Japan’s ferronickel producer Pacific Metals expects demand for ferronickel to remain subdued as COVID-19 has severely impacted the operations of stainless-steel producers. Pacific targets to produce 13,800mt of ferronickel in FY 2021 (April 2020-March 2021), according to its statement.
The company states its nickel ore procurement is unlikely to be affected despite the suspension of operations at Philippines mines. Operations at Taganito Mining and Hinatuan Mining were stopped last month to contain the spread of COVID-19.
Pacific Metals plans to implement a medium-term management plan which would look at the renewal of its ageing equipment, expediting discussions with overseas partners for expansion.
The company’s ferronickel output dropped by 8pc in FY 2020 to 30,885mt. Sales declined by 11pc to 28,533mt due to diminishing demand in the domestic market and also in India and Taiwan.
The company holds 36pc stake in the Philippines’ Rio Tuba mine in Palawan which continued to operate amid COVID-19. The Philippines supplied 57pc of Pacific Metals’ nickel oxide ore requirements in 2019-20. The rest 43pc was imported from New Caledonia. In the upcoming year, more procurements would be made from New Caledonia.
The company posted a net profit of JPY625mn ($5.8mn) in 2019-2020, down by 78pc from JPY2,872mn in the prior year. The company said given the uncertainty and impact of the global pandemic, it is unable to provide profit and output guidance for 2020-2021. Although, it hinted on the production volume to go down in FY2021 due to F6 electric furnace.