Indonesia remained Chinas second-biggest nickel ore supplier in 2020, Chinese customs data showed on Wednesday, despite the Southeast Asian countrys ban on exports of the material. Arrivals of Indonesian nickel ore into China totaled 3.4 million tons last year, the General Administration of Customs reported. That was down 85.8 percent from 2019 but still second only to the Philippines at 31.98 million tons, and ahead of New Caledonia in third.
Indonesian shipments were 1.98 million tons in January and February combined, likely the last cargoes to depart Indonesia before the ban came into force on Jan. 1, 2020, although some may have been delayed by coronavirus curbs. The data then shows a trickle of Indonesian nickel ore imports in every subsequent month of last year, including 78,245 tons for December. Data from Indonesia, which enacted the ban to force more ore domestic ore processing, shows zero nickel ore exports to China for January to November.
Chinas customs administration and an Indonesian mining ministry official did not provide an explanation but some analysts believe the answer may lie in material being exported as iron ore but imported into China as nickel ore. These shipments typically consist of ore that has around 1 percent nickel content and over 50 percent iron, so are iron ore as far as the Indonesia government is concerned, CRU analyst Ellie Wang said.
Some stainless steel firms in China then declare it as nickel ore at customs, she adds. They can mix the ore with some other grade, then produce low-grade nickel pig iron, which is used to make stainless steel, Wang said. BMO analyst Colin Hamilton concurred such an arrangement is certainly a potential workaround given high iron ore prices. We always used to add some reported nickel ore to full-year iron ore import numbers particularly from the Philippines but its entirely possible from Indonesia as well, he added. In 2020, Chinas imports of nickel pig iron from Indonesia, which can still be exported, rose 100.9 percent year-on-year to 2.73 million tons.