* China is the world's largest producer of nickel pig iron
* Russia's Norilsk is the world's top producer of refined
* Norilsk sees write-offs in H2 2013 financials, to repay
$1.1 bln 2014
(Adds details, quotes, context)
MOSCOW, Jan 17 Indonesia's ban on nickel ore
exports may lead to a fall in Chinese stocks of the material
later this year, Russia's Norilsk Nickel, the world's
largest producer of the metal, said.
A long-expected ban on Indonesian ore exports came into
force at the weekend as part of Jakarta's policy to force
companies to build processing plants.
The ban is expected to increase costs for Chinese makers of
nickel pig iron who use Indonesian raw material to produce a
low-cost alternative to refined nickel. Prices for refined
nickel have surged more than 5 percent in London this
"It was an event, which everybody was expecting thanks to
the role which China is playing on the nickel market," Sergey
Malyshev, Norilsk head of economy and finance, told reporters on
Thursday. Malyshev's remarks were approved for publication on
Indonesia's nickel production will decline by 84 percent
from last year to 9 million tonnes this year, the chief economic
minister said on Thursday, as a ban on nickel ore hits output
from the world's largest exporter.
Many analysts, however, expect refined nickel prices to
remain capped by a weak stainless steel market, a surplus of
nickel this year and adequate stockpiles of nickel ore in China.
Asked whether the global nickel market would turn to a
deficit due to the ban, Malyshev said that everything would
depend on China's stocks of ore.
"In a quarter it will become clear how this decision will
affect ore stocks in China, and towards the end of the year it
will become clear how much these stocks have decreased," he
To cope with weak metals prices, Norilsk trimmed spending
last year, focused on its lucrative assets in Russia's Arctic
and cut the portion of short-term debt in its portfolio.
Its first-half 2013 earnings were hurt by $636 million of
non-cash write-offs mainly related to its investment in state
electricity holding firm InterRao.
In its earnings for the second half of 2013 which the
company plans to publish during the first ten days of April,
Norilsk expects write-offs related to its electricity assets to
be significantly lower, Malyshev said.
The company's net debt totalled $5 billion at the end of
2013 with $6.3 billion of total debt. In 2014 Norilsk,
controlled by Russian tycoon Vladimir Potanin and aluminium
giant Rusal, should repay $1.1 billion of debt, the
(Reporting by Polina Devitt; Editing by Douglas Busvine and