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Indonesia Nickel Ban Unlikely to Disrupt Near Term Supply

Metal News - Published on Mon, 09 Sep 2019

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Mining Journal reported that the hastened ban follows the relaxation of a previous ore export ban in 2017. Market analyst Wood Mackenzie believes the move has serious implications for nickel supply, particularly in China, but also Indonesia. The nickel price rose last week from USD 15,779 per tonne on August 27 to USD 18,004 on August 30 a fresh five-year high lingering at elevated levels on Wednesday at USD 17,905 per tonne. While the early implementation of an ore export ban by Indonesia is, in WoodMac's view, unlikely to impact nickel production in 2019, from 2020, the export ban is expected to result in a loss of 16,000 tonne, 190,000 tonne in 2021, 112,000 tonne in 2022 and 85,000 tonne per annum from 2024 onwards.

The analyst said that "Likewise, while it is probable that we will need to reduce out Chinese nickel in nickel pig iron production from the current forecast of 516,000 tonne, this could still prove conservative depending on how much ore permit holders manage to export over the remainder of 2019 and into early 2020.”

WoodMac said that "We do not believe that the total forecast loss in production in 2021 can be offset by a production increase in Indonesia. For 2020, should the nickel prices remain at current levels, it will be enough to support the reactivation of around 50,000tpa of idled blast furnace capacity, offsetting the modest production loss forecast. For 2021 we do not believe that the loss of 190,000 tinne of production can be offset by increases in output elsewhere. From 2022 onwards, our view is that the bulk of the lost output could be offset by increased output in Indonesia assuming funds can be secured for the planned expansions.”

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Posted By : Rabi Wangkhem on Mon, 09 Sep 2019
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