China's Stainless Steel Manufacturers Will Enter The Summer Maintenance Period

China's stainless steel manufacturers will enter the summer maintenance period. In the next few weeks, nickel prices would face pressure. However, given the domestic stainless steel production capacity expansion will boost the market demand for nickel, nickel prices are expected to rebound in the second half. China's nickel consumption has accounted for more than a third of global consumption, demand from China have become the main driver of global nickel consumption. However, due to the global market is expected to be a surplus of nickel supply, coupled with competition from nickel, nickel prices rebound in the second half of the space may be limited. Domestic stainless steel pipe manufacturers in the case of higher nickel prices lower-cost nickel iron as an alternative raw material, the situation has become increasingly common. China's nickel prices follow a recent London Metal Exchange (LME) nickel price decline, on June 16 yuan per ton below 170, 000 yuan (26, 269 U. S. dollars) of the psychologically important support level on Monday fell to this year's minimum. The recent debt crisis in the global financial system may be concerns about the spread of re-warming, coupled with fears that slowing U. S. economic recovery, these factors to the LME nickel price pressure. Shanghai Metals (Shanghai Metals Market) Nickel said analyst Wang Haoyang, factory overhaul is to push the low nickel price is another factor, since the second quarter, the downstream demand is not very good, positive stainless steel pipe plant this year, early entry into the maintenance phase, maintenance scale relatively large. Industry sources said, including Baosteel Group Corporation (Baosteel Group Corp. ), Jiuquan Iron and Steel Group (Jiugang Iron & Steel Group) subsidiary, including some of the steel plant has begun equipment maintenance; At the same time, taking into account measures to limit power, demand is low, the East Special Steel Co., Ltd. (Eastern Special Steel Co. ) and some steel factories to suspend some of the production. Stainless steel, a subsidiary of Baosteel Group, executives said, equipment maintenance will be completed before the end of this month; and expected output of 1.3 million tonnes of stainless steel, with the same level as last year. According to a report by Shanghai Metals, Jiuquan Iron and Steel Group, a subsidiary of stainless steel tube maintenance will continue until the end of July, the affected production of about 40, 000 tons. Analysts are not too worried about the recent market slump in nickel prices. They said the rest of the year continued decline in nickel prices is unlikely, because the demand for nickel from stainless steel business is on the rise, this part of the demand accounted for 75% of nickel consumption. State-owned metals information Beijing Antaike Information Development Co., Ltd. (Beijing Antaike Information Development Co. ) Expects 15% growth last year reached 515, 000 tons, this year China's nickel demand will grow 16% to 599, 000 tons. The agency also expects China's steel production will increase 13 percent, to 1, 400 tons. Beijing Antaike anonymity of nickel analysts said China's steel production capacity, and still grow every year, so the market demand for nickel is guaranteed, nickel demand will rebound in the third quarter. Some media reports earlier this month, general manager of Stainless Steel House set wave expected in the next 5-10 years, China's annual stainless steel consumption will average 5% -7% growth rate. Posco Company subsidiary in China, Zhangjiagang Pohang Stainless Steel Co., Ltd. (Zhangjiagang Pohang Stainless Steel), a management source said that this year the company will yield about 70 million tons from last year's increased to 100 tons. However, industry sources said, even if the nickel price rebound, it will not break in February this year rose to U. S. $ 29, 000 per tonne after touching a high as the market expected excess supply, and the higher nickel prices will encourage more manufacturers to use nickel-stainless steel a substitute. Barclays Capital on Monday it expected third-quarter nickel prices down to $ 29, 000 per ton from U. S. $ 25, 000 per ton on the grounds that the supply outlook improved. The Beijing Antaike analyst, said the moment of nickel is not a threat, because the current nickel price is still low, and the limit of nickel iron producers facing the influence of power, their own problems such as low profit margins; However, once nickel prices U. S. $ 24, 000-25, 000 per tonne, nickel iron business is likely to significantly improve productivity. He said that nickel prices will be under pressure. In recent years, in order to reduce costs, increase profitability, China's domestic stainless steel pipe manufacturers to gradually start using nickel in stainless steel pipe production of nickel iron as a substitute, and this practice has become increasingly common. Since 2005, nickel-nickel iron began to be used as a substitute for, China has at least 100 tons of nickel iron production capacity. Source: al-metal.org