The world’s best nickel producer is Indonesia. It has halted plans to tax export of nickel product while it works on creating a price index to ease volatility associated to the London Metal Exchange (LME) benchmark. The government decides to launch a nickel price index by the end of this year. It wants it to be in place before proceeding with an export levy. By the end of the year, the index will be created.
Indonesia manufactures a variety of nickel products, most of which are of a lower “Class 2“ purity grade coming from the underlying “Class 1“ product for the global benchmark nickel contract on the LME. Indonesia’s plan to produce the index is happening as response to requests from consumers, traders after the LME suspended nickel trading. Mr Septian explained the need for index because the discount between the LME refined nickel price and the market price of nickel pig iron was mostly created in Indonesia, was highly explosive.