SHANGHAI (Scrap Register): China’s NPI capacity had been expanding since 2007 as the product has been applied as raw material for stainless steel production. But, the turning point occurred from 2014 due to supply shortage of nickel ore and falling nickel prices. In Indonesia, the newly-emerged NPI sector is on the way of expansion.
Indonesia is rich in nickel ore resources, with higher quality than Philippine ores. It is relatively cheaper to use nickel ore locally, so many Chinese companies went to Indonesia to build NPI plants after Indonesian ban on raw ore exports from early 2014.
NPI capacity in Indonesia expanded at over 100% from 2015 to 2017. SMM predicts Indonesia’s NPI capacity will reach 285,000 tonnes (Ni content) in 2017, with output expected at 160,000 tonnes (Ni content), and both NPI capacity and output is expected to keep growing in 2018 and 2019. For output increment in details, please see Chinese NPI Projects in Indonesia in SMM Nickel Monthly.
In China, there is a different story. After peaking at 1.31 million tonnes (Ni content) in 2014, China is gradually phasing out inefficient NPI capacities along with falling supply of nickel ore and stricter environmental protection inspections.
SMM projects that China’s NPI capacity and output will fall to 740,000 tonnes and 365,000 tonnes in 2017, respectively, both measured in Ni content. Both NPI capacity and output is estimated to keep falling in 2018 and 2019.
All these show that Indonesia’s NPI market share is and will be increasing, and its NPI output will approximately reach up to China’s output level in 2019. Its changes in production costs will also play an increasing influence on the market. SMM will make further analysis of NPI capacity costs in Indonesia in our monthly report.