August 12, 2021 – Chinese nickel production has fallen by more than 15% so far in 2021. Inventories have also fallen significantly. According to Deutsche Bank calculations, China will lose 2.4 million tons of aluminum production by mid-2022. And delivery times for Chinese products could continue to rise due to Covid-19 outbreaks, for example at the port of Ningbo-Zhoushan. 

Stainless Espresso: Chinese nickel production down 15%
Stainless Espresso: Chinese nickel production down 15%

China to lose 2.4 million tons of aluminum production by 2022 

According to Deutsche Bank calculations, more than 2.4 million tons of aluminum production will be lost in China until at least May 2022. In Guangxi province alone, this is likely to temporarily eliminate more than 500,000 tons of annual aluminum production capacity. The reasons for this are the ongoing power shortage in China and the upcoming Winter Olympics.  

China needs to import aluminum 

China is likely to cover additional demand from stocks from reserves and from imports. This should give the aluminum price a further boost in view of sustained demand, write Deutsche Bank analysts in a recent newsletter. European and North American aluminum producers could then benefit from this. 


Economic growth in China clouded  

Due to the spreading delta variant of Covid-19 in China and the zero Covid strategy of the Chinese government, more persistent lockdowns could occur there in the near future. Delta variant has now been detected in 17 of China’s 32 provinces.   

Ningbo-Zhoushan: workers at key port test positive for Covid-19  

In one of China’s major ports, Ningbo-Zhoushan, a worker has been diagnosed with Covid-19, according to media reports. Appropriate hygiene measures have been taken and, according to initial reports, apparently ships intending to land at Ningo-Zhoushan have already been turned away. It remains to be seen how severe the impact will be on the major port’s overall operations and whether it may have to go into full lockdown.  

Further delivery delays for goods from China possible  

The Delta variant is not only a problem for the domestic Chinese market, but also for companies that buy products, such as steel and aluminum, from China. Due to the new lockdowns, there may be further delays in deliveries here.  


Chinese nickel production down 15%: Nickel at SHFE moves up significantly  

Due to concerns in nickel supply, nickel prices on SHFE have risen significantly today. It is reported from China that nickel production has plummeted by over 15% this year. Nickel inventory at the SHFE is down 80% from last year. This has significantly boosted nickel prices not only on the SHFE, but also on the LME. In Shanghai, nickel is currently up by almost 5% and in London by more than 1.5%. On the LME, the nickel price had already increased significantly yesterday, Wednesday. 

Base Metals on the upswing again 

Overall, Base Metals in Shanghai showed positive trends on Thursday morning. The background is the positive data from the United States. The LME also reacted positively, but not quite as strongly as its Asian counterpart. 

Stainless steel futures pick up  

SHFE stainless steel futures also rose by over 2.4% today, following the sharp rise in the nickel price. Chinese stainless steel spot price also increased.


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