Weaker metal demand from China is expected to affect the local mining industry, which has been the Mainland’s chief supplier when it came to nickel ore.
According to a report by the World Bank entitled “Commodity Markets Outlook,” there is a possibility for the booming Chinese economy’s consumption of metal to flatline as it limits its output and exports due to tighter environmental policies.
Moreover, the shift of that country’s focus from manufacturing to services might bring demand for steel in particular to dip.
For the last 15 years, the World Bank said China has accounted for the bulk of global growth in the consumption of metals as it continued to grow its red-hot economy.
Nonetheless, metal prices are projected to ease slightly this year following an estimated 22-percent rise. Minerals like copper and nickel are seen to increase by 1.12 percent and 4.54 percent, respectively, to $6,050 a metric ton (MT) and $10,559 a MT, respectively.
“A 10-percent decline in ore prices will also be offset by increases in all base metals prices, particularly for lead, nickel and zinc due to mine supply tightness,” the report said.
Meanwhile, prices of precious metals like gold and silver are projected to fall by 1 percent this year as interest rate increases in the United States are seen to materialize. Normally, a stronger dollar would translate to lower metal prices.
Overall, the multilateral institution said it expected a more robust global demand for metals.
Chamber of Mines of the Philippines (COMP) Executive Director Ronnie Recidoro said that while the industry was aware of the global factors that would come into play as a new fiscal year started, they were looking ahead with optimism.
COMP chair and Nickel Asia Corp. president Gerard H. Brimo said he was expecting a “far better and improved performance from the industry [this] year as a whole” while the sector continued to push for reforms.
Aside from China, the sector is also looking at Indonesia’s comeback in the global mining industry after it stopped the exports of unprocessed minerals to push for domestic processing in 2014.
Indonesia is known to be one of the most important mining countries in the region with more than 500 mining projects nationwide.
Last year was a challenging one for the sector after it faced unstable policies and stricter environmental reforms with the short tenure of then-environment secretary Regina Paz Lopez.
Prices were also down by the early part of the year but fortunately recovered before the end of 2017.