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Rally drives China nickel pig iron prices past refined metal

Keywords: Tags  China nickel, nickel pig iron, refined nickel, Taigang Stainless Steel, Jiuquan Iron & Steel, Tsingshan Holding Group, stainless mills

SHANGHAI — Chinese nickel pig iron prices overtook refined nickel prices thanks to an August rally in which stainless steel mills increased purchases.

Mainstream high-grade nickel with a metal content of 10 to 15 percent is trading at 1,010 to 1,020 yuan ($164 to $166) per nickel unit, up nearly 10 percent from early August, sources in China said.

The price is around 4,000 to 5,000 yuan ($649 to $812) higher than the current refined nickel level, which is unusual for the market.

Domestic spot nickel prices on the Changjiang Nonferrous Metals Market were at 96,700 to 97,900 yuan ($15,696 to $15,891) per tonne Sept. 12, down 1,200 yuan ($195) from August levels.

Major Chinese stainless steel mills, including Taigang Stainless Steel Co. Ltd., Jiuquan Iron & Steel (Group) Co. Ltd. and Tsingshan Holding Group Co. Ltd., started increasing their prices in late July due to tight supply.

Stainless steel mills are still willing to buy nickel pig iron as a raw material even though it is priced higher than refined nickel, participants said.

"In theory, demand for refined nickel should increase in the current market situation, but we haven’t seen any improvement so far," a trader from Wenzhou, in Zhejiang province, said.

A version of this article was first published in AMM sister publication Metal Bulletin.

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