NPI Output in Mar to Gain 1.63% from Feb Limited by Poor Demand

SHANGHAI, Mar 9 (SMM) - Chinese NPI output stood at 305,000 mt in physical content in February, up 8.56% MoM and 0.72% year-on-year. The total Ni content was 32,800 mt. 

In February, the downturn in the stainless steel sector resulted in a large accumulation of NPI stocks, which further greatly dragged down the NPI output in the month. The month-on-month increase was due to the production resumption of low-grade NPI plants. In detail, the output of high-grade NPI was about 26,100 mt in Ni content, down 5.19% from the previous month, which was contributed by the slower-than-expected commissioning of integrated stainless steel mills. At the same time, some NPI plants that did not overhaul before the Chinese New Year carried out maintenance in February, which reduced their cost pressures while alleviating market oversupply. In addition, some high-grade NPI plants whose output declined due to furnace problems. The low-grade NPI output ballooned 26.91% to 6,700 mt in Ni content. The integrated enterprises carried out large-scale maintenance at the end of the year. In February, the production of 200-series stainless steel was still profitable, so the low-grade NPI output improved.
It is estimated the Chinese NPI output in March will increase 1.63% from January to around 33,400 mt in Ni content. In March, some high-grade NPI plants were still under maintenance, but the increase in working days in the month will slightly push up the output. On the other hand, stainless steel mills carry high in-plant inventories of NPI, which will limit the output growth of NPI in March.