Source: MetalMiner analysis of fastmarkets.com data.
Nickel rose sharply on the news. Over the last few weeks, nickel prices were struggling to make headway as investors feared that the easing of the Indonesian export ban would bring more ore supply into global markets.
Now we have two factors, Indonesia’s easing of its export ban and the Philippines’ shutdowns, that could drive prices in opposite directions. However, as we explained recently, the mining shutdowns in the Philippines are likely to be a greater driver of prices.
Indonesia may export up to 5.2 million metric tons of nickel ore a year under the country’s new rules. Meanwhile, the Philippines produced 32 mmt of nickel ore in 2015. Therefore, while Indonesia could potentially add 5.2 mmt to the global markets, 16 mmt of nickel production in the Philippines is at risk.
The Wind Is Blowing On Nickel’s Back
If we narrow our view to the supply/demand fundamentals of the nickel industry, the picture looks bullish, but rather complex. However, we need to widen our view to the whole industrial metals spectrum, and this one looks quite bullish. Industrial metals continue to rise on robust demand and shrinking supply.