Nickel Asia Corp. (NAC) has budgeted capital expenditure this year significantly lower than in 2023, the bulk of which is earmarked for the purchase of heavy equipment.
“Capex this year is much less than we spent last year. Last year was an outlier because we had to do a lot of equipment replacement, but this year will be much less,” Andre Mikael Lu Dy, Nickel Asia vice president for treasury and investor relations and sales, said at the company’s earnings call on Wednesday.
Nickel Asia in 2023 spent P4.5 billion as capital expenditures.
The company also projects global nickel prices to improve short-term, in part because of a change of leadership in Indonesia, the world’s biggest producer of the metal.
“Right now, because of oversupply there is some pressure on nickel prices. However, because of the presidential elections in Indonesia, there has been some slowdown in the awarding of mining quota permits. In the very near term there is some price upside for nickel,” Dy said.
According to Dy, demand for nickel continues to grow by 2 to 3 percent from the stainless steel producers. Supply could tighten around 2028.
Also, nickel production is seen growing in low single digits.
Nickel Asia has delivered up to 19 million wet metric tons (WMT) the past many years.
It sold 16.5 million WMT of nickel ore in 2023, a 3 percent increase from only 15.94 million WMT the year before.
