Tax breaks cut: Indonesia wants to conserve nickel reserves
Tax breaks cut: Indonesia wants to conserve nickel reserves

4 May 2023 – The government of Indonesia has stressed several times in the recent past that it wants to conserve its nickel reserves for higher-value products. Now the government is cutting tax breaks for NPI smelters. Positive data is coming out of China for nickel, stainless steel and scrap. And LME nickel stocks continue to fall, prices rise.

Tax breaks cut: Indonesia wants to conserve nickel reserves

The Indonesian government said Wednesday it has removed tax breaks for low-quality nickel products, according to recent media reports.

Nickel reserves to be conserved for higher-quality products

According to Investment Minister Bahlil Lahadalia, this is to conserve the country’s rich but limited nickel reserves for higher-quality products in order to extract as much value as possible from them.

Only renewable energies in the future?

In addition, new nickel smelters are to be operated only with renewable energies in the future. However, there do not seem to be any details on this yet.

Carbon trading system presented

However, the news fits in with the Indonesian Carbon Trading System, which was also presented on May 3.

Difficult environmental standards, high CO2 emissions

Recently, Indonesia has been criticized time and again for its low environmental standards and overexploitation of nature, especially with regard to the mining of nickel. Especially the upgrading of low-grade nickel, such as nickel pig iron to nickel matte and then to nickel sulphates, which can also be used in battery production, is up to four times more CO2 intensive than the industry average.

Chinese stainless steel and nickel values upbeat after holidays

The SHFE started with a whopping 2.85% gain in nickel contracts after the Labor Day holidays in China. Stainless steel futures were also up more than 1.7%. In addition, spot markets gained up to 1.25%, depending on the grade of precious metal.

Scrap prices also continue to rise. Between 1% to 5%, 304 and 316 scraps gained in the Chinese market today.

LME nickel further at over $ 25,000

The nickel on the LME had gone yesterday with a significant plus of more than 3.3% from the official trading. The nickel stocks on the LME have also fallen again below the 40,000 mark, after the limit was already torn once last Friday.

Data from active trading today also continue to show positive trends, with nickel currently up 1.4%. This could have an impact on stainless steel prices in the coming week.

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