As demand for nickel rises, the Philippines can strengthen its function within the EV provide chain. Nonetheless, a proposed ban on uncooked mineral exports may reshape its trade. On the identical time, world commerce tensions are including uncertainty. New US tariffs on nickel imports, mixed with an ongoing provide surplus, are conserving costs unstable.
Whereas some consultants predict that the long-term nickel price would possibly improve as demand outpaces provide, near-term challenges stay. Can the Philippines capitalize on this shift, or will market instability hinder progress?
Nickel and Copper Demand Soars – Can the Philippines Capitalize?
The Philippines is the world’s second-largest producer of mined nickel. Copper and nickel each are important for lithium-ion batteries utilized in electrical automobiles (EVs). With the demand for these metals rising, the Philippines has a novel alternative to change into a key provider within the EV supply chain.
However on February 3, Senate President Francis Chiz G. Escudero approved the measure to ban the export of uncooked minerals.
He stated,
“What we are looking at is to shift our policy from merely exporting raw minerals that will be utilized by other countries to produce higher value products, to developing our processing capabilities. This will result in added value for our minerals-related exports, provide a much-needed boost to our economy and generate employment for our people.”
Boosting Home Nickel Refining
If enacted, the ban will take impact in 5 years, giving mining corporations time to determine processing vegetation. This coverage shift is very vital for key power metals like nickel, which play a vital function within the world battery and renewable power sectors.
Escudero highlighted Indonesia’s 2020 ban on nickel ore exports as a profitable instance. He hopes that by processing nickel and copper inside the nation, the Philippines can change into a significant provider of battery supplies and a key participant within the world EV trade.
He additionally believes that constructing a powerful refining trade will create jobs, scale back dependence on uncooked materials exports, and boost the economy. Sooner or later, this might even assist the Philippines manufacture its electrical automobiles.
Challenges in Implementation
Mining teams are against a proposed export ban on oresaying it can damage the nation’s mineral sector.
The Chamber of Mines of the Philippines (COMP) and the Philippine Nickel Business Affiliation (PNIA) help Senate Invoice (SB) 2826 however disagree with the ban. The invoice introduces a brand new tax system primarily based on earnings, however the teams imagine stopping ore exports will trigger issues.
They argue that mining corporations can not construct processing vegetation inside 5 years due to excessive energy prices, poor transport methods, and conflicting native guidelines. The Philippines additionally has a number of the highest electrical energy costs in Asia, making native processing too costly.
They stated, “Unless these issues are fixed, processing minerals locally will remain just a dream. There are no shortcuts.”
To make this plan work, the federal government should enhance infrastructure, reduce power prices, and assist mining corporations construct processing vegetation. With out these steps, the export ban may damage the industries it goals to help.
Provide Surplus and Funding Dangers
Though the Philippines needs to spice up its nickel industrythe worldwide market already has an excessive amount of provide. Massive corporations have secured their nickel assets, and consultants on the Shanghai Metals Market (SMM) predict this surplus will develop much more in 2025 and past.
As this determination takes form, the Philippines might face challenges in creating a powerful native processing trade. With too much nickel already obtainable, demand is probably not excessive sufficient to make processing worthwhile. This might make it exhausting to draw massive traders, slowing down the nation’s plans to maneuver from uncooked ore exports to processed nickel merchandise.
Influence on China’s Nickel Provide
According to SMMthe Philippines exported 54 million metric tons of nickel ore in 2024. Out of this, 43.5 million mt went to China, whereas 10.35 million mt was despatched to Indonesia.
If the Philippines decides to ban ore exports, China may face critical provide disruptions. The nation depends closely on Philippine nickel, particularly after Indonesia tightened its mining quotas in 2024. A ban would probably create shortages, pushing China to search for different suppliers or put money into processing services inside the Philippines to safe its provide.
A Quick-Lived Rally for Nickel Costs
So, what occurred to nickel prices after the Philippine authorities’s announcement of contemplating banning nickel ore exports? Properly, as reported by S&P World, this information sparked optimism within the nickel market, serving to costs climb again to $15,811 per ton on February 6.
Nonetheless, additional features have been restricted. Between February 7 and February 21, costs remained inside the $15,400 to $15,800 vary, and fears of worsening commerce tensions loomed giant.
The Bigger Image: How the U.S Tariff Warfare is Shaping Nickel Costs?
S&P World has offered deeper insights into how U.S. tariffs may have an effect on nickel costs and the broader American nickel market. In January, the White Home introduced new tariffs on imports from Canada, Mexico, and China. Following this, nickel costs tumbled to a one-month low of $15,210 per ton.
In early February, President Trump signed govt orders imposing a ten% tariff on imports from China and a good increased 25% tariff on items from Canada and Mexico. These tariffs took impact on February 4, conserving nickel costs on the London Steel Trade (LME) beneath $16,000 per ton all through the month. As commerce tensions escalated, market uncertainty overshadowed issues a couple of potential nickel ore export ban within the Philippines.
Canada rapidly responded. Trudeau introduced a 25% tariff on $155 billion price of US items, set to take impact the identical day. However simply earlier than the deadline, the US authorities delayed tariffs on Canada and Mexico by 30 days, briefly easing market issues.
Will it Backfire on the US EV Business?
If the US strikes ahead with a ten% tariff on nickel imports from Canada after the 30-day delay, it may drive up prices for American industries. Canada equipped almost one-third of the US’s major nickel imports in 2024, making it the nation’s largest supply.
The larger problem? The US produces little or no nickel. The one nickel-producing mine is Lundin Mining’s Eagle Mine in Michigan. It contributed simply 0.21% of world output in 2024 and is about to shut earlier than the last decade ends. On high of that, the US lacks refining capability for sophistication 1 nickel, a key materials for EV batteries.
If tariffs on Canadian nickel stay in placeit may change into tougher for US producers to entry reasonably priced provides, particularly for the EV and stainless-steel industries. The US had anticipated to rely on Canada to satisfy its rising demand for battery-grade nickel.
Nonetheless, commerce restrictions would possibly create challenges for this plan. It may possibly additionally have an effect on the competitiveness of home EV corporations within the world market.
The Backside Line
At current, the worldwide nickel market stays unstable, affected by commerce tensions, excessive supplyand evolving insurance policies. All these elements are driving costs down. Nonetheless, this dim nickel setting is predicted to shift sooner or later.
With a declining market steadiness and decreased oversupply, nickel costs are forecasted to rise. By 2030 and past, demand is projected to exceed provide, resulting in an additional value improve.
