09 DECEMBER 2013www.fnarena.com
Indonesian govt has reiterated plans to ban tin, bauxite and nickel ore exports from Jan '14
Edited by : AL CIRCLE
1 min read
The Indonesian government has reiterated plans to ban tin, bauxite and nickel ore exports from January 2014. The extent of the bans and the specific implications are still unclear, as some exports may still be allowed if companies reveal an intention to build smelters in the country.
The move is populist, in CIMB's opinion, as Indonesia proceeds to a national election in April. The broker doubts the country will enforce the bans in full and with immediate effect. In the case of bauxite, the analysts expects an interim measure of increased export tariffs is likely, beyond the current 20%.
Macquarie considers the news a long-term bullish signal for prices, although the broker's base case does not assume a material ban on nickel exports. High levels of nickel ore inventory in China and finished metal on the LME are likely to prevent any price recovery for the present. Nevertheless, if Indonesia goes ahead it's likely that a major part of global nickel ore and bauxite supply will be withheld from the market.
The move is populist, in CIMB's opinion, as Indonesia proceeds to a national election in April. The broker doubts the country will enforce the bans in full and with immediate effect. In the case of bauxite, the analysts expects an interim measure of increased export tariffs is likely, beyond the current 20%.
Macquarie considers the news a long-term bullish signal for prices, although the broker's base case does not assume a material ban on nickel exports. High levels of nickel ore inventory in China and finished metal on the LME are likely to prevent any price recovery for the present. Nevertheless, if Indonesia goes ahead it's likely that a major part of global nickel ore and bauxite supply will be withheld from the market.
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