INCO's matte nickel output rose in Q1

9 months ago . 1 min read
MP
Marella Putri
Writer at Forbes Indonesia
INCO's matte nickel output rose in Q1

by Robert Yota

Brazilian mining giant, Vale S.A, has reported a rise in its matte nickel output in Indonesia during the first quarter of 2020. PT Vale Indonesia (INCO), its local business unit, has produced 17,614 tonnes of nickel in matte in Q1, increased by 34.6% year-on-year (YoY). The rise was reflected in INCO’s noticeable turnaround in earnings of $29 million (after recorded a net loss of $20.2 million YoY), followed by revenue increase by 38% to $174.6 million, YoY.

Despite year-to-year improvements, INCO underperformed this quarter compared to 2019’s 4Q. The company reported lower net profit and revenue due to a lower nickel price and lower shipments. 
“The COVID-19 pandemic has been spreading rapidly across the globe, causing an economic slowdown which negatively impacted supply-demand in the nickel industry. This, in turn, drove a downward trend in nickel prices in the first quarter of 2020, a trend that could potentially continue into the second quarter,” said Nico Kanter, CEO and President Director of INCO in a statement last week.

According to Stefanus Darmagiri, an analyst at Danareksa Sekuritas, the COVID-19 pandemic has further reduced global demand for nickel as the slowdown in economic activities worldwide is expected to soften global demand for stainless steel. 
“As such, we expect the continuation of weak nickel prices in this year’s second and third quarter with recovery in nickel prices starting in the last quarter,” Stefanus stated in a recent report. Based on Market Insider’s Nickel commodity index, the price of nickel has been experiencing a downward trend from $14,000 to $12,247 per tonne as of May 9.

MP
Written By
Marella Putri
Writer at Forbes Indonesia
Topics
Companies