In the second half of 2019, Indonesia's mining ban caused a sharp shock in the nickel market. Since the market began to rumor in mid-July, after the Indonesian government decided to ban laterite nickel ore exports by 2023, the price of nickel climbed from 13,000 US dollars / ton to 15,000 US dollars / ton ~ 16,000 US dollars / ton in July~August. On August 30, the Indonesian government officially announced that it will implement the laterite nickel ore export ban in advance from January 1, 2020. On the same day, the London Metal Exchange (LME) and Shanghai Futures Exchange nickel prices soared to more than 18,000 US dollars / ton.

Immediately, on October 28, there were rumors that the head of the Indonesian investment coordination agency said that Indonesia's nickel industry would immediately stop nickel ore exports, causing sharp fluctuations in nickel prices in the market. On October 30, Indonesia's coordinating minister for economic affairs said that the government's mining ban will still take effect on January 1, 2020. The country's energy and mineral resources minister also said it would not issue any new export restrictions until January 2020. The rumor that the ban on mining would take effect immediately was officially falsified in only 3 days.

While Indonesian officials said the ban would be implemented as originally planned, Indonesia's coordinating minister overseeing shipping and mining said Indonesia was investigating manipulation and other illegal practices that led to large-scale exports of high-grade nickel ore. Suspension of export quota recommendation letters until mid-November.

Indonesia's nickel ore export ban differs from the 2014 ban on high-grade nickel ore and the 2017 quota export order, but will ban the export of all nickel ore products. From the perspective of the Indonesian government, the ban on nickel ore exports is mainly in the hope that nickel ore can be processed and smelted in Indonesia to increase the added value of commodities, thereby bringing a multiplier effect to its economic development. However, according to industry data estimates, Indonesia's existing ferronickel processing and RKEF (rotary kiln-mine hot furnace process) capacity simply cannot fully absorb the nickel ore produced in the country. Therefore, industry participants predict that after 2020, the production of Indonesia's primary nickel ore may be reduced due to the government's export restrictions, which will have a greater impact on the supply of global nickel metal resources.

China's stainless steel industry is developing rapidly, and nickel resources are extremely dependent on foreign countries

Nickel is the main raw material in the production of stainless steel, accounting for more than 60% of consumption, plus other heat-resistant alloy steels, accounting for more than 80%. Based on the 9% nickel per ton of 304-grade stainless steel, China's stainless steel production in 2018 alone requires about 1.6 million tons of nickel. Due to the high price of nickel compared with other chemical components, it has become an important factor affecting the production cost of stainless steel, accounting for about 61% of the cost of stainless steel tons.

China's nickel resources are highly dependent on foreign countries. According to data released by the US Geological Survey, the proven recoverable reserves of nickel in the world are 89 million tons. Among them, Indonesia has 21 million tons, Australia has 19 million tons, Brazil has 11 million tons, Russia has 7.6 million tons, these four countries together account for nearly two-thirds of the global total. China's nickel reserves are 2.5 million tons, accounting for about 3% of global reserves, and belong to countries that are extremely short of nickel metal mineral resources, with foreign dependence of more than 90%.