column-stainless steel surge impacts nickel and ferro-chrome: andy home - stainless steel natural gas grill
The opinion expressed here is the opinion of the columnist of Reuters)* tmsnrt.
Andy house rs/2ebtQC3, London, October 11 (Reuters)-
Global steel demand will rise slightly.
2% according to the World Steel Association (WSA).
The forecast is only 0, and it will not be better next year.
Growth of 5%.
But it could be worse.
WSA raised its forecast starting in April, when demand was expected to drop by 0.
8% of this year
China's production and demand has been boosted by the government's latest economic stimulus, another push for infrastructure and construction buttons.
However, there is a much better situation in the steel industry.
Stainless steel production rebounded strongly again in the first half of this year, thanks to China.
This has an impact on the two metal inputs in the stainless steel production process, nickel and ironchrome.
The latter is one of those metals that trade mainly in shadows --traded pricing.
But this could change on the London Metal Exchange (LME)
Look at the potential new contracts.
Chart on stainless steel production in China: tmsmrt.
Rs/2ebtQC3 global stainless steel production increased by 4 year on year. 1% to 22.
According to the International Stainless Steel Forum, there were 1 million tons in the first half of this year (ISSF).
This represents a strong recovery from a drop of 0 in annual output.
3%, and the total output of steel fell by nearly 2% over the same period is better.
There is no doubt that China's stainless steel production accounts for more than half of the world.
China's output has grown by 11.
Growth of 5% in the second quarter, first
Half to seven. 9 percent.
Domestic demand has been booming, but exports are also booming, a mini-play in the broader story of a boycott of China's soaring steel exports.
Trade tensions can be seen during the regional collapse of ISSF.
In addition to China, stainless steel production growth in other parts of Asia is also the only one.
Production in the rest of the world has fallen, and this trend may begin to reverse as trade sanctions accumulate.
Stainless steel is the core driving force of nickel demand. At present, the market is concerned about the supply dynamics brought about by government policies in Indonesia and the Philippines.
Indonesia is a major supplier of nickel ore for the production of nickel iron in China, a metal used in stainless steel production.
The country banned iron ore exports in 2014 in an effort to force miners to abandon the value chain.
This policy was only partially successful.
There are some buildings-
The capacity of smelters is insufficient, and even stainless steel production capacity is insufficient in Qingdao, China.
However, other smelter projects are difficult to land, and the government is now considering whether to ease the ban on projects that have already started construction.
After Indonesia's ban, the Philippines filled the iron ore supply gap, but the country's nickel production was in chaos as miners were subjected to severe environmental scrutiny.
Miners in the country for a quarter have been shut down with another 20 miners under the threat of suspension, many of which are nickel operations.
This raises the question of how Chinese stainless steel producers can get enough nickel to meet such strong production.
Analysts at Macquarie Bank believe the answer will be higher
Concentrate or even refine the metal in the ore mixture. (
"Nickel and Philippines
Big surprise in 2016 ", July 13, 2016).
After all, there is no shortage of refined nickel in China, especially in China, where imports have increased by 68% to 290,000 tons so far this year.
According to the International Nickel research group, this relatively new use of primary metals in stainless steel production may be one of the reasons why China's nickel demand has increased by 8% so far this year and global usage has increased by 6%. THE FERRO-
Chromium effect stainless steel manufacturers also need iron
According to data from Macquarie Bank, soaring production in chrome and China has translated into strong price increases. (
"Chromium returns to raw material restrictions" in October ". 5, 2016).
The market is still characterized by producer benchmark pricing.
Merafe Resources in South Africa settled European deliveries for the fourth quarter at 110 cents per pound, the highest level in two years
The rise in a quarter is usually characterized by weak prices.
This reflects a shortage of chromium ore more upstream, especially in South Africa, the world's largest supplier.
China does not have its own chromium resources and is highly dependent on South Africa's supply.
According to Macquarie, there are many port stocks
This year's lows are due to a surge in demand from stainless steel manufacturers.
Banks do expect some options.
Supply has increased, but "overall, we are considering the chrome market where inventory will continue to decline in the next few years ".
With the increase in stainless steel production capacity in Indonesia, it is largely due to the government's policy of promoting value --
In addition to the nickel industry, "there is likely to be an ongoing supply competition in the next few years.
"It's usually not going to be a lot of headlines outside the small world of the chrome market. But ferro-
Chrome has landed on the radar of the London Metal Exchange (LME).
According to the Metal Bulletin, a group of insiders recently met in London to discuss the idea of a new contract.
The idea of London Ferro-
Chrome contract has done several rounds before, but this time it seems to have drawn the attention of the exchange to be happy to confirm interest.
"Industry users have made contact with LME on the introduction of LME ferro
Chrome contract ".
"We believe in developing products with participants to meet the real needs of the market and are committed to evaluating and improving our products as effectively as possible.
So look at this space.
The current surge in stainless steel may have a greater impact than just increasing the demand for nickel and ironchrome.