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September 5, 2021 – Chinese Nickel pig iron (NPI) prices have climbed to a new high despite further production cuts for Chinese stainless steel mills in August and September 2021, which should further underline the shortage of NPI and nickel ore. And steel prices in Germany continue to pick up after the summer break. Steel inventories still at record lows.

Stainless Espresso: Chinese Nickel pig iron price at new highs
Stainless Espresso: Chinese Nickel pig iron price at new highs

Nickel pig iron at new high

Chinese nickel pig iron (8-12%) climbed to a new high last week and is now over $220 per tonne – an increase of almost 38% since the beginning of 2021. Demand from stainless steel mills remains high and the high cost of nickel ore is creating further pressure on nickel pig iron. Ore and NPI continue to be in short supply.

German steel prices expected to rise

German market participants expect steel prices to rise further in September. This was revealed in a survey by S&P Global.

The problems encountered by auto manufacturers in procuring semiconductor chips have freed up some capacity in the hot-dipped galvanized coil sector, which is currently being rapidly absorbed by the market.

German steel stocks still very low

Over the summer, stockholders were also able to increase their inventories slightly, as reported by the German Steel Trade Association (BDS AG). However, German steel inventories are still significantly below the lows seen in January 2021.

China production restrictions on stainless steel mills

China continues to rely on output and production restrictions in stainless steel production. Just recently, the issue has been revisited. Back in early July 2021, the government called on the steel industry not to exceed 2020 production levels for 2021 Which has resulted in many companies having to reduce their capacity utilization to 70%.

Stainless steel mills further reduce production for September 2021

More southern Chinese stainless steel mills have started to cut their production in early September 2021. In Guangxi, production was already cut in August due to power shortages. The production planning for stainless steel indicates a further decrease for September.

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