The nickel
consumption in
China reached 17'797 tons in March, basically equaling to that in February 2005, while it declined almost 2'000 tons from the 20'405 tons in January 2005.
China's total nickel
consumption for the first quarter of 2005 totaled 55'827 tons with 18'609 tons of average monthly
consumption.
Although the Chinese
stainless steel industry has possessed great nickel
consumption potential, continuously increasing nickel price forced some large steel mills to reconsider their
production. For example, Taiyuan Steel decided to produce 900'000 tons of
stainless steel through 2005, while 400 series
stainless steel
production will account for more than 40% of that figure. Although
Baosteel has not announced any restructuring, they will also produce
stainless steel based on customers' request.
On the point of
stainless steel market situation, the high invertory in cold-rolling
stainless steel mills led to a RMB 2000-3000 /ton decline in the current price for
stainless steel after reaching to its highest level.
The slump in the prices of
stainless steel products, adding to the high prices of raw materials caused some foreign
stainless steel mills to reduce their productions recently. In spite of increasing their
production capacities, the domestic
stainless steel mills of
China also suffer from high raw material prices.
Major nickel miners expect the upward trend in nickel prices would continue for some more time. World's second largest nickel miner, Canadian based Inco Ltd. announced that they expected to see further increases in nickel prices due to the demand in Chinese
stainless industry.
Global prices of nickel used to make
stainless steel rose 69% in the last two years.