Bloomberg News

Nickel-Concentrate Imports by China at Record as Output Climbs

June 22, 2011

June 22 (Bloomberg) -- Imports of nickel ores and concentrate by China, the largest consumer of the refined metal, climbed to a record in May as nickel pig-iron producers ramped up output to meet demand from stainless-steel makers.

Inbound shipments jumped to 4.19 million metric tons, according to the Beijing-based customs office. That’s a record, said Xu Aidong, a senior analyst at Beijing Antaike Information Development Co. Imports doubled from a year ago and were 70 percent more than in April, according to Bloomberg calculations.

“Nickel pig-iron capacity has increased,” said Wang Haoyang, an analyst at researcher and data provider Shanghai Metals Market. “We don’t rule out the possibility that nickel pig-iron production reached a record last month.”

Output of the low-cost substitute for refined nickel in China, the world’s biggest stainless-steel producer, may surge 50 percent this year to 240,000 tons from 160,000 tons in 2010, Antaike’s Xu said on June 9. She expects production capacity to reach 500,000 tons this year, with another 500,000 tons planned over the next two years.

Baoshan Iron & Steel Co., the country’s second-biggest stainless-steel maker, said today refined-nickel use in production of the alloy fell to a record low in May as the company used more nickel pig-iron and scrap. About two-thirds of global nickel production goes into stainless steel, used to make everything from kitchen sinks to aircraft-fuel tanks.

Nickel, the worst performer on the London Metal Exchange this year, has dropped 26 percent from its 33-month high of $29,425 a ton in February, as users shunned the refined metal for the cheaper alternative. The nation’s least-efficient makers of nickel pig-iron need about $20,000 a ton to break even, according to Societe Generale SA. Three-month futures traded at $21,760 a ton today.

--Editor: James Poole

To contact the reporter for this story: Glenys Sim in Singapore at gsim4@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


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