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China Imported 16 Million Tons Of Nickel Ores In CY 2009
= Increased By 34% Compared To That In 2008, Imports From Philippines Doubled
According to the customs-statistics released in China, this country imported 16.575 million tons of nickel ores in the calendar year (January - December) of 2009, having had a considerable increase of 34% compared with that (12.372 million tons) in the preceding calendar year of 2008. The quantities (on material base) of nickel ores imported by China in 2009 and broken down by sources were as per the table attached hereto.

The total quantity of 16.575 million tons of nickel ores imported by China in 2009 had exceeded that (15.626 million tons) imported in 2007 and reached new record. LME nickel prices at the beginning of 2009 had a sharp fall and China had become negative to import nickel ores but, owing to the fact that LME nickel prices had turned to rise steeply and reached a level of US$10 per lb. in August, the imports of nickel ores by China in the second half had a substantial increase.

The quantities (on material base) of nickel ores imported from two main sources into China in the calendar year of 2009 were <> from Philippines : 8,783,000 tons (increased by 2.18 times from that in 2008) and <> from Indonesia : 7,237,000 tons (decreased by 2.7% from that in 2008), having had an overwhelming share of 96.6% of the whole. Following these two main sources, New Caledonia was the third largest source of nickel ore for China until 2008 but China had nil of the import from New Caledonia in 2009. The reason is that SMSP is an exporter of nickel ore from New Caledonia but SNNC has been established as a joint venture company by Posco of South Korea and SMSP of New Caledonia to produce ferro-nickel at a new refinery constructed in South Korea and launched its operation, for which SMSP has to supply nickel ore. Therefore, the exports of nickel ore from SMSP to other countries than South Korea have been cut and, as a matter of fact, the export of New Caledonian nickel ore for China in 2009 was nil.

According to the customs-statistics in China, the averaged unit prices of nickel ores imported from Philippines and Indonesia into China in the calendar year of 2009 were <> Philippine ore : at 31.7 per metric ton CIF and <> Indonesian ore : at US$44.8 per metric ton CIF respectively. On the basis of these unit prices on material base, nickel contained in these two ores has been presumed to be 1.5 - 1.75% for Philippine ore and 1.7 - 2.0% for Indonesian ore.

The reason, why the imports of nickel ores by China had been depressed at the beginning of 2009 but finally expanded to the largest scale, was due to an considerable increase in production of nickel-contained pig iron in China. The annual output of nickel-contained pig iron (low grade ferro-nickel) by China in 2009 was initially anticipated to be 30,000 - 40,000 tons on nickel content base but, reflecting a remarkable expansion of the production in the second half of 2009, the total quantity on nickel content base produced in China for the year of 2009 was estimated to have increased to a higher level than 100,000 tons on an annualized base. Accordingly, it was necessary for China to import urgently more nickel ores from overseas sources and China actually imported nickel ores on a scale of 1.50 - 2.00 million tons per month from July of 2009.

A payable line for production of nickel-contained pig iron in China is estimated to be US$7 - 8 per lb. of NI and, whenever LME nickel prices fall to a lower level than this cost price, the production of nickel-contained pig iron in China has shown a strong tendency to shrink. When the averaged monthly prices of LME nickel fell to US$7.34 per lb. as broken the level of US$8 per lb., the producers in Shandong Province had been driven to reduce or to suspend their production of nickel-contained pig iron.

In order to produce nickel-contained pig iron (containing 4 -6% of nickel) in China, small blast furnaces to consume a substantial quantity of coke have to be operated but these facilities have caused to lose a power to be competitive. Coke price is US$4 per lb., having shared 50% of the total cost for this production. On the other hand, ferro-nickel is produced by means of operating electric furnace but rotary kiln is used for pretreatment of nickel ore, for which low grade coal is required. Consequently, when ferro-nickel is produced by electric furnace, coke is not necessary to use as reducing agent and the high cost caused by using coke is avoidable but electric furnace requires a larger volume of electric power for its operation, resulting in the factor to pay more electricity fee.

It is forecasted that China will maintain a high level for imports of nickel ores in 2010. The output of crude stainless steel in China in 2009 recorded 9.90 million tons and, following this record, China has a probability to increase further their production of crude stainless steel in 2010. Therefore, a necessity to use nickel-contained pig iron (low grade ferro-nickel) as raw material for production of stainless steel will still continue. China is supposed to produce 140,00 - 150,000 tons per annum of nickel in nickel-contained pig iron in 2010.

In order to double production of nickel metal (produced 120,000 - 125,000 tons in 2009), Jinchuan Group Ltd. of China requires more high grade nickel ore and has been developing nickel mines in Western Australia and Papua New Guinea. Apart from Jinchuan Group, Jolin Jien Company has recently moved to develop nickel mines in Raglan District of Quebec Province of Canada (to produce 12,000 tons / year of Ni in nickel concentrate from 2011) and in Redstone and McMatters Districts of Ontario Province of Canada.
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