Five things to watch out for in China’s nickel, stainless steel markets SHANGHAI
While the ramp-ups of a number of NPI projects were announced in 2018 and this is expected to narrow the deficit of this material in the Chinese market this year, participants have expressed doubt over whether these projects would be implemented on time – expecting to see a more persistent shortage of NPI than previously thought.
China’s Jinchuan Group and Indonesian mining company WP & RKA announced plans in May last year to build a NPI smelter in Indonesia with four RKEF lines boasting capacity for 30,000 tpy of nickel in NPI.
This expectation stems from issues surrounding smelter shutdowns witnessed last year due to China’s stringent environmental policy and the delayed construction of projects in Indonesia.
This is also the case for other new RKEF projects [in Indonesia],” the analyst added.
Shandong Xinhai, the country’s largest NPI producer, last year announced the addition of eight RKEF lines with a nameplate capacity for 120,000 tonnes per year of nickel contained in NPI.
“Some [stainless steel mills] in China will continue to face a shortfall of NPI because many Chinese NPI smelters were forced to shut down during several rounds of environmental inspections across the country in 2018, leaving only a few still in operation,” an NPI trader in east China said.
Fastmarkets assessed the NPI spot price, China on delivery, at 950-970 yuan ($139-141) per tonne on Tuesday January 8, down by 10 yuan per tonne from the prior week due to slowing demand ahead of the upcoming holidays for Chinese New Year on February 4-10.
For example, Jinchuan previously said that its RKEF lines would come on stream by the end of 2018, but then it said that it would delay this until at least March 2019.
“Xinhai Technology has made slow progress in commissioning the rest of its RKEF (rotary kiln-electric furnace lines) and the company has been affected by [China’s] environmental policies which can be quite unpredictable,” a Shanghai-based analyst said.
“Elsewhere, such as in Indonesia, it’s also difficult to tell if planned NPI projects will be implemented smoothly given the [slow] progress on construction.
