Sean Brodrick: The price of nickel touched a three-week high this week. The short-term trend is up. The bigger trend is even higher. And you can potentially make a boatload of dollars on nickel. The reason: Nickel faces supply problems, starting in mineral-rich Indonesia.
On January 12, Indonesia imposed an export ban on raw mineral ores. The intent is to force companies to build smelters on Indonesian soil. This affects all sorts of minerals. The list includes copper, iron, lead, zinc, chromium, tin, gold, silver and bauxite.
But it especially affects nickel.
Why? Because Indonesia supplies 20% to 25% of the world’s nickel, most of it as raw ore, and there aren’t many nickel smelters there.
So we could see nearly a fourth of the world’s nickel supply shut off.
Mark Selby, vice president of Royal Nickel Corp(TSE:RNX), explains, “This is the equivalent to all of the OPEC Gulf states ceasing oil production.”
In China, producers of “nickel pig iron” – a lower-grade substitute that nevertheless includes some real nickel – imported more than 30 million metric tons of nickel ore from Indonesia last year.
“And the export ban will also severely impact nickel producers in Ukraine, Australia and