QA with AngloAmerican, Jinduicheng Molybdenum and Million Link (webinar)
March 27, 2020
Asian Steel, metals and ferroalloys markets remain in turmoil since the outbreak of the Covid-19 Coronavirus. Despite Chinese measures to manage the situation, great uncertainty remains, posing a risk to global trade. In a webinar held by Metalshub on the 17. March, we raised the questions to experts to gain unique insights into the situation in Asia. Questions from Q&A session.
For webinar participants or other interested parties, we have added questions that did not make it into the live Q&A sessions and also summarised the main subjects of each presentation in the sections below.
Jianfeng Zhang (AngloAmerican):
Q: What is your forecast for Q2 stainless steel production in China? What is the impact of the oil price drop on nickel cash production costs and nickel demand?
JZ: I think China is recovering. We will see the improvement of stainless steel consumption in the latter part of the second quarter. Regarding oil prices, this is related to the cost composition of each factory, and it is difficult to say the specific impact on each cost. But lower oil prices generally reduce costs, including shipping costs.
Q: Will Indonesia government also impose ban on NPI export? If yes, are there enough demands for NPI inside Indonesia?
JZ: I don’t think Indonesia will ban NPI exports. The original intention of Indonesia to ban the export of raw ore is to produce products with higher added value locally. In addition, from the perspective of the current stainless steel production in Indonesia, it does not support the consumption of all their NPI production.
Overview of webinar presentations content:
Nickel market overview
The drivers of consumption
Impact of the Indonesian nickel ore ban
The growing demand for battery grade class I nickel
Corona virus impact on the stainless steel industry – stock levels
Pressure on NPI production
Nick Cao (Jinduicheng Molybdenum):
Q: We see a great shortage of empty seavessels hampering deliveries. What is your forecast on the molybdenum market in Q2?
NC: We expect the market in Q2 to be much weaker than Q1. We saw more and more countries in lock-down, resulting in an extremely low level molybdenum demand. Oil prices and decreased automobile production, especially, puts a big pressure on the market. Meanwhile, we still expect supply to almost no big change.
Overview of presentation content:
China factors on global molybdenum market before and post Covid-19
China-World Exposure Index (trade, technology and capital)
Mo production in China vs western world
Mo demand in China vs western world
Covid-19: the biggest black swan in 2020
Covid-19: impact on Mo market • Business cycle and structural changes
Xia Gang (Million Link):
Q: Which measures would you recommend to foundries and mines in Europe to successfully adapt to this uncertain time?
XG: Supply chains may break temporarily at any time if corona virus outbreaks happen in a city or any city in China. Keeping two months´ inventory of EMM might be a good strategy if cash flow has no difficulty. Other materials like foundry pig iron, inoculates, ferro silicon, ferro silicon manganese, foundry coke, can be supplied from China, India, South Africa, Malaysia, Brazil, Georgia, South Korea and many other countries, so you don’t need to worry too much.
Q: Given the recent developments, is there any risk of manganese metal output reduction or export sales limitations due to the South African lockdown and possible shortage of manganese ore?
XG: Highly likely, EMM output will not be affected in the next months. But, South Africa 21 days lock-down already has pushed manganese ore current market soaring, we expect that EMM price may be driven higher to match cost rise. South Africa manganese ore is not used in EMM production, but price of manganese ore from all sources collaborates.