NPI production rises to record high in Aug

SHANGHAI, Sep 10 (SMM) – Production of refined nickel in China came in at 12,670 mt in August, up 0.56% from July and 11.36% from August 2018, showed an SMM survey.

A smelter in Gansu put its one production line under maintenance for about a month ending at the middle of August. This impacted production by some 1,000 mt.

Nickel production is expected to rise to 14,000 mt in September, as greater profit margins encourage smelters to shift from nickel sulphate production to nickel metal after nickel prices soared. This includes smelters in Gansu and Shandong.

Output of nickel pig iron (NPI) in China rose 4.82% from a month ago to a record high of 53,200 mt in Ni content in August, showed an SMM survey, as high profit margins prompted smelters to ramp up operations.

August’s NPI output was up 38.22% from a year ago, as environmental pressure subdued production in the same period last year.

As smelters in major producing hubs such as Shandong and Inner Mongolia stepped up production on high profits, output of high-grade NPI grew 5.62% from July to 46,000 mt in Ni content last month.

Output of low-grade materials, meanwhile, held stable at 7,200 mt in Ni content.

NPI production is expected to shrink 0.18% month on month to 53,100 mt in September, as output of high-grade materials declining 0.56% to 45,700 mt.

Production of low-grade NPI will likely rise 2.22% to 73,700 mt, as some smelters in the north recover.

Overall NPI production will rise 28.38% from a year ago in September.

China produced 9,876 mt in Ni content of nickel sulphate in August, which translated to 44,900 mt in physical content.

This was up 16.6% from a year ago and 1.66% from a month ago, bolstered by the ramp-up of newly-commissioned capacity and recovery from production curtailments.

The growth in production, however, was limited by production cuts at some integrated producers of nickel sulphate and precursor, who procured nickel sulphate for production instead of producing nickel sulphate from nickel briquette or powder on its own, as the latter will incur losses.

Demand from new energy vehicle batteries improved last month, but has yet to recover to levels seen before the government subsidy cuts took effect in late June.

Despite poor demand, output of electroplating-grade nickel sulphate held stable last month.

Producers’ shift from nickel sulphate to pure nickel is expected to lower output of nickel sulphate by 5.48% from August to 42,400 mt, or 9,335 mt in Ni content, in September. Prices of battery-grade nickel sulphate have been lower than those for pure nickel for months.