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Indonesia’s planned ban on exports of nickel ore could prompt the European Union to complain to the World Trade Organization amid concerns about supply shortages for steelmakers.

Leopoldo Rubinacci, a director in the trade department of the European Commission, the EU’s executive arm, referred to the possible lawsuit at the WTO while addressing Indonesian threats to the steel industry in Europe and the bloc’s responses. Nickel is used in the production of stainless steel.

Rubinacci cited a surge in European imports of stainless steel from Indonesia and an EU probe into whether to impose tariffs on the shipments. In addition, he said the commission would include Indonesian stainless steel in the scope of EU import quotas meant to prevent a controversial U.S. tariff on foreign steel from diverting shipments to the bloc’s market and flooding it.

“We’re also looking at the WTO compatibility of the Indonesian measures” to ban nickel-ore exports, Rubinacci told a European Parliament committee on Tuesday in Brussels.

The Indonesian government said last month it would halt nickel-ore exports starting Jan. 1 -- two years sooner than previously announced -- as part of a push for the country to process more of its own minerals. Nickel prices on the London Metal Exchange surged in response.

The Indonesian ban would add to European steel-industry woes that include weaker demand from automakers, U.S.-instigated tariff wars and the threat of a disorderly U.K. withdrawal from the EU.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Brendan Murray, Brian Swint

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