Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.
Indonesia will again ban exports of nickel ore, encouraging
investors to build smelters at home to produce value-added
products. Nickel prices surged following the news and freight
premium for nickel ore fitted ships, mostly Supramax, will increase
in the short-term.
When Indonesia banned Nickel ore in January 2014, Indonesian
nickel ore export volumes spiked in the last quarter of 2013. The
Philippines increased export volumes after 2014 but have maintained
stable sales since
In 2018, the Philippines accounted for 59% of global nickel ore
supply, while Indonesia contributes to 29% of global supply
There are not enough alternative suppliers, New Caledonia and
others have 7% and 5% market share respectively in 2018
China is the world's largest producer of stainless steel and
naturally the biggest importer of nickel and nickel ore. Indonesia
contributed to 32% of China's nickel ore imports in 2018
Indonesian nickel ore shipments to China were already up pretty
significantly so far this year before the announcement of the ban
and will export maximum nickel ore for the rest of the year. This
will boost near-term nickel ore supply although there are still
some limitations given export quotas
The Philippines has also increased their exports by 5% YTD and
is expected to increase exports in 2020 but has little room to
expand capacity significantly. In the short-term, the Philippines
nickel ore exports will face seasonal decline in the coming
months
IHS Markit had assumed the ban would not come into force until
2022, therefore, IHS Markit 2019 nickel price forecast has been
revised substantially higher
The nickel ore trade impact in freight will be limited as the
current Indonesian nickel ore export market share is much less than
the 2013 level (57%). However, the premium for nickel ore fitted
Supramax will increase in the short-term, given there are limited
vessesls which can load nickel ore owing to liquefaction risk
Overall, Supramax freight rates are expected to stable in the
short-term with strong ECSA grain chartering activities and
speculative coal demand in China. However, there remains a downside
risk in the medium-term, with weak US grain demand and potential
Chinese coal import control in the fourth quarter