FEATURE: Indonesian Ni export ban coming, market stirred
Source: Mysteel
Nov 06, 2019 13:30
Nickel ore or concentrate supplies from other countries such as Philippines will fill up some of the supply gap left by Indonesia in quantity, but the grade will be lower than that from Indonesia, he added.
The ban on nickel ore may lead to Indonesia’s exports of nickel alloys such as nickel pig iron or ferronickel, both of which are not in the list of curtailment, but this will lead to much higher procurement costs to Chinese stainless producers, Mysteel Global understands.
Will Indonesia bring forward nickel ore exports ban?
The market sentiment has been further disturbed on the market speculation in late October that the Indonesian authority may bring forward the prohibition of nickel ore exports from originally-planned January 1 2020.
“We have read a lot of media reports on the possible earlier ban of nickel ore exports, but so far I have not seen any official government notices on this,” an official from a nickel mining company in Indonesia said, confirming that no official announcement has been released from Indonesia’s Energy and Mineral Resources Ministry.
“The action will not be as swift, even though the mining association submits the petition to the government, it will take at least a couple of weeks for the related governing bodies to review the case, and it is not a straightforward decision,” he added.
Among the factors the government needs to take into consideration is whether or how long a grace period the authority should be granting to guarantee the fulfilment of the signed contracts.
Personally, he felt that the decision should be left with the market, especially if the domestic demand can’t absorb all the supplies.
“If the overseas buyers are buying reasonable and high prices for higher-grade nickel ore, exports should be allowed, as it is better than forcing the domestic miners to compete against one another, fighting a pricing war when they are not able to export with the ban,” he added.
No officials from the PT. Indonesia Guang Ching Nickel And Stainless Steel Industry, the Indonesian investment by China’s top stainless steel producer Tsingshan Group, and PT. Dexin Steel Indonesia, an stainless investment by China’s Delong Holding Limited, could not be reached for comment on the status quo of the Indonesian nickel market.
Indonesia achieving positive results on regulating nickel ore exports
Indonesia introduced a ban on the export of unprocessed minerals including nickel ore in January 2014, but it reallowed the processed low-grade nickel concentrate with content at 1.7% and below to exports in January 2017, but all exports will be banned starting January 2020.
All the efforts are to encourage domestic and overseas investments in producing higher value-added nickel producers such as nickel pig iron or ferronickel or even extent the industrial value chain from nickel mining to the production stainless steel and battery materials, market sources in Indonesia and China agreed.
“It will help boost the development of their local smelters, what’s more, overseas investments may come into Indonesia for the country’s rich sources there, thus driving the country’s economic growth and more job opportunities,” the Shanghai trader said.
Indonesia’s harsher stance on nickel ore exports in the past few years has indeed attracted a few Chinese enterprises to set up their stainless steel plants in this ASEAN country, and among them are the PT. Indonesia Guang Ching Nickel And Stainless Steel Industry, and PT. Dexin Steel Indonesia.
Dexin, co-invested by China’s steel mill Delong Holdings, a carbon steel HRC producer with the works in North China’s Hebei province, and Tsingshan Group’s Shanghai Decent Investment (Group) Co, is part of Tsingshan Holdings’ plan to erect a 10 million integrated steel project in Indonesia including carbon and stainless steel utilizing local raw materials such as iron ore, coal, and nickel ore, as Mysteel Global reported.
PT. Indonesia Guang Ching Nickel And Stainless Steel Industry was a co-invested project by Guangxin Group headquartered in South China’s Guangdong province and Tsingshan Holding Group, and the project runs a ferronickel capacity of 600,000 tonnes/year,Mysteel Global understands.
In 2014, China imported 10.6 million tonnes of nickel ore from Indonesia, being down 74.1% on year, according to statistics from China’s General Administration of Customs.
Written by Hongmei Li, li.hongmei@mysteel.com, Anna Wu, wub@mysteel.com
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