For the past 10 years, booming stainless steel mills in China have purchased a relatively low percentage of imported stainless steel scrap, relying instead on nickel ore from Indonesia and the Philippines.

Among measures taken to slow the spread of the COVID-19 coronavirus in the Philippines, however, has been a severe cutback in activity in that nation’s foremost nickel mining region.

Two mining companies have announced an indefinite suspension of activity in the Surigao del Norte province of Philippines, according to Reuters. The operation of the two firms in that southern province account for more than half of the nation’s nickel ore output, says the news agency.

The April cutback in the Philippines follows a decision by the government of Indonesia in 2019 to ban the export of unrefined ore. The additional constriction of the nickel ore market comes just as China’s stainless mills prepare to supply an economy rebounding from several weeks of COVID-19-related lockdown.

While some nations use 50 to 75 percent nickel-bearing scrap as feedstock in stainless steel production, China’s stainless steel producers used just 22.3 percent scrap in 2018. (That figure comes from a presentation by Anil Shah of Canada-based Ni-Met Metals Inc. at the 2020 Materials Recycling Association of India [MRAI] meeting near Delhi in February.)

Combined with the Chinese government’s willingness to recognize some grades of scrap metal as a resource rather than a highly regulated waste, an opportunity for stainless scrap exporters could be emerging in China in the second quarter of 2020. That opportunity, however, relies on exporters in developed nations to get hold of supply just as their manufacturing and energy sectors are deactivating because of COVID-19 restrictions.