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:
- Independence Group NL (ASX: IGO) saw its share price gain 8.64%.
- Mincor Resources NL (ASX: MCR) also saw its shares rise 4.65%.
- Ardea Resources Limited (ASX: ARL) skyrocketed 19.78%.
- BHP Billiton Ltd (ASX: BHP), which also has nickel operations, saw its share price climb more modestly, rising just 0.47%.
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.
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