Nickel prices soar 9% after Indonesia expedites export ban

In response to the Indonesian government’s plan to ban nickel ore exports, the price the silvery-white metal has soared in the past week.

Price action at a glance

The nickel price has been on a tear in the last week, rising from $15,779 per tonne (August 27) to $18,004 per ton on (August 30).

The nickel price now sits at a five-year high.

What’s driving nickel prices higher?

In a surprising turn of events, Indonesia’s government last week announced that it intended to move up its plans to ban nickel ore exports to the end of December 2019.

Though the government had previously expressed plans to ban nickel ore exports by 2022, this new move represents a highly expedited version of such a vision.

According to The Strait Times, this will mean that ‘local miners [will] have to soon start processing the raw metal domestically before shipping overseas.’

Such a move will hopefully help Indonesia reign in its fast-rising government deficit.

Off the back of this planned government intervention, it's hardly surprising that the price of nickel has soared – rising as much as 9.24% last Friday – as concerns over supply-side shortages circulate.

For reference and as noted by Jakarta Global, citing a 2018 WoodMac study: Indonesia accounts for 27% of the world’s nickel market, followed by the Philippines (14%), Latin America (10%) and New Caledonia (9%).

ASX-listed nickel miners skyrocket in response

As a consequence of nickel's bullish price action, a number of ASX-listed, small and large-cap nickel focused-companies have seen their share prices surge in response.

A quick summary of today’s stock market activity alone illustrates this point:

Nickel demand is crucially linked to the electric vehicle (EV) market – with the silvery-white metal counted as a key component in the construction of EV batteries.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.