Glencore Sees Nickel Price Rising on Global Supply Shortage – by Eko Listiyorini (Bloomberg News – September 21, 2016)

Glencore Plc, the commodities trader and miner, expects nickel prices to climb through 2018 as demand outstrips supply, assuming Indonesia continues its policy of curbing ore exports and encouraging local processing.

“We believe we’ve seen the bottom, both in terms of the actual spot prices experienced earlier this year and also in terms of the annual average we will see in 2016,” said Kenny Ives, the company’s head of nickel. “We expect spot prices to be higher and we also expect the average to be higher,” he said in an interview in Jakarta on Tuesday.

Nickel prices have advanced 17 percent this year on the London Metal Exchange as global stockpiles declined. The Philippines, the world’s largest shipper of mined nickel used in stainless steel, is carrying out an environmental audit and closing mines that don’t meet international standards, curbing supply. Output of stainless steel in China, the world’s biggest producer, has also been increasing this year as new capacity fires up.

The global deficit will probably be about 100,000 metric tons in 2016 in terms of nickel metal, and shortages will continue going forward, said Ives, who declined to give specific forecasts.

Indonesia halted the export of unprocessed ores in 2014, forcing companies to invest in domestic smelters as it sought to add value to its commodities locally and create more jobs. Ives said the policy had been a success and there will continue to be an increase in processing capacity in the country.

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