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Nickel likely to hit US$20,000 a tonne on Indonesia ban: Goldman Sachs
[BEIJING] Goldman Sachs expects nickel prices to reach US$20,000 a tonne in three months, a level not seen since May 2014, after Indonesia said it would expedite a ban on nickel ore exports by two years to the end of 2019.
The ban would remove 10 per cent of global supply and "create substantial supply uncertainty," the investment bank said in a note on Sunday.
Nickel is used to make stainless steel and batteries for electric vehicles.
Three-month nickel on the London Metal Exchange closed up 8.8 per cent on Friday and rose as much as 3.2 per cent in early trade on Monday to US$18,470 a tonne, the highest since Sept 15, 2014.
After reaching US$20,000, nickel will recede to US$18,000 in six months and US$16,000 in 12 months as supply and demand respond to higher prices, according to Goldman's base-case scenario where Indonesia confirms the full ore ban by end-2019.
"At the same time, given that no official document has so far been published we cannot rule out that some exceptions could be announced," it added.
Indonesia is due to hold a press conference on the export ban on Monday.