2 August 2024 – Prices for nickel ore and NPI from Indonesia have risen significantly since the beginning of the year. Prices have risen by almost 50%, particularly for laterite nickel ore with a high nickel content. And a turnaround in key interest rates in London: The Bank of England (BoE) cut its key monetary policy rate by a quarter of a point to 5.0 per cent on Thursday.
British central bank cuts key interest rate
Key interest rate turnaround in London: The Bank of England (BoE) cut the key monetary policy rate by a quarter of a point to 5.0 per cent on Thursday. This is the first easing since spring 2020
The monetary authorities avoided giving any clear indication of the future interest rate path and reiterated that interest rates should remain restrictive “for a sufficient period of time” until the risks of persistent inflation have diminished further. The key interest rate cut had not been fully priced in on the markets beforehand, meaning that market participants corrected their expectations.
Inflation rate already at target value of 2.0% in June
In June, the inflation rate remained at the central bank’s target value of 2.0 per cent. This is lower than in the eurozone, where inflation recently picked up and reached 2.6 per cent in July. The European Central Bank (ECB) had already completed the interest rate turnaround in June in view of the subsiding wave of inflation in the eurozone and, according to many experts, is likely to follow suit in September. The US Federal Reserve could also loosen the monetary reins next month.
Indonesian nickel ore and NPI prices have risen significantly since the beginning of the year
Prices for Indonesian nickel ore have risen significantly since January 2024. Prices for laterite ore (Ni content: 1.2%) had risen by more than 16% by the beginning of August, while prices for Indonesian ore with a nickel content of 1.6% had even risen by almost 50%. Prices for nickel pig iron (NPI) from Indonesia have risen by almost 8% since the beginning of the year.
The main reason for this is the scarce availability of ore in Indonesia, as the relevant authorities are well behind schedule in granting mining licences. The recent expansion of the SIMBARA online tracking and reporting system to include nickel ore is also likely to further curb the illegal mining of ore in Indonesia and put additional pressure on availability.
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