China's nickel raw materials will face a big gap next year

After the LME nickel was quickly lowered to $18,000/ton, the nickel price quickly rebounded to $19,000 and went sideways. What is the trend of the late nickel? According to the latest survey of Indonesian nickel supply data, the overall gap in 2014 is not large; however, with the gradual digestion of stocks in 2015, China's nickel demand gap will be large.

There are three main sources of nickel smelting in stainless steel: electrolytic nickel, nickel pig iron and stainless steel scrap. China uses high-grade laterite nickel ore to smelt high-nickel pig iron to produce stainless steel. 80% of high grade laterite nickel ore is from Indonesia. In January 2014, Indonesia banned the export of raw ore and encouraged enterprises to build smelters, but because of the smelting plant construction cycle, it will affect the medium-term supply. According to the latest survey of nickel industry chain consulting firm Nickel Bar, the supply of nickel metal in Indonesia was the same as that of the previous year, that is, 120,000 tons in 2014. In 2015, it will increase production by 120,000 tons and increase production in 2016 by 40. Ten thousand tons; in 2017, the output of nickel metal was 530,000 tons.

In 2013, China's stainless steel plant consumed about 680,000 tons of nickel pig iron. After the ban on the export of raw ore from Indonesia, Chinese companies increased their reserves. Nickel bar research data shows that at present, China's laterite nickel ore stocks are sufficient for China's ferronickel plant for nearly five months; at the same time, nickel pig iron stocks are enough for nearly two months. In general, China's nickel supply and demand in the second half of 2014 is in a balanced state.

Nickel Bar analysts believe that after China's spot nickel resource inventory consumption, China's nickel demand gap will be large in 2015, until 2016 can be basically balanced.

The Philippines also has laterite nickel ore, which can be properly compensated. However, the Philippine laterite nickel ore is dominated by lower grade nickel ore and is not suitable for high nickel pig iron production in China. Therefore, the commissioning of the new nickel smelter project in Indonesia will affect the supply of stainless steel nickel raw materials in China.

In addition, Shanghai Nonferrous Metals analysts also believe that there is no shortage of stainless steel raw materials supply for the Nisshin Railway Line in 2014; however, nickel prices are still rising during the year.