Plans by Indonesia to introduce a planned export ban on nickel ore earlier than originally intended should be supportive for nickel, said Commerzbank in a commodity research note.
According to the commodity data, The country is one of the world’s largest nickel producers. Its export ban on ore will now take effect in May rather than from 2014.
“In taking this step, Indonesia wants to ensure that more ore is processed in the country itself and exported as refined nickel, which would increase the value of the country’s exports,” the bank added.
“As a result, China in particular, a major consumer which last year purchased 53% of its nickel ore from Indonesia, will be forced to look for alternative sources.” One possible supplier could be the Philippines, following the commissioning of a new mine there, Commerzbank continued.
In the meantime, Commerzbank stated that, “The price of nickel could therefore find good support initially. From a charts perspective, one positive aspect is that the price remained above the $17,000-a-(metric)-ton mark at the end of last week, a threshold it has not fallen below for any significant period of time since the end of 2009.”
MBN Price at posting:
53.5¢ Sentiment: ST Buy Disclosure: Held
