September 27 .good news/bad news.bring it on., page-79

„Analysts at Goldman Sachs said the price of nickel could rise to $20,000 a tonne over the next three months because of the ban, which will to create considerable uncertainty among large consumers.“

BOOOOOM!!!

Financial Times
Industrial metals
Nickel hits five-year high as price surge continues
Fears of market tightness as Indonesia confirms full export ban on metal from 2020
   
September 2, 2019 9:07 am by Neil Hume in London
Nickel’s breathtaking advance continued on Monday after Indonesia said it would halt exports of the metal in 2020 as Jakarta steps up efforts to build a local smelting industry.

Indonesia is the world’s second-largest exporter of nickel ore after the Philippines. Most of it production currently heads to China to be processed into nickel pig iron (NPI), a cheap alternative to pure nickel.

Talk of an expedited deadline has been swirling for a couple of months, helping to push up the price of nickel from its summer low of $11,500 a tonne.

On Monday, nickel for delivery in three months on the London Metal Exchange hit a five-year high of $18,785 after Indonesia confirmed the export ban would be applicable to all nickel ore from the start of next year.

“This cuts off one of the major sources of raw material to the Chinese nickel pig iron industry, and leaves a hole of around 100,000 tonnes per annum in the nickel market for the next couple of years, even assuming alternate suppliers step up and domestic smelting projects are advanced,” said Colin Hamilton of BMO Capital Markets.

The ban was first announced in 2014 but in 2017 the government said it would allow exports of low grade ore (less than 1.7 per cent content) up to 2022 provided that companies build smelters. A full ban, therefore, is something of a shock for the industry.

Analysts at Goldman Sachs said the price of nickel could rise to $20,000 a tonne over the next three months because of the ban, which will to create considerable uncertainty among large consumers.

“The ban is meant to speed up the development of domestic smelting capacity. At the same time, Indonesia’s President Jokowi wants to develop a domestic electric vehicle industry and has cited availability of key raw materials, such as cobalt and nickel, as one of Indonesia’s key competitive advantages,” the analysts said.

Indonesia has had considerable success with push to to build a domestic smelting industry.

On the island of Morowali China’s Tsingshan has built a huge integrated stainless plant with annual capacity of 3m tonnes. Tsingshan is also part of a consortium working on a project to produce high-grade nickel for the battery packs of electric vehicles also on Morowali.

Speaking to reporters in Jakarta on Monday, Bambang Gatot Ariyono, director general for mining and coal at the Energy and Mineral Resources Ministry, said the government had decided after weighing all the “pros and cons” that it wanted to expedite smelter construction.

“So we took the initiative to stop exports of nickel ores of all quality,” he explained, adding that new technology meant low-grade material could be used in batteries. Mr Ariyono said exports of bauxite, the key commodity needed to make aluminium, and copper concentrate would continue to 2022.