Nickel price slump worries BNC

Nickel price slump worries BNC
Published: 05 October 2017
BINDURA Nickel Corporation (BNC) says volatile world nickel prices would continue to affect the company's operations after the US$12 000 per tonne rally of September again dipped to slightly over US$10 000 per tonne.

Sustained volatility in the world nickel prices is also reflected in the company's first quarter performance that shows a 10 percent decrease in prices, with management focusing attention on the London Metal Exchange (LME) where significant changes are expected in the coming months.

BNC board chairman, Muchadeyi Masunda, said price stability would be critical to the company's survival amid the current economic pressures.

"It's a pity the nickel prices have dipped a bit. They went up over US$12 000 in September, but now they have gone down to slightly over 10 000," said Masunda.

Masunda told The Financial Gazette at the company's annual general meeting last week that developments in the Philippines, where there is growing uncertainty of supply, would be of interest to Zimbabwe.

"So we are keeping an eye on the London price and we are cheerfully hoping that what is happening in the Philippines and Indonesia continues. It would obviously benefit us," said Masunda.

Philippines, one of the world's largest nickel producers, has been affected by recent government policy to ban open-pit mining.

Prices of nickel have been sustained in recent months by strong demand by the Chinese stainless steel industry and enthusiasm towards the production of electric vehicles and batteries.

During the period under review, the cash settlement price on the LME rose marginally by 2,13 percent to US$9 617 per tonne compared to US$9 412 per tonne last year.

Nickel fell to a 13-year low of US$7 725 per tonne in February last year then rallied to more than US$11 700 by mid-November only to end the year barely above US$10 000.

Masunda indicated that the Bindura smelter would be functional by March, 2018.

"Everything is on track as far as the rehabilitation of the smelter is concerned. We would have liked to move a lot faster than we have, but there were issues we had to contend with. There was this issue concerning the dispute among the shareholders and as a result we took our eyes off the ball a bit. But I am glad we managed to settle our obligations with the bond holders," said Masunda.

The refurbishment of the smelter was funded by a US$20 million bond floated on the market in 2015.

In the first quarter to March, BNC's nickel production rose two percent to 1 810 tonnes largely on the backdrop of improved efficiencies.

Mined tonnage was however 23 percent below the previous quarter at 83 351 tonnes from 107 604 tonnes in the first quarter of 2017.

Nickel sales volume of 1 763 tonnes were up eight percent compared to last quarter year's 1 631 tonnes.
- fingaz
Tags: BNC, Nickel,


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