COLUMN-Crunch time coming for Philippines nickel ore exports – by Andy Home (Reuters U.S. – December 9, 2016)

LONDON, Dec 9 Crunch time is coming for the flow of nickel ore from the Philippines to China. The market is awaiting news of how many more nickel mines might fall foul of a sweeping clamp down on what the Philippine administration terms irresponsible mining.

Eight nickel mines have already been suspended. Another 14 have been put on notice. Between them they account for around half of the country’s production, putting at risk China’s nickel pig iron (NPI) producers who have become increasingly reliant on Philippine supply for their raw material input.

But the truth of the matter is that Philippine ore exports are going to slow dramatically over the coming months whatever the outcome of the current mine audit. They always do at this time of year because of the rainy season.

This time around, however, normal seasonality could generate an abnormal supply-chain shock because of low inventory in China. That’s what nickel bulls will tell you anyway. Bears are unconvinced, arguing that China’s NPI sector has proven itself resilient in the past to shifts in raw material flows, so why should this time be any different?

Uncertain as to which way to call the impact on nickel’s complex supply landscape, the market is expressing itself less on outright price than on call options. The results of the latest audit on the mining sector are coming imminently, according to Regina Lopez, former environmental campaigner and now Philippine Environment and Natural Resources Secretary.

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