Nickel makers in China including Jinchuan Group Co., the country’s largest supplier of refined metal, plan to gather on Friday to discuss measures to respond to the lowest prices in 12 years, including possible cuts to supply, according to people with knowledge of the event.
The meeting in Shanghai will also include representatives from nickel pig iron makers including Tsingshan Holding Group Co., according to the people, who declined to be identified because the planned gathering is private. There’s not any guarantee yet that action will be agreed, according to the people.
Nickel is this year’s worst performer on the London Metal Exchange as slowing growth in China spurs a supply glut, sending prices to lowest level since 2003. The slump is so severe that at least half of global production is now loss-making, according to PT Vale Indonesia, a unit of Vale SA. Last week, Chinese zinc producers announced plans to jointly cut supply in 2016 to combat lower prices, spurring a rally that faded.
An official at Jinchuan’s press office who answered a call from Bloomberg News on Wednesday said the company couldn’t immediately comment on the meeting, in line with company policy. Calls to Tsingshan Holding’s general office weren’t answered. Tsingshan is China’s top maker of nickel pig iron.
Nickel futures rose as much as 1.5 percent to $8,900 a metric ton on the London Metal Exchange on Wednesday and traded at $8,860 at 5:17 p.m. in Shanghai. Prices rallied 5.7 percent on Tuesday after dropping to $8,145 a ton, the lowest in more than a decade.
The rout in metals has spurred some producers to curb supplies, within China and overseas. Glencore Plc cut a third of its zinc supply last month, prompting a 10 percent jump in prices. Producers in China announced a plan last week for similar zinc output cuts in 2016. That time the market reaction was smaller and got rolled back after a day.
Recent output reductions aren’t large enough to rescue metals prices, according to Goldman Sachs Group Inc., which says that Chinese demand needs to improve. The plan by Chinese zinc producers to reduce supply was short on specifics and shouldn’t be taken at face value, Standard Chartered Plc said.
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