Output of nickel rises in Dec

SHANGHAI, Jan 8 (SMM) – China produced 15,800 mt of nickel in December, 4.45% higher than December 2017. Output in January-December came in at 150,200 mt, down 6.08% from a year earlier.

On a month-on-month basis, nickel output gained 6.92% in December as producers stepped up output to meet annual production targets in the last month of 2018.

SMM learned that nickel producers would lower output in January as Chinese New Year and the traditional low season approach. Nickel output is expected to fall some 21% month on month in January.

In December, NPI output in China dipped 0.63% from November to stand at 41,500 mt in Ni content, up 2.65% on a yearly basis. This grew output in January-December to 457,000 mt in Ni content, standing 7.92% higher than the previous year.

On a month-on-month basis, output of high-grade NPI held stable in December, standing at 38,100 mt in Ni content, up 0.11% from a month ago. Restrictions on electricity use lowered operating rates across plants in Inner Mongolia while output across Liaoning expanded after environmental probes ended earlier in the month.

For low-grade materials, output decreased by 8.29% to 3,400 mt in Ni content last month as a plant in the south stopped producing low-grade NPI.

Output of NPI is expected to edge up 0.88% to 41,800 mt in Ni content in January with that of high-grade materials up 0.95% to 38,500 mt in Ni content and that of low-grade materials barely changed at 3,400 mt in Ni content.

In December, China produced 9,262 mt in metal content of nickel sulphate, which translated to 42,100 mt in physical content. Production in 2018 came in at 99,200 mt in metal content, or 451,100 mt in physical content.

Compared to a month earlier, production rose 3.57% in December, driven by higher output across precursor plants.

Margins on nickel sulphate that is produced by nickel powder or briquettes and growing precursor output prompted precursor plants to produce nickel sulphate.

Raw material stockpiling across ternary precursor plants for CNY kept demand for nickel sulphate upbeat in December-January, while supplies of nickel sulphate failed to expand significantly. This kept the nickel sulphate market in a tight supply-demand balance.

The first stage of MCC Ramu's nickel sulphate project in Caofeidian, with annual capacity of some 50,000 mt, commissioned in late December and has begun to produce output. Products have not entered the market as the company finetunes product quality.

MCC Ramu's ternary precursor project in Caofeidian remains under construction. The company plans to sell its nickel sulphate in 2019 before ternary precursor capacity comes online.