SHANGHAI: Jinchuan Group Ltd, China's biggest nickel producer, plans to increase output by more than 50 percent by diversifying into nickel pig iron and nickel hydroxide while seeking overseas resources.
The company's combined output will total 200,000 metric tons a year, compared with 130,000 tons of refined nickel last year, Chairman Yang Zhiqiang said in an interview in Beijing today, without giving a timeframe.
The company is looking for nickel, copper, cobalt and precious metals mines abroad, he said.
China's demand for refined nickel may be boosted by planned restrictions in Indonesia on exports of metal ore, Nicholas Snowdon, an analyst at Barclays Capital said in a report on March 1.
Nickel slid 2.1 percent on March 5 after China, the world's biggest consumer of industrial metals, pared its economic-growth target and data showed Europe's economy shrank in the fourth quarter.
"Demand for refined nickel is now steady," Yang said. "The property market is recovering, thanks to social housing development, and stainless steel consumption is not bad."
World production may exceed demand by 45,000 tons, a 73 percent jump from 2011, according to estimates by Barclays Capital.
Baoshan Iron & Steel Co., China's biggest publicly traded steelmaker, plans to sell its loss-making stainless steel and special steel assets to boost profitability.
Pig Iron Makers
Indonesia, which supplies more than half of the ore to Chinese pig iron makers, will obligate mining companies to process ore locally from 2014, according to a ministerial decree published last month.
Jinchuan forecast an average nickel price this year of about $22,000 a ton, according to Yang. Nickel for three-month delivery on the London Metal Exchange declined 24 percent last year, and traded 0.7 percent higher at $18,883 a ton at 4:30 p.m. Shanghai time.
The company, the world's third-largest nickel producer, is preparing for a listing and plans to use the proceeds to develop resources and expand production, Yang said, declining to give a timeframe for the plan.
Jinchuan, based in Gansu province, bought Metorex, which mines copper and cobalt in Africa, for $1.3 billion last year. (Bloomberg/aph)
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