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Indonesia: production of Nickel will decrease due to price

4 July 2017

Indonesian Smelter Association — Association of the enterprises of the coloured metallurgy sector of Indonesia reported about the upcoming reduction of the global cost of Nickel. Low price of metal was the cause of the decline in its production in the country. The Deputy Chairman of the Association, Jonathan Handojo, shared his impressions on the situation. Today its activities stopped 13 plants. This refers to enterprises whose activities are focused on the production of Nickel-containing cast iron. Their combined annual production capacity is 750,000 tons. Twelve more companies of the same orientation continue their work. With this undeniable losses on the background of reducing the cost of Nickel. Quotation of Nickel on the LME over the last year has fallen to the lower boundary, amounting to less than 9 thousand USD/tonne for 3-month agreement.

In 2014, Indonesia began the widespread construction of factories for production of Nickel containing pig iron or other products of Nickel. Such a surge occurred on the background of the ban in the country on the export of unprocessed Nickel raw materials. But last year the Chinese companies have bought 747,1 thousand tons of Indonesian ferronickel. This indicator three times exceeds the results in 2015. The volumes of purchased Nickel cast iron with a metal content from 4 to 10% more than 95 thousand tons.

Most likely, the closure of enterprises in Indonesia will not cause major disruptions in the global Nickel market. This year, the Indonesian government has partially removed the ban on the export of raw materials. It is also anticipated that will increase the supply of Philippine raw materials — the country has seen a change of leadership, which will affect the existing restrictions. In respect of the mining operations they were significantly weakened.

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