What Chinese Ferronickel Could Do? When Indonesia Increase Production meet Chinese Decrease Production.


In lately, PT.WANXIANG STEEL INDONESIA and PT HUADI NICKEL-ALLOY INDONESIA have each one new Nickel Pig Iron line for production, in the meanwhile, Qingdao Zhongcheng and Liqin Indonesia might keep producing nickel-iron in the end of this year. For the stainless steel side, big pressure from the sales and some main mill factories might stop production temporarily, which makes the market more depressed emotion.

The impact still continues from the Indonesia ferronickel. 

Recently, there has been continuous news about the new projects of nickel pig iron in Indonesia being put into production, but in fact, most of them are concentrated production caused by the delay of production lines. Affected by the epidemic in the first half of 2022, the transportation of construction materials was hindered, and the commissioning of some ferronickel production lines in Indonesia was delayed. IWIP, one of the main forces in production, was put into operation quickly in the first half of the year. Although the park plans to have more than a dozen production lines planned for this year, according to the actual construction situation, it may not be ideal, and the monthly growth rate of local nickel pig iron production may slow down. In 2022, the output of high-nickel pig iron and nickel metal in Indonesia is expected to be 1.1443 million tons, a year-on-year increase of about 32%.

 304 stainless steel

There is no consumption increase of ferronickel in Indonesia

Compared with Indonesia's local nickel pig iron consumption, which has not grown significantly, the continuous increase in Indonesian ferronickel production has transformed into a large amount of Indonesian ferronickel returning. In July, domestic mainstream steel mills began to sell self-produced Indonesian nickel pig iron, and the oversupply landed, impacting the domestic market. Although the growth rate of nickel pig iron production in Indonesia may slow down by the end of the year, it is expected that the impact of Indonesia's return flow will continue this year.

Grade 300 series stainless steel decrease production continues.

The dual pressure of sales and cost plagues every link in the industrial chain, and the pressure on stainless steel mill factories closer to final consumption is only a lot more. Due to continuous loss of production, the rare 300 series stainless steel output is 1.27 million tons, which 16% less than in previous years. It is expected that the year-on-year production reduction will continue in August.


nickel stainless steel

Indonesian nickel pig iron continues to impact the domestic market. Although the Indonesian nickel product export tax policy may be implemented in the third quarter, it is currently understood that the tax rate may be 2-3%. The cost of Indonesian nickel pig iron could be lower than that of the Chinese market. If the tax rate is fixed at 2-3%, and the export cost of ferronickel in Indonesia will increase by about US$3-5/nickel, and the impact is relatively limited. The actual export tax policy needs continuous attention.

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