Indonesia’s ban on export of nickel ore has hit China’s production of Nickel Pig Iron (NPI), a raw material used extensively to produce stainless steel. The ban, which was previously expected to come into effect in 2022, will begin in Jan 2020.
Though the ban is likely to have a big impact on Chinese stainless steel production, it could increase Indonesia’s NPI production through projects that are chiefly run by Chinese companies like the Tsingshan Holding Group.
The production of NPI has already grown manifold in Indonesia from next to nothing in 2014 to a projected 500,000mt by 2020. On the other hand, NPI production in China is estimated to go down to 575,000mt in 2019 — a decrease of 13pc — due to reduced supply of nickel ore and can constraint China’s stainless steel production. The drop in China’s NPI output will restrict the launch new projects in the country.
The combined NPI output for both countries will be 49pc of global NPI output in 2019 and increase to 51pc in 2020.