Chart of the week: Nickel is due an upturn

Chart: Nickel price chart

Nickel prices have eclipsed $17,000 a tonne for the first time since March 2012, says Neil Hume in the Financial Times. Speculators have pushed up the price of the stainless steel component following an Indonesian export ban.

China relies on the Indonesian exports to produce nickel pig iron, and Indonesia’s ban of unprocessed ore is a game-changer for the metal, says Hume.

Previously the market was oversupplied but, according to Macquarie, the Indonesian ban could mean the nickel market has a deficit of 134,000 tonnes in 2015, 106,000 tonnes in 2016 and 77,000 tonnes in 2017.

The Australian investment bank reckons prices could hit $30,000-$50,000 a tonne in 2016. If you’re looking for a way to play nickel, Jonathan Allum of SMBC Nikko notes that Japanese metals group Pacific Metals (JP: 5541) tends to do well when the nickel price rises.