Off The Wire
Philippines' Global Ferronickel holds ore shipments to China steady as economy cools
Global Ferronickel also said it has signed a contract to sell 1 million wmt of ore to Baosteel, a unit of top steel manufacturer China Baowu Steel Group. It is also looking to sell ore to China's Guangdong Century Tsingshan Nickel Industry Co.
The Philippines is the world's second-biggest supplier of nickel ore, used to make stainless steel, after Indonesia.
The deal with Baosteel, which has been a customer of the Philippines' second-largest nickel ore producer since 2014, is the biggest so far between the two companies, said Global Ferronickel President Dante Bravo.
Bravo said the miner expected to remain profitable this year despite a loss of growth momemtum in China.
"The effect of the cooling Chinese economy basically brought down the expected demand and ore prices," he told Reuters. "But overall, we are still profitable. We will be signing new supply agreements with our buyers after the Chinese new year (next month)."
As nickel prices fell last year, Global Ferronickel opted to ship higher-grade ores to maximise profitability. Last year's shipment volume of 5.709 million wmt was also 3.8 percent higher than its 5.5 million wmt target, thanks to favourable weather conditions and more efficient operations, it said.
The miner is looking to further boost sales of medium- and high-grade ores this year to 60 percent of total sales, with low-grade ores accounting for 40 percent.
Medium- and high-grade made up 53 percent of the sales mix last year and just 39 percent in 2017.
The forecast sales volume for 2019 is subject to weather
(Reporting by Enrico dela Cruz; editing by Richard Pullin)