China's 2009 oversupply stainless steel will affect nickel demand

Published: 28 Feb 2010 22:49:28 PST

http://news.alibaba.com/article/detail/metalworking/100253752-1-china%2527s-2009-oversupply-stainless-steel.html

March 1 MetalBiz--According to data, in 2009, China's stainless steel production increased by 26.8% to 8.8mln tons. In contrast, China's stainless steel apparent consumption rose by 32% to 8.22mln tons. The oversupply was 600,000 tons, which will affect the nickel demand in short-term.

Additionally, in 2009, the production and net imports of China's nickel including low-grade nickel climbed by 66% to 430,000 tons, which means that there are a large amount of nickel inventories in the market. However, it is expected that China's stainless steel production in 2010 will increase by 20% to 10.5mln tons, in the first half of 2010, a large number of nickel stockpile will be cleared up. And therein China's nickel market will become prosperous.

If ValeInco resumes the production of Sudbury to full capacity, it will have the great impact on nickel price.

The company has restarted part production of the mine. Next step is to increase its production to full capacity. Besides, workers of Xstrata and Sudbury succeed negotiating the salary issue, which make nickel price lose one potential support.

The stainless steel demand except for China is still sluggish, and therefore the nickel consumption except for China will not increase to large degree.

Finland's stainless steel producer, Outokumpu recently summarized that currently the stainless steel demand has not obviously been improved yet.