Indonesia Nickel Export Ban Still On, But Watch the Price Fundamentals

by Raul de Frutos on

Against the backdrop of the nickel export ban in Indonesia, MetalMiner’s monthly Stainless MMI® dropped to a value of 78 in December, a decrease of 4.9 percent from 82 in November.


Nickel prices fell significantly, after rising the previous month, driving the stainless index down. The 3-month price of nickel dropped 7.5 percent on the LME, while transactional prices of Chinese and Indian primary nickel fell by 6.5 and 7 percent respectively.

There are several analysts out there who feel nickel prices will turn around once the Indonesians kick their export ban into effect in January 2014. Current evidence points to the ban remaining intact, which could make the global nickel oversupply situation do a one-eighty.

Compare with last month’s trends – here’s our free November MMI® Report.

However, nickel prices remain in a long-term downtrend since prices topped in the first quarter of 2011. What’s our nickel outlook? Let’s base it on a more technical analysis, shall we?

Nickel Price Technical Analysis

As with other industrial metals, prices have kept dropping and new highs always seem lower than previous ones. This is an important concept for metal buyers, since it is risky to place forward buys to meet long-term requirements under a major falling trend.

lme nickel historical prices chart

Source: LME data, MetalMiner analysis

The 3-month price of nickel on the LME fell this month from $14,570 to $13,475 per metric ton. However, this significant drop seems to be losing selling pressure since prices are reaching a supported area.

LME nickel prices 2013 chart

Source: LME data, MetalMiner analysis

MetalMiner’s Nickel, Stainless Price Outlook

We wouldn’t be surprised to see nickel prices gain some support during the month of December. However, in the near term into 2014, nothing indicates a breakdown in the major downtrend, which means that prices will likely remain in low levels. In addition, despite talk of export bans, both stainless and nickel markets still remain in an oversupply situation.

Did you know MetalMiner has nickel price forecasting capability?

Key Price Drivers of the Stainless Index

In addition to the hefty LME price drops mentioned above, Chinese primary nickel prices fell 6.5 percent after rising the previous month.

The Allegheny Ludlum 316 stainless surcharge rose 4.1 percent after falling the previous month, and the Allegheny 304 stainless surcharge was up 3.7 percent over November – clearly not enough to offset the drag of the nickel complex.

Last month was consistent for Chinese ferro-chrome, which did not move. Chinese ferro-moly traded sideways last month, as did Chinese 304 stainless steel scrap, Chinese 316 stainless steel scrap, Chinese 304 stainless coil and Chinese 316 stainless coil.

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The Stainless MMI® collects and weights 14 global stainless steel and raw material price points to provide a unique view into stainless steel price trends over a 30-day period. For more information on the Stainless MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.