Steel to boost China nickel demand 62%

Demand for nickel in China, the world's biggest consumer of the metal, might raise 62 per cent by the end of the decade because of rising demand from stainless steelmakers, a government researcher said.

Demand for nickel would rise to 400,000 tonnes in 2010 from 247,000 tonnes in 2006, Zhang Mei, a researcher at the ministry of land and resources's information centre, said today at a conference in Shanghai. Imports accounted for 61 per cent of the nation's demand last year and would rise to two-thirds in 2010, he said.

Nickel futures in London rose to a record this month as China's economic growth fuelled demand for the metal. Domestic production of the metal in 2010 might rise 71 per cent from 2005, Zhang said. Most of the new capacity will come from Jinchuan Group Corp, which supplies 90 per cent of the nation's nickel.

"Chinese producers, including Jinchuan, will boost overseas purchase to meet rising demand,'' said Zhang in an interview at the conference. "The global nickel market will be basically balanced in the next few years.''

The global nickel market would be in slight deficit this year and move towards a balance in 2008, said John Barkas, director of Metalytics, Sydney-based independent advisory firm for the resources industry. Nickel would move into a surplus of 10,000 tonnes in 2009 and 40,000 tonnes in 2010, he said.