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

Byungkwon Lim, Hyeon Sook Kim and Jaehwan Park ()
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Byungkwon Lim: Korea Consumer Agency, Chungbook 27737, Korea
Hyeon Sook Kim: Public Procurement Service, Daejeon 35208, Korea

Risks, 2021, vol. 9, issue 5, 1-7

Abstract: Forecasting of LME (London Metal Exchange) nickel prices remains an interesting topic but lacks consensus. This study aims to fill knowledge gaps by demonstrating the announcement effect of export bans by the Indonesian government. This article focuses on Indonesia because Indonesia produces more than 60% of global nickel ore. We identified the sequence of two episodes in which Indonesian export bans of nickel ore appeared to increase LME nickel prices. The impact of the Indonesian export ban in 2014 is somewhat larger than that of 2019. The shock on the LME nickel market in 2014 was sustained for a while after the ban was implemented. We believe that this is the first export ban that has had unexpected effects within the market.

Keywords: announcement effect; Indonesian export bans; cumulative forecasting error (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:9:y:2021:i:5:p:93-:d:552601

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