In 2019 nickel clearly outperformed other industrial metals.
Indonesia is the world’s biggest exporter of Nickel ore followed by Philippines accounting for over 20% of the total exports. Prices rose sharply in June after Indonesia announced that it would impose an export ban by January 2020, a ban that was initially expected in 2022.
This measure is intended by the government to relaunch the internal sector where 11 processing plants are currently operating, 25 on-site fusion plants with the goal of a total ore processing capacity of 81 million tons per year by 2022. The Indonesia aims to become the hub for electric vehicle batteries and the stainless steel segment.
Australia, New Caledonia and Philippines are stepping up efforts to significantly increase production capacity.
Philippines – the inadvertent winner
In this scenario, the Philippines is the unplanned winner as they are the second largest exporter after Indonesia.
The mineral that is supplied from the Philippines, however, is of lower quality than that exported from Indonesia. This problem affects the producers who are not easily able to obtain the purity required for the production of stainless steel.
The fundamentals of nickel are quite strong, without the offer from Indonesia, the main exporter. Furthermore, the increase in demand for stainless steel and the electric vehicle segment could support prices.
Technical analysisLast week, in the weekly report reserved for subscribers, we warned about further descents. The metal actually arrived at the indicated target of $ 14,300 (in € 12930 currently). On the daily chart the price is now on a potential support represented by the 200 period moving average (the most used by institutional investors). This evidence indicates, in the short term, a possible slowdown in negativity. So, from a short-term perspective, the price is certainly on interesting levels.
On the weekly chart, where we observe a medium/long term trend, the trend is rather negative and further descents are not excluded. The metal could reach $ 13900 (€ 12560).
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