The first working day of Indonesia's ban on mineral exports has provided a $90 million fillip for investors in WA's four nickel producers amid hopes the price of the stainless steel ingredient may finally rise from the doldrums.
Western Areas shares led the charge, rising 9 per cent to $2.56 to add $41.3 million to the Forrestania nickel producer's market capitalisation. The three Kambalda miners - Independence Group, Mincor Resources and Panoramic Resources - enjoyed gains of between 4.4 per cent and 6.5 per cent in anticipation that a firmer nickel price will improve their profit margins.
The much-maligned nickel price was up 2.4 per cent to $US14,190 a tonne but needs to break past $US15,000/t permanently to improve investor confidence. Bloomberg says the nickel price is up 0.9 per cent this year, after falling 19 per cent in 2013.
Barclays say Indonesia's ban could help drive the nickel market into deficit next year, for the first time in five years.
However, the full impact of Indonesia's export ban remains unclear. Indonesia accounts for about 20 per cent of world nickel supplies, with much of its low-grade laterite ore shipped by small-scale operators to China for use in nickel pig iron.
Already the ban has been watered down, with the government allowing more than 60 companies to continue to export base metals concentrates, including Vale Indonesia and Aneka Tambang. It has prompted analysts to describe the ban as a crackdown on small, local mining operations.