More than half of China’s low-grade nickel pig iron (NPI) producers may have shut in some key areas on falling nickel prices and a weak stainless steel market.“Nearly 50% of producers in Shandong province have shut amid a bearish stainless steel market, and also some in Jiangsu　　

province,” an analyst in Wuxi, Jiangsu province, said. Both 　Shandong　 and 　　Jiangsu　　 are major　　

sources of NPI with metal content below 8%. Higher-grade production has not been so badly affected, with London Metal Exchange nickel prices hovering around $19,000 per tonne.　　

Many stainless steel producers have cut production or brought forward maintenance, and have correspondingly cut purchases of NPI, especially at lower grades, the analyst added.　　

  Some producers in 　Sichuan　 and 　　Shanxi　　 were also reported to have shut recently in the poor market.“We had to close one of our two furnaces as customers have reduced purchasing　　

this month on falling stainless steel prices. There is no sign that the market will improve,” a major NPI producer in Shandong said. A government drive to eliminate small furnaces is also pushing down production.“All furnaces which use coke to produce nickel pig iron with volume smaller than 300 cubic meters will be phased out this year,” the analyst said, adding that a　　

furnace volume of 128 cubic metres is fairly typical. 　　China　　 produced 18,800 tonnes of metal　　

contained in NPI in May, down 6% from April, and up 103% from May last year, according to Shanghai Metals Market.