LONDON, Feb 7 Last month Indonesia rocked the nickel market. This month it is the turn of the Philippines. Indonesia’s decision to allow the partial resumption of exports of nickel ore sent the London Metal Exchange (LME) nickel price spiralling to a six-month low of $9,350 per tonne.
What Indonesia giveth, the Philippines apparently taketh away. The country’s eco-warrior-turned-mining-minister Regina Lopez has ordered the closure of 23 mines and the suspension of five others, most of them nickel producers.
In London the price shot up to a three-week high of $10,500 on the news and is currently trading around $10,400. Over the coming weeks nickel’s fortunes are likely to be beholden to the uncertain implications of government policy in both countries.
Volatility is assured but it will be at least partly mitigated by high stocks of the alloying metal.
This, after all, is a market that is struggling to emerge from years of over-supply and resulting inventory build. And while events in both Indonesia and the Philippines are going to be key price drivers for the foreseeable future, they will impact only the most upstream part of a supply chain which is still amply filled at the refined metal stage.
Last month’s part reversal of Indonesia’s 2014 ban on the export of unprocessed nickel ore was not what the market was expecting.
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