SHANGHAI Aug. 29 (CBI China) -- Although the Olympics have ended, electricity power cuts continue in Shandong, Shanxi, and Anhui provinces. Market players expect the Central Government will continue to implement new policies to control production at high-energy consumption and high polluting enterprises, affecting NPI production.
A limited number of NPI producers remain online, and those with high furnaces were even fewer, causing supply of 4-6% NPI to tighten and prices to rise. One NPI producer with a high furnace in Shanxi province posted ex-works prices of RMB 1,950/mtu, with prices were also reported at RMB 1,900/mtu in Jiangsu and Zhejiang province. Prices of 1.6-2.0% NPI were under downward pressure as prices of substitute products, such as scrap steel, plunged.
Although LME nickel prices rallied to USD 20,000/mt following continuous rises since August 20th, most NPI producer sentiment was not very positive. There are uncertainties surrounding the resumption of production even if domestic nickel prices keep pace up with rising LME nickel prices. Demand from stainless steel producers remained weak, and it will take time for market sentiment to improve.