China's nickel consumption in Q1

China’s nickel consumption in Q1

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.