Rising ore supplies dim Nickel prospects: Angel Commodities Broking

Views of Ms. Kaynat Chainwala (Research Analyst - Base Metals, Angel Commodities Broking):

Nickel received a heavy blow in today's session and prices plummeted by as much as 2.5 percent to $9110/t following comment by a Indonesia mining ministry official that two more companies have been issued recommendations to export mineral ores. PT Ceria Nugraha Indotama has been permitted to export 2.3 million tonnes of nickel ore through to July 2018 and PT Dinamika Sejahtera Mandiri to ship 2.4 million tonnes of bauxite.

Earlier in May'17, government had allowed Indonesian largest nickel producer PT Aneka Tambang to ship 2.7 million tonnes of nickel ore and 850,000 tonnes of bauxite. Acting on the same, the Indonesian mining giant on 30th May 2017, revealed that it had exported 165,000 wet metric tons (wmt) of nickel ore to China. Along with this, the company has submitted a second proposal to the government to export another 3.7 million wmt of nickel ore.

This is a double whammy as the metal has already been the worst performer of 2017, hit hard by another top producer, Philippines. Rejection of appointment of stern environment minister Regina Lopez by the Philippines Parliament in May'17 eased major supply disruption woes as she planned to shut down roughly half of the Philippines' annual mining output.

Looking at the current scenario, it can be conveniently said that future course for Nickel won't be smooth given increased ore supplies from both top producing nations.

Source : Equity Bulls

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