Tsingshan eyes first Indonesian nickel pig

iron output in Jan

By Fergus Jensen and Melanie Burton
JAKARTA/SYDNEY, Sept 4 Thu Sep 4, 2014 4:15am EDT

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(Reuters) - China's Tsingshan Group expects to start production at its Indonesian nickel pig
iron smelter as soon as January, becoming the second plant to ramp up since the country's
new mineral processing laws came into force at the start of the year.
"Hopefully by October or November we will have started commissioning," said Slamet
Panggabean, finance manger of Tsingshan's local joint venture partner Bintang Delapan
Mineral, referring to the firm's pilot smelter project in Morowali on the Indonesian island of
Sulawesi.
"The plan is for production (to begin) in January or February."
As part of a strategy to reap more value from its mineral wealth, Indonesia banned ore
exports in January as it pushed its nickel and copper miners to set up metal processing plants.
The move has driven up London Metal Exchange nickel prices by a third so far this year.
Stocks of nickel pig iron at China's stainless steel makers are running down, leaving them
exposed to a supply gap next year and fuelling the need to build smelters in Indonesia as
quickly as possible.
Tsingshan, China's second largest stainless steel company, was one of the few firms to act
when the law was enacted in 2009 and is well ahead of other nickel pig iron producers, many
of which held back on hopes the ban would be rolled back.

Output at the joint venture, Sulawesi Mining Investment, is expected to ramp up slowly and
is unlikely to reach name plate capacity of 300,000 tonnes of nickel pig iron in the first year
Panggabean said.
The group is currently preparing foundations for the planned second phase of the project, he
added. This would add a further 600,000 tonnes of output capacity to the facility, which was
partly funded by a $384 million loan from China's policy lender State Development Bank.
Some production could even start as early as October, two sources told Reuters.
"(They) already tested the facilities in last month, so I think production in October is
possible," said one of the sources who is familiar with the operations but is not authorised to
talk to the media.
Rival producer, PT Cahaya Modern Metal Industri, began output at the end of 2013 and has
already begun exports to China, a source with knowledge of the operations said.
Another producer, PT Indoferro, which began NPI production in 2012, is on track to finish an
expansion project by the end of 2015 that would lift output to 12,000 tonnes of nickel in pig
iron from 8,000 tonnes annually at the moment, an company official said.
Vale Indonesia processes all of its nickel ore at its four smelters in South Sulawesi, which
have a capacity of more than 70,000 tonnes while Indonesia's second-biggest nickel producer,
PT Aneka Tambang (Antam) exports from its three ferronickel smelters.
China's stainless steel makers have largely turned to lower grade Filipino ore, which they are
blending with their stocks in order to make them last. This week a Philippine senator urged
the country to halt exports of unprocessed mineral ores.
(Additional reporting by Fergus Jensen in JAKARTA; Reporting by Melanie
BNine Nickel Smelters Seen in Indonesia This Yr After Ban
By Yoga Rusmana and Eko Listiyorini May 12, 2014 6:54 PM GMT+0700
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Indonesia forecasts that nine nickel-processing plants may be completed this year after the
largest mined producer banned raw ore exports in January, spurring a rally in refined prices to
the highest level since 2012.

The plants comprise two ferronickel and seven nickel-pig-iron smelters, according to data
from the Energy and Mineral Resources Ministry. One chemical-grade alumina plant is also
scheduled to be completed this year, the data showed.
Southeast Asias largest economy is seeking to force a move toward processed commodities,
betting that repercussions from the ban such as job losses will be offset by investment in new
plants and output of higher-value products. The metal used in stainless steel is the biggest
gainer this year among the six main metals traded on the London Metal Exchange amid
concern that the ban will raise costs and spur a global deficit.
Greenfield smelters are horribly expensive and drag down the profitability of even the best
ore-mining operations, said Xavier Jean, a credit analyst at Standard & Poors in Singapore.
The prospects for completions this year are unrealistic, Jean said in an interview.
As many as 63 smelters may be built by 2017, including 40 nickel plants, 10 iron ore smelters
and four copper-cathode smelters, according to the ministrys data, which was presented at a
seminar in Jakarta on April 30.
Construction work at 30 companies may be 80 percent to 100 percent complete this year,
mostly for nickel and some iron projects, R. Sukhyar, director general of coal and minerals at
the Energy and Mineral Resources Ministry, said on May 7.

Weekly Advance
Nickel rallied 9 percent last week, the biggest gain since February 2010, as disruption to a
plant in New Caledonia deepened the supply concern spurred by Indonesias curbs. Today,
the metal rose as much as 4.9 percent to $20,870 a metric ton, the highest since February
2012, and traded at $20,760 at 12:53 p.m. in London. Its advanced 49 percent this year.
For a greenfield nickel smelter to be economical, capacity must be at least 10,000 or 15,000
tons of contained nickel per year, said Jean. Such a smelter would require several hundred
megawatts of electricity capacity and more than $1 billion in investment.
PT Perusahaan Listrik Negara, the state utility known as PLN, received requests from 25
companies to supply new mineral-processing plants with power as of last month. While
investors want electricity at the mines, for example nickel in Halmahera island, theres not
enough capacity there, according to Nur Pamudji, PLN president director.

Archipelago Challenge
Indonesia is an archipelago of more than 17,000 islands, with many mineral deposits
including nickel and bauxite located away from the most-populated island of Java. Smelters
are often sited in remote areas where power stations and infrastructure are lacking, according
to Jarman, director-general of electricity at the energy and mineral resources ministry.
Some companies have announced plans for smelters. Sulawesi Mining Investment, a joint
venture between Chinese and Indonesian companies, said in March it plans to start output at a
300,000-ton ferronickel smelter in Central Sulawesi in 2015. PT Aneka Tambang (ANTM)

and PT Freeport Indonesia, the local unit of Freeport-McMoRan Copper & Gold Inc., are
conducting a feasibility study for a copper smelter.
While refined nickel may rally on the ban this year, Chinese investment to expand nickel-pigiron capacity in Indonesia over the next two years will eventually hurt prices, according to
Goldman Sachs Group Inc.
The global nickel market will swing to a deficit of 132,200 tons next year from a surplus of
13,800 tons this year, Citigroup Inc. said in a report on May 9. Prices may rise to more than
$30,000 a ton next year, according to Citigroup.
To contact the reporters on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net;
Eko Listiyorini in Jakarta at elistiyorini@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Jake
Lloyd-Smith, Alexander Kwiatkowski
urton)
My colleague Taras posted an article this week on the stainless market in North America
drawing on comments coming out of the Institute of Scrap Recycling Industries conference in
Chicago. Taras reported most industry experts felt the medium-long term future for stainless
to be very positive, citing growth in many high-end applications such as oil & gas, nuclear
and petrochemicals. Even the commodity end of the market was felt to have good growth
prospects looking past the immediate short-term weak consumer market. However, Taras only
had time for a brief comment on the role nickel pig iron is playing in supplying nickel content
to the largest stainless-producing country in the world (China) so were following up with a
more detailed analysis of the role this source of nickel plays in both stainless production and
the primary refined nickel price.
No discussion of nickel prices has historically been complete without mention of the state of
stainless production, as roughly two-thirds of primary nickel is consumed directly in the
stainless steel industry. As with many metals, China rise to largest stainless steel producer
hasnt happened unaided one of Chinas advantages is a source of relatively low-cost
nickel that in recent years has given domestic producers a competitive edge over foreign
rivals.
In a recent article, Energy Digital quoted various industry and research sources to explore
nickel pig irons role in the supply of nickel content to Chinas stainless producers. Nickel pig
iron (NPI) is made from low grade (1-2% Ni) nickel laterite ore combined with coking coal
and a mixture of sand and gravel aggregates that is heated in a blast furnace or electric arc
furnace depending on the desired grade. Following further sintering and smelting to remove
impurities, the end result is a nickel iron alloy or ferro nickel material of lower purity (but
cheaper) than conventional ferro nickel.
According to Jim Lennon in a Macquarie Research Report, purities range from 1.5% to 8%
Ni content for NPI being produced from blast furnaces and 1025% Ni for NPI produced from
electric arc furnaces. Under Beijings pressure to close small, less efficient steel blast
furnaces, a major transformation has taken place as these sub-200-cubic-meter capacity

furnaces have switched to making NPI. Since about 2005, NPI production has mushroomed
in China and is still rising; analysts estimate output in China could grow by 50 percent this
year, a jump to 240,000 metric tons from 160,000 tons in 2010.
Those Chinese stainless producers with captive NPI production capacity can access nickel at
the equivalent of about $21,000 to 22,000 per ton, the estimated marginal cost of NPI
production, giving them a very significant advantage over producers elsewhere. During the
first half of this year, refined nickel was trading on the LME at between $23,000 and $29,000
per metric ton, although since early August the LME price has bounced along between
$20,000 and $22,000 per ton.
Stainless production has been weakening in Europe and Asia during the summer. After a
record first quarter at 8.39 million tons, the flat second quarter showed no global growth and
the third is widely expected to be down. Meanwhile nickel supply has increased, although a
number of new mine and production setbacks have delayed increases in capacity into the
second half, such that the WBMS estimates the first half 4,900-ton surplus to be higher in the
second half. According to Reuters, the consensus for 2012 is a 30,000-ton surplus.
Interestingly though, nickel stocks have been falling steadily at LME warehouses,
particularly in Asia. Reuters Andy Home puts this down to speculators positioning ahead of
a rumored physical nickel ETF to be launched in China later this year; the SHFE does not
have a nickel contract. Whether that is correct or whether it is Chinese stainless mills buying
refined nickel in preference to NPI as the LME approaches the NPI marginal cost of
production is not clear, but such trends may reverse by year end if the slowdown in stainless
production continues.
The extent to which NPI production in China continues to give Chinese stainless mills an
advantage remains to be seen in a market with markedly lower refined nickel prices, but what
is clear is the rise of NPI in China has created a partial disconnect in the previously held
direct correlation between stainless production and demand for (and hence price of) refined
nickel.
Stuart Burns

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Nickel advances as supply tightens

Jan 09, 2015 12:38 GMT Source:Scrap Monster
Tags: nickel, analysts, supply of commodity, london, metal exchange, metal market
Author: Paul Ploumis09 Jan 2015 Last updated at 04:27:47 GMT

LONDON (Scrap Monster):The cost of nickel pig iron , which is a lower grade alternative
for the refined nickel ore, is increasing, and the inventories are low in commodity, therefore
there is a good chance of restocking. Gayle Berry, a strategist at Jefferies Group LLC, stated
that, there is a chance of a deficit in the commodity at a rate of about 40,000 metric tonnes,
just after the 45,000 tonnes surplus, which occurred in the year 2014. In the second half of the
year 2014, the value of nickel declined to about 20 percent, which indicated a decline in
demand in China, as well as in Europe.
An analyst at INTL FCStone, Edward Meir, stated that, the supply conditions of the
commodity are a great concern, and some of the buyers are reclining after the big drop in the
price of the commodity. There is a possibility that, there will not be a big rally as there is
support at this level, he added.
The value of nickel on the London Metal Exchange, which is to be delivered in three months,
hiked by 1.9 percent, and settled at 15,550 dollars per tonne. Recently, the price of the
commodity had reached 15,567 dollars per tonne, which is the highest value since the month
of December. The metal hiked for four straight days in a row.
Berry, in a report stated that, the current price of nickel offer buying opportunity as well as
favor building length on dips, which are below 16,000 dollars per tonne, in the year of 2015.
Nickel prices likely to move higher in 2015

Jan 04, 2015 02:17 GMT Source:Scrap Monster

Tags: nickel pig iron, chinese mills, refined nickel, indonesia, export
ban, closure, futures, contract, SHFE
Author: Paul Ploumis
02 Jan 2015 Last updated at 04:52:40 GMT
ALBANY (Scrap Monster): The rapid change in fundamentals led to high volatility in Nickel
prices in 2014. The volatility is expected to continue in 2015, according to analyst reports.
The expectations of an interest rate hike by the US Fed and the feared slowdown in Chinese
economy are the major drivers for base metal prices this year. The Nickel prices plunged
almost 22% from its peak to close 2014 at $14,935 a tonne. The prices had hit its yearly high
of $21,200 a tonne after the imposition of ban on exports by Indonesia. The suspension of
production at the Koniambo mines in New Caledonia further support Nickel prices in 2015.
According to latest forecast provided by the London-based consultancy Natixis Commodity
Markets, the Nickel prices are likely to average nearly $19,000 a tonne in 2015. This is
almost 13% higher than the 2014 average price of $16,867 a tonne. Natixis believes that
prices may get adequate support due to supply concerns. However, easing of such concerns
would lead to drop in nickel prices in 2016. It predicts the average price in 2016 at $17,375 a
tonne.
Natixis forecasts the average price for copper at $6,335 a tonne, aluminum at $2,071 a tonne,
zinc at $2,523 a tonne and lead at $2,145 a tonne for 2015.

Topicsnickel pig ironchinese millsrefined nickelindonesiaexport

banclosurefuturescontractSHFE
1 CNY = 0.160413 USD, 1 USD = 6.23390 CNY ... EUR-USD extended to a new
11-year low of 1.1219 during the European AM, almost a big figure down on
the ...

Harga NPI
Rmb/mtu

1100 yuan / 10 kg NPI x 2003.72637 IDR/CNY = 2.204.103,- IDR/ 10 kg x 1000 kg/

ton = 220.410.300 IDR/ton
Laterite

Harga laterite = 600.000 IDR/truk x 1 truk/12 ton = 50000 IDR/ton

Kapasitas yang diijinkan truk besar JBI kelas II 16 ton, asumsi karena berbentuk batuan
hanya muat 12 ton.
Pada tabel berikut ditunjukkan JBI untuk jalan Kelas II dengan muatan sumbu terberat 10 ton
dan untuk jalan dengan muatan sumbu terberat 8 ton unuk berbagai konfigurasi sumbu
kendaraan.
Konfigurasi sumbu
1-1
1-2
1 - 2.2
1.1 - 2.2
1 - 2 - 2.2
1 - 2.2 - 2.2
1 - 2.2 - 2.2.2

Jumlah sumbu
2
2
3
4
4
5
6

Jenis
Truk Engkel
Truk Besar
Truk Tronton
Truk 4 sumbu
Trailer Engkle
Trailer Tronton
Trailer Tronton

http://themoneyconverter.com/CNY/IDR.aspx

JBI Kelas II
12 ton
16 ton
22 ton
30 ton
34 ton
40 ton
43 ton

JBI Kelas III

12 ton
14 ton
20 ton
26 ton
28 ton
32 ton
40 ton