Nickel ore prices have been rising constantly since Indonesia government launched anti-corruption investigation towards its mining sector in early August following the PT Antam Tbk Mandiodo case, which delayed the approval of new production permission.
While some mines have almost depleted its existing quotas, the supply of nickel ore tightened significantly. Mysteel recently learned that the prices of 1.5% nickel ore have jumped $4 to $58/wet tonne, and are expected to rise further on bullish market sentiment.
The event began with Indonesia's Attorney General Office (AGO) arresting a former senior mining ministry official accused of corruption relating to nickel mining that caused losses to the state. The case was followed by an immediate anti-corruption investigation towards Indonesia's mining sector, which pressed the pause button on RKAB approval process, which is key for miners to validate their mining activities in the country.
Mysteel interviewed 10 leading industry chain players in Indonesia upon the fermentation of the above news, and the feedback is as follows:
As most market players were concerned about when the RKAB approval could return to normal, the supply worries aggravated and the consumers raised their offers extensively, with some trying to source nickel ore form the Philippines.
If the approval is still closed in the next three months, more plants will likely be shut down temporarily.
Written by Aggie Hu, huchenying@mysteel.com