UBS Group AG said nickel prices could rally by a further 25% through 2017, as the Philippine government's crackdown on miners could shave 11% of the world's nickel supply, Bloomberg News reported Oct. 3.

An audit of 41 mining operations in the country saw the suspension of 30 mines due to environmental violations; 18 of the mines are nickel operations.

This places 55% of Philippine nickel output, or 11% of global supply, at risk, according to UBS. Nickel could reach US$6 per pound, or US$13,228 per tonne, by the end of 2017, the report cited analyst Daniel Morgan as saying.

"In the short term, there is enough metal out there as a buffer for the next few months, so are the stainless steel customers anxious? I would say not yet, but they will be in 2017," Morgan commented.

The UBS forecast sees nickel averaging US$5 per pound in 2017, or US$11,023 per tonne, above the median consensus from 18 analysts of US$10,920 per tonne.