Indonesian nickel smelters that halted operations this year because of low prices need them to climb about 10 percent from current levels before resuming work, according to Jonatan Handojo, vice chairman of the Indonesian Processing and Refining Industry Association.

The processors require the metal to stabilize at least around $11,000 a metric ton for two months as they’re only breaking even at levels now, he said in an interview. About 13 smelters, some still under construction, stopped operating because prices fell below costs, he said in June, estimating their combined capacity at 750,000 tons of nickel pig iron, an alternative to refined nickel.

Nickel has climbed by more than 15 percent on the London Metal Exchange since hitting one-year lows almost two months ago, boosted by demand for stainless steel in China. Prices were at $10,155 a ton on Tuesday. Indonesia was the top supplier of mined nickel before it halted ore exports in 2014 to help develop its smelting industry and maximize income from minerals.

“The smelters are still waiting for prices to reach at least $11,000, because $10,000 is only enough to cover costs, including loan and interest payments,” Handojo said by phone on Monday. Ten smelters may resume output immediately if the target price is reached, while the rest would probably need more time because they have to rehire workers, he said.

Indonesia has some 26 nickel smelters either in production or under construction, with total capacity equivalent to 2 million tons of NPI, Handojo said, without giving output details.

The policy of encouraging domestic processing has boosted exports of nickel pig iron, which normally contains about 10 percent metal. China, the largest producer of stainless steel, imported a record 184,000 tons of ferronickel in May, more than double a year earlier, according to customs. The category includes NPI and most of the shipments came from Indonesia.

Source: Bloomberg.

• [Editor:tianmichai]