China's Shandong Xinhai told to cut nickel pig iron output for summit -official

BEIJING, June 1 (Reuters) – Shandong Xinhai Technology Co, one of China's largest nickel pig iron producers, has been told to cut back output ahead of the Shanghai Cooperation Organisation (SCO) summit in nearby Qingdao, an official told Reuters on Friday.

The company has received a notice from the local government in Shandong province telling it to reduce production, the official said, although he was unable to say by how much output would be cut or over what time frame.

Shandong Xinhai is based in the city of Linyi, about 215 km (135 miles) from Qingdao, which will host the high-profile SCO summit to be attended by leaders including Chinese President Xi Jinping and Russia's Vladimir Putin on June 9-10.

The port of Qingdao has already banned handling refined oil products, liquefied petroleum gas and dangerous chemicals from June 1-6, while independent refineries in Shandong have been ordered to reduce operating rates in an effort to ensure blue skies for the showpiece event.

Shandong Xinhai has annual nickel pig iron production capacity of around 1.2 million tonnes, according to Ji Yuanfei, a nickel analyst at GF Futures in Guangzhou. Linyi accounts for about 20 percent of China's total nickel pig iron capacity, she added.

Shanghai nickel prices rose as much as 5.5 percent to a three-year high of 120,000 yuan ($18,704.12) on Friday due to production restrictions, falling inventories and higher Chinese steel prices.

($1 = 6.4157 Chinese yuan renminbi)

(Reporting by Tom Daly; editing by Richard Pullin)