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Metal price rally to cool after China lockdown
The cooling would come after Indonesian benchmark prices for nickel, aluminum and gold rose to all-time highs in April.
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An employee works at a ferronickel smelter owned by PT Aneka Tambang (Antam) in Pomalaa, Central Sulawesi, in May 2019. (MIND.ID/-)
T
he prices of metals such as nickel, copper and aluminum are predicted to decrease slightly in the coming months due to COVID-19 lockdowns in China, potentially ending the year-long price rally of these major Indonesian export commodities, analysts say.
But despite the cooling, prices would remain higher than pre-pandemic levels, buoyed by strong global demand, low global-inventory levels, supply disruptions due to bad weather in major mining countries South Africa and Australia and western sanctions against fellow major metal-miner Russia.
"Commodities prices will tend to decrease, although they will not fall to pre-pandemic levels and this will provide a fairly strong margin for mining companies, especially nickel, until year-end," said RHB Sekuritas mining analyst Fauzan Luthfi Djamal on Monday.
He said supply constraints have become a major theme causing a price spike across commodity sectors, including nickel, copper and aluminum, given the rapid recovery of demand in the post-pandemic period, which has not been met with a proportional increase in output.
Indonesia's mineral benchmark price (HMA) for nickel, aluminum and gold in April hit US$35,995, $3,483 and $1,940 per dry metric ton (dmt), respectively, an all-time high since the reference was first introduced in 2017.
Copper and zinc prices also recorded an all-time high at $10,124 and $3,831 per dmt in the same month.
Read also: Indonesia imports, exports hit all-time high in March
