METALS-Nickel edges higher as Indonesia blocks exports

Peter Hobson

(Updates throughout, moves dateline from SINGAPORE)

LONDON, Oct 29 (Reuters) - Nickel prices rose on Tuesday as top producer Indonesia said it would temporarily stop ore exports ahead of a ban due to come into force next year.

Benchmark nickel on the London Metal Exchange (LME) was up 0.2% at $16,675 a tonne at 1205 GMT.

With the metal used in stainless steel up more than 50% this year and traders already factoring in the end of Indonesian exports, news of more stoppages was not enough to significantly move prices, said Capital Economics analyst Kieran Clancy.

Weak demand from China's steel industry is likely to cause nickel to slip to around $15,000 by the end of next year, he said.

EXPORT BAN: Indonesia is temporarily stopping nickel ore exports as authorities investigate "massive violations" of export rules, Luhut Pandjaitan, coordinating minister overseeing maritime and mining said on Tuesday.

Pandjaitan said shipments had jumped since the government announced in September it was moving forward a ban on ore exports to January 2020 from 2022.

Indonesian miners said on Monday they would stop nickel ore exports immediately.

NICKEL STOCKS: On-warrant nickel stocks in LME-registered warehouses, at 30,300 tonnes, have plunged from more than 110,000 tonnes in August and are the lowest since 2007. <MNISTX-TOTAL>

This may send a misleading signal, said Capital Economics' Clancy. He estimates that 200,000 tonnes of nickel have flowed into non-exchange warehouses since 2017.

NICKEL SPREAD: Cash nickel on the LME flipped back to a premium against the three-month contract, suggesting tightening nearby supply, but at $27.50 it remains far short of recent highs above $200. <MNI0-3>

FUNDAMENTALS: The 2.5 million tonne-a-year nickel market will see a small deficit next year, the International Nickel Study Group (INSG) said last week.

LME WEEK: Metals consumers, producers, traders and brokers gathered in London for LME Week 2019, an annual jamboree where deals are struck, relationships formed and discussions about fundamentals and industry developments take place.

CHILE COPPER: Unionized workers at BHP's Escondida copper mine said they would walk off the job for part of the work day on Tuesday in a show of solidarity with protests in Chile.

Copper mining companies in Chile last week said nationwide riots had mostly spared production but had hobbled port facilities, public transportation and supply chains, impacting operations.

CHINA STEEL: China is expected to produce 994 million tonnes of crude steel this year, an official at the China Iron and Steel Association (CISA) said on Tuesday, up 7% on last year's output even as Chinese economic growth slows.

POLL: Prices of copper and other industrial metals are expected to be capped next year as weak economic growth weighs on the market, a Reuters poll showed on Monday.

PRICES: LME copper was down 0.1% at $5,902.50 a tonne, aluminium was 0.2% higher at $1,741, zinc was flat at $2,543.50, lead gained 0.3% to $2,242 and tin was 0.1% higher at $16,745.

(Reporting by Peter Hobson; Additional reporting by Mai Nguyen; Editing by Jan Harvey)