SHANGHAI, Jun 8 (SMM) – China’s production of NPI increased in May after five consecutive months of decline since November 2019, driven by the resumption and ramping-up production at major producers of high-grade NPI. SMM data showed that China’s NPI output rose 15.15% on the month to 44,200 mt in Ni content in May. On a yearly basis, the NPI output was 7.49% lower in May.
Production of high-grade NPI rebounded 17.92% on the month to 36,900 mt Ni, while that of low-grade materials extended increase by 2.88% month on month to 7,300 mt Ni.
During the May-June period, production of high-grade NPI may expand while capacity is in a downward trend, due to the gradual phasing out of high-cost capacity. Some producers halted operation or shifted capacity to other alloys in May, but higher production of #300 stainless steel bolstered demand for high-grade NPI and this increased the willingness to restart production for some major NPI plants, who drastically cut output in the previous months.
The rise in low-grade NPI output was moderate in May, driven by a slight increase in #200 stainless steel output at integrated stainless steel and NPI mills.
SMM expects China’s NPI output to continue to expand in June to 45,100 mt Ni, up 2.08% from May, with the output of high-grade NPI rising 2.97% on the month to 38,000 mt Ni and production of low-grade materials dipping 2.43% to 7,100 mt Ni.
Eased tightness of nickel ore supply at major NPI plants, high demand for NPI from rising stainless steel output and stepped-up operations of new capacity, despite the closure of some plants, account for the estimated higher NPI output in June.
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