Nickel caught between shifting Indonesian and Philippine supply trends – by Andy Home (Daily Mail/Reuters – September 26, 2016)

LONDON, Sept 26 (Reuters) – Indonesia shocked the nickel market at the start of 2014 when it made good on a commitment to ban all exports of unprocessed minerals. With the stroke of a presidential pen the flow of nickel ore to China’s nickel pig iron (NPI) producers was halted.

Indonesian mined nickel production slumped from 834,000 tonnes in 2013 to 177,000 tonnes in 2014, according to the International Nickel Study Group (INSG). Only two local operators, Aneka Tambang and Vale Indonesia, were in a position to keep digging because they were already transforming ore into downstream products.

Now it is the turn of the Philippines to roil the nickel market. The country, which lifted output to capitalise on the gap left by Indonesia, has been closing nickel mines on environmental grounds with another tranche of suspensions to be announced on Tuesday.

But just how big an impact will this have on nickel’s supply dynamics? Particularly when there are signs that Indonesia’s own production is starting to recover.

The new Philippine administration has already suspended 10 mines, eight of them nickel ore producers, since coming into power in June. It is expected on Tuesday to announce another 12 suspensions for environmental violations following an audit of all the country’s operating mines.

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