Despite Indonesia’s ban on nickel ore exports, seaborne trade of the metal will continue as China – the world’s biggest nickel ore importer – seeks alternative sources, according to Italian shipbroker Banchero Costa.
Before the Indonesian ban came into effect on 1 January 2014, China rushed to stock up on nickel ore in 2013, resulting in imports hitting a record high of 71 million tonnes that year.
This huge stockpile and the ban resulted in China’s nickel ore imports falling to just under 50 million tonnes in 2014.
The Philippines is now China’s biggest nickel ore supplier, accounting for 14 million tonnes in the first half of 2015 (1H15), up 15% year-on-year (y/y). Other sources include New Caledonia. However, quantities are nowhere near the 41.1 million tonnes Indonesia shipped to China in 2013 and imports to China were down 37% y/y in 1H15.
China uses nickel ore to make nickel pig iron, a low-grade ferronickel that the country’s steelmakers created as an alternative to pure nickel in stainless steel production.
Banchero Costa observed that consequently both ferronickel and refined primary nickel imports to China have risen. Imports of ferronickel more than doubled to 318,000 tonnes in 1H15 compared with the same period last year.
“It is unlikely that the Indonesian government relaxes its ban on nickel ore exports in the short term,” the shipbroker said. “However with strong global demand and an increase in exports from alternative sources, global trade volumes of nickel ore are expected to increase. Consequently nickel ore is expected to continue to provide strong volumes for Handysize and Supramax vessels.”