grade ore,” Mr. Bravo said, noting that this trend may continue until 2019.

Currently, the Philippines has 48 metallic mines of which 30 are devoted to nickel ore. Most of the ore is exported to China for processing into stainless steel. — Reicelene Joy N. Ignacio

（Bworldonline.com）

• [Editor:王可]