September 28, 2016 / 2:58 AM / 4 years ago

METALS-Nickel holds near 7-week high as Philippine mine crackdown deepens

* Philippines says 20 more mines face suspension

* Market still a bit dubious on impact of closures - ANZ

* Coming up: U.S. durable goods at 1230 GMT (Updates prices)

By Manolo Serapio Jr

MANILA, Sept 28 (Reuters) - London nickel futures held near a seven-week high on Wednesday after the Philippines said 20 more mines may be suspended for environmental violations, threatening supply from the world’s top nickel ore exporter.

Manila has already halted 10 mines in an audit over the past two months aimed at punishing irresponsible miners as the government vowed to pursue stricter standards than in global mining centres such as Canada and Australia.

Suspending another 20 would leave only 11 operating mines in the Southeast Asian country, which accounts for nearly a quarter of the world’s mined nickel supply - most of which is shipped to China.

“There’s a large risk of all these 20 being out for much longer than expected,” said Daniel Hynes, senior commodity strategist at ANZ, who sees nickel at $11,500 per tonne by yearend.

“The rhetoric coming out of the government seemed quite strong and intense, so I suspect (these mines) are going to have to jump through a lot of hoops to get these operations back up and running and that could drag on for sometime.”

Three-month nickel on the London Metal Exchange was unchanged at $10,630 a tonne by 0708 GMT. The metal, which is used to make stainless steel, peaked at $10,900 on Tuesday, its strongest since Aug. 10.

Nickel’s failure to build on gains suggests that the “market’s still a bit dubious as to the impact of these potential closures” in the Philippines, said ANZ’s Hynes.

The impact to global nickel supply may also be limited at this time given the monsoon season which affects mining operations and shipments there, he said.

The most-traded nickel on the Shanghai Futures Exchange climbed 0.9 percent to close at 82,090 yuan ($12,306) a tonne, after touching a six-week high of 82,980 yuan.

Goldman Sachs said “the risks surrounding our base case assumption of 60,000 tonnes per annum of suspended nickel production are skewed to the upside” with the Philippines’ latest announcement.

Similarly, Goldman said its near-term nickel price forecasts of $11,000 in three months and $12,000 by year-end “are also skewed to the upside.”

Elsewhere, LME copper edged up 0.4 percent to $4,808 a tonne and aluminium also gained 0.4 percent to $1,657.50.


Three month LME copper

Most active ShFE copper

Three month LME aluminium

Most active ShFE aluminium

Three month LME zinc

Most active ShFE zinc

Three month LME lead

Most active ShFE lead

Three month LME nickel

Most active ShFE nickel

Three month LME tin

Most active ShFE tin

$1 = 6.6706 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Joseph Radford and Sherry Jacob-Phillips

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below