Chinese NPI Production Output Review
China’s NPI output in February was 26,100 mt in nickel content, 681,000 mt in physical content (+5.18% MoM) and a monthly drop of 8.04% in metal content. Production resumption from maintenance pushed up 200-series output of some integrated stainless steel mills in China, adding low-grade NPI output. A monthly drop in metal content was due to the CNY holidays and scheduled maintenance of high-grade NPI. Lower-than-expected RKAB approval and insufficient nickel ore supply in Indonesia lifted nickel ore prices in Philippine in February. Losses of high-grade NPI producers and no steep price hike pressed NPI output in China.
It is estimated that China’s NPI output in March 2024 will be 25,900 in nickel content, down 0.92% MoM. According to SMM research, most domestic producers suffered losses, and some cut productions in February, and may suspend production in March.
Indonesia NPI Production Output Review
NPI output in Indonesia in February was 113,900 mt in nickel content (-6.58% MoM as expected, +13.2% YoY), with YTD output being 235,800 mt in nickel content, up 16.6% YoY. Slow RKAB approval at Indonesian mines made most NPI plants pessimistic, pushing down their operating rates, and some lowered the operating rates by 10-20%. Estimates of high-grade NPI output will be 119,400 in nickel content in March, up 4.83% MoM. According to SMM research, acceleration of RKAB approval for Indonesian nickel ore may ease nickel ore supply crunch in late March. In addition, there was start-up of some production lines since February. NPI output may climb in March.
In December, China's ferronickel and NPI imports totaled 817,900 mt in physical content
According to customs data, in December 2023, China imported a total of 817,900 mt of FeNi and NPI, up 20.3% MoM and 31.95% YoY. In terms of nickel content, the import volume of FeNi and NPI imported in December was 106,400 mt in nickel content, up 19% MoM. Breaking it down by category, the import volume of FeNi in December was 38,000 mt, down 23.7% MoM. Specifically, China's import of Korean FeNi amounted to 4,600 mt, showing a slight downward adjustment. Regarding NPI, China imported 779,800 mt of NPI in December, equivalent to 97,000 mt in mental content, up 24.7% MoM. During December, both high-grade nickel matte and high-grade NPI prices were on a downward trend, with NPI prices down 9.18% MoM and high-grade nickel matte prices down 8.19% MoM. Assuming no significant changes in processing fees, the price gap between the two narrowed, leading to a slight decrease in profitability from selling high-grade nickel matte compared to direct sales of NPI, down 2.68% MoM, thereby reducing the incentive to switch production from NPI to high-grade nickel matte. Furthermore, affected by the previous downturn in NPI prices, steel mills began stockpiling as a necessity once prices reached a periodic low. Overall, the main reasons for the increase in China's imports of Indonesian NPI are the domestic steel mills' need to stockpile and the rise in local NPI production in Indonesia. It is expected that the domestic production of stainless steel in January will have limited growth, and the import volume of high-grade NPI may remain low.
Please do not hesitate to contact Jean at jeantang@smm.cn or 86-19946295759 if you have any question or inquiry.
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