The nickel price has enjoyed a strong run over the past week after the new Philippines government announced stricter environmental scrutiny for the country’s mines.

The Philippines Information Agency confirmed yesterday that two nickel operations in Zambales, operated by Benguetcorp Nickel Mines and Zambales Diversified Metals Corporation, were suspended late last week.

Mines and Geosciences Bureau director Leo Jasareno said the mines were suspended for “various alleged environmental crimes, violations of the mining and environmental laws, and complaints of various groups against the alleged environmental impacts”.

UBS said Philippines accounts for around 400,000 tonnes per annum of mostly low-grade nickel laterite ore, which is mostly exported to China.

“This trade accounts for around 20% of global mined supply and now with Indonesia offline almost all of China's nickel pig-iron feed,” analysts said.

“While the potential volume impact at this stage is unclear, this is an emerging risk to supply which needs to be monitored.”

Nickel jumped by another 4.4% overnight to $US10,448/t, its highest point since late October. It is up around 11% since the Philippines news broke.

On a per pound basis, the price is around $4.74.

“In our view spot is still not at a level that would place the industry back on a sustainable footing,” UBS said.

“Cash losses are still accruing for many producers and spot remains below the marginal cost of production.”

UBS is expecting the price to rise over $5 per pound next year as positive demand signs also emerge like an increase in Chinese stainless steel consumption.

Analysts’ top local pick is Independence Group, which operates the low-cost Long mine and has the even lower-cost Nova operation commissioning later this year.

IGO shares have jumped by around 40% since late last month, while fellow producer Western Areas is up by 45.5% over the same period.

Panoramic Resources shares have more than doubled, with its Lower Schmitz development dependant on a better nickel price.

And South32, which operates the Cerro Matoso mine in Colombia, has jumped 22.5%.

Interestingly, the Perth-based major signed a joint venture with Toronto-listed junior Northern Shield Resources over the Huckleberry nickel-copper-platinum project in Quebec.

South32 can earn 50% of the project by spending $C2.5 million, and can move to 70% by spending a further $2.5 million.