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[SMM review] in order to maintain nickel mine inventory level, Indonesia's large stainless steel plant plans to reduce nickel pig iron production by 20% in November.
Oct 29,2019 17:27CST
The content below was translated by Tencent automatically for reference.

SMM10, March 29: according to the latest report, Indonesian investment agency head Bahlil Lahadalia said that Indonesian nickel miners agreed on Monday to immediately stop nickel exports, after Jakarta last month proposed a transportation ban from 2022 to January 2020. Lahadalia said products originally scheduled to be exported from Indonesia, the world's largest nickel producer, would be bought by local smelter operators at international prices. "the implementation of this agreement is not based on a letter from the Government or the Ministry of Technology, but a joint agreement implemented by the Nickel Association and our Government."

The Indonesian government accelerated its ban on ore exports for two years in September as part of its efforts to boost the expansion of the local smelting industry. The move to suspend nickel exports is in line with President Joko Widodo's plan to turn Indonesia into a mineral resources processor, not just a supplier of raw materials. In August, the government moved up the planned ban on nickel exports by two years to early January, resulting in a reduction in the supply of millions of tonnes of nickel on the market and a global shortage of nickel supply. Expectations of an Indonesian ban sent nickel prices on the London Metal Exchange (LME) up nearly 40 per cent to about $17000 a tonne. In September, they hit a five-year high of $18850 a tonne.

Lahadalia, appointed by President Joko Widodo in his new cabinet last week, said: we agree that we can no longer export nickel ore, but can only be processed at home. For when we export ore, the country will suffer losses. We hope to develop downstream industries so that we can export high value-added products and create more jobs. The nickel company agreed not to export ore based on "collective consciousness", but to create added value by exporting Indonesian resources through onshore processing. Since Indonesia announced that it would postpone the ban on ore exports until January, nickel smelters have been having trouble buying raw materials for their plants.

China's Castle Peak, Indonesia's largest smelter operator, will cut production by 20 per cent from November to maintain its ore inventories because of ore scarcity and as the rainy season begins, a company official in Jakarta said.

Alexander Barus, executive director of the Morowali industrial park in PT, Indonesia, said Morowali's smelter was prepared to buy ore from miners. "We will make the purchase according to the stock and when the specifications and prices are appropriate. As long as the government helps support domestic ore prices, miners will be fined for shutting down exports. We support it, but the price given to the miners should be fair. "

According to foreign media, Indonesia's large stainless steel plant plans to reduce nickel pig iron production by 20% in November, mainly due to a shortage of nickel mines after the start of the rainy season in Indonesia, in order to maintain a certain level of nickel ore reservoirs. According to SMM, it was confirmed by relevant sources of the company that there was such a plan in November. The company produced about 180000 metal tons of nickel pig iron this month, which would affect about 36000 metal tons if it were to cut production as planned.

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