Since the third quarter of 2007, there has appeared a unilateral price increase for the common carbon steel products, with stainless steel price slumped and then keep dull. On the raw materials, nickel is also in the reverse direction from the up trending coke, iron ore and high-carbon ferrochrome.

Mysteel analysts have given a brief introduction of the stainless steel industry chain and status of the industry as under.

As seen from global nickel supply and demand, the nickel consumption is on the rise every year. In 2007, LME nickel price grew over 100% from 2005. Although the crude nickel output exceeded consumption in 2005, anticipation of increasing stainless capacity in China supported the nickel price firm.

During 2000-2007, annual growth of nickel consumption was about 25% in China, with domestic sufficiency decreasing to 43% from 94% and the imports jumping. There is a trend that profit of the stainless steel industry is moving toward upstream sector, and many Chinese factories moved to produce the material. Monthly capacity of the ferronickel enterprises totals 31,000 tonnes.

Due to high price and difficulty of acquiring nickel resource, more Chinese enterprises are importing laterite ore, which can smelt 8.5-9% nickel contained ferronickel. Thanks to advanced ferronickel smelting technology, nickel supply is also supplemented to some degree so that the price is checked.

(Sourced from Mysteel.net)