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China’s Cheaper Alternative Causes For 10 Year’s Worst Fall In LME Nickel

5 Mar 2021 9:04 pm
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NEW DELHI (Commodities control) Nickel has witnessed its worst week in almost ten years, with the London Metal Exchange (LME) price collapsing by 16% in the space of two days to a three-month low of $15,830 per tonne. Later, Nickel cash price settled at $ 16349 per tonne.

The trigger for the ferocious sell-off was an announcement by China's Tsingshan Holding Group that it had signed deals to deliver nickel matte to two Chinese battery materials suppliers. Tsingshan has rapidly emerged as one of the world's largest nickel producers, its Indonesian mines pumping nickel pig iron (NPI) into a local stainless steel plant the company brought online in 2017.

It is a self-proclaimed disruptor of the stainless steel market and it's now disrupting nickel's bullish electric vehicle narrative. The conversion of NPI to matte for processing into battery-grade nickel sulphate is another twist of nickel's alchemical Rubik's Cube and one which, according to Citi, "could rock the long-term investment case for nickel". The news was certainly enough to rock the nickel market this week.

Nickel pig iron (NPI) is a low grade ferronickel
invented in China as a cheaper alternative to pure nickel for the production of stainless steel. The production process of nickel pig iron utilizes laterite nickel ores instead of pure nickel sold on the world market. The alternative was developed as a response to the high price of pure nickel.

(By Commoditiescontrol Bureau: +91-22-40015505)

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