Review of Chinese nickel pig iron industry and steel demand outlook in 2008
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" Review of Chinese nickel pig iron industry and steel demand outlook in 2008
In this week's report, we review Chinese nickel pig iron industry developments in terms of production output as well as cost analysis. We estimate that in 2008 Chinese recoverable nickel from nickel pig iron will be 110,000t, up by 29.4% YoY from 85,000t in 2007. However, nickel ore imports will come down from the 15.6mt hit in 2007 to 12.0-13.0mt in 2008 due to a large amount of ore inventory carried over from the previous year and higher grades.
Breakeven costs for nickel pig iron are rising due to rising nickel prices and also higher coke input costs. Chinese coal mining and weather problems, leading toward a severe shortage of coke and the surge in coke prices, have placed a critical upward pressure on nickel pig iron production costs. We estimate that for 7% nickel content pig iron, the rise in coke prices over the past six months has almost doubled the coke input value from an estimated US$4,300/t ni in 1H07 to over US$8,000/t ni in 2008 (100% Ni basis).
SHFE copper prices made marginal gains last week despite strength on the LME. The front-month copper contract ended at Rmb67,900/t (US$9,563/t) by the market close on Friday, up by 0.6% from the previous week. SHFE aluminium prices rose marginally last week despite the price hike on the LME. The front-month aluminium contract closed at Rmb19,710/t (US$2,776/t) on Friday, modestly up by 0.6% WoW.
Baosteel announced its 2Q08 ex-factory price on Monday last week, with an average price rise of Rmb800/t (US$112/t) from 1Q08. Baosteel is the only Chinese steel mill that systematically uses the quarterly pricing mechanism and its 2Q price list rise is mainly playing catch-up with spot price developments.
Chinese spot steel prices rose for the second consecutive week after the Chinese New Year holiday. The hot rolled steel price rose by 4% WoW to $644/t and the cold rolled coil price was up by 7.3% to US$793/t ex-Vat. The rebar price hit US$576/t over the past week, registering a 2.3% WoW increase and plate price was up by 5.6% WoW to reach US$698/t ex-Vat.
Our analysis of Chinese end-use demand by sector suggests that demand will largely be unaffected by the strong steel price rises currently being witnessed.
The Chinese domestic iron ore price surged by 8.2% WoW and 17.9% MoM to US$196/t ex-Vat, benchmarked by the 66% Hebei iron ore fine. The Indian iron ore price was stable at US$193/t cif and US$135/t fob, unchanged from last week. At the time of this writing, however, we were hearing of a rise in fob quotes to US$140/t."
For more information http://www.worldscrap.com/modules/news/article.php?aid=6270"
In this week's report, we review Chinese nickel pig iron industry developments in terms of production output as well as cost analysis. We estimate that in 2008 Chinese recoverable nickel from nickel pig iron will be 110,000t, up by 29.4% YoY from 85,000t in 2007. However, nickel ore imports will come down from the 15.6mt hit in 2007 to 12.0-13.0mt in 2008 due to a large amount of ore inventory carried over from the previous year and higher grades.
Breakeven costs for nickel pig iron are rising due to rising nickel prices and also higher coke input costs. Chinese coal mining and weather problems, leading toward a severe shortage of coke and the surge in coke prices, have placed a critical upward pressure on nickel pig iron production costs. We estimate that for 7% nickel content pig iron, the rise in coke prices over the past six months has almost doubled the coke input value from an estimated US$4,300/t ni in 1H07 to over US$8,000/t ni in 2008 (100% Ni basis).
SHFE copper prices made marginal gains last week despite strength on the LME. The front-month copper contract ended at Rmb67,900/t (US$9,563/t) by the market close on Friday, up by 0.6% from the previous week. SHFE aluminium prices rose marginally last week despite the price hike on the LME. The front-month aluminium contract closed at Rmb19,710/t (US$2,776/t) on Friday, modestly up by 0.6% WoW.
Baosteel announced its 2Q08 ex-factory price on Monday last week, with an average price rise of Rmb800/t (US$112/t) from 1Q08. Baosteel is the only Chinese steel mill that systematically uses the quarterly pricing mechanism and its 2Q price list rise is mainly playing catch-up with spot price developments.
Chinese spot steel prices rose for the second consecutive week after the Chinese New Year holiday. The hot rolled steel price rose by 4% WoW to $644/t and the cold rolled coil price was up by 7.3% to US$793/t ex-Vat. The rebar price hit US$576/t over the past week, registering a 2.3% WoW increase and plate price was up by 5.6% WoW to reach US$698/t ex-Vat.
Our analysis of Chinese end-use demand by sector suggests that demand will largely be unaffected by the strong steel price rises currently being witnessed.
The Chinese domestic iron ore price surged by 8.2% WoW and 17.9% MoM to US$196/t ex-Vat, benchmarked by the 66% Hebei iron ore fine. The Indian iron ore price was stable at US$193/t cif and US$135/t fob, unchanged from last week. At the time of this writing, however, we were hearing of a rise in fob quotes to US$140/t."
For more information http://www.worldscrap.com/modules/news/article.php?aid=6270"
07 Mar 2008 11:35
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