Mincor: Nickel Could Gain for Up to Five Years While Indonesia Builds Smelters

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Western Australia nickel miner Mincor’s Founder, David Moore, says conditions behind the recent nickel price spike could last up to five years, provided Indonesia’s nickel export ban stays in place.

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Speaking at a Western Australia Mining Club lunch yesterday, Moore said Indonesia’s move to consolidate its export ban by building 100,000 ton-a-year nickel smelters would take time.

“The question is: how quickly can this happen?” he said. “Firstly, it can only start happening once people are convinced the ban will stay in place – you don’t want to be halfway through a billion-dollar construction project to find you’ve lost your market. Very little has actually started and the numbers I’m hearing is three years and $2.5 billion to build a 100,000 ton-per-annum smelter. But they don’t even know really what the costs are going to be. It’s quite difficult and it’s hard to see the smelter capacity currently in China replicated in Indonesia in three years – maybe it’ll take five years.”

With a 0.7 percent increase over the past day, the spot price of nickel was the biggest mover on the LME, closing at $18,845 per metric ton on Wednesday, July 2. On the LME, the 3-month price of nickel gained 0.7 percent to finish at $18,925 per metric ton. The cash price of primary Indian nickel saw a 0.6 percent decline to INR 1,149 ($19.15) per kilogram.

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Chinese stainless steel prices were flat for the day. The price of Chinese ferro-chrome continues hovering around CNY 8,300 ($1,339) per metric ton for the fifth day in a row. The price of Chinese ferro-moly saw little movement at CNY 145,000 ($23,387) per metric ton.

The Allegheny Ludlum 316 stainless surcharge saw essentially no change for the fifth day in a row, remaining around $1.31 per pound. For the fifth day in a row, the price of Chinese 316 stainless coil remained essentially flat at CNY 26,000 ($4,194) per metric ton. The price of Chinese 304 stainless coil remained essentially flat at CNY 16,400 ($2,645) per metric ton. The price of Chinese 316 stainless steel scrap saw essentially no change for the fifth day in a row, remaining around CNY 16,100 ($2,597) per metric ton. The price of Chinese 304 stainless steel scrap saw little movement at CNY 16,400 ($2,645) per metric ton.

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