Nickel: Indonesia quashes hopes of ore export ban U-turn

The Indonesian government has confirmed that a ban on exporting nickel ores will remain in place following a request from the Indonesian nickel miners’ association (APNI). APNI proposed back in April that the country should permit a resumption of shipments of nickel ores, in order to mitigate the impact on exports of processed nickel products caused by global measures to control the COVID-19 outbreak.

The decision by the Indonesian government comes after it performed revisions to its mining law for other minerals. It passed revisions to its mining law last month, which permitted exports of certain ores over the next three years for those miners actively constructing smelters. Significantly, for nickel, the revisions included the option that the government could rule against the export of specific ores under a separate regulation.

Roskill View

Indonesia has not shied away from making swift changes to its export policies, first implementing a total ban on nickel ore shipments in January 2014. This was designed to incentivise investment in downstream nickel processing capacity and was largely successful in doing so. It was followed by a partial relaxation on export policies in early 2017.

Indonesia is the world’s largest producer of nickel ores and hosts abundant reserves. Prior to the re-implementation of the export ban, which commenced from 1 January 2020 (originally scheduled to take place in January 2022), the country was one of the largest exporters of nickel ore destined for Chinese nickel pig iron (NPI) production. With the loss of ore imports from Indonesia, Chinese NPI producers have lost a major source of their raw material requirements. As a result, Chinese imports of Indonesian NPI have surged so far in 2020, to feed Chinese stainless mills. In Q1 2020, exports of Indonesian NPI to China were 685kt gross, representing a 218% increase y-o-y. Roskill expects this rapidly rising trend to continue as NPI capacity ramps up through the remainder of the year.

Roskill’s NEW Nickel: Outlook to 2029, 16th Edition report was published in April 2020 and outlines industry trends and forecasts for the next decade. The report forecasts the growth of NPI capacity used by Indonesian and Chinese stainless steel mills. Click here to download the brochure for the report, or to access further information.

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This article was written by Jack Anderson. Please get in touch below if you wish to discuss further:

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