Chinese nickel pig iron output to rise 50%

Nickel pig iron output in China may increase 50% this year, possibly cutting into demand for refined nickel and putting further downward pressure on refined nickel prices, Bloomberg reported. According to a nickel analyst at Beijing Antaike Information Development, domestic production of the cheaper nickel pig iron may reach 240,000 metric tons in 2011, compared with 160,000 tons in 2010. April output in China was 25,000 tons, up from an average of 20,000 tons per month produced between January and March. About two-thirds of refined nickel is used for producing stainless steel, but low prices for stainless steel have squeezed margins at steel-makers. Baoshan Iron & Steel, China’s second-largest stainless-steel maker, said it will increasingly use nickel pig iron as a substitute for refined nickel. Refined-nickel futures on the London Metal Exchange have declined 8% so far this year.