SMM, 12 Oct: due to the fact that the profit level of the 300th series of domestic stainless steel plants is still good, the output of 300th series stainless steel has increased steadily, thus driving the demand for high nickel pig iron. Judging from the recent trend of high nickel pig iron, the factory average price has always been running above 1050 yuan / nickel point. In September, the average price of high nickel pig iron is about 5 yuan / nickel point compared with electrolytic nickel. However, according to SMM tracking research, nickel pig iron production capacity will usher in explosive growth this year, including the domestic and Indonesian markets. So can the price of high nickel pig iron maintain such a strong trend?
1. What are the new production capacity during the year:
1. The increment of domestic production capacity comes from X, a large nickel pig iron plant in East China, which plans to increase the production capacity of 8 48000KVA ore furnaces with an annual capacity of about 60 000 metal tons. According to SMM, the plant may launch two ore heaters by the end of the year, that is to say, there will be little increase during the year, but its capacity may be released at the beginning of 2019, with a monthly output increase of more than 1000 metal tons.
2. Three companies in Indonesia will launch new capacity by the end of the year:
Indonesia D Company will produce 5 33000KVA ore heaters by the end of the year, and only 7 of the 10 33000KVA furnaces that the company has put into production at present, because the power plant and wharf facilities are not yet in place, if the construction of the plant is completed and all put into production by the end of the year, There will be 15 33000KVA ore heaters in production, with a monthly output increase of 4800 metal tons. However, given its production time or in November-December, the year increment or limited.
Indonesia's Q Company plans to put into production four 33000KVA ore heaters during the year, that is, the monthly output will be increased by 2400 metal tons, and its production time will also be in November-December, with a limited increase during the year.
Indonesia J Company's smelting project plans for 4 sets of 33000KVA, which will trial produce its 4 # production line by the end of December this year, but whether the remaining production capacity will be put into production one after another in the first quarter of next year is still in doubt. Neutral expects to put into production two of them 33000KVA in early 2018. Monthly output or more than 1000 metal tons.
II. How to deduce the price of high nickel pig iron:
1. The supply is relatively tight and the increase in demand is more certain. The price of high nickel pig iron may remain optimistic this year.
On the supply side, production in the country's main nickel pig iron production areas returned to higher levels in September, with capacity utilization rising from 48 per cent at the environmental peak in June to 61 per cent in September and reaching its highest level since 2016, with limited increments expected in the coming months. In addition, after entering winter, it is also necessary to be vigilant that the north will be affected by environmental protection or power restriction in the heating season, and the output may fall instead of increasing.
National nickel pig iron operating rate
On the demand side, on the one hand, as mentioned at the beginning of this article, due to the relatively considerable profit level, the 300series stainless steel plant may maintain the pace of production increase, SMM expects the 300th series output to increase to more than 1.2 million tons during the year, and the downstream production release will support the demand for nickel pig iron. On the other hand, the recent continuous strengthening of the price of waste stainless steel has led to the poor economy of higher nickel pig iron in waste stainless steel. Some stainless steel plants with more flexible production plans have actively adjusted the proportion of raw materials-increasing the purchase quantity of high nickel pig iron.
2. There may be downward pressure on the price of high nickel pig iron in early 2019
On the supply side, due to the release of new capacity, the monthly production of high nickel pig iron will increase by more than 9000 metal tons.
On the demand side, Indonesian company D is expected to start production of its stainless steel capacity in early 2019, according to SMM, which may be able to absorb the production released by its 15 33000KVA ore heaters in Indonesia. However, on the one hand, whether the stainless steel production capacity can be put into greater uncertainty, on the other hand, even if Company D puts into production its stainless steel production capacity at the beginning of the year, according to past experience, it will take 1 to 2 months to reach production. It may not be too late to release at the same time as the production of high nickel pig iron.
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Outlook for metal prices in 2019:
What will be the balance between supply and demand in the metal market next year, and how will the price go? Where is the demand growth point? What is the impact of environmental protection? What is the evolution of industry policy? Please pay attention to the "2018 China Nonferrous Metals Annual meeting and 2019 (SMM) Metal Price Forecast Conference" held in Shanghai on October 19, at which there will be famous macroeconomists, executives of well-known enterprises in various industries, and senior analysts of various metal varieties in SMM. For you a comprehensive analysis of the 2019 metal market.