Heavy Chinese investment in Indonesian nickel smelting and stainless steel production means that an increasing quantity of nickel ore mined in the country will be consumed internally from 2018 onwards.
In spite of higher production in the coming year, Indonesian nickel pig iron (NPI) exports to China will fall in 2018 as around 180,000 tonnes of nickel metal will be consumed domestically on an annual basis after Tsingshan Group's stainless steel capacity on the Indonesian island of Sulawesi comes fully on stream next year. Moreover, cheaper production costs and access to locally-sourced raw material supply at the Indonesian stainless steel plant will weigh on Chinese stainless steel prices and cut into China's stainless steel exports in 2018, market participants said. More NPI production from Indonesia in 2018 China's Merchant Futures (CMF) forecasts that China-backed nickel smelters in Indonesia will produce 235,700 tonnes of nickel metal in 2018, up from this year's 186,100 tonnes. "The most likely increase in nickel production in 2018 will come from Xinxing Ductile Co's fourth furnace which is planned to come on line in the first quarter, while the most uncertain project...