September 07, 2008

China nickel pig iron demand rises on iron ore hikes

Reuters reported that high prices of iron ore are spurring Chinese stainless steel producers to increase purchases of nickel pig iron for which iron is a byproduct.

Mr Xinfang president of Shanghai Tsingshan Mineral Co Ltd said that "In the price of nickel pig iron, iron is free. That is why the use of nickel pig iron in China has risen. He said we do not have any technical problem and I do not believe Taigang and Baosteel would have."

Mr Jiang said China's two top stainless steel producers Shanxi Taigang and Baoshan Steel are using more nickel pig iron to lower production costs.

He said that “Chinese nickel prices are at CNY 245,000 per tonne. But the price of nickel in nickel pig iron is about CNY 155,000 per tonne after deducting the value of iron. Costs to process imported laterite ores into nickel pig iron containing 5% to 7% nickel are at USD 8,000 per tonne to USD 9,000 per tonne in China.”

Mr Jiang said Tsingshan has 200,000 tonnes of nickel pig iron capacity in China equivalent to 10,000 tonnes of nickel per year and 1 million tonnes of stainless steel capacity. He added that “A new project would include the building a power plant, the laterite mine and a stainless steel plant with 300,000 tonnes of capacity a year using nickel pig iron as the main feed. Total investment would be USD 350 million.”