MYSTEEL: China’s NPI, FeCr prices follow V-curve in H1
The prices of NPI and FeCr dipped in Q1 after the COVID-19 outbreak nationwide dampened demand for both raw materials from domestic stainless mills, according to the report.
However, the prices of the two gradually recovered in Q2 as the spread of the virus abroad caused their raw materials costs to rise for the Chinese smelters. Contributing too was the fact that stainless steel production in China resumed from March, with output in June reversing the on-year decline in stainless in the months prior to rise compared with June 2019, the report said.
The Philippines and South Africa are the largest providers of nickel concentrates and chrome ore to China respectively, Mysteel Global notes.
The two countries had imposed lockdowns in March to contain the spread of the pandemic, as Mysteel Global reported, with ore production and shipments to China being disrupted, fuelling concerns among domestic mills about ore supply tightness looming in the near term. Although the restrictions on mining and shipping in the two countries were gradually eased during the latter months of Q2, exports remained unstable under the virus’s lingering impact.
Thus, Chinese steelmakers were willing to raise their buying prices of NPI and FeCr to ensure that the smelters could enjoy smooth production amid their increased raw materials costs. This was because the stainless mills had to largely rely on domestic sources of both under the COVID-19 contagion.
Not surprisingly, in this year’s first half the prices of imported nickel concentrates and chrome ore tracked in a V-shape curve similar to the price trends for NPI and FeCr, both of which hit bottom in March then quickly recovered, Mysteel’s database showed.
China’s price of imported nickel concs and NPI prices
(Unit: Yuan/t)
Source: Mysteel
China’s price of imported chrome ore (Unit: Yuan/dmtu)
and FeCr prices (Unit: Yuan/t)
Source: Mysteel
As of June 30, the price of Philippines-origin 1.5% Ni content concentrates in East China had reached Yuan 401/tonne ($57.3/t) including delivery and 13% VAT, a record high since Mysteel first conducted the survey in February 2017. This was also up by a substantial 39.7% on year, according to Mysteel’s assessment. Meanwhile, that of high-carbon FeCr with 55% Cr content in North China’s Inner Mongolia had also climbed to Yuan 31.75/dmtu at end-June, higher by 11.4% on year.
The NPI and FeCr prices both reached a similar level at the end of June compared with last year at the same time, Mysteel’s data showed. The price of 8-15% grade NPI in East China’s Jiangsu province was at Yuan 970/t including delivery and the VAT as of June 30, some 0.5% higher on year. That of 55% Cr content FeCr in North China’s Inner Mongolia reached Yuan 6,200/t including the VAT as of June 30, lower by 2.4% on year.
Written by Zhiyao Li, lizy@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com
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