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| General Review Of Nickel In 2007 And Its Outlook For New Year (1) |
| = Nickel Prices Fluctuated Considerably, Progressing New Large Projects May Stabilize Its Supplies |
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The existing nickel producers had been blown in 2006 by a storm of takeovers attempted by large capitals of natural resources. The year of 2007 was that new large nickel projects scheduled to be materialized during 2009 to 2010 have ascertained its routes. This aspect is due to the fact that, by means of having taken over large enterprises, a scale of enterprise has enlarged and amplified to an extent to enable to procure a huge amount of fund to be invested. On the other hand, nickel price at LME recorded on the 16th May of 2007 the highest one ( US$54,200 per ton for cash ) in its history. As LME nickel prices became an advance guard point of money game, having isolated from the realities on supply and demand of nickel, the managing authorities of LME enforced on the 7th June of 2007 the substantial regulations for nickel dealings ( to regulate backwardation ). Owing to the unusual regulations enforced in June as mentioned above, the manipulated LME nickel dealings were discouraged and LME nickel prices fell suddenly to a considerable extent, having resulted in approximately half price ( US$25,055 per ton recorded on the 16th of August ) compared to the highest one in May as mentioned above. In the past years, a differential of LME nickel prices between higher one and lower one was US$21,810 per ton recorded in 2006 but that recorded in 2007 was US$29,145 per ton, having exhibited a volatility of LME nickel dealings in 2007. The myth, concerning a growth of stainless steel, has still firmly rooted. However, a limitation existed. A circle to decrease production of stainless steel as commenced from April - June quarter of 2007 by mills in Europe and the USA enlarged to such East Asian countries as South Korea, China and Japan, and the world production of stainless steel completely entered into a period for adjustment from July - September quarter. Reflecting an effect of the regulations for backwardation in LME nickel dealings, LME nickel prices fell to a large extent as mentioned above. A core to grow stainless steel is China and it is estimated that China produced 7.50 million tons of crude stainless steel in 2007, having had a considerable expansion of 41% compared with that ( 5.30 million tons ) in the preceding year of 2006. The total capacity at present to produce crude stainless steel in China has already exceeded 12.00 million tons per annum and it is also anticipated that China will expand further in 2008 the capacity for production of crude stainless steel. China is supposed to produce 8.50 million tons of crude stainless steel in 2008. China played the main role of pulling the demand for nickel in the last 2 - 3 years. The quantity of nickel demanded by China in 2007 is estimated at 330,000 tons. However, China launched to produce nickel-contained ( 4 - 6% of nickel content ) pig iron on a substantial scale from 2007 and, consequently, an expectation of the demand for nickel from China as counted by the western nickel producers was diluted to a large extent. China imported 15.00 million tons per annum of low grade nickel ore in 2007 ( compared to 3.79 million tons imported in 2006 ) mainly from Philippines. Indonesia and New Caledonia and the production of nickel-contained pig iron in China brought about an extraordinary boom in 2007. China commenced to produce nickel-contained pig iron from 2006 on a scale of 32,000 tons per annum of nickel content and supposedly produced 80,000 - 90,000 tons of nickel in nickel-contained pig iron in 2007. According to a survey by INSG ( The International Nickel Study Group ), China is anticipated to continue a stable production of nickel-contained pig iron on a scale of 80,000 - 90,000 tons per annum of nickel content from 2008 and afterwards. However, China has been producing nickel-contained pig iron by means of utilizing the existing small blast furnaces but the Central Government of China has enforced from August of 2007 to prohibit to operate small blast furnaces ( with less than 300 cubic meters ) in order to prevent environmental pollution. This prohibition has aimed to regulate this disorderly production of nickel-contained pig iron in China. Chinese producers have been endeavoring to raise nickel content in this type of pig iron from 1 - 2% at the time of starting this production to 10% of nickel content as a final target and, if this nickel content is successful in materialization, the production of nickel-contained pig iron in China will be stabilized. This sudden boom in China for production of nickel-contained pig iron has given a favor to nickel mines located in Philippines and Indonesia but, in an inner part of China, part of nickel ore imported into China and discharged at such main ports as Rizho port has been accumulated. Among these cargoes of nickel ore, about several million tons have been still placed on open-air storage for a long period and some cargoes have raised a problem of environmental pollution. However, the cost to produce nickel-contained pig iron in China is estimated at US$7 - 8 per lb. of nickel on the basis of the current price for nickel ore and, even if nickel price falls to a level of US$5 per lb. in the future, this nickel-contained pig iron produced in China will still see a possibility to survive. When the quality of Chinese nickel-contained pig iron is able to upgrade ( to produce with higher content of nickel and lower content of phosphorus ), a power to supply nickel-contained pig iron as nickel unit at a lower price will be possible to maintain. In view of the regulations for environmental pollution, new project to produce 60,000 tons per annum of nickel in the western world is required to invest a huge amount of US$3,000 million class in its development but China has held an advantage of nil cost to invest in facilities, which is able to produce nickel-contained pig iron by means of utilizing the idled small blast furnaces, and found a means of escape in a hard struggle for existence in the nickel industry. When the matter to regulate small blast furnaces is strengthened, Chinese enterprises are still able to produce low grade ferro-nickel ( containing 6 - 15% of nickel ) by means of utilizing electric furnaces for production of ferro-alloys and facilities for pretreatment of nickel ore ( rotary kiln ) and, accordingly, the strongly rooted route to supply low grade nickel-contained products will be possible to maintain. In order to accord with a strong growth of stainless steel as anticipated, China has held a potentiality to have new demand for nickel on a large scale of 300,000 tons per annum in the future. ( To be continued ) |
| last modified : Mon 25 Feb, 2008 [11:15] |
