Nickel Asia shipments up 78%

Nickel Asia Corp. (NAC) disclosed Friday that its nickel ore shipments amounted to P9.8 billion in the first nine months of 2011.

In a report to the Securities and Exchange Commission, the company said this was 78 percent higher than the P5.7 billion reported in the same period last year as demand and prices of nickel ore sold to Chinese customers improved.

The total volume of nickel ore shipped from the company’s four mines reached four million wet metric tons (WMT) during the third quarter of 2011. NAC said this was almost equivalent to the level of shipments made during the first half of the year.

NAC said it sold 8.3 million WMT of nickel ore during the first nine months as compared with 5.8 million WMT in the same period last year, which was a growth of 43 percent.

In terms of price, the estimated realized nickel price applicable to 3.3 million WMT of ore shipped in the first nine months was at an average of $10.88 a pound as against $9.57 during the same period last year.

NAC reported that the price of ore sold to China increased by an average 50 percent so far this year despite nickel prices falling by 27 percent at the London Metals Exchange. “While the price for high-grade nickel ore typically tracks LME nickel price, the ore of medium-grade and low-grade variety does not always follow in the same direction,” NAC said.

Of the various types of ore sold to Chinese customers this year, NAC said the most notable were the increases in the shipments of medium-grade nickel ore (1.4 percent to 1.6 percent) in which demand might have been driven by the high price and limited supply of higher-grade nickel ore. There was also a substantial increase in demand for nickel ore with high iron content, which is used in the production of carbon steel.

NAC said its product has become the preferred material for China’s stainless steel producers due to the limited availability of ferro-nickel and stainless steel scrap. There was also additional cost savings due to the free iron content.

The balance of the shipments, which were mainly the low- and medium-grade variety ore sold to Chinese customers, were sold on the basis of a negotiated price per WMT of ore.