Tough nickel mart persists

The global nickel market remains challenged, driven by supply growth, particularly from Indonesia, and shifting demand patterns.

Slower battery electric vehicle (BEV) sales outside China have led to a more cautious outlook on long-term nickel demand, though China’s strong EV production and increasing exports to the Association of Southeast Asian Nations (ASEAN) and South America may support continued demand for nickel ore.

Regulatory developments, including potential changes in mining taxes and environmental policies, could also influence the operating environment for nickel producers.

To adapt to market conditions, local miners are focusing on optimizing operations, increasing ore shipments, and improving logistics efficiency, with projects such as the Dinapigue causeway aimed at reducing transport costs.

While long-term demand for nickel remains linked to the expansion of the EV industry, near-term market conditions suggest continued price pressures.

Listed producer Nickel Asia Corp’s strategy of managing costs and exploring potential value-added processing could play a role in mitigating the impact of price fluctuations on profitability.

Nickel Asia reported a decline in earnings in nine months of 2024, primarily due to lower nickel prices despite an increase in sales volume.

Revenues fell to P16.98 billion, down 12 percent year-on-year (y/y), as the average realized price of nickel ore dropped by 18 percent year-on-year.

Net income softened to P3.69 billion, while net income attributable to parent equity holders stood at P2.55 billion. Total costs rose marginally rose by single-digit due to higher contractor and material movement expenses, while the GPM got impacted by pricing pressures.