David Wilson, head of metals research at Citigroup, said on the conference call on Tuesday that nickel and aluminum will be the most important metals affected by the new ore export regulations in Indonesia.
According to Wilson, Indonesia is a major supplier of nickel and bauxite to China. The export volume of nickel and bauxite in Indonesia has decreased, which is expected to have a huge impact on the output of nickel and aluminum in China.
Wilson recently pointed out in his report that since the beginning of this year, nearly 75% of the total imports of nickel ore from Indonesia have been imported.
According to Wilson, Indonesia's ore exports are crucial to the Chinese nickel and aluminum market.
The Indonesian Ministry of Finance announced last month that the decree on the taxation of 65 unrefined metals and non-metal exports had come into effect on May 16. All mining companies that have obtained a mining permit seem to have to pay a 20% tariff on export.
Taxation is a supplement to new export regulations. At present, the miners who want to export unrefined ore must first meet a series of requirements before they can ship.
Wilson expects that Indonesia’s new export regulations will support nickel prices; Nickel prices on the London Metal Exchange may rise to more than US$20,000 per ton in the fourth quarter of this year as the reduction in Indonesia’s supply will affect Nickel pig iron production in China.
Wilson said that the nickel market may experience a slight loss in the fourth quarter. However, he also expects that nickel prices will not be affected much in the third quarter of this year, because the inventory of nickel pig iron producers can be used for two to three months.
Wilson said that the recent surge in alumina imports from China indicates that China is worried about the impact of new regulations on bauxite exports from Indonesia. The data released by the General Administration of Customs of China on Sunday showed that from January to May this year, China imported 2.16 million tons of alumina, an increase of 128.6% over the same period of last year.
Wilson said that Aluminum Corporation of Japan (Aluminum Co., Ltd.) recently decided to reduce alumina production capacity by 1.7 million tons, also because of concerns about the supply of bauxite.
According to Wilson, Indonesia is a major supplier of nickel and bauxite to China. The export volume of nickel and bauxite in Indonesia has decreased, which is expected to have a huge impact on the output of nickel and aluminum in China.
Wilson recently pointed out in his report that since the beginning of this year, nearly 75% of the total imports of nickel ore from Indonesia have been imported.
According to Wilson, Indonesia's ore exports are crucial to the Chinese nickel and aluminum market.
The Indonesian Ministry of Finance announced last month that the decree on the taxation of 65 unrefined metals and non-metal exports had come into effect on May 16. All mining companies that have obtained a mining permit seem to have to pay a 20% tariff on export.
Taxation is a supplement to new export regulations. At present, the miners who want to export unrefined ore must first meet a series of requirements before they can ship.
Wilson expects that Indonesia’s new export regulations will support nickel prices; Nickel prices on the London Metal Exchange may rise to more than US$20,000 per ton in the fourth quarter of this year as the reduction in Indonesia’s supply will affect Nickel pig iron production in China.
Wilson said that the nickel market may experience a slight loss in the fourth quarter. However, he also expects that nickel prices will not be affected much in the third quarter of this year, because the inventory of nickel pig iron producers can be used for two to three months.
Wilson said that the recent surge in alumina imports from China indicates that China is worried about the impact of new regulations on bauxite exports from Indonesia. The data released by the General Administration of Customs of China on Sunday showed that from January to May this year, China imported 2.16 million tons of alumina, an increase of 128.6% over the same period of last year.
Wilson said that Aluminum Corporation of Japan (Aluminum Co., Ltd.) recently decided to reduce alumina production capacity by 1.7 million tons, also because of concerns about the supply of bauxite.
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