Over supply, rising inventory levels, and continued increases in nickel pig iron (NPI) production are the top reasons for the price decline. In the near-to-mid-term, the enforcement of the enacted ban on unprocessed ore from Indonesia starting on 1 January 2014 is highly uncertain. Will the Indonesian government enforce, relax, delay, and/or introduce some alternative measure? Would an alternative measure, like a duty, be significant enough to reduce or curtail the production of NPI? In the longer-term, it is possible that NPI plants would be built in Indonesia.
In the meantime, nickel producers have continued to decrease production, decrease operating costs, and defer capital development. Many are also attempting to sell their nickel assets; albeit, there are unfortunately not many buyers at this time.