Refined nickel production slips 2.56% in Jun

SHANGHAI, Jul 5 (SMM) – Production of refined nickel in China lost 2.56% from May to stand at 12,600 mt in June, according to SMM data. Output stood 5.82% higher than June 2018.

An SMM survey found that annual maintenance at some smelters, likely to last for two months from July, will affect production of refined nickel by 900-1,000 mt/month. 

However, poorer consumption of nickel sulphate is likely to prompt a smelter to restart production of refined nickel, by using 1,000 mt in Ni content of nickel sulphate. Output is likely to be generated in the first half of July, and will cap the decline in refined nickel production. SMM expects output in July to stand 1.83% lower from June, at 12,300 mt. 

NPI output rebounds 3.44% from May to 49,500 mt in Ni content in June, up 51.93% from June 2018.

On a month-on-month basis, output of high-grade NPI rose 2.87% to 42,200 mt in Ni content, driven by smelters resumption from May maintenance, higher operating rates at some mills, and release of new capacity. Environmental curbs in Shandong province offset ramp-up production at a local large plant, keeping output of the area flat in June. 

For low-grade materials, output grew 6.91% to 7,300 mt in Ni content last month, bolstered by the recovery from maintenance across steel mills in the north and the reopening of mills in the east, which outdid the impact from maintenance in the south. 

SMM expects China’s NPI output to expand 5.37% month on month to 52,100 mt in Ni content in July.

Fewer maintenance works and a reprieve from environmental pressure are expected to boost output of high-grade materials by 5.93% to 44,700 mt in Ni content in July, while the recovery from maintenance across steelmakers in the south will grow output of low-grade materials by 2.11% to 7,400 mt in Ni content. 

In June, China produced 10,263 mt in Ni content of nickel sulphate, which translated to 46,700 mt in physical content, down 10.29% on the month but up 58.14% on the year. 

Subsidy cuts for new energy vehicles (NEVs) dragged on downstream consumption and demand for nickel sulphate, a raw material for batteries. Poor orders for battery-grade nickel sulphate drove producers to lower output in June, with further cuts expected in July. 

Integrated producers of nickel sulphate, precursor also slashed their production of nickel sulphate solution, due to losses by using nickel briquette as feedstock. They favoured procured nickel sulphate. Fewer orders also depressed production on the integrated lines of nickel sulphate and precursor. 

Stable demand for electroplating-grade nickel sulphate kept production of the materials unchanged in June. 

For July, domestic output of nickel sulphate is expected to extend its declines, by 16.93% on the month to stand at 38,800 mt in physical content. This translates to 8,500 mt on Ni content basis, falling below 10,000 mt for the first time since March.