Nickel is down for a second day after Indonesia surprised markets by relaxing its ban on exports of the raw metal.

The price of the stainless steel ingredient fell 2.47 per cent Friday on the London Metal Exchange to $10,070 a tonne, the biggest loser of the metals traded on the LME.

The Indonesian government said Thursday it would reverse the prohibition on the export of nickel ore that had been in place since 2014. That’s likely to upset mining companies who had started to invest in smelters in the country in order to process raw nickel ore before it could be exported. It could also add more supplies of raw nickel to the global market.

Shares in Brazilian miner Vale’s Indonesian company PT Vale fell 16 per cent Friday on the news. European stainless steel makers have also been hit: Finland’s Outokumpu fell 7 per cent on Thursday while Aperam closed down 6.5 per cent.

The lifting of the ban could see the country’s state-owned nickel producer PT Antam ship around 70,000 tonnes per year of nickel ore over the coming years, according to analysts at Macquarie.

“Such volume would have a negative impact on the nickel ore price,” they said.

That could see nickel prices of between $9,000 to $10,000 a tonne “becoming more like the norm,” they said. Nickel prices rebounded by 17 per cent last year, after hitting their lowest level since 2003 early in the year.

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