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Sydney, Sep 4, 2009 (ABN Newswire) - The nickel price is expected to rebound by about 9 per cent in 2010 as China's stainless steel market shows some signs of recovery, according to Minara Resources Ltd (ASX:MRE) chief executive Peter Johnston.
The nickel price is now about US$18,300, compared to a high of about US$55,000 a tonne at the height of China's steel-making boom in 2007. The price dropped to as low as US$8,900 when the Chinese steel mills cut production in 2008.
China's top steel maker, Baoshan Iron & Steel (SHA:600019), made a turnaround from losses to gains in its stainless steel business during the first half and expects it to profit this year. Nickel is a major material for producing stainless steel, accounting for 60 per cent of the production cost. Baoshan minimised its nickel stocks and tightened the stainless steel costs to ease pressure of fluctuated nickel price amid the global financial crisis.
Mr Johnston said nickel demand and production in 2009 decreased 20 per cent. "I didn't think it would last," said the chief of the Australian nickel miner. He believed that China's nickel consumption was "showing sign of recovery".
Europe and Japan markets are still very soft despite east Asia and the US have seen some signs of improvement, Mr Johnston said.
The nickel price is now about US$18,300, compared to a high of about US$55,000 a tonne at the height of China's steel-making boom in 2007. The price dropped to as low as US$8,900 when the Chinese steel mills cut production in 2008.
China's top steel maker, Baoshan Iron & Steel (SHA:600019), made a turnaround from losses to gains in its stainless steel business during the first half and expects it to profit this year. Nickel is a major material for producing stainless steel, accounting for 60 per cent of the production cost. Baoshan minimised its nickel stocks and tightened the stainless steel costs to ease pressure of fluctuated nickel price amid the global financial crisis.
Mr Johnston said nickel demand and production in 2009 decreased 20 per cent. "I didn't think it would last," said the chief of the Australian nickel miner. He believed that China's nickel consumption was "showing sign of recovery".
Europe and Japan markets are still very soft despite east Asia and the US have seen some signs of improvement, Mr Johnston said.
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