China’s Baowu joins Xinhai and Brazil’s Vale to invest in Indonesian NPI project
China’s Baowu Steel Group has signed an agreement to jointly invest in a nickel pig iron (NPI) project in Indonesia with Brazilian miner Vale and China’s Xinhai Technology, the company announced on Thursday June 24.
Baowu, the parent company of China’s second biggest stainless steelmaker, Tisco, will first establish a Chinese joint venture with Chinese NPI maker Xinhai, and then set up a joint venture with Vale Indonesia, with the latter holding 49% of the shares, while the Chinese companies split the remaining 51%.
The joint venture will be in Morowali on the Indonesian island of Sulawesi and has a target production capacity of 73,000 tonnes of NPI per year on a nickel-content basis via eight rotary kiln electric furnaces, Baowu said.
The project will use natural gas-fired power stations to provide energy for the smelter, to reduce carbon emissions by 60%, the company added.
“Vale and Xinhai Technology are outstanding enterprizes with important influence in their respective industries,” Baowu’s chairman Derong Cheng said, and said he hoped the joint venture would help to build a low-carbon, high-tech, and high-efficiency steel ecosystem.
China’s domestic stainless steel prices recently rose to their highest in four-and-a-half years, while NPI prices have increased for the past three weeks due to strong demand from high production levels at stainless steel mills.
Fastmarkets’ price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,200-1,210 yuan ($185.87-187.42) per nickel unit on June 25, up by 15-25 yuan per nickel unit (1.69%) from 1,175-1,195 yuan yuan per nickel unit a week earlier.
Fastmarkets’ price assessment for the stainless steel cold-rolled coil 2mm grade 304 domestic (Wuxi) stood at 16,900-17,500 yuan per tonne, up by 300 yuan per tonne (1.78%) from 16,600-17,200 yuan per tonne on June 16.