Nickel Asia Corp. (NAC) on Wednesday said the value of its nickel shipment rose by more than half last year because of strong demand in China.

In a disclosure to the Philippine Stock Exchange, NAC reported that the estimated value of nickel ore shipments reached P12.1 billion in 2011, up by 51 percent from P8 billion recorded in 2010.

NAC added that it has achieved record-high ore shipment volume in 2011 with the total volume of nickel ore sold and delivered from its four operating mines amounting to 10.4 million wet metric tons (WMT), up from 8.3 million WMT in 2010.

“The average realized exchange rate in 2011 was P43.15 to the dollar compared to P44.86 in 2010,” the company said.

Of the total volume of ore shipped last year, 3.4 WMT was saprolite ore and 7 million was limonite ore – of which 3 million WMT was shipped to the Coral Bay hydrometallurgical plant.

The realized LME nickel price in 2011, applicable to 4.4 million WMT of ore shipped in 2011 was at an average of $10.54 per pound of payable nickel as against $9.61 per pound of payable nickel in 2010.

“The balance of the shipments, which are mainly the low and medium grade variety ore sold to Chinese customers, was sold on the basis of a negotiated price per WMT of ore which averaged $24.51 per WMT of ore compared to $18.15 per WMT of ore in 2010,” NAC said.

NAC also announced that it has concluded price negotiations with its key Japanese customers, namely Pacific Metals Co. Ltd. (Pamco) and Sumitomo Metal Mining Co. Ltd., (SMM) with respect to the sale of its high and medium grade saprolite ore.

“As a result, the percentage of payable nickel in the ore will increase by an average of 20 percent for the 2 percent nickel grade and 40 percent for the 1.8 percent nickel grade should the LME nickel price average within the range of $8 to $10 per pound,” NAC said.

NAC noted that the upward adjustment, which is retroactive to September 1, 2011, was largely the result of strong competition from the China market and will help cushion an expected lower LME nickel price in 2012.

In 2011, the volume of ore shipments to both Pamco and SMM reached 832,000 WMT and accounted for 19 percent of the company’s total revenues.

“For 2012, our estimated volume of ore shipments to both customers should be approximately 1.3 million WMT,” the company said.

At the same time, NAC announced that it has signed an agency agreement with Mistubishi Corporation (Shanghai) Ltd. for the sale of approximately 800,000 WMT of saprolite and limonite ore to the Chinese market in 2012.

SSL is a wholly-owned subsidiary of Mitsubishi Corporation, Japan’s largest general trading company.

“We consider this to be a major step forward with respect to NAC’s marketing strategy in China, as this would enable the company to tap SSL’s strong network and access to market intelligence in China,” NAC said.

To date, the company has executed contracts with various customers for the delivery of 8.9 million WMT of saprolite and limonite ore for the current year, including about 2.8 million WMT of limonite ore to the Coral Bay nickel processing plant. It also intends to sell an additional 1.5 million WMT of ore of various grades through spot sales.