Nickel posted its best quarterly performance since 2010 as investors expect Indonesia’s year-end ban on exports of raw ore to tighten supply.
The metal used in stainless steel and batteries surged after Indonesia said on Sept. 2 that the ban on nickel ore exports will take effect Jan. 1, two years earlier than previously announced. That will remove as much as 350,000 tons of the metal from global supply, the International Nickel Study Group has said.
Nickel jumped 34% this quarter, leading returns on the Bloomberg Commodity Index of 23 raw materials and far outpacing gains in equities. That makes it one of the few bright spots in industrial metals, which have been weighed down by concerns that the U.S.-China trade war and slowing global economies will erode demand.
“The Indonesian ore ban, along with speculators investing on momentum being buyers rather than being sellers, are the two main reasons” nickel has performed better than other metals this quarter, Ryan McKay, a commodity strategist at TD Securities, said by phone from Toronto.