FEATURE: China Ni users shrug at Philippines shipping ban
Chinese stainless producers and ferronickel smelters are nonetheless concerned at the province’s ban – which seems targeted at Chinese-operated and manned vessels – given that the Philippines is now China’s top supplier of nickel after Indonesia banned nickel ore exports in January. Last year, China imported over 56 million tonnes of nickel ore, over half of which sailed from the Philippines.
An official from Belize-registered shipping agency group, Philhua Holdings, confirmed to Mysteel that the authority’s notice will take effect from 12:00 am on March 18 to 11:59 pm on March 31, unless another administrative order or memorandum issued by the signatories cancels or delays it in advance.
However, she noted that currently, the notice applies only to Surigao del Norte and not other parts of mineral-rich Mindanao Island or to Dinagat Island, just north of the province’s largest city, Surigao. “Vessels from Surigao del Sur (to the east of Surigao del Norte) and Dinagat Island will be allowed to sail to the north of Surigao – subject to normal quarantine checks – because they only pass through and are not loading there,” she added.
In any case, exports of nickel ore are unlikely to be impacted severely by the ban, given that the province is now in the rainy season which generally lasts from November through April and that overall nickel exports this month have not yet reached a high level, the official commented. Total nickel ore exports from Surigao this month will probably accounted for less than 2% of the country's total annual exports, she noted.
Once mining recommences for the year from April, annual shipments of nickel from Surigao, consisting mainly of low and medium grade nickel ore, will account for 50-60% of the total Philippines shipments, Mysteel noted. In 2019, shipments of nickel ore from Surigao accounted for 64.5% of the total shipments, with those from Surigao del Norte accounting for about 53%.
On the other hand, the official warned that future nickel ore exports could still depend on how effectively the central government in Manila controls the spread of COVID-19. A severe outbreak might see the ban extended and could even result in mining being suspended. “For now, we believe the current ban on foreign vessels in Surigao del Norte is just a response to maritime traffic control policies in Manila,” she added.
On March 12, the Philippines government announced that in order to prevent and control COVID-19, the capital will be effectively locked down from March 15 to April 14, with domestic flights and vessels prohibited from entering and leaving the capital. All schools in Manila are closed until April 12. Last Saturday, Cebu City, the country’s second largest, was also placed under a 30-day community quarantine until April 14. Sea ports within the jurisdiction of the city government were declared closed except for cargo deliveries of essential goods.
The move by Surigao del Norte represents an intensification of measures intended to keep the virus at bay. In mid-February, officials from coastal provinces including Surigao del Norte had merely agreed that all seagoing vessels from China and other countries affected by COVID-19 would not banned from entering the country but would be required to undergo mandatory 14-day quarantine at sea and that a "no disembarkation" policy for all ship personnel would be enforced, according to the Philippine News Agency.
During 2019, China imported a total of 56.08 million tonnes of nickel ore of which the Philippines supplied about 30.85 million tonnes, accounting for 53.7%. Last year nickel imports from Indonesia reached about 23.71 million tonnes, equivalent to 42.3%, Mysteel noted.
China’s nickel ore port stocks dip to 4-month low
Exacerbating concerns of Chinese nickel consumers over the shipping ban is the fact that current inventories at Chinese ports continue to decline.
Over the week of March 7-13, stocks of imported nickel concentrates at the 15 major ports nationwide under Mysteel’s regular check dipped again to reach 13.17 million tonnes, down by another 677,700 tonnes or 4.9% on week and a four-month low, Mysteel’s latest weekly survey showed. Falls have now continued for six successive survey periods, with the Indonesia’s export ban on all grades of nickel ore from the beginning of this year blamed primarily, though reduced exports from the Philippines during the wet season also contributed, Mysteel noted.
Within the total of imported nickel ore stocks at Chinese ports, tonnage from Indonesia slipped by another 302,900 tonnes or 7.6% on week to 3.68 million tonnes as of March 13, while the volume originating in the Philippines totalled 9.44 million tonnes, down 374,800 tonnes or 3.8% from one week earlier, the survey showed.
On the other hand, as of March 13, the price of nickel concentrates with 1.5% nickel content from the Philippines at Lianyungang port, East China’s Jiangsu province, rebounded by Yuan 11/tonne ($1.6/t) on week to reach Yuan 311/t including 13% VAT, Mysteel’s database showed.
“The slight recovery had nothing to do with the suspension policy from Philippines,” a Shanghai-based market insider said. “It’s mainly due to the current low stocks at ports which made traders unwilling to cut their prices further. Also, the recent dealing price of ferronickel between a large smelter in East China and a steelmaker was firmly concluded at Yuan 940/t which supported the concs prices,” she added.
As of March 13, the price for NPI with 8%-12% nickel content in Jiangsu delivered to works reached Yuan 920/t including 13% VAT, a 26-month low and off by another Yuan 5/t on week, according to Mysteel’s database.
Written by Zhiyao Li, lizy@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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