Chart of the week: Nickel is due an upturn

An Indonesian export ban on nickel threatens to send the price of the metal soaring.

687-COTW-620

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 couldmean the nickel market has a deficit of 134,000 tonnes in 2015, 106,000 tonnes in 2016 and 77,000 tonnes in 2017.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

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.