Abstract
Growing Chinese stainless steel industry driving nickel demand
Consumption of nickel is dominated by the stainless steel sector, which
accounts for around 70% of demand for primary nickel. Since 2001, world output
of stainless steel has increased at an average rate of almost 10%py, driven by
China where growth has averaged over 50%py over the same period. At these
growth rates China will overtake Japan as the largest primary nickel consuming
country, possibly as early as 2006. The outlook for nickel demand to 2010 is
one of higher than average growth than that for the other base metals. If the
5%py growth forecast by International Stainless Steel Forum in 2005 proves to
be correct, then demand for nickel in stainless steel is likely to grow at
between 3% and 5%py over the same period. There are a number of potential
nickel mining and refining projects in various stages of development, as well
as some expansions at existing facilities, that will ensure continued growth
in supply of primary nickel to 2010. In the short term, with a small surplus
forecast for the nickel market in 2006, Roskill expects the average nickel
price to fall to around US$12,000t in 2006 from almost US$15,000 in 2005. The
medium to longer-term outlook for nickel prices is good as nickel supply may
struggle to match growth in demand, particularly after 2008. The key trends,
issues and developments in the market are analysed in this major new report
from Roskill. It provides a clear insight into the industry and its trends,
and an authoritative analysis of the prospects for the future.
What the report gives you
- Independent, in-depth research and analysis
- Essential market intelligence for successful business planning
- Detailed survey of production in 46 countries
- Up-to-date profiles of over 80 nickel exploration, mining and refining
companies and their activities, including Norilsk Nickel Mining, BHP Billiton,
Western Mining Corporation, Inco and Falconbridge
- Forecasts for end-use consumption and world supply and demand
Report highlights
The major recent development on the supply side for nickel is Inco's proposed
takeover of Falconbridge. If the takeover receives shareholder and regulatory
approval, 'new' Inco will be the world's largest nickel producer, and sixth
largest mining company. Combined production of Inco and Falconbridge in 2005
is estimated over 330,000t, 25% of world refined nickel output.
World mine production of nickel totalled 1.32Mt in 2004, the highest ever
output recorded. Russia with 22%, Canada (14%), Australia (12%), Indonesia
(10%) and New Caledonia (9%) were the principle producing countries.
World consumption of primary nickel reached 1.25Mt in 2004, after growing at
over 4%py since 2001. Japan remains the main nickel consuming country with
consumption totalling 192,500t in 2004 (15% of world consumption).
Despite short-term downturns in the aerospace and electronics industries,
demand for nickel in high performance and special performance alloys is
expected to continue to recover steadily in the medium term. The superalloy
sector is forecast to increase at around 5%py on the back of more optimistic
predictions for growth in civil air traffic.
The battery market continues to offer strong growth, albeit from a much
smaller base, and offers significant upside potential in the longer term if,
as appears probable, large nickel-metal hydride batteries become the future
battery of choice in electric and/or hybrid vehicles. Of the other more minor
end-uses, consumption of nickel in plating and other alloys steels is not
expected to grow at much more than 2%py to 2010.
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