Analysis of refined nickel as raw material in stainless steel production

SMM Insight 04:20:06PM Jul 19, 2018 Source:SMM

SHANGHAI, Jul 19 (SMM) – New-energy vehicles have been touted as the future driver of demand for nickel, which is one of the major raw materials in stainless steel production.

In this analysis, SMM aims to look at how much refined nickel currently used to make stainless steel could be channelled to the new energy space.

In 2012, the proportion of refined nickel as raw materials in stainless steel production fell to just 19% as China’s nickel pig iron (NPI) output climbed to 368,000 mt. While the decline extended into the next year, refined nickel saw its proportion increase during 2014-2016 when China’s NPI output was affected by Indonesia’s export ban on nickel ore.

The proportion dropped again in 2017 after Indonesia, the world’s biggest nickel ore supplier, eased its ore export ban. The drop is expected to continue this year.

Compared to NPI and other raw materials, refined nickel is more costly. To understand other technical challenges, SMM surveyed three stainless steel mills in south China with a total capacity of 6.5 million mt.

This includes capacity that had converted to carbon steel but could be easily converted back to stainless steel. Capacity across the three surveyed mills accounts for nearly 20% of active capacity in China.

Active capacity refers to capacity that has been in operation over the past three years. The three mills deploy different production processes: blast furnace + electric furnaces + argon oxygen decarburisation (AOD); blast furnaces + rotary kiln electric furnaces (RKEF) + electric furnaces + AOD; and electric furnaces + AOD.

Refined nickel accounted for 26% of nickel raw materials across these mills.

One of the mills used 31% of refined nickel. Its options were limited to refined nickel or ferronickel as its pig iron accounted for some 67% of stainless steel capacity at this mill.

Another mill, which produced small amounts of #300 stainless steel, used 32% of refined nickel.

The third mill has reduced the ratio of refined nickel to 10-15% and is actively seeking ferronickel.    

We believe the use of refined nickel in stainless steel production is likely to continue to decline if more ferronickel enters China and if Chinese NPI plants resume production.

A minimum proportion of 8-10% of refined nickel is required for a nickel content of 9% in NPI, SMM learned from a survey of technicians across the mills. This proportion could be reduced to 3-5% when the nickel content in NPI reaches 12%.

It is challenging to raise the nickel content in NPI as Indonesian nickel ore sold to China typically contains less than 1.7% of nickel.     

 

Analysis of refined nickel as raw material in stainless steel production

SMM Insight 04:20:06PM Jul 19, 2018 Source:SMM

SHANGHAI, Jul 19 (SMM) – New-energy vehicles have been touted as the future driver of demand for nickel, which is one of the major raw materials in stainless steel production.

In this analysis, SMM aims to look at how much refined nickel currently used to make stainless steel could be channelled to the new energy space.

In 2012, the proportion of refined nickel as raw materials in stainless steel production fell to just 19% as China’s nickel pig iron (NPI) output climbed to 368,000 mt. While the decline extended into the next year, refined nickel saw its proportion increase during 2014-2016 when China’s NPI output was affected by Indonesia’s export ban on nickel ore.

The proportion dropped again in 2017 after Indonesia, the world’s biggest nickel ore supplier, eased its ore export ban. The drop is expected to continue this year.

Compared to NPI and other raw materials, refined nickel is more costly. To understand other technical challenges, SMM surveyed three stainless steel mills in south China with a total capacity of 6.5 million mt.

This includes capacity that had converted to carbon steel but could be easily converted back to stainless steel. Capacity across the three surveyed mills accounts for nearly 20% of active capacity in China.

Active capacity refers to capacity that has been in operation over the past three years. The three mills deploy different production processes: blast furnace + electric furnaces + argon oxygen decarburisation (AOD); blast furnaces + rotary kiln electric furnaces (RKEF) + electric furnaces + AOD; and electric furnaces + AOD.

Refined nickel accounted for 26% of nickel raw materials across these mills.

One of the mills used 31% of refined nickel. Its options were limited to refined nickel or ferronickel as its pig iron accounted for some 67% of stainless steel capacity at this mill.

Another mill, which produced small amounts of #300 stainless steel, used 32% of refined nickel.

The third mill has reduced the ratio of refined nickel to 10-15% and is actively seeking ferronickel.    

We believe the use of refined nickel in stainless steel production is likely to continue to decline if more ferronickel enters China and if Chinese NPI plants resume production.

A minimum proportion of 8-10% of refined nickel is required for a nickel content of 9% in NPI, SMM learned from a survey of technicians across the mills. This proportion could be reduced to 3-5% when the nickel content in NPI reaches 12%.

It is challenging to raise the nickel content in NPI as Indonesian nickel ore sold to China typically contains less than 1.7% of nickel.