Implicit Interpretation of Indonesian Export Bans on LME Nickel Prices: Evidence from the Announcement Effect

Lim, Byungkwon; Kim, Hyeon Sook; Park, Jaehwan

doi:10.3390/risks9050093

Cited by 10 publications

(5 citation statements)

References 11 publications

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“…While the overall trend in trade price volatility is broadly similar, there are still differences in trade prices between countries. Canada’s nickel ore import prices maintain a high level, while there is a more pronounced volatile variation (unit prices fluctuate between $5 and $35) Nickel ore export prices in the Philippines and the U.S. in 2014, and in Brazil and the U.S. in 2019 are significantly higher, which may be related to Indonesia’s mining ban policy [ 41 ] (Indonesia introduced a ban on nickel ore in 2014 and announced a total ban on nickel in 2019 ore exports). The import prices of nickel and iron in the United States and India remained high and volatile.…”

Section: Resultsmentioning

confidence: 99%

Risk Transmission of Trade Price Fluctuations from a Nickel Chain Perspective: Based on Systematic Risk Entropy and Granger Causality Networks

Zhou

Zheng

Zhang

et al. 2022

Entropy

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Nickel is a strategic mineral resource, with 65% of nickel being used in stainless steel. The situation in Ukraine starting in February 2022 has led to significant fluctuations in nickel prices, with prices of nickel products along the same chain affecting and passing through each other. Using systematic risk entropy and granger causality networks, we measure the volatility risk of trade prices of nickel products using the nickel industry chain trade data from 2000–2019 and explore the transmission patterns of different volatility risk prices from the industry chain perspective. The findings show that: (1) Nickel ore has the highest risk of import trade price volatility and a strong influence, but low risk transmission. Stainless steel has the highest trade price impact but is also subject to the strongest passive influence. (2) The Americas have a higher risk of trade price volatility but a weaker influence. The influence and sensitivity of trade prices is stronger in Asia and Europe. (3) Indonesia’s stainless steel export prices have a high rate of transmission and strong influence. Germany’s ferronickel export prices are highly susceptible to external influences and can continue to spread loudly. Russian nickel ore export prices are able to quickly spread their impact to other regions.

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Section: Resultsmentioning

confidence: 99%

Risk Transmission of Trade Price Fluctuations from a Nickel Chain Perspective: Based on Systematic Risk Entropy and Granger Causality Networks

Zhou

Zheng

Zhang

et al. 2022

Entropy

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“…A handful of studies have discussed issues around the Indonesian nickel ore ban. Lim et al [93] found that the latest nickel ore ban did not significantly impact price shocks in the market compared to the ban issued in 2014. Similarly, Situmorang [94] found that the ban on nickel ore exports hurt PT.…”

Section: Discussionmentioning

confidence: 97%

The Emerging Electric Vehicle and Battery Industry in Indonesia: Actions around the Nickel Ore Export Ban and a SWOT Analysis

et al. 2021

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As the automotive industry shifts from internal combustion engine (ICE) vehicles to electric vehicles (EVs), many countries are setting new strategies in their transportation sector. The Li-ion battery is currently the most common battery used in EVs due to its high energy density, durability, safety, and cost competitiveness. Nickel is predicted to be an essential component for the lithium nickel cobalt manganese oxide (NMC) as a cathode material of choice for EV applications. Indonesia, one of the world’s largest nickel ore suppliers, put an export ban on nickel ore effective from 2020. The bold movement was intended to initiate the domestic EV industry and encourage investors abroad to drive their manufacturing activities into the country. On the other hand, the global Li-ion battery manufacturers who imported nickel from Indonesia had to restrategize their businesses. This review discussed the chronological events leading to the ban and after the ban from the media, government regulations, and literature reviews. The authors of this study also conducted interviews and attended seminars with the national experts and key players in the battery and EV industry to gain their most pertinent insights. The SWOT analysis of the reviewed materials indicated that while the Indonesian battery industry is still new, it needs to diversify its research and development activities and collaborate internationally to optimize the utilization of its resources and meet the purchasing power of the domestic EV market. Finally, this study summarized six key factors to support Indonesia’s ambition to be a new regional hub for EVs. These factors are: (1) pricing, (2) technology, (3) policy, (4) investment, (5) infrastructure, and (6) compliance with sustainability standards.

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“…Electric vehicle development grows rapidly considering its environmentally friendly characteristics (Lim, 2021). The increase of awareness regarding green energy transition in the society, along with the environmental actions and also the implementation of environmental-related legal instruments, have strengthened the EV industry development.…”

Section: Indonesia's Nickel Export Restriction Policy 15mentioning

confidence: 99%

“…One of the leading natural resource commodities in Indonesia is nickel, which also has made Indonesia the biggest nickel producer in the world, with 52% of the world of nickel reserves located in Indonesia (Indonesian Ministry of Energy and Mineral Resources, 2020). With technological advances and the increasing of electrification demand, nickel demand in the market rises as it becomes one of the core components of lithium battery used in various electronic devices, including the electric vehicle (Lim, 2021). One of the reasons that lead to the increasing nickel demand for lithium battery purpose in electric vehicles is because of energy transition reason specifically in transportation, which leads to massive development of EV industry.…”

Section: Introductionmentioning

confidence: 99%

Indonesia’s nickel export restriction policy: alternative on environmental approach for Article XI:1 GATT justification

Bari

Trihastuti

Hananto

2023

JITLP

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Purpose This paper aims to analyse the aspects of the demonstration process of Indonesia's regulation on nickel export restriction for its eligibility to be excluded from Article XI:1 GATT. It also analyses the possibility of the use of an environmental approach in the demonstration process and for an alternative measure in its implementation. Design/methodology/approach The paper uses a normative research method in conducting its analysis. It analyses Indonesia's nickel export restriction policy based on the European Union's claim regarding quantitative restriction, with the international trade governance in the WTO framework, and certain international trade principles. The study also involves certain WTO jurisprudence to give a comprehensive analysis to the case. Findings This paper finds that Indonesia still needs to provide a complete and comprehensive demonstration to prove its eligibility for exclusion from Article XI:1. Demonstrating merely based on an economic approach is inadequate to convince the panel in Indonesia – measure relating to raw material for justification under Article XI:2. This study further finds that both parties generally focus on the economic aspect, which leaves room for conflict of interest. Other aspects with a lower probability of conflict of interest, such as the environmental approach, could be an alternative for the implementation. Originality/value This paper fulfils the need to provide a scientific analysis of the application of Indonesia's nickel export restriction policy, including its proceedings in WTO's dispute settlement body, which is essential for international trade governance enforcement.

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Implicit Interpretation of Indonesian Export Bans on LME Nickel Prices: Evidence from the Announcement Effect

Cited by 10 publications

References 11 publications

Risk Transmission of Trade Price Fluctuations from a Nickel Chain Perspective: Based on Systematic Risk Entropy and Granger Causality Networks

Risk Transmission of Trade Price Fluctuations from a Nickel Chain Perspective: Based on Systematic Risk Entropy and Granger Causality Networks

The Emerging Electric Vehicle and Battery Industry in Indonesia: Actions around the Nickel Ore Export Ban and a SWOT Analysis

Indonesia’s nickel export restriction policy: alternative on environmental approach for Article XI:1 GATT justification

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