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| Reducing Production Of Stainless Steel Is Causing To Increase Nickel Stocks In China |
| = Imports In August Decreased To Half Of That In July, Nickel Stocks Are Viewed To Reach 140,000 Tons |
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It was known that, for the purpose of implementing maintenance for facilities in October - December quarter, two major stainless steel companies in China (Taiyuan Iron & Steel and Baoshan Group) are entering into the structure to reduce their production of stainless steel. Therefore, the matter, which China intends to expand production of stainless steel, is coming to a standstill and nickel stocks in China are said to have an excess but supposed to increase further by this movement in production of stainless steel. According to a survey report published by Goldman Sach in this week, nickel stocks in China as of the 31st August of 2009 are estimated at 139,000 tons and, in view of the fact that China is moving to produce nickel-contained pig iron on full scale as its current price has turned to be profitable, a feeling of the excessively stocked nickel in China is anticipated to multiply. China has already put the brake from August on imports of nickel metal and actually imported 22,702 tons of nickel metal (primary nickel) in August, having decreased to half of that (47,754 tons) imported in July. This tendency is thought to continue further and, as a matter of fact, China imported 272,000 tons on material base of nickel in January - August of 2009, which are compared with that (164,000 tons) imported in the same period of 2008. The total quantity of nickel imported by China in January - August of 2009 had reached 223,000 tons on nickel content base, having exceeded considerably that (93,000 tons) in the same period of 2008. It is certainly forecasted that China will produce more than 8.00 million tons of crude stainless steel in the calendar year (January - December) of 2009, because China already produced 4.067 million tons in the first half (January - June) of 2009. Owing to the overproduction in the first half, a tempo to increase the output of crude stainless steel in the second half (July - December) of 2009 is supposed to slow down but the total quantity of crude stainless steel to be produced in China for the full year of 2009 is anticipated to be more than 8.000 million tons on an annualized base. For a reference, China actually produced 6.94 million tons of crude stainless steel in the preceding year of 2008. According to an estimation of nickel demand in China for 2009 released in September by Antaike, China is assumed to consume 404,000 tons of nickel in 2009 by an increase of 25% from that in 2008 but, on the other hand, Goldman Sach estimated that a nominal quantity of nickel consumed in China for January - August of 2009 had reached the level of 379,000 tons in total, consisting of 156,000 tons produced in China and 223,000 tons imported by China. However, the net quantity of nickel really consumed in China for January - August of 2009 is supposed to be 240,000 tons and, therefore, nickel stocks in China as of the 31st August of 2009 will come to 139,000 tons, which are able to cover actual nickel consumption for 141 days in China. Since it passed August of 2009, the inquiries to export nickel for China have suddenly shrunk and this change of the situation is thought to have been caused by a pressure of the excessive nickel stocks in China and a weakness of LME nickel prices. The break-even cost to produce nickel-contained pig iron in China is estimated at 550 - 600 US-Cents per lb. of Ni and, on the basis of LME nickel prices at present, the case to produce nickel-contained pig iron in China will be fully profitable. The quantity of nickel-contained pig iron to be produced in China for the calendar year of 2009 was estimated at the beginning of the year to be 28,000 - 36,000 tons on nickel content base but these figures have changed to 75,000 - 90,000 tons on an annualized base at present. The exports of nickel (nickel metal and ferro-nickel) from Japan in the first half of 2009 were maintained on a favorable tone but, owing to the changed market situation of nickel in China where is an important country for Japan to export nickel, the exports in the second half are turning to be inevitable to decrease in comparison with those in the first half. For a reference, in the first half of 2009, nickel producers in Japan exported <> primary nickel : 5,179 tons (including 399 tons of nickel cathodes) and <> ferro-nickel : 17,715 tons on Ni content base, having totalled to 22,894 tons on nickel content base (including an estimation). |
| last modified : Mon 05 Oct, 2009 [10:20] |
