OTTAWA — Scotiabank is raising its outlook for the price of nickel — a key component in stainless steel — following an Indonesian export ban on unprocessed ore that took effect earlier this year. Nickel prices have been rising following the Indonesian ban that was enacted in an attempt to encourage foreign investment in ore processing in the country.
“While the export ban was announced more than four years ago with an unchanged starting date of January 2014, few market observers, including ourselves, believed that Indonesia would have the resolve to stick with this agenda,” Scotiabank said in a report Monday.
“However, after three months and no signs of the ban being eased or watered down, the nickel market has begun to panic, with prices moving up sharply.”
The bank said it now expects nickel to average US$7.66 per pound this year, up from earlier expectations for US$6.75. Scotiabank also raised its outlook for 2015 to US$9 from US$7 for 2016 to US$10 from US$7.50. The price of nickel was US$6.82 per pound last year.