In 2016, prices of the metal used mostly to harden stainless steel surged the most in two years after the Philippine government said it would shut down mines blamed for water pollution and denuded forests as part of an environmental audit of about 300 open pits. But 10 months later, output is unchanged and prices are lower than before the first closures were ordered.
President Rodrigo R. Duterte now holds the fate of the miners in his hands. Citigroup, Inc. says most pits will keep operating, while consultant CRU Group says the market is now more focused on slowing demand from China because of a steel glut. And rival exporter Indonesia is making moves to resume shipments of the metal that’s also an ingredient in batteries, coins, magnets and guitar strings.
“It’s taken such a long time for the Philippines to make the final decision, and in the meantime the market has changed,” Peter Peng, a nickel analyst in CRU Group’s Beijing office said by phone. “If prices fall further some of the Philippines mines might have to close anyway.”
The market got a surprise back in July, when newly-appointed Environment Secretary Regina Paz L. Lopez announced a sweeping investigation of the industry. An avowed anti-mining crusader, Ms. Lopez ordered the closure of eight mines that month, and by the end of the year, nickel prices had surged almost 25%, touching a 16-month high of $12,145 a metric ton on the London Metal Exchange.