CHINA’S nickel producers said Friday they plan to slash output of refined metal and nickel pig iron (NPI), the first major coordinated move in the industry globally to lift prices out of their worst slump in more than a decade.

    In an open letter, eight producers, including State-owned Jinchuan Group Co. Ltd., said they will cut production by 15,000 tons of metal next month and reduce their output next year by at least 20 percent from this year.

    Chinese smelters have been hit hard by the rout in global nickel prices as a crisis in the country’s steel industry has deepened.

    “Nickel prices have already seriously deviated from the market fundamentals and the whole industrial chain has fallen into a vicious circle,” they said in the letter. The producers also promised to refrain from engaging in price wars with rivals.

    The announcement followed a meeting by producers Friday afternoon in Shanghai to discuss coordinated output cuts after prices on the London Metal Exchange plunged to their lowest in more than 10 years last week amid concerns over a global glut and falling demand.

    Xu Aidong, senior analyst at State-backed research firm Antaike, who attended the meeting, said the eight producers could expand production cuts next year if domestic prices stayed below 70,000 yuan (US$10,960) a ton.

    The most active nickel contract in Shanghai traded at 69,090 yuan Friday.

    She said the eight producers’ output in 2015 would be about 400,000 tons of nickel, meaning that the cuts would amount to around 80,000 tons in 2016, she added.

    “The cuts should at least stabilize the prices,” Xu told Reuters.

    The move is the first major coordinated output cut by the global nickel sector aimed at eroding oversupply and offsetting weak demand.

    (SD-Agencies)