North China NPI plant suspends output for one month

China’s NPI output rose 3.27% from December to 38,600 mt Ni in January. This included 31,600 mt Ni of high-grade NPI, up 5.74% on the month, and 7,000 mt Ni of low-grade NPI, down 6.58% month on month.

SMM high-grade NPI average price on December 4 was 1,030 yuan/mtu (ex-factory, tax included), down 10 yuan/mtu on the week. The purchase prices of high-grade NPI moved between 1,020-1,045 yuan/mtu (delivered to factory, tax included).  The willingness of restocking across steel plants have weakened along with the low stainless steel prices, which had dropped below the costs in all domestic ferronickel plants. This has led to lower transactions amid the ferronickel plants’ low intention of delivery.

China’s NPI output shrank 2.2% from October to 42,700 mt Ni in November.

The producer, called Jingxin Silicon Industry, now has two furnaces running and will ramp up to full capacity, lifting its monthly output to 6,000 mt.

The government of Fengrun district of Tangshan, China’s top steelmaking hub, has urged local steel companies to tighten production controls between 12:00 CST June 27 and 24:00 CST June 30, in the face of unfavourable weather conditions for dispersing air pollutants.

The Chinese market is expected to see an excessive supply of nickel pig iron (NPI) in Q3, following well-balanced demand and supply by end-May, as consumption from stainless steel mills may not be strong enough to sustain a draw in high-grade NPI inventories. 

This is a roundup of China's base metals output in April 2020, from an exclusive survey of key producers by SMM analysts.

The most-traded July stainless steel contract on the Shanghai Futures Exchange climbed more than 3% on Wednesday May 6, ending at 13,215 yuan/mt following an intraday high of 13,245 yuan/mt.

SMM surveyed 41 major aluminium processors in 12 provinces and found that their average operating rate remained largely flat from a week ago at 77.8% last week.

High costs and falling NPI prices have pushed the producer towards the verge of losses. The company has scaled back operations in recent months, to 300-500 mt per month.