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Steeply Risen LME Nickel Price Encourages To Produce More Ni-Contained Pig Iron In China
= Aiming To Produce 180,000 Tons On Ni Content Base In Next Year, New Projects Are Commissioned Successively
There is a large probability that China will produce more than 180,000 tons per annum on Ni content base of nickel-contained pig iron in the next year of 2011. China is anticipated to produce nickel-contained pig iron on a scale of 150,000 - 160,000 tons on Ni content base in 2010 by an increase of 20,000 - 30,000 tons from that in 2009.

The output of nickel in nickel-contained pig iron in China in 2010 once turned to decrease in summer time, reflecting a fall of LME nickel price, but LME nickel price is rallying from the beginning of September and currently approaching a level of US$25,000 per ton (US$11.33 per lb.) since the beginning of October.

The cost to produce nickel-contained pig iron in China is estimated to be US$8 - 9 per lb. of Ni and, in view of LME nickel price at present, China is thought to have regained a profitability for this production. Accordingly, the production of nickel-contained pig iron in China is strengthening again a power to increase.

Under the circumstances, the first phase of new ferro-nickel project, which Hubei Changjiang Nickel Company has been proceeding and constructing a plant in Anlu City of Hubei Province, is being commissioned in order to start up its commercial production of ferro-nickel by the end of 2010. This new plant has been designed to produce 40,000 tons per annum in material of ferro-nickel and laterite ore is used as raw material.

In addition, this new ferro-nickel producer has been promoting the second phase of this project and is scheduled to commence its construction from 2011 with completion by the end of 2011. When the second phase is finished, the annual capacity to produce ferro-nickel will be expanded to 80,000 tons on material base.

China has been so far producing low nickel-contained pig iron with 5% max. of Ni content by means of operating small blast furnaces but is currently shifting to produce mainly low grade ferro-nickel with 8 - 10% of Ni content by means of operating kilns and electric furnaces for refining, cost of which is estimated to be more competitive. The new ferro-nickel projects as mentioned above are scheduled to apply to the process to operate electric furnaces.

However, while China has been producing nickel-contained pig iron on a favorable tone, the sources to purchase nickel ore (low grade laterite ore) as raw material have relied on the two countries of Indonesia and Philippines and, from this point of view, China has to face the matter of raw material.

(1)In particular, the Government of Indonesia has enforced in February of 2010 New Mining Law, which has stipulated a deferment for 5 years but also a duty to add value to nickel ore. Therefore, it is wondered from when does the Government regulate exports of nickel ore on the basis of this New Mining Law, and a potential anxiety for this regulation has still existed. Also, owing to the mass mining of nickel ore in Indonesia, nickel content in crude ore has lowered and this reality is another problem for China.

(2)On the other hand, laterite ore produced in Philippines has contained about 50% of iron (Fe) but the price is a very low level of US$30 - 35 per metric ton of material CIF China. Therefore, the case to use this low grade nickel ore as a substitution for iron ore (US$120 per ton on Fe 65% base) is now being investigated to produce pig iron by means of operating small and medium blast furnaces. In this usage, nickel contained in crude ore has to be removed but, in view of high prices for iron ores continued for a long period, this low grade nickel ore is in the direction to be utilized for production of pig iron, which is not severe in quality to produce long products.
last modified : Mon 18 Oct, 2010 [11:29]
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