THE Philippines’s nickel supply in the next few years will depend on mining policies implemented in the country, the World Bank said.
In its latest Commodity Markets Outlook, the World Bank said the suspension of operations of several mining firms by the Department of Environment and Natural Resources (DENR) has already resulted in economic losses for the country.
Nickel prices, the World Bank added, surged 16 percent due to strong stainless-steel demand, which the Philippines missed out on due to the suspensions.
“The nickel market had already moved into deficit with falling production output in the Philippines due to depletion, and declining NPI [nickel pig iron] production in China,” the World Bank said.
The suspension of mining permits has effectively suspended 55 percent of the country’s nickel production, equivalent to over 10 percent of global supply, the bank added.
The Washington-based lender said the Philippines’s nickel production is exported to China for its NPI production.
Apart from the country’s mining policies, the World Bank said Indonesia’s plan to revisit its January 2014 ore-export ban will also be a factor in increasing production.
The World Bank said the ban in Indonesia was designed to encourage value-added domestic processing in the country.
Revisiting the ban, the World Bank added, could allow companies to export ore that are in the process of constructing smelter/refining operations.
“Inventories remain high, but key drivers will be policy developments in the Philippines and Indonesia,” it said.
The World Bank also raised its 2017 forecast for crude-oil prices as members of the Organization of the Petroleum Exporting Countries prepare to limit production after a long period of unrestrained output.
The World Bank said oil prices could increase to $55 per barrel from $53 per barrel.
Energy prices, which include oil, natural gas and coal, are projected to jump almost 25 percent overall next year, a larger increase than anticipated in July.
However, oil prices are expected to average $43 per barrel in 2016, unchanged from the July report.
The World Bank’s Commodity Markets Outlook is published quarterly—in January, April, July and October. It provides detailed market analysis for major commodity groups, including energy, metals, agriculture, precious metals and fertilizers. Price forecasts to 2025 for 46 commodities are presented along with historical price data.