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As it has done with cobalt, graphite and rare earths, China appears to be locking up the nickel market. Nickel’s top producer, Indonesia, in early September decided to accelerate a scheduled ban on ore export shipments, from 2022 to January 1, 2020.
The ban which instead took immediate effect on Oct. 28, is to encourage the building of domestic smelters instead of exporting raw nickel, and other metals, for processing abroad. (the country did the same thing in 2014 but lifted the ban three years later).
No coincidence
Is it any coincidence that Indonesia decided in September to ban nickel ore exports, just a few weeks after a meeting between Indonesian president Joko Widodo and Chinese industrial executives, including Xiang Guanda, who in partnership with his wife, runs Tsingshan Holding Group?
We think not. Tsingshan is the world’s biggest stainless steel-maker, and has substantial investments in Indonesian nickel. The Chinese metals giant is known for causing a major disruption to the nickel market in the mid-2000s, when it and other Chinese companies massively adopted nickel pig iron (NPI), crushing the nickel price. The firm went on to build low-cost NPI plants in Indonesia.
Tsingshan now plans to construct an Indonesian plant to produce nickel-cobalt salts from nickel laterite ores. Using previously uneconomic technology Tsingshan says it will transform class 2 laterite deposits into class 1 metal for the battery market.
For the rest of this commentary: https://www.aheadoftheherd.com/Newsletter/2019/Is-China-locking-up-Indonesian-nickel.htm