SHANGHAI, Sep 17 (SMM) – Under the full implementation of energy and production restrictions, the production of NPI and stainless steel across all provinces in China has been significantly affected recently.
The notices was issued in early July that the output in 2021 shall not exceed that in 202, but only Guangxi actually reduced production significantly in August.
Since September, Jiangsu, Guangdong, Shandong, Guangxi and other regions have received production restriction notices again, requiring major stainless steel plants to strictly implement production reduction measures. NPI plants in some regions also received notices of production restrictions and power rationing.
Stainless steel output is expected to drop 530,000 mt or 18.9% MoM in September
300According to SMM survey, the total output of stainless steel is expected to drop 530,000 mt on the month in September. The 200-series output will decline 20,000 mt or 24.1% on the month, and the 300-series output will be 330,000 mt or 22.4% lower.
NPI output is expected to fall 43% on the month in September amid tight raw material supply and dual control energy consumption
Guangxi implemented power rationing in July, and the restrictions were most serious in August, but alleviated in September. NPI plants in Guangdong reduced production under the environmental protection policies, and some plants have kept the production in suspension since early September. NPI plants in Shandong reduced 30% after they received the power rationing notice. NPI and stainless steel plants in Jiangsu were basically in suspension due to the production curtailment and the dual control on energy consumption. NPI output is expected to fall 13,000 mt or 31% on the month in September. The output of high-grade NPI is likely to fall by 31.9%, and that of low-grade NPI is likely to drop 45.9%. The large decrease of low-grade NPI is mainly due to the decrease 200-series stainless steel output in the plants with NPI facilities.
The NPI and stainless steel industries are significantly affected by the dual control. The impact is expected to extend until end-September or mid-October. SMM will continue to track the subsequent implementation.
Low-grade NPI is mostly self-produced by stainless steel plants for their production, so the market supply not be affected. The 300-series stainless steel output is expected to fall by 330,000 mt in September, most of which is in the 300-series stainless steel plants with NPI facilities, and NPI accounts for 70% of the 300-series stainless steel raw material. This means that the demand for high-grade NPI will drop by 18,900 mt in Ni content in September. High-grade NPI output is expected to fall by 9,700 mt in Ni content in September, the reduced amount narrower than the demand. Therefore, it will ease the current NPI supply shortage to a certain extent. However, NPI supply remains tight.
![[SMM Analysis] Inventory Accumulation and Weak Demand Push High-Grade NPI Lower in Search of a Bottom](https://imgqn.smm.cn/usercenter/LNpBh20251217171732.jpeg)