BHP Sees Imminent Turning Point in Nickel With Deficit Looming – by Rebecca Keenan (Bloomberg News – October 20, 2016)

BHP Billiton Ltd., the world’s largest mining company, sees the nickel market swinging into deficit because of supply threats in the Philippines and growing demand from electric vehicles and stainless steel.

“There are signs that this year could be finally the turning point for nickel with many expecting the market to be in deficit and so starting the much needed re-balancing process,” Eduard Haegel, asset president of BHP’s Nickel West unit, said at a conference in Perth Thursday. “The welcome return to balance over the next few years should see further recovery in nickel prices.”

Nickel has rebounded more than a third from the intraday low in February this year, which was the cheapest in more than a decade. Prices have been buoyed as the market awaits the final results from a nationwide audit in the Philippines, the world’s largest producer, which was ordered by President Rodrigo Duterte to ensure suppliers aren’t flouting environmental rules.

“The current situation in the Philippines where mines representing around half of the country’s annual nickel output are facing potential suspension could hasten this by disrupting more supply,” Haegel said, referring to the market rebalancing.

There’s a high level of uncertainty surrounding the changes, he told reporters after his presentation. The Philippines accounts for about a quarter of global mined nickel supply, with most cargoes going to China.

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