Exclusive: SMM’s nickel team field trip - Yangzhou Yichuan Nickel Industry Co., Ltd.

SHANGHAI, Jul 16 (SMM) - The rapid expansion of the new energy industry has driven the continuous increase in demand for nickel since 2020, and nickel has been applied to new end fields. Stainless steel still occupies an absolute dominant position in the nickel consumption, and the NPI-stainless steel production line has great influence.

Tsingshan announced its high-grade nickel matte nickel project in March 2021, which connected the two parallel industrial chains, and the complexity of the nickel industrial chain and the influence of each link on the entire industry are deepening. With the development of Indonesia's nickel industry, the domestic market has undergone changes, especially the NPI-stainless steel industry chain. How will domestic NPI plants solve the problem of single source of raw materials in the future? How do NPI plants and stainless steel plants cope with the impact of low-cost products in Indonesia? Will stainless steel plants have a targeted layout for nickel raw materials in the future?

Hereby, SMM started the first stop of the 2021 nickel team field trip in Jiangsu, to investigate the upstream and downstream enterprises of the NPI and stainless steel industries, in order to seek more precise and deeper cooperation and create more effective and continuous communication with the relevant companies.

Wu Chenyu and Pan Jinxiu, consultants of SMM New Energy Marketing department, Li Chuntian, SMM nickel and stainless steel analyst, and other SMM staff and members of the delegation will be visiting the enterprises of the nickel industry during July 13-16.
The second stop: Yangzhou Yichuan Nickel Industry Co., Ltd.

Yangzhou Yichuan Nickel Industry Co., Ltd. is located at No. 3 Beach, Yanjiang Village, Lidian Town, Guangling District, Yangzhou City, Jiangsu Province. The company was established in October 2011 with a registered capital of 105 million yuan. The company covers an area of 170,000 square metres and adopts the international mainstream RKEF (rotary kiln + submerged arc furnace) production technology. The production line was completely built and put into production in October 2012, and the second production line was officially put into operation in June 2019. The company mainly produces 10-15% high-grade nickel-iron alloys, and the products are mainly sold to POSCO (Zhangjiagang).

The company's main raw material logistics path: The nickel ore purchased from abroad arrives at the domestic seaport to reduce the load, and after that the ship is transported to the Yangtze River wharf, then transferred to the Yichuan wharf. Nickel slag sales is one of the company's sources of income. The slag is generally sold to concrete companies, mainly used as construction materials. It is estimated that the sales of slag in 2021 will be about 270,000 mt, and the income will be about 20 million yuan.

In response to the construction of the "carbon peak" and "carbon neutrality" goals, the company is currently constructing new clean energy projects, including wind power, solar power, and photovoltaic projects. In the first phase of wind power project, three wind towers will be built, with the energy storage capacity at 12 MWh.

SMM and the members of the delegation visited the factory of Yangzhou Yichuan Nickel industry to learn more about the technical advantages and characteristics of the products and conducted in-depth exchanges on its core competitiveness and future development plans.

The company integrates scientific research, design, manufacturing, installation and marketing. Its business includes production and sales of high-quality NPI, development, utilisation, and transfer of related technologies, and sales of self-produced solid waste. The company actively responds to the country's call to encourage Chinese companies to develop overseas nickel resources, utilises the abundant laterite nickel ore resources imported from abroad, produce high-quality NPI with RKEF process, and develops a new stainless steel industrial chain.

The company signed a memorandum of cooperation for the yearly purchase of 600,000 mt of laterite nickel ore with New Caledonia Societe Miniere du Sud Pacifique S.A. (SMSP) on March 22 2018. From September 2018 to March 2021, the company's main business income was approximately 1.25 billion yuan, with a profit of approximately 33 million yuan.

During the period, a total of about 1.126 million mt of laterite nickel ore was purchased, of which about 790,000 mt came from SMSP, accounting for 70.16% of the total purchased nickel ore. The actual consumption of laterite nickel ore was about 1.13 million mt, of which about 770,000 mt came from SMSP, accounting for 68.23% of all. About 98,000 mt of bituminous coal and 71,400 mt of white coal as a reducing agent was consumed, and about 543.05 million kWh of electricity was used. The products totalled 114,577 mt.

The company started to construct the second production line in September 2018, with a total investment of approximately 120 million yuan (including 40 million yuan for a set of ultra-low emission environmental protection facilities). The construction of the new line was completed in June 2019, and was fully put into normal production at the end of July. The monthly output averaged 4,000 mt. The annual output is expected to reach 100,000 mt, and the annual sales are expected to reach 1.2-1.4 billion yuan. The annual raw material consumption is expected to be 1 to 1.2 million mt of laterite nickel ore, 85,000 mt of bituminous coal, 72,000 mt of reducing agent, and 450 million kWh of electricity.

After visiting the factory, representatives of SMM and nickel industry took a group photo with the staff of Yangzhou Yichuan Nickel Industry Co., Ltd. to increase the deeper cooperation and friendship between each other. SMM believe there will be deeper exchanges and cooperation in the future.

After this visit and investigation, the representatives of SMM and nickel industry have a deeper understanding of Yichuan’s products, technologies, and company development. At the same time, they have a better understanding of the market status, development trends, and existing conditions of the nickel industry. With a deeper understanding of the problem, SMM will continue to deepen cooperation with major companies to achieve complementary advantages and jointly promote the development of China's nickel industry.