SHANGHAI, Oct 29 (SMM) – China’s high-grade nickel pig iron (NPI) market is expected to see a supply surplus in the first quarter of 2019 with additional output from China and Indonesia, and as consumption across domestic stainless steel markets stands at a cyclical low, SMM expects.
Prices of high-grade NPI are set to stand lower than refined nickel in the first quarter of 2019, while high-grade NPI across Chinese markets is likely to trade in premiums over refined nickel in the fourth quarter of 2018.
Domestic high-grade NPI output has been on a tear since June, but growth slowed in September as operating plants entered high gears and as environmental restrictions and cash flow issues deterred plants that suspended operation or switched to other products, from resuming production of high-grade NPI. Operating rates across Chinese high-grade NPI producers stood at 61% last month, high levels since 2016.
While Shandong Xinhai’s new capacity commissioning timeline turned out earlier than expected, the new capacity is estimated to generate only 10,000 mt in Ni content of high-grade NPI in 2018.
Tsingshan stopped shipments of NPI from Indonesia to China from May after it expanded capacity of #300 stainless steel in Indonesia.
Meanwhile, NPI producers without stainless steel production capacity in Indonesia intensified efforts in developing new clients in South Korea, India and other South-east Asian countries. In the first nine months of the year, NPI imports from Indonesia decreased 54% from the same period last year.
About 80% of high-grade NPI supplies across Chinese markets are produced domestically while some 20% were from Indonesia, SMM data showed.
Chinese stainless steel mills continued to ramp up output. SMM expects China’s stainless steel output to increase by 16% quarter on quarter in the fourth quarter of 2018.
SMM expects a supply surplus of high-grade NPI across Chinese markets in the first quarter of 2019 as Shandong Xinhai’s capacity addition would generate more output.
Jiangsu Delong has built 15 electric arc furnaces (EAFs) of 33,000 KVA at its plant in Indonesia with eight furnaces in operation and the other seven likely to come online by the end of this year. This is estimated to boost its NPI output by some 5,000 mt in Ni content in the first quarter of 2019.
SMM learned that the company would pour some of its Indonesian NPI resources into the domestic markets in the future. This would also grow NPI supplies across Chinese markets.
The first quarter of the year is a cyclical low season for the Chinese stainless steel markets, when shrinking profit margins drive mills to cut or suspend production. This is set to suppress the demand for NPI.
![[SMM Analysis] Indonesia Một Lần Nữa Điều Chỉnh HPM Quặng Niken, Kéo Giá Limonit Về Sát Mức Thị Trường](https://imgqn.smm.cn/usercenter/GmHLU20251217171733.jpg)
