The London Metal Exchange three-month nickel price has been in a downtrend since Monday July 3, slipping to as low as $8,970 per tonne on Friday July 7, the lowest since June 22.
This was partly triggered by news that Indonesia has approved PT Ceria Nugraha Indotoma to export 2.3 million tonnes of low-grade nickel ore up to July 2018, as local media reported mining ministry mineral enterprise director Bamgba Susigit as saying this week.
This took the number of nickel export permits approved in Indonesia to three and the total export quota approved to 6.06 million tonnes so far this year – 2.7 million tonnes was approved for PT Aneka Tambang (Antam) and 1.06 million tonnes for PT Fajar Bhaki Lintas Nusantara earlier this year.
In January, Ignasius Jonan, the country’s energy and mineral resources minister, had said that Indonesian mines might only export up to 5.2 million tpy of nickel ore under the country's new rules to re-allow nickel ore exports. The latest quota approval has thrown up the question of how many more tonnages Indonesia will approve for export.
“This second round of approval may not be the end. There is no ruling out of more companies receiving quota approvals,” China’s Galaxy Futures said in a report on Thursday July 6.
For instance, Antam has been reported to be seeking approval to export another 3.7 million tonnes of nickel ore.
How much more export quota could be approved by Indonesia depends on whether more local miners and/or smelters intend to apply for the quota, which is rather difficult to gauge, a Guangdong-based nickel analyst told Metal Bulletin.
“That means how much nickel ore will come out of Indonesia this year is uncertain,” he said.
China’s Tsingshan Holding, for instance, has not applied for export quotas, but it is unclear if it has intentions to do so in the future, according to the analyst who estimated that the company qualifies for exports of at least 15 million tpy. Tsingshan is the world's largest stainless steel producer and the largest nickel pig iron producer in Indonesia.
A Tsingshan official confirmed with Metal Bulletin that the company has not applied for a nickel ore export permit, but added: “There are many who have applied for export quotas. It probably does not matter that we have not applied.”
Reversal of policy in Philippines?
Other than the latest nickel ore quota approval in Indonesia, Philippine environment secretary Roy Cimatu’s decision to suspend an administrative order previously issued by his predecessor Regina Lopez, has also hurt nickel price sentiment.
Cimatu, on July 3, suspended the order issued in February which limited the authority to issue environmental compliance certificates (ECCs) to only the secretary of the country’s department of environment and natural resources (DENR). The authority to issue ECCs has now returned to the director and regional directors of the environmental management bureau, which operates under the auspices of the DENR.
"This is consistent with the president's directive to fast track the issuance of permits, licences and other documents issued by government, and can also be viewed as our contribution to making the country more investor-friendly," Cimatu said in a DENR statement on Friday July 7.
Cimatu’s latest decision has raised expectations that he could reverse more orders made by Lopez during her ten-month tenure as head of the agency, including the controversial closing/suspension of several mining operations as well as the cancellation of government contracts with miners.
Cimatu had said in late June that he aims to complete by the end of July a review of the decisions made by Lopez.
Nickel prices have come under pressure as market participants become increasingly wary of Indonesia approving more nickel ore export quotas and the Philippines reversing its previous mining clampdown decisions.