Indonesia is considering imposing an export tax on nickel products with a nickel content of less than 70%
 
At around 4 pm on September 17, a piece of news reported by foreign media said that Indonesia plans to impose an export ban or tax on nickel, which will restrict the export of nickel with a content of less than 40%. Affected by this news, the price of LME nickel rose to a maximum of US$20,295/ton, with a maximum increase of more than 5%.
 
Then another media interviewed Indonesian Investment Minister Bahlil Lahadalia and stated that Indonesia is considering imposing an export tax on nickel products with a nickel content of less than 70% in order to promote the further refinement of low nickel products in Indonesia to at least 70% content in order to promote the nickel battery industry. Chain development.
 
Extend the needs of Indonesia's local nickel industry chain. Indonesia has gone from a single nickel ore producer to NPI smelting to the world’s second largest stainless steel producer. It only took less than 10 years for Indonesia. At present, the stainless steel production lines of Qingshan and Delong in Indonesia have been put into production, forming a total of 550 In addition, Baowutai will join hands with Xinhai to invest in nickel-iron stainless steel in Indonesia, and Indonesia's stainless steel territory will also expand.
 
In addition to stainless steel, Indonesia is also actively expanding the new energy automotive industry chain. Currently, all newly built wet process projects in the world are in Indonesia. In the next five years, Indonesia will build more than 500,000 tons of wet process projects. In terms of expanding the downstream industry chain, 2021 In September 2009, LG Chem, the first battery manufacturer in Indonesia, also started construction. The battery plant has a capacity of 10GWh and a total investment of US$9.8 billion. Therefore, Indonesia is not satisfied with just an intermediate processing plant, but refers to the entire industrial chain.
 



Therefore, Indonesia has the motivation to prohibit or restrict the export of nickel products, so let's analyze the feasibility and possible impact of this situation.
 
It is unlikely that exports will be banned, and it is very likely that taxes will be levied. At present, Indonesia’s nickel products include high matte, ferronickel, NPI and Liqin’s new MHP this year. From the point of view of nickel content, high matte nickel content is 75%, nickel-iron nickel content is about 25%, and NPI nickel content is 12%. About, MHP is about 40%. If tariffs are imposed on products below 40%, NPI and ferronickel will be the first to bear the brunt. At present, Indonesia has formed more than 1 million tons of NPI production capacity. From the current Indonesian NPI production capacity, Indonesia’s monthly NPI production is 77,000 tons. Indonesia’s stainless steel cannot fully digest its domestic NPI and ferronickel. Therefore, Indonesia prohibits it. The possibility of export is unlikely, and it is very likely that taxes and duties will be imposed on NPI. Of course, this part of the cost will eventually be paid by Chinese buyers, which will raise the production cost of Chinese stainless steel. On the other hand, due to the cost advantage of Indonesia's local stainless steel, considering that my country's stainless steel industry is facing greater pressure to reduce carbon emissions, my country's imports of stainless steel from Indonesia will inevitably show an increasing trend in the future.
 
From the perspective of the timing of tax collection, it is unlikely that tariffs will be imposed at this stage. After all, the formulation and implementation of policies may still take time. We believe that the Indonesian authorities will also communicate with Chinese companies. Whether it is taxation or carbon emission constraints, we have to face the fact that the nickel cost center will move up in the future, and Indonesia's cheap nickel will become a thing of the past.