China's refined nickel imports soar in Aug'24 driven by Russian shipments

Mysteel Global: In August 2024, China's refined nickel imports touched 8,795 tonnes (t), marking a dramatic 107% increase m-o-m from 4,245 t in July 2024 and a 28% rise y-o-y, according to the General Administration of Customs of the People's Republic of China (GACC). However, imports for the January to August period showed a decline of 15% compared to the same timeframe last year.

The sharp increase in August's imports was mainly driven by shipments from Russia, which totalled 5,245 t, up from 945 t in July. Of this, 29% was sent to Shanghai through spot transactions from the bonded zone, while the rest was delivered to Beijing primarily through long-term general trade agreements.

Conversely, China's refined nickel exports fell significantly in August, totalling 12,495 t, down 17% m-o-m but up a staggering 810% y-o-y. This monthly decline was attributed to narrow export profits, which kept producers eligible for London Metal Exchange (LME) contracts on the sidelines. Nevertheless, some producers still exported about half of their output, as export margins remained positive.

According to GACC data, most of China's refined nickel exports went to LME delivery warehouses in Taiwan, South Korea, and Singapore.

Looking ahead, while China is expected to continue being a major destination for Russian refined nickel exports following new sanctions from the US and the UK, the volume may struggle to maintain its current high levels due to the slow absorption of Russian resources, which are now being offered at discounted prices.

Additionally, Russian President Putin indicated on 11 September that Russia might consider restricting exports of nickel, titanium, and uranium, which warrants attention.

Regarding China's refined nickel exports, the volumes are highly dependent on export margins, which are currently low. As a result, domestic refineries appear to be prioritising long-term orders with downstream clients. However, the export market will still play a crucial role in balancing domestic supply and demand, especially with two new projects expected to begin operations by the end of 2024.