Indonesia nickel curbs may push foreign firms away
ORLD nickel prices climbed, while inventory took a tumble, in the weeks since Indonesia’s surprise ramp-up of export curbs in late August.
With ore producer Indonesia supplying nearly one-quarter of global nickel, the price of the key industrial metal jumped by 18 per cent between end-August and Sept 2 before “moderating somewhat thereafter”, DBS economist Masyita Crystallin remarked in a note this week.
Meanwhile, inventories in warehouses have fallen by 16 per cent in the first week of October, she added, citing the London Metal Exchange.
The latest decision from Jakarta has brought a nickel ore export ban forward by two years, to Jan 1, 2020, in a move that Fitch analysts argued on Sept 30 “reinforces the country's reputation of high policy uncertainty and poor mining operating environment”.
“We expect increasing regulatory difficulties to result in more foreign miners selling their operations in Indonesia to local stakeholders in the coming years,” the Fitch report added.