January 31, 2023

To grow its processing capabilities and attract foreign direct investment, the Philippines is contemplating either taxing or outright banning nickel ore exports, according to Bloomberg. The move, if implemented, is similar to one that Indonesia recently applied. Several large Chinese nickel processors built smelters and refineries in Indonesia after the Indonesian government banned nickel ore exports in 2020. This has “inspired” the Philippines to consider a similar ban on nickel ore exports. The Philippines currently has 55 metallic mines and seven mineral processing plants, including two for nickel. The Philippines’  Environment and Natural Resources Secretary Antonia Yulo Loyzaga recently stated she aims to add three more mineral processing facilities during her term. The Philippines is the world’s second-largest nickel miner, bested only by Indonesia. (Source: Bloomberg)

LME Nickel prices are essentially flat so far this year. The recent lackluster performance follows a stellar rally in 2022, with nickel prices up nearly 36% that year. Nickel end-users such as stainless-steel producers can mitigate price volatility in a variety of ways. One very simple example is by purchasing swaps. Such positions are standard for consumer hedging; however, they can result in opportunity costs or cash costs if metal prices decrease. Please contact AEGIS for specific strategies that fit your operations. (1/31/2023)

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Price Indications

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