Indonesia rocks the nickel market again
The London Metal Exchange nickel price initially slumped 5 percent on the news to a four month low of $9,660 per tonne before recovering to $10,275 at the Thursday close.
The tremors have spread canada goose factory sale to the equities market with the shares of Australia nickel producers and Indonesia buy canada goose jacket cheap own PT Vale Indonesia experiencing similar turbulence.
The fear is that Indonesia will ramp up both production and exports buy canada goose jacket again, reversing a shift to supply shortfall in the global nickel market and killing off a budding rally in canada goose clearance sale the canada goose price from the February 2016 low of $7,550.
But will it? Not only canada goose uk outlet is there considerable devil in the detail of this latest policy flip flop but much has changed in the nickel supply chain since 2014.
SURPRISE? The first thing worth noting about Thursday announcement is that it shouldn really have come as a total shock.
As long ago as February last year Indonesia minister for energy and minerals resources said that some sort of partial revision to the export ban was possible, even probable.
The domestic debate has raged very publicly ever since, pitting the country miners, including state canada goose store controlled PT Aneka Tambang (Pt Antam), against investors, mainly Chinese, Canada Goose Coats On Sale who have committed to building nickel processing capacity in the country.
The government itself has been split between those arguing that the ban was achieving its goal of forcing value added production against those more concerned over the loss of export revenues.
The nickel market problem is that it has failed to read correctly the Indonesian policy debate.
There is an analogy with the original ban here. Although it too shocked the market, it had been signposted as early as 2009 when the legal groundwork was set.
It just the Canada Goose online market bet that the Indonesian government wouldn do it. It was wrong then and it has been proved wrong again this time around.
DEVILISH DETAIL The second key point about this canada goose jacket Canada Goose Outlet latest policy shift is that it does not amount to a wholesale Canada Goose Jackets lifting of the ban on nickel ore exports.
As explained by Indonesia Coal and Minerals Director Bambang Gatot, exports canadian goose jacket will only be allowed of low cheap Canada Goose grade ore, defined as 1.7 percent or less contained metal, by processors who uk canada goose outlet have excess material after meeting a canada goose uk black friday minimum 30 percent usage threshold in their plants.
Which, frankly, is as clear as mud, or indeed as a handful of wet nickel ore.
You can just about discern the logic in this messy canada goose uk shop compromise. The presumed aim Canada Goose Online is to reward those who have Canada Goose Parka committed to investing in processing capacity by allowing them to generate revenues from selling surplus ore.
The only clear short term winner is Pt Antam, which runs its own cheap canada goose uk ferronickel plant but which had historically also mined and exported ore up until the January 2014 ban.
The loss of those export revenues has squeezed the company revenues to the Canada Goose sale point that it has publicly warned it wouldn be able to invest in downstream processing capacity.
The company, according canadagooseoutlet4online to David Wilson, analyst at Citi, may be sitting on up to 20 million tonnes uk canada goose of stockpiled ore. That could represent as much as 250,000 tonnes of contained nickel which could be potentially available to the market (Global Commodities Focus, Jan. 12, 2016).
Emphasis on the word in that sentence. How much PT Antam will be allowed to export is of course dependent on the devilish detail.
SHIFTING FLOWS Interestingly, PT Antam has canada goose black friday sale been lifting its ore mining activities this canada goose clearance year above and beyond what it needs for its own plant.
Production totalled 1.1 million wet tonnes canada goose coats on sale in the first nine months of 2016, up from 432,500 tonnes in the year earlier period.
That because PT Antam is now selling ore to the new processing plants that have been built since canada goose coats 2014. Sales to domestic third parties totalled 631,500 tonnes in the January September 2016 period, compared with zero in 2015.
