THE country’s biggest nickel miner on Tuesday said revenue from its total ore shipment dropped by almost half in the first nine months of the year due to weak demand in China and a lackluster global economy.
In a disclosure to the Philippine Stock Exchange, Nickel Asia Corp. said the estimated value of shipments in January-September 2015 reached P12.3 billion, down 40 percent from P20.5 billion reported a year earlier. Higher shipment volumes failed to offset weak metals prices, the miner noted.
“The slowdown in China and lackluster world economic growth have led to high metal inventories, which in turn took quite a toll on commodity prices in general,” said Gerard Brimo, Nickel Asia president and CEO.
Brimo, however, said that they expect prices to bounce back in the coming months, noting that “we continue to feel that the bottom has been reached for nickel prices and now see a gradual withdrawal of metal from the LME warehouses.”
In January-September, the miner’s four operating mines sold 15.96 million wet metric tons (WMT) of nickel from 14.26 million WMT.
The estimated realized nickel price on 10.34 million WMT of direct exports of ore in the first nine months of the year averaged $22.65 per WMT, considerably lower than the average $46.85 in the same period last year.
There was a surge in ore prices last year due to expectations of tight supply due to Indonesia’s ban on ore export.
“The tightness, however, did not materialize due to increase in supplies from other sources besides China nickel pig iron and weaker than expected global demand,” Brimo said.
At current prices, about 60 percent of producers are operating at a loss, a situation unseen in many years, Brimo noted.
In other developments, Brimo said the company’s majority owned renewable energy subsidiary Emerging Power Inc. (EPI) has commenced building its P7.7-billion, 100-MW solar facility at the Subic Bay Freeport Zone.
“EPI expects 60 MW of capacity to go on stream prior to March 15 next year, allowing the project to avail of the applicable solar feed- in tariff rate,” he said.
Nickel Asia owns 66 percent of EPI. The energy firm earlier signed deals to sell 40 megawatts to electric cooperatives of Occidental and Oriental Mindoro.