SYDNEY, Sept. 3 (Xinhua) -- Australian nickel miners have seen stock prices surge this week in response to an early ban on exports by top nickel ore producer, Indonesia.
Unconfirmed reports that Indonesia would be stopping ore exports as of January 2020 in a bid to process more of the metal domestically, sent the commodity price to a five-year high, surpassing 18,000 U.S. dollars a ton on Tuesday.
"Assuming no mitigating factors, it would be about a 200,000 ton per annum of contained nickel hit to the global nickel trade which is about 8 percent of global supply," UBS analyst Daniel Morgan told Xinhua.
"So it would be a meaningfully large impact to the supply side in 2020."
Australian nickel miners saw a surge in share price with Western Australian producer, Western Areas, lifting by 14 percent on Monday and continuing to climb by over 6 percent on Tuesday.
Meanwhile miners Independence Group and Mincor shot up 10 percent and 7.75 percent respectively on Monday.
The strong commodity price may see some Aussie producers not just getting new projects off the ground but also provide the opportunity to reestablish old ones.
"Nickel has been for most of the past five years below the cost curve and in a bear market I would say and that led to shuts of projects and mines - I guess there's an opportunity for some of those to reopen," Morgan said.
Nickel is a key component for the batteries used in electric vehicles, demand for which is expected to rise in coming years.
