(Updates with closing prices)
By Peter Hobson
LONDON, Oct 29 (Reuters) - Nickel prices rose on Tuesday as top producer Indonesia said it would temporarily stop ore exports ahead of a ban due to come into force next year.
Benchmark nickel on the London Metal Exchange (LME) ended up 1.1% at $16,830 a tonne.
The metal used in stainless steel is already up more than 50% this year and traders have factored in the end of Indonesian exports, so news of more stoppages was not enough to move prices significantly, said Capital Economics analyst Kieran Clancy.
Weak demand from China’s steel industry is likely to push nickel down to about $15,000 by the end of next year, he said.
EXPORT BAN: Indonesia is stopping nickel ore exports temporarily as authorities investigate “massive violations” of export rules, Luhut Pandjaitan, the coordinating minister overseeing maritime and mining, said on Tuesday.
Pandjaitan said shipments had jumped since the government announced in September that a ban on ore exports would be moved forward to January 2020 from 2022.
Indonesian miners on Monday said they would stop nickel ore exports immediately.
NICKEL STOCKS: On-warrant nickel stocks in LME-registered warehouses have plunged to 30,300 tonnes from more than 110,000 tonnes in August, the lowest since 2007. MNISTX-TOTAL
This may send a misleading signal, said Capital Economics’ Clancy. He estimates that 200,000 tonnes of nickel have flowed into non-exchange warehouses since 2017.
NICKEL SPREAD: Cash nickel on the LME flipped back to a premium against the three-month contract, suggesting tighter supply in the near term, but at $35 it remains far short of recent highs above $200. MNI0-3
FUNDAMENTALS: The nickel market, accounting for 2.5 million tonnes of metal a year, will be in slight deficit next year, the International Nickel Study Group (INSG) said last week.
LME WEEK: Metals consumers, producers, traders and brokers were gathered in London for LME Week 2019.
CHILE COPPER: Union members at BHP’s Escondida copper mine said they would walk off the job for part of the work day on Tuesday in a show of solidarity with protests in Chile.
Protests in top producer Chile caused only minor supply disruption.
COPPER FUNDAMENTALS: There was a global copper market deficit of 324,000 tonnes during January-June up from a deficit of 237,000 tonnes in the same period a year earlier, the International Copper Study Group said.
POLL: Prices of copper and other industrial metals are expected to be capped next year as weak economic growth weighs on the market, a Reuters poll showed on Monday.
PRICES: LME aluminium finished 1% higher at $1,754 a tonne, zinc rose 0.1% to $2,544, lead climbed 1.3% to $2,264.50 and tin ended up 0.8% at $16,850. Copper did not trade in closing rings but was bid up 0.3% at $5,927.
Reporting by Peter Hobson; Additional reporting by Mai Nguyen; Editing by Jan Harvey, David Goodman and David Clarke