What’s Impact on Nickel Price after Indonesia Names Fourth Nickel Ore Exporter? SMM Reports

SHANGHAI, Aug. 1 (SMM) - Indonesian government has recently allowed PT Trimegah Bangun Persada and PT Gane Permai Sentosa to export nickel ore, according to market sources. 

The two mines, owned by Harita, have been given an export quota of 1.559 million tonnes, and 519,900 tonnes, respectively. So far, Indonesian government has expanded its nickel ore export list to four companies, with a total export quota up to 8.14 million tonnes. 

Indonesian Nickel Ore Shipments to Grow in August, and Philippine Nickel Ore to Tighten after President Remarks, SMM Reports

LME nickel, which rallied strongly from $8,865 per tonne on Jul. 10, closed Jul. 28 at $ 10,270 per tonne, a gain of $ 1,290 per tonne or 14 per cent. On Monday’s night trading, LME nickel retreated below $ 10,100 per tonne from $ 10,355 per tonne.  

What’s the impact on nickel price after the news?

“The expansion of export quota list will weigh down nickel market, but any declines will be small, and LME nickel will find support at $ 10,000 per tonne,” SMM nickel analyst foresees, citing following three reasons. 

First, before Harita, the first three companies have been given a total export quota of 6.06 million tonnes, but as of June, China’s inbound shipments of nickel ore from Indonesia were only 860,000 tonnes, less than 15 per cent of total quota. Prices of Indonesian ore are relatively higher over those of Philippine ore with same grade, so domestic NPI producers showed low buying interest in Indonesian ore. 

China Total Nickel Ore Port Inventories Estimated to Grow, SMM Reports

Second, China imported approximately 10 million tonnes of nickel ore from the Philippines during the first six months of 2017, down 630,000 tonnes or 6 per cent on a yearly basis. Ores from the Philippines reduced ore demand from Indonesia. 

Third, major domestic steel mills have reported decent orders for August, and will need to board raw materials for production. 

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