LME WEEK 2019: Nickel ore shortage to take its toll H2 2020 after Indonesian export ban

London, Oct 29 (SMM) – Tightness in nickel ore supply may unlikely to materialise until the second half of next year, as top producer Indonesia announced the export ban four months in advance of its effective date on January 1, 2020, said Jim Lennon, senior commodities consultant at Macquarie. 

Speaking to delegates at LME week in London on Monday October 28, he forecasted the annual average LME cash nickel prices next year to be 2% lower from the current levels, and stood at $16,500/mt. 

Nickel was the standout performer in the base metals complex in 2019, with a gain of 59% so far in London, on the back of supply concerns after Indonesia brought forward the export ban by two years to 2020. 

But Lennon expected the upside room in nickel prices to be capped next year as prices might have been overpriced on speculative buying. 

He added that another export of 80,000-100,000 mt of Indonesian nickel units before end-2019 may keep producers in China well supplied in the first half of 2020. 

The metal is used to produce stainless steel and batteries for electric vehicles.