What Impact on Nickel Market after China Stainless Steel Production Cuts? SMM Reports

SHANGHAI, Dec. 3 (SMM) – China’s major six producers of #200 stainless steel mills announced to cut output from December, SMM learns from Stainless Steel Branch of China National Association of Metal Material Trade. 

The six producers agreed in one meeting in Fujian to reduce output by 30 percent from December, and would not sell goods at low prices. 

What impact will be on the nickel market after the cuts by those producers? 

“A 30%, or 136,000-tonne cut at the six producers will reduce nickel demand by 1,633.5 tonnes (nickel content) at least from the #200 stainless steel sector, or 99,000 tonnes (physical content) of low-grade NPI,” SMM nickel analyst predicts. 

SMM survey finds that #200 stainless steel output at the six producers is 453,800 tonnes in November, accounting for 93 percent of total output in SMM survey sample, and 88 percent of China’s total national output. 

Market insiders said that production cuts would be inevitable as losses are expanding across the industry, and believed that only elimination of inefficient capacity would be a way out in the long term, as idled capacities would be put online again as prices recover.  

At present, the output growth of China’s stainless steel is almost zero, and market share of #200 stainless steel is also falling.  

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