Interfax China reports that China's nickel pig iron production in 2008 is expected to stand 8% lower annually at between 80,000 tonnes and 85,000 tonnes due to sluggish demand from stainless steel mills and low nickel prices.
Mr Fan Runze an analyst with Beijing Antaike Information told Interfax that "The cutting of production by Chinese stainless steel mills by 50% in May 2008 and another 30% in June have been heavy blows. The current nickel price of CNY 185,000 (USD 26,843.11) per tonne puts Chinese high cost nickel pig iron producers between a rock and a hard place.”
Mr Fan believes that slowing stainless steel output growth, increasing production of non nickel stainless steel and the use of refined nickel instead of nickel pig iron for production when nickel prices are low, will all dampen nickel pig iron production this year.
According to Mr China's average nickel pig iron producers have to sell their nickel content at more than USD 21,000 per tonne in order to make a profit. He said that "In addition to low nickel prices, almost all nickel pig iron producers using blast furnaces have halted production, or have turned to produce other more profitable ferroalloys, as it is difficult for them to make ends meet, especially when coke prices have more than doubled.”
Mr Dong Shutong chairman of China Nickel Resources Holdings Co Ltd told Interfax in Shanghai that "If nickel prices drop to CNY 150,000 (USD 21,764.68) per tonne more nickel pig iron production operations will be suspended. Current low nickel prices have sliced off one-third of China's nickel pig iron production capacity.”
However, global nickel market stability cannot do without China's 100,000 tonne nickel pig iron capacity. Without sufficient nickel pig iron production, nickel prices will return to previous high levels of above USD 50,000 per tonne.
Source: Steel Guru
No comments:
Post a Comment