Environmental Protection Actions to Affect China NPI Output in 2015, SMM Says

SHANGHAI, Mar. 18 (SMM) - As pollution-related concerns loom ever larger in China, environmental protection efforts will affect domestic NPI output at irregular times, Shanghai Metals Market foresees.  

Several low-grade NPI producers in Linyi City, Shandong Province, were ordered to close for environmental concerns before the Chinese New Year Holiday. Additional closures were reported in the region prior to this year’s NPC & CPPCC sessions. 

Linyi is a major producing region of low-grade NPI in China, and capacity in the region is 2,290 tonnes in Ni content in January, about 25% of the nation’s total, according to SMM data. 

SMM survey also finds that two RKEF-based producers of high-grade NPI in Linyi were also required to halt production because of environmental protection inspections. Local high-grade NPI will lose 1,800 tonnes should the two producers close for a half-month, SMM expects. 

Altogether, latest environmental protection actions will cut 2,600 tonnes of NPI production in Linyi, 7% of the nation’s total, SMM estimates.  

Production at the two closed RKEF producers should resume production quickly after inspections thanks to equipment with compliant environmental protection facilities, though. 

The last time of large-scale production halts at domestic NPI producers was in late 2014 when NPI producers in Ulanqab, Inner Mongolia closed from October 23 through November 13 for Beijing APEC meeting.   

Because of the closures, Inner Mongolia’s NPI output dropped 2,870 tonnes in Ni content, shaving 8% off China’s total supply. That drop in output helped LME nickel rebound to $17,200 per tonne.

Hence, environmental protection efforts may become a spur for nickel prices. 

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