Jinchuan Gains Most in Three Months on Indonesia Speculation
Jinchuan Group International Resources Co. (2326) shares jumped the most in three months on speculation Indonesia may bring forward restrictions on exports of metal ores including nickel to May, potentially boosting sales from Chinese suppliers.
Shares gained as much as 30.4 percent to HK$1.76, the most since Nov. 14, before closing at HK$1.69. The benchmark Hang Seng Index dropped 0.4 percent. The company, a unit of Jinchuan Group Co., mines and explores for nickel in China.
A call to the switchboard of the company was answered by someone who declined to be identified or comment. No other contact numbers are given on the company’s website.
Indonesia will oblige mining companies to process metal ores locally from 2014, including copper, iron ore, nickel and bauxite, according to a ministerial decree on Feb. 10. The regulation will bar companies with existing operations from shipping ore overseas, forcing them to build smelting plants, or sell production to local processors.
“There was speculation today that Indonesia will start to ban exports of laterite ores from as early as May 7, and Jinchuan is going to benefit from that if it’s true,” Wang Haoyang, an analyst at SMM Information & Technology Co., said by phone from Shanghai. Nickel laterite ore can be processed into nickel pig iron as a substitute for the refined metal for use in stainless steel.
Calls to Thamrin Sihite, director general of coal and minerals at Indonesia’s Energy and Mineral Resources Ministry and Dede Suhendra, director of minerals management weren’t answered.
Disrupted Supplies
“If supplies from Indonesia are disrupted, then Chinese supplies are going to play a bigger role,” Wang Lixin, an analyst with researcher Custeel.com, said by phone from Beijing.
China imported 25.60 million tons of nickel ores from Indonesia last year, or 53 percent of the total arrivals, according to Bloomberg News calculations based on Chinese customs data.
“Still, there are lots of uncertainties about when and how strictly the policy will be implemented,” Wang said. “That will have a big impact on nickel prices and market balance.”
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at hsun30@bloomberg.net
To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net
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