Part 2. Nickel pig iron output in China is mostly made of imported laterite ores with low nickel content and high iron and a cheaper alternative for the metal. Output tripled to about 90,000 tonnes of metal last year on strong global nickel prices, which hit all time high of $51,800 in May last year.
But the price MNI3 has fallen 42 percent from the peak to $29,800 a tonne on Thursday, partly due to high Chinese output of nickel pig iron.
Bonnie Liu, Macquarie Bank's China commodity research analyst, predicted nickel prices would range at $18,000-$25,000 a tonne in 2009-2010.
Chinese nickel prices were at 245,000 yuan ($34,920) a tonne. But the price of nickel in nickel pig iron is about 155,000 yuan a tonne after deducting the value of iron, Jiang said.
He said the costs to process imported laterite ores into nickel pig iron containing 5-7 percent metal were at $8,000-9,000 per tonne in China.
Tsingshan had 200,000 tonnes of nickel pig iron capacity in China, or 10,000 tonnes of metal a year, and one million tonnes of stainless steel capacity, Jiang said.
It planned to develop a laterite ore concession in Obi island in North Maluku in Indonesia, together with Indonesian state-controlled miner PT Aneka Tambang ANTM.JK.
Jiang said the project would include the building a power plant, the laterite mine and a stainless steel plant with 300,000 tonnes of capacity a year using nickel pig iron as the main feed. Total investment would be $350 million.
