Nickel Producers Hammered in Indonesia as Metal Price Slumps 40% – by Yoga Rusmana (Bloomberg News – December 17, 2015)

http://www.bloomberg.com/

Almost two years after Indonesia, the largest producer of mined nickel, banned ore exports to nurture its metals industry, fledgling smelters are being pummeled by a plunge of more than 40 percent in prices.

The chief executive officer of one of the biggest producers, a Chinese-Indonesian venture called Tsingshan Bintangdelapan Group, says with output costs at $10,000 to $11,000 a metric ton, he’s making a $2,000 loss on every ton he ships. While CEO Alexander Barus thinks prices will recover, he says plans for new smelters will be put on hold if rates stay where they are now.

The principal cause of the slump is the slowdown in China, which consumes about half of the world’s nickel used mostly for corrosion-resistance in stainless steel.

Asia’s largest economy is facing the weakest growth in a generation as the country shifts to consumer demand and services as the main driver of expansion. That’s cut demand for everything from coal to cement and steel. Nickel trades at $8,665 a ton in London, near the lowest in 12 years.

“People planned their investments when prices were at $12,000,” said Barus at the venture held by the Jakarta-based Bintangdelapan Group and Tsingshan Holding Group from China.

“If nickel recovers to above $10,000, new smelters are still possible, but it’s highly unlikely below that,” he said in an interview.

For the rest of this article, click here: http://www.bloomberg.com/news/articles/2015-12-17/nickel-producers-hammered-in-indonesia-as-metal-price-slumps-40-

Comments are closed.