China Sees Cuts in Stainless Steel Production after Latest Environmental Drive, SMM Reports

Published: Dec 12, 2016 11:17

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What’s impact on domestic producers in the nickel industry from the latest environmental protection inspections?

SHANGHAI, Dec. 12 (SMM) –What’s impact on domestic producers in the nickel industry from the latest environmental protection inspections?

The second round of 7 environmental protection inspection teams arrived in seven regions from November 24 to 30 to supervise environmental protection work, including Beijing, Shanghai, Guangdong, Hubei, Chongqing, Shaanxi and Gansu.

Will New Environmental Protection Inspections Trigger Massive Cuts in China Metals Producers? SMM Reports

SMM learns that Jiangsu Delong Nickel Industry has suspended stainless steel production again due to environmental protection inspections, but maintains high-grade NPI production at present, but the production is going to be suspended.

In November, the company produced 130,000 tonnes of stainless steel, all #300 stainless steel, counting for 12 per cent of China’s total output of the type product. The company needs to purchase 20,000-30,000 tonnes of high-grade NPI each month for its stainless steel production in addition to its own high-grade NPI production. In November, the company also produced around 70,000 tonnes of high-grade NPI.

The suspension of stainless steel production at the company means that demand for high-grade NPI will fall by 20,000-30,000 tonnes, accounting for 6-9 per cent of China’s total output.

Baosteel Group Hikes Steel Prices for January

Moreover, China’s high-grade NPI output will fall in December with output declines at producers in north China due to colder weather and possible cuts at Jiangsu Delong, but any declines will be small.

Hence, stainless steel suspension at Jiangsu Delong will negatively affect high-grade NPI demand in China’s market in December and months ahead.
In other news, stainless steel production at Linyi Jinhaihui Technology is now online, and there is high possibility for the company’s stainless steel production to be suspended. SMM will watch closely to progress of the event.

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