SHANGHAI, Mar 26 (SMM) – High-grade nickel pig iron (NPI) plants in China saw mixed profits as of late-March mainly due to their locations and furnaces, SMM research showed.
While some high-grade NPI plants in Shandong province registered profits of more than 30% higher than their cash costs, those in Jiangsu and Fujian provinces saw profits between 20-30%. In Inner Mongolia, however, profits were below 5%, according to SMM data.
That is because NPI producers in Shandong, such as Shandong Xinhai Technology, have their own power plants and therefore have a distinct advantage on energy costs over their competitors in Jiangsu and Fujian.
For NPI producers in Inner Mongolia, the transportation costs of getting imported nickel ore are higher. They are also typically of smaller scale than those in Shandong, restricting their bargaining power in nickel ore prices.
In addition, about 20% more power is needed to run electric furnaces than rotary kiln-electric furnaces (RKEF) and most NPI producers with electric furnaces are located in Inner Mongolia.
Separately, transportation costs for coke and semi-coke, the other main materials for NPI production, are higher for producers in Fujian as they’re mostly produced in Shaanxi.
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