SINGAPORE, July 10 (Bloomberg): Indonesia's ban on ore exports will probably remain in place and speculation that the curb may be relaxed if Joko Widodo becomes the country's next president is misplaced, said Australia & New Zealand Banking Group Ltd.
Nickel fell as much as 2 per cent in London yesterday as unofficial counts showed Jakarta Governor Widodo won the most votes in the world's third-biggest democracy, putting him ahead of Suharto-era general Prabowo Subianto. While the market perceives Widodo's market-friendly policies as an indication that the ban will be lifted or at least watered down, that's unlikely, analysts including Mark Pervan wrote in a note.
The ban in the biggest mined nickel producer, which was implemented in January to induce investment in processing plants, spurred forecasts for global shortages of the metal used in stainless steel. Nickel rallied in May to the highest level since 2012, and outperformed all other base metals this year. Widodo, who's known as Jokowi, would probably relax the ore ban, Mike Dragosits, senior commodity strategist at TD Securities in Toronto, said yesterday as prices retreated.
That decision is unlikely "given the upside to revenue is substantial, and the fact that the policy has been in place for six months already and appears to be encouraging investment in processing facilities," Pervan said.
Nickel for delivery in three months, which tumbled 1.3 per cent to end at $19,525 a metric ton on the London Metal Exchange yesterday, pared losses today. The metal, which fell as much as 1 per cent to $19,330 a ton, was 0.3 per cent lower at $19,475 at 8:13 a.m. in London. The price peaked this year at $21,625 on May 13 and is 40 per cent higher in 2014.
Both Jokowi and Prabowo claimed victory in the contest to lead Southeast Asia's largest economy. Jokowi, had about a five per centage point lead, according to unofficial counts from two survey companies that declared him the winner. The rupiah surged to a seven-week high as the currency market reopened today and the Jakarta Composite Index rose to the highest since May 2013.
Jokowi would keep the ore export ban, Jusuf Kalla, his vice presidential candidate, said during the campaign. A Widodo government would seek to boost exports of processed minerals rather than raw ores, according to a party policy document.
Indonesia ore ban to remain should Widodo win poll
FE Team | Published: July 11, 2014 00:00:00 | Updated: November 30, 2026 06:01:00
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