Nickel hits near one-year high fuelled by Philippine mine closure

Mai Nguyen, Reuters

Posted at Oct 28 2020 04:39 PM

Heavy equipment carved the mountains for nickel laterite ore, one of the primary sources of processed nickel. File/Mark Z. Saludes, ABS-CBN News

MANILA - Nickel prices jumped to their highest level in nearly one year on Wednesday on supply worries after the top nickel ore producer in the Philippines suspended operations at a mine following a coronavirus outbreak.

The Philippines is the top supplier of nickel ore to China, the world's biggest user of the metal.

The most-traded December nickel contract on the Shanghai Futures Exchange (ShFE) jumped as much as 5.7 percent to 125,670 yuan ($18,748.60) a tonne, its highest since Nov. 11.

Three-month nickel on the London Metal Exchange advanced as much as 2.5 percent to $16,310 a tonne, a level unseen since Nov. 7.

Nickel Asia Corp said it suspended operations at its Hinatuan mine, one of its four in the Philippines, until Nov. 10, after 19 employees tested positive for the virus. 

The mine contributed 11 percent of the firm's ore sales volume last year. 

"This will cause nickel price to shoot up a lot," said a Singapore-based nickel trader. "Pandemic situations pose a big threat to the supply chain. It can explode very fast."

Nickel ore supplies have been tight in China since top producer Indonesia banned exports from January. 

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