FOCUS - Chinese output of refined nickel, NPI to drop in June - SMM

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Vivian Teovivian.teo@fastmarkets.comJoint News Editor - Asia

Singapore 09/06/2016 - Chinese refined nickel and nickel pig iron (NPI) production is set to decline further in June, Shanghai Metals Market (SMM) said.

The Chinese metals research firm expects Chinese nickel output at 14,700 tonnes in June, down 1.3 percent from May, it said in a report on Wednesday.

Market nickel inventory has increased, domestic demand has weakened and shuttered capacity is unlikely to reopen while prices remain weak, it said.

Chinese electrolytic nickel production fell 13.6 percent year-on-year to 14,900 tonnes in May, taking year-to-date production to 69,100 tonnes, according to SMM. This is down 23.8 percent from the same period a year ago.

Weaker output is due to lower nickel prices, with producers switched to other profit-making products, it said.

Meanwhile, SMM forecast Chinese NPI production at 33,500 tonnes (contained nickel) in June, down 4.8 percent from May.

NPI production will be affected by power grid works in the Yangjiang region as well as production stoppages by low-grade NPI producers in the Liaocheng area, SMM noted.

Chinese NPI production fell six percent year-on-year but rose 3.5 percent month-on-month to 35,200 tonnes in May. This took production to 151,100 tonnes in January-May, down 12.6 percent year-on-year.

Production had increased month-on-month in May when major producers in Shandong and Jiangsu lifted output in anticipation of higher nickel prices in May, SMM noted.


(Editing by Mark Shaw)



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