SMM Price Forecast Conference 2019: Integrated capacity of NPI, stainless steel to dominate

SHANGHAI, Oct 19 (SMM) – Integrated capacity of nickel pig iron (NPI) and stainless steel would gradually dominate the Chinese market by the end of 2019, said Yang Bo, SMM senior analyst.

Speaking to delegates at the annual SMM Price Forecast Conference in Shanghai on Friday October 19, Yang said that high-grade NPI that is produced by capacities with integrated NPI and stainless steel production, is likely to account for 60-70% of the overall output across China by the end of 2019. The proportion will grow from some 40% as of the end of September 2018.

Shandong Xinhai plans to commission such integrated capacity that can produce 1.8 million mt of stainless steel per year in 2019, Yang added.

Yang also said that rising ore prices and transportation fees would drive up costs for high-grade NPI across the global markets. The costs for transporting nickel ore stood at $5-7/wmt across Indonesia in September and are likely to grow to $10-12/wmt in 2019.

Costs for high-grade NPI are expected to increase by $400-450/mt in Ni content in 2019, Yang estimates.

SMM sees a supply deficit of 77,300 mt across the global nickel markets in 2018 and expects the gap to narrow in 2019.

Separately, a poll conducted during LME week in London earlier this month identified nickel as the base metal with the greatest potential in 2019.