Singapore 24/05/2016 - China’s refined nickel and nickel alloy imports jumped around 2.5-times year-on-year to 49,012 tonnes in April, according to latest data from the Chinese customs.
This took imports to 157,599 tonnes in January-April, a 3.5-fold increase from the same period last year.
Other than earlier arbitrage opportunities between Shanghai and London markets, nickel imports had risen so far this year due to nickel financing deals, said industry participants.
The bulk of imports came from Russia, which accounted for 79 percent and 72 percent of total imports in April and January-April respectively.
China’s ferronickel imports rose 42.6 percent year-on-year to 107,161 tonnes in April, taking year-to-date imports to 294,695 tonnes. This is a 50.1-percent increase from the same period last year.
Ferronickel imports have remained strong due to production cuts among Chinese nickel and nickel pig iron (NPI) producers, and ramp-up of NPI projects in Indonesia, said industry watchers.
Ferronickel imports from Indonesia into China jumped nearly six-fold year-on-year to 196,373 tonnes in the first four months of the year.
“The fact that imports continue to run significantly above year-ago levels suggest that the slowdown in domestic NPI production has made China increasingly dependent on foreign supply,” said Boris Mikanikrezai, metals analyst at FastMarkets.
Chinese NPI production should fall by nine percent to around 350,000 tonnes this year, ICBC Standard Bank estimated in a report last week.
Meanwhile China’s nickel ore and concentrate imports fell 56.6 percent year-on-year to 1.37 million tonnes in April. Of the April imports, 1.26 million tonnes were from the Philippines, which was a 57.7-percent decline from the same month last year.
Total nickel ore and concentrate imports fell 35.5 percent year-on-year to 4.53 million tonnes in January-April. Those from the Philippines were down 37.5 percent year-on-year to 4.16 million tonnes during the period.
The decrease in imports so far this year reflects slower demand from Chinese NPI producers, heavy rains in parts of the Philippines which had hampered shipments, and possible production cuts among Philippine miners, sources said.
The Philippine Nickel Miners Association, which accounts for 60 percent of domestic nickel ore production, had agreed earlier this year to reduce ore output by as much as 20 percent over 2015 volumes.
But analysts said it remains to be seen if the pledge will be adhered for the rest of the year.
Filipino nickel ore supply should respond to the heavy destocking of nickel ore stocks in China, provided nickel prices rally in the second half of 2016, said Macquarie Commodities Research in a report last week.