China's Demand for Nickel Could Hit 400,000 Tonnes by 2010 By...

China's Demand for Nickel Could Hit 400,000 Tonnes by 2010

By Interfax-China
30 May 2007 at 09:54 AM


SHANGHAI (Interfax-China) -- China's demand for nickel might hit 400,000 tonnes in 2010 on growing demand from the stainless steel industry and battery production, an official with the Ministry of Land Resources said at the China Nickel 2007 conference today.

"China's nickel raw materials supply will remain tight until 2010, and more than half of that supply will be reliant on imports," Zhang Mei, a researcher with the Information Center under the MLR said.

China will only be able to supply 124,000 tonnes of nickel domestically by 2010 due to limited mining production in China, Zhang said.

China had verified nickel ore reserves of 9.51 million tonnes as of 2005, spread over 97 sites, with 98% of the mining sites under full production. Gansu Province has 56.3% of the country's total nickel reserves, while 34.6% of reserves are located in other provinces, including Xinjiang, Yunnan, Sichuan and Qinhuai.

In March, Gansu Province-based Jinchuan Nickel Group, a company that controls 90% of China’s nickel output, reduced its 2007 nickel export target to 3,000 tonnes due to pressure from the increased export tax raised by state regulators.

Jinchuan's nickel exports for the first quarter of the year reached 1,100 tonnes, according to the company.

China raised its nickel export tax from 2% to 15% last November, as part of a state macro-control policy to impede on high-energy consuming industries and narrow the growing trade surplus.

Zhang said around two-thirds of nickel demand comes from the stainless steel industry and stainless steel output may hit 9 million tonnes in 2010.

China's stainless steel output was 3.6 million tonnes last year, swelling 67.72% from the previous year. China produced 419 million tonnes of crude steel in 2006, up 18.5% from a year earlier.

In the first quarter of this year, China imported 2.2 million tonnes of primary nickel ore, while imports in March stood at 1.03 million tonnes, representing an 80.7% increase from the previous month.

Last year, China imported 3.78 million tonnes of nickel ore, a 6.8 fold increase compared with the previous year, according to statistics released by the General Administration of Customs.

Total nickel ore imports amounted to RMB 3.41 billion ($440 million) in 2006, 1.5 times the amount for 2005. However, average import prices declined by 67.7% to RMB 903.26 ($116.40) per tonne.

Indonesia and the Philippines are the major countries that export nickel to China.

China's nickel ore imports from the Philippines reached 3.34 million tonnes, up 11.6% from 2005, which accounted for 88.5% of China's total nickel ore imports. In 2005, China's imports were mainly from Australian nickel mines.

© Interfax-China 2007.

This article comes from Interfax China Commodities Daily, a daily digest produced by Interfax News Agency in Mainland China. To receive 10 free copies of this, please e-mail [email protected].