As NPI is the main raw material of 300-series stainless steel, the fluctuation of the stainless steel market is normally closely related to the change of price for nickel, which is produced with traditional pyrometallurgy. With the continuous technology innovation, the technology to produce high nickel matte with NPI is becoming more and more mature. Many enterprises led by Tsingshan have begun to shift to produce nickel matte, and the production paths of various nickel intermediate products have been opened up. NPI can be used as a raw material for high nickel matte, which is used in nickel sulphate production. Nickel sulphate is used to produce ternary precursor of nickel-cobalt-manganese ternary lithium battery in the new energy industry. The expanding range of applications will increase the demand for NPI. A smart move would be to enter the new energy market by focusing on front-end products, securing nickel ore resources, and adding value to the products.
Nickel industry chain overview
SMM also takes NPI as the research focus, continuously tracks the supply, demand and price of the NPI market for a long time, and makes reasonable predictions for future trends. In the next five years, the global NPI industry will remain in oversupply, and small smelters without cost advantages will be forced out of the market.
Global NPI supply-demand forecast (2021-2026E)
With improving downstream demand and the continuous increase in Indonesia's investment attraction, by 2025, Indonesia's nickel matte production capacity will be more than five times that of 2020, and seven projects will be put into production.
Indonesian nickel matte supply locations and production capacity
As the largest downstream consumer of NPI, the consumption of 300-series stainless steel is also the focus of long-term tracking and analysis as well as forecast of SMM Consulting team. The increase in demand for 300-series stainless steel from China will become weaker and weaker. SMM predicts that Japan and South Korea will contribute more to the raw material consumption in the future.
Global NPI consumption in 2021 (by country) and stainless steel raw material consumption in China and globally from 2021 to 2026E
At present, only China uses NPI as the raw material of 200-series stainless steel, and other countries use secondary nickel as the main raw material.
SMM summarizes the current NPI production process. There are a small number of EAF and BF processes in China. RKEF is the current mainstream process and will continue to increase its proportion in the future. At the same time, most of China's EF production capacity will be squeezed out of the market due to cost issues. Most of Indonesia's new projects use RKEF, covering almost the entire market.
SMM summarizes the current mainstream technology and its raw materials, the extent of its application, the application area and the main representative enterprises. It can be seen that the rotary kiln smelting technology is expected to bring about a revolution in the supply side and greatly increase the production of nickel matte in Indonesia.
Of course, the key cost issue is also the main direction for SMM to research in. After a large amount of public information collection and in-depth expert interviews, SMM found that there is a certain scale efficiency in NPI production. The cost of the company with the lowest NPI production cost in Indonesia only stood at around $9,000/mt with metal content in 2021, having advantages in raw materials and energy consumption. Compared with 2021, the production costs rose in the third quarter of 2022 across all enterprises due mainly to surging raw material cost.
Cost curve of major NPI enterprises in Indonesia
Here are some past NPI project cases analyzed by SMM consulting teams:
Technology due diligence for a NPI production line in Indonesia
Analysis of key players in Indonesian RKEF smelting sector
For more details, please contact our Senior Director, Bai Fan, via phone at 13661603373 or email at baifan@smm.cn.
