Reuters reported that global nickel consumption will grow by more than 5% in 2011 and output will expand by 10%, bringing the market into balance from a deficit a year ago.

A chief analyst for Norilsk Nickel said that the rise in consumption would be driven by demand from China's stainless steel sector, for which nickel is a key ingredient, adding that last year there was a global nickel deficit of 65,000 tonnes.

Mr Dmitry Kuznetsov, chief analyst of the market analysis department at Norilsk Nickel, said that "Consumption will grow more than 5% YoY mainly due to a modest demand increase in stainless steel consumption."

He also estimated a 10% YoY growth in China's stainless steel output and added that the country was expected to replace more 200 series stainless steel with higher quality 300 series.

The 200 series stainless steel uses 1% to 4% nickel and is used to make indoor products, while the 300 series contains 9% or more nickel and is used for making outdoor products.

Nickel ore and concentrate imports by China, the world's leading nickel consuming nation, surged 52% YoY to 5.6 million tonnes in the first quarter of 2011.

(Sourced from www.reuters.com)