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Surging China stainless steel output may reverse recent nickel slump-The 18th China(Guangzhou)Int'l Stainless Steel Industry Exhibition
9/6/2016 不銹鋼展-不銹鋼展會-效果最好的不銹鋼展會- Stainless Steel Exhibition |
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Reuters reported that a surprise jump in stainless steel production this year in China, the world''s biggest nickel user, may reignite a rally in nickel prices as investors shift focus to demand from worries over Philippine supply. The pick up in China''s stainless steel production could fan a rally in prices after they slumped in August when a steady stream of mine closures in the Philippines dried up and blunted concerns over contracting mine supply.
UBS said “China''s output of nickel-bearing stainless steel, which uses more nickel than overall stainless steel, during January to July surged to 11.201 million tonnes, up 10 percent from the same period in 2015. Overall stainless steel output for the first seven months of 2016 was 8 percent higher than a year ago at 13.639 million tonnes.”
Analyst Dan Morgan at UBS in Sydney said "Everyone has been focused on the supply side. People should also be paying attention to the demand side and that''s looking rosier. Mills are making more series 300 stainless steel, used in finishings such as kitchen fixtures and construction, instead of lower quality 200 stainless steel typically used in items like cutlery. The 300 series metal contains 8 to 10 per cent nickel, while the 200 series contains around 3 per cent.”
Analyst Jim Lennon of Macquarie added “Low nickel prices plus a rejection by customers of low quality steel has seen a switch away from 200 series stainless towards 300 series.”
He added “China''s nickel demand was set to expand by 90,000 to 100,000 tonnes in 2016, as even producers of nickel pig iron, a cheaper substitute for nickel, use more of the metal in their feed after the supply of ore dropped because of low prices and an Indonesian export ban.”
China accounts for some 53 per cent of global nickel demand, according to UBS.
-The 18th China(Guangzhou)Int''l Stainless Steel Industry Exhibition
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