SHANGHAI (Scrap Register): Last week, shorts weighed the most active SHFE nickel contract from a high since October 2018, to lows around 102,000 yuan/mt, after the US dollar rose and on reports of the start of nickel pig iron (NPI) capacity expansion in China.
Despite capacity additions, NPI supply remained tight and this kept materials in premiums against refined nickel last week.
Amid poor downstream consumption, prices of hot-rolled stainless steel fell with nickel, but profits kept production of #300 series at highs last week. SMM expects nickel to trade rangebound this week as the market awaits more clarity around changes in social inventories of stainless steel.
Fewer working days in February lowered production of high-grade NPI by 4.89% from January, to 37,200 mt in Ni content last month. Capacity expansion at a large NPI mill in Shandong province offset part of the decline.
SMM learned thatthe producer in Shandong commissioned its fourth furnace last week, which will generate output by 650 mt in metal content per month. Regular production is expected in at least a month.
Steel plants in the east and south restocked NPI actively last week, with a stainless steel producer in the south stockpiling raw materials for April and May. Most NPI plants had pre-sold their output for March, and were fully booked in April and May, indicating tight supplies in the market.