A worker processes nickel at a nickel smelter of Vale Indonesia, near Sorowako, Sulawesi. (Reuters Photo/Yusuf Ahmad)

Nickel Hits 4-Month Low as Indonesia Eases Ore Export Ban


JANUARY 12, 2017

London. Nickel fell as much as 5 percent on Thursday after Indonesia eased a ban on metal ore exports, while copper retreated from a one-month high after the country said shipments of concentrate could resume under certain conditions.

An official said on Thursday (12/1) that Indonesia would allow exports of nickel ore and bauxite if smelters built could absorb at least 30 percent of low-grade ore output.

Three-month nickel on the London Metal Exchange fell to its lowest since mid September at $9,660 a tonne after the news, and was at $10,000 a tonne in official midday trading, down 1.8 percent.

"From the headlines we've seen, it does now suggest that there will be a channel for exports for nickel ore producers," Standard Chartered analyst Nicholas Snowdon said. "It is a pretty significant shift in terms of policy compared to the last three years with the export ban."

LME copper also pared gains after Indonesia said it could loosen a ban on shipments of copper concentrate, but remained up 1.2 percent at $5,780 a tonne in official trading.

Overnight it hit its highest since Dec. 12 at $5,848 a tonne as a ban on Indonesian concentrate shipments took effect.

Freeport-McMoRan and other miners halted copper concentrate shipments to abide by a government ban on exports of unprocessed metal ores that took effect on Thursday, a mining ministry official told Reuters.

The move sparked some speculative buying, Citi analyst David Wilson said. "Freeport exports around 300,000-400,000 tonnes of concentrate from Indonesia, so a pretty sizeable volume," he said. "Copper is not over-inventoried ... there may be some concentrate inventory, but not massive amounts."

A retreat in the dollar to its lowest since mid-December after U.S. President-elect Donald Trump failed to unveil detailed economic plans at a news conference on Wednesday also boosted commodities.

Trump's first news conference since the Nov. 8 election contained no details on tax cuts and infrastructure spending, two factors that had fuelled a five-week rally in stocks and a sell-off in global bond markets.

Copper surged in line with other base metals in the wake of the election. While prices remain elevated, they are off November's 17-month peak of $6,045.50 a tonne.

LME zinc and lead were untraded in official rings, but were last bid up 1.3 percent at $2,735 a tonne and 2.6 percent higher at $2,193 a tonne respectively. Aluminium was 1.6 percent higher at $1,787 in official trading.

A person familiar with the matter said the Obama administration was expected to launch a complaint against Chinese aluminium subsidies with the World Trade Organization on Thursday.

LME tin was untraded in official rings, and was last bid down 0.7 percent at $21,000 a tonne.

Additional reporting by Pratima Desai in London and Melanie Burton in Melbourne