Posted on 21 Sep 2021
After banning the export of most nickel ore for more than a year, Indonesia has once again set its sights on further export restrictions related to nickel products.
Indonesia is exploring the possibility of levying an export tax on nickel products with less than 70% nickel content, Kallanish learns from local media reports. The discussion is still in its early stages and the government has not yet determined the details.
Investment minister Bahlil Lahadalia said during a virtual media briefing last Friday that most nickel products exported from Indonesia have a nickel content of 30-40% and could be refined further domestically to at least 70%. This plan also shows that Indonesia hopes to increase the added value of its local mineral products and improve the local new energy battery industry chain. The policy could however make nickel pig iron and ferronickel exports from Indonesia more expensive.
Although the country's resources are very attractive to investors, sudden policy changes may discourage investment. After Indonesia announced its export ban on most nickel ore, many Chinese investors had to speed up the construction of smelters in Indonesia, in order to meet the targets of the Indonesian government.
Market data show that most nickel ore exports from Indonesia to China remain at only 15% average Ni content. If this policy is implemented, it will have an impact on China's ferronickel supply and support nickel prices, but hit the profit of the stainless steel industry overseas.
In January-July China imported 1.8 million tonnes of ferronickel from Indonesia, accounting for 84.14% of China's total ferronickel imports.
Source:Kallanish
