Rules to be tightened on nickel pig ironThursday, August 30,...

Rules to be tightened on nickel pig iron

Thursday, August 30, 2007

China aims to tighten controls over the production of nickel pig iron, a move likely to increase production costs and slow growth in coming years, industry sources said yesterday.
A circular posted on the National Development and Reform Commission's website said plants producing nickel pig iron, or crude iron in blocks, were required to cut consumption of energy and water to meet environmental requirements.

Plants were not allowed to switch furnaces that used to produce iron or ferroalloys to nickel pig iron, a cheaper alternative to refined nickel at stainless steel mills.

Small furnaces were required to close, the circular said.

"In the long term, environmental requirements on nickel pig iron production will be higher. Production costs will rise," said an analyst at state research group Antaike.

World nickel prices stood at US$27,600 (HK$215,280) per tonne on Wednesday, down 46.7 percent from the peak of US$51,800 in May this year, partly due to reduced demand from stainless steel mills, and high nickel pig iron production in China, where high nickel prices had spurred output.