China refined nickel production grows 5% in Sep

SHANGHAI, Oct 11 (SMM) – China’s production of refined nickel grew 4.97% from August to 13,300 mt in September, showed an SMM survey, as a smelter in Gansu recovered from maintenance and also a smelter in Shandong moved up a gear to chase higher margins after refined nickel turned more profitable than nickel sulphate.

The production growth was capped by maintenance at a smelter in Jilin.

On a year-over-year basis, refined nickel output rose 21.81% in September.

SMM expects production to inch up to 13,500 mt in October, in anticipation of greater output from Gansu and stable operations at other smelters.

Output of nickel pig iron (NPI) in China dipped 0.79% month on month but rose 27.59% year on year to 52,700 mt in Ni content in September.

The production decline from August was moderate, as healthy profits kept smelters in normal operations. Authorities did not require major plants in the north to slash production around the National Day holiday, while power supply controls had limited impact on plants in Inner Mongolia.

High-grade NPI accounted for 46,100 mt in Ni content last month, up 0.38% from August, while production of low-grade materials declined 8.26% to 6,600 mt in Ni content as a slew of plants conducted maintenance.

China’s NPI production is expected to decline 2.28% from August to 51,540 mt in Ni content in October, as output of high-grade materials will shrink 2.28% to 44,800 mt in Ni content after a mill in east China suspended for maintenance for several days at the start of the month.

The recovery from maintenance at some plants will bolster output of low-grade NPI up 2.57% to 6,800 mt in Ni content this month.

China produced 42,700 mt of nickel sulphate in September, down 4.79% month on month but up 20.01% year on year. This translated to 9,403 mt in Ni content.

The production shrank from August, as some producers suspended for the National Day holiday and some cut output or turned to refined nickel on poor demand.

Integrated nickel sulphate and precursor plants made deeper cuts in their nickel sulphate production, as producing the material from nickel briquette or powder continues to incur losses.

Production of nickel sulphate across China will likely extend its decline in October, down 2.11% from September to 41,800 mt, or 9,205 mt in Ni content, as demand from the new energy vehicle sector recovered slower than expected.

But some nickel sulphate producers reported improvement in orders.