Nickel smelters in China, the largest producer, plan to cut output next year by at least 20 percent in a bid to shore up prices after the metal plunged to its lowest in 12 years.
Eight producers, including the largest refined metal supplier Jinchuan Group Co. and nickel pig iron maker Tsingshan Holding Group Co., also agreed to cut output next month by 15,000 metric tons, according to a statement circulated by the group on Wechat.
The smelters didn’t say how much of China’s total supply the 20 percent reduction would account for, but their statement suggests cuts of about 120,000 tons next year, according to Celia Wang, general manager at Tianjin Zhongwei Group Co.’s investment department. The eight account for almost all of China’s nickel capacity, she said.
Nickel prices in London pared losses on the news, and at 7:22 p.m. in Shanghai were down 2.5 percent to $8,970 a ton, after earlier sliding as much as 3.3%.
“The plan may provide support to prices in the short-term period,” Peter Peng, a Beijing-based CRU analyst, said by phone. “Whether it can fuel the market for a longer period depends on the implementation.”
Nickel, used to produce stainless steel, is this year’s worst performer on the London Metal Exchange as slowing growth in China spurs a supply glut, sending prices to their lowest since 2003.
For the rest of this article, click here: http://www.bloomberg.com/news/articles/2015-11-27/china-s-top-nickel-smelters-agree-20-production-cut-for-2016