China Nickel Pig Iron Output To Drop On Power Rationing -Industry

Recently, the conflict between Russia and Ukraine has caused many worries in the financial market. With the further aggravation of the situation, both domestic and foreign nickel prices have risen sharply, among which SHFE nickel prices have once again been set a record high.

China imported 4.01 million mt of nickel ore and its concentrate in November, a decrease of 10% from the previous month and a year-on-year increase of 12%, According to General Administration of Customs.

Copper semis processing enterprises across Jiangsu, Guangdong, Anhui and Guangxi have been significantly affected by the power rationing implemented in late September driven by the dual control policy on national energy consumption amid intensified contradiction between the supply and demand of electricity and coal.

After the National Day holiday, Guangdong’s power rationing has eased significantly, and most copper processing companies have been able to resume normal production. However, the unexpected rise in copper prices has become a major obstacle to the recovery of the operating rate of copper processing enterprises and the recovery of copper consumption.

Global energy crisis is still in the spotlight of the market. Nyrstar announced to cut the zinc output by 50% amid surging electricity prices, which is likely to reduce the actual output by 70,000 mt. In China, the zinc output in October is likely to drop by 8,400 mt due to sustained power rationing in Guangxi and less production activities in Yunnan in the dry season.

According to SMM survey, the operating rates at 6 blast furnace mills in Jiangsu increased as of October 9. Also, 3-5 companies plan to resume production between October 10 and 15. About 50% of the rolling lines have returned to normal operation. In addition, most of the electric furnace plants and the billet rolling mills maintain the pre-holiday operating rates, which is difficult to further increase in the short term.

The increase in tin prices for more than half a year has had a significant impact on downstream companies. According to the latest survey results, the downstream solder companies that supply electronics factories failed to see increased production in the seasonal high in September and October. Although the demand from photovoltaic companies has made up of the sluggish demand from electronics companies to a certain extent, the follow-up sustainability will remain as the focus.

Jiangsu required all companies to halt production for maintenance from 0:00 on September 16 to 24:00 on September 30.

SMM has conducted a survey on the impact of the power rationing on the copper industry chain. And found that the power rationing has led to broad-based closures across downstream producers.

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