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Indonesian ban on nickel will be scarce

28 January 2014

According to forecasts of the Australian company «Macquarie Group» in 2015 there lack of nickel on the world market, which is justified by the Indonesian ban on the export of ore from the country. No less pessimistic in their forecasts «Barclays» — in 2015 it is likely to lack of nickel proposals. Small supply of raw materials instantly affect the release of nickel pig iron in 2014 its production will fall by 1.5% (475 thousand tons), while the surplus proposals, which in 2013 amounted to 150 thousand tons, decrease this year to 35 million tons.

Exports from Indonesia, amounts to 20% of raw materials from the world's total, respectively, that is about 400 thousand tons of metal. The most severely hit Indonesian ban on China, because China's laterite purchased in very large quantities. In anticipation of the ban manufacturers from China imported more than 30 million tons of nickel ore. As for the world's reserves of nickel, then their level according to the London Metal Exchange rose to 260 thousand tons, which is a record. Weak reaction when nickel prices ban due to the availability of raw materials and a simultaneous increase in its production volumes — it has increased by 20% since 2011. By the middle of January 2014 the price of nickel on the LME continued to rise, and in a few days the quotations increased by 6.9%, which amounted to 14 340 USD per tonne.

Experts «Capital Economics» predict that the Indonesian ban in the short term will be able to maintain the value of the world's nickel, but its effect on the market will be rather limited in comparison with the number of the world's supply of nickel. In 2014 the price of nickel according to analysts will be somewhat increased — 15 500 USD per tonne. Over the border in Indonesia at this time begin to operate at full capacity, new laterite projects: «Ambatovy», Madagascar, 60 thousand tons per year. «VNC», New Caledonia, 60 thousand tons per year. «Onca Puma», Brazil, 57 thousand tons per year. «Koniambo», New Caledonia, 60 thous. Tons per year. Thus, the total amount produced in 2015. Nickel experts predict will exceed 2 million. Tons.

However, there is a possibility that not all of the planned projects will be able to achieve the design capacity, especially since some manufacturers — for example, «Talvivaara», Finland — due to tighten market conditions begin to curtail output, large as producers will try to maintain the maximum level capacity utilization in an effort to reduce overall costs.

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