LAUNCESTON, AUSTRALIA – Is nickel’s current rally sustainable or is the metal merely having a strong run because market participants are more focused on the environmental crackdown in top ore miner the Philippines, rather than on the surge in Indonesian ferronickel exports?
No doubt nickel is one of the strongest commodity performers this year, with benchmark London futures rising 13.3 percent from the end of last year to the close on Wednesday.
The bulk of that rally has come in the past three months as new Philippine President Rodrigo Duterte and his hard-line environment secretary Regina Lopez cracked down on alleged environmental abuses by the mining industry.
At least eight nickel mines have been shut down in the Philippines this year, cutting around 10 percent of the country’s capacity. The Chamber of Mines of the Philippines has called the closure of mines a “demolition campaign”, but Lopez appears undeterred, saying more mines will be shut if they are having adverse impacts on the environment.
Certainly, it seems that lower Philippine nickel ore exports are already showing up in the import numbers for China, the world’s biggest buyer of the metal that is used mainly in the manufacture of stainless steel and electronics.
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