China to increase import of NPI, ferronickel

China is expected to increase ferronickel import in the second quarter of this year due to lower production from domestic smelters amid rising production cost of the metal, according to PT Indeks Komoditas Indonesia (IKI) in its latest Indonesia Nickel Report (INR).

The report said that while a number of steel making companies have announced plans to reduce output in the next few months due to rising raw material and fuel prices, overhaul program, and prolonged lockdown to curb with the spread of Covid-19, IKI expected China’s stainless steel production will increase as several new stainless steel plants were scheduled to start production April.

It added that other supporting factors include the fact that China’s import of coking coal had increased in the first quarter, and the expected easing of the lockdown policy.

“IKI thinks that China will increase stainless steel production in the second quarter of 2022, taking advantage of the Yuan depreciation and low stainless-steel supply in the global market as some producing countries like India, Japan, and Korea have indicated to reduce output due to higher energy prices,” the report said.    

IKI said that China is also expected to increase import of cheaper NPI from Indonesia to help cope with rising prices of energy, nickel ore and metals.

The report said that Japan is also expected to increase ferronickel import in the second quarter amid rising demand for stainless steel from the manufacturing and automobile industries and lower stainless steel inventories, although some Japanese car makers including Toyota, Mazda, Mitsubishi, and Subaru due to the spread of Covid-19 in China, Russia-Ukraine war, and semiconductor shortage. 

Meanwhile, South Korea is expected to increase import of cheaper NPI and MHP from Indonesia to meet rising demand for steel making and battery production to cope with rising prices of nickel and fuel.

“IKI thinks that Korea will also increase the import of ferronickel in the second quarter 2022, especially from Indonesia to reduce expenses,” the report said.

The report also highlighted the new AIM project and expansion plans of IDX-listed gold and copper mining firm PT Merdeka Copper Gold Tbk including in the nickel downstream industry and future partnership with CATL to develop HPAL smelter, based on a recent interview with the company.

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