A total of P618.83 million worth of 84.53 million shares were traded from Feb. 6-10, data from the Philippine Stock Exchange showed. This made Nickel Asia the 18th most active stock last week.
The mining company’s shares closed at P7.42 apiece on Friday, up 9.4% week on week from its P6.78 finish on Feb. 2. For the year, the stock has gained 27.1%.
Cristina S. Ulang, research head at First Metro Investment Corp., said in an e-mail that elevated global prices made Nickel Asia one of the most active stocks last week.
“Price per ton of nickel globally has almost tripled since the pandemic and add to that China’s reopening which will further boost demand. That is against a predicted global supply deficit,” she said.
Ms. Ulang said the manufacturing of electric vehicles will also keep nickel, which is used in clean technology, in demand globally.
In a Reuters report, Indonesia, with the largest reserves of nickel, has signed more than a dozen deals worth more than $15 billion for battery and electric vehicle production in the country with manufacturers including Hyundai Motor, LG Group and Foxconn and next might be Tesla, Inc.
Indonesia produced 1.4 million tons of nickel in the third quarter of last year, according to the International Nickel Study Group. That’s far ahead of the second-biggest producer, the Philippines, which mined 290,000 tons in the same period.
During the third quarter of 2022, Nickel Asia said it sold a total of 12.44 million wet metric tons (WMT) of nickel ore at an average price of $29.46 per WMT. In the same quarter in 2021, the company exported more at 14.44 million WMT but priced lower at $28.05 per WMT.
The drop in sales volume was caused by unfavorable weather that adversely affected the group’s mining operations. However, the company’s nickel ore sales were realized at P54.22 per dollar, up 10% from P49.17 a dollar in the previous year.
Nickel Asia reported an attributable net income of P3.07 billion in the third quarter of 2022, lower by 10.9% from P3.45 billion in the same period in 2021. Still, its nine-month bottom line rose to P6.90 billion, up 11.8% from the P6.17-billion net profit attributable to equity holders of the parent.
As of Feb. 8, nickel spot prices closed at $27,390 per MT, according to London Metal Exchange.
In a previous report, Nickel Asia said it was looking for opportunities in the electric vehicle industry as the government is pushing for the manufacture of electronic vehicle batteries.
Meanwhile, Diversified Securities, Inc. Equity Trader Aniceto K. Pangan pointed to the company’s disclosure about a penalty incurred regarding its nickel ore shipment.
“This means that the demand for the commodity is so tight that they hardly could follow the government documents permit to serve their buyers,” said Mr. Pangan.
Last week, Nickel Asia disclosed to the Philippine Stock Exchange that its subsidiary, Rio Tuba Nickel Mining Corp., paid a penalty of P100,000 to the Bureau of Customs for loading nickel ore to a bulk carrier without the authority to do so from the agency.
However, Ms. Ulang noted that the disclosure had no bearing on Nickel Asia’s share prices.
“It is the company’s strong fundamentals that’s keeping investors inspired,” she said.
“Stock might be range-bound this week and test P7.00 ahead of the Bangko Sentral ng Pilipinas interest rate hiking event. But overall, the momentum would be upward to P7.50,” said Ms. Ulang.
She placed Nickel Asia’s support and resistance at P6.30 and P7.50, respectively.
“Expected revenue should reach around P7 billion in the fourth quarter of last year. Full-year should be flat as compared to last year at P28 billion,” Mr. Pangan said.
“As the current price is a new high, it should be on consolidation with support at P7.15 per share while resistance at P7.60 per share,” he added.
The Philippines has 34 operating nickel mines and exports most of its nickel ore to China and some to Japan. But it has only two nickel processing plants, which are both partly owned by Nickel Asia. The country is one of the biggest suppliers of the prized metal ore to China, overtaking Indonesia’s status.
Nickel Asia is partly owned by Japan’s Sumitomo Metal Mining Co. Ltd.
Reprinted from Business World