SHANGHAI, Apr. 27 (SMM) – The Philippines’ Environment Secretary Gina Lopez said Thursday to ban prospective open-pit mines for the damages for environment, in addition to other measures for improvement, ABS-CBN reported.
Following the news, nickel market regained some of the lost ground in the afternoon business. As of 14:30, LME nickel traded at $9,245 per tonne, with a daily decline of 0.43 percent, and SHFE nickel traded at 77,700 yuan per tonne, off 0.52 percent. Nickel market, however, remains in the downward track, SMM notes, with reasons below.
First, stainless steel prices are sluggish, and finished goods inventories are high. Stainless steel mills, in the face of slim profits, push for lower procurement price for high-grade NPI. Meanwhile, some large domestic steel mills announce to cut production amid the sluggish market, which will reduce demand for high-grade NPI.
Second, domestic high-grade NPI producers have also started unit maintenance for sector-wide losses, and the scale is expanding.
Third, ore demand is being affected by production cuts at high-grade NPI producers. According to SMM data, prices for Ni 1.5% ore for future delivery are down $7 per wmt over the past days of the week, with CIF traded prices largely at about $ 35 per wmt. The market is still exposed to downward pressures. On the other hand, Philippine ore suppliers held offers firm due to high costs from environment crackdowns. At present, the struggle between suppliers and buyers is intense, and most of traders purchase based on orders.
Hence, SMM projects that the news is not expected to lend a strong boost to nickel market amid poor market fundamentals. Eyes should be on inventories at downstream producers to get a better understanding of price changes.
The next big uncertainty will be the confirmation hearing for Lopez on May 2.