Indonesias nickel ore prices have fallen by nearly
one-third in the first half of the year due to a combination of
its depreciating currency value against the U.S. dollar and a
weak stainless steel market in China, the largest consumer of
the nations laterite nickel ore.
"If the U.S. reduces
the scale of quantitative easing or quits easing, the rupiah
will fall further," a senior nickel analyst in Shanghai
Nickel ore prices are
denominated in U.S. dollars, and the slide in the rupiah
against the dollar is putting further downward pressure on
metals prices, the analyst added.
The Indonesian rupiah
has fallen by as much as 13 percent so far this year, reaching
the lowest level in four years Sept. 3 as inflation soared to
its highest level since the 2009 global financial crisis.
The Indonesia f.o.b.
price for nickel ore with a metal content of 1.8 to 2 percent
fell to a low of $28 to $42 per tonne in May and June, although
there was a small rally in August, according to traders. That
price now stands at $32 to $46 per tonne following last
months rise in Chinese nickel pig iron prices as the
countrys stainless steel mills raised their purchase
prices for the raw material.
inventory of nickel ore stands at 19 million tonnes, with ore
from Indonesia accounting for more than half the total.
nickel pig iron prices have fallen 15 percent so far this year,
with the ex-works prices of high-grade nickel pig iron with a
metal content of 10 to 15 percent standing at 990 yuan to 1,040
yuan ($161 to $169) per nickel unit.
The three-month nickel contract on the London Metal Exchange
ended the official session Sept. 12 at $13,660 per tonne ($6.20
per pound), down 5.2 percent from $14,405 ($6.53 per pound)
A version of this
article was first published in AMM sister publication Metal