The report starts from the development of nickel industry all over the world, and focuses upon analysis of nickel resource reserves, status quo of supply and demand in the market, import & export, price trend, substitutive product (ferro-nickel) and key enterprises etc in China. The nickel industry of China is characterized as follows:

First, China is short of nickel reserve;
Basic reserve of nickel reaches 7.6 million tons in China, a share of only 5% in global total, which converges in Gansu province (taking 62% of China’s total nickel reserves) and are led by copper-nickel sulfide ore (accounting for 91% of China’s total nickel reserves).

Second, the production and sales of China’s nickel industry showed the sustained growth in recent years;
In recent years, nickel output and consumption keeps falling worldwide, with the supply exceeding market demand. Inflicted by financial crisis in 2008, global nickel price slumped and nickel enterprises cut their production in succession. As a result, nickel output decreased to 1.378 million tons, down 3.2% year-on-year. In the same year, the world’s consumption of nickel fell 3.4% year-on-year to 1.278 million tons affected by the declining demand of stainless steel. In all, the surplus of supply got to 100,000 tons in 2008. The global nickel market still remained sluggish in 2009 when nickel output amounted to 1.329 million tons, decreasing by 3.6%; nickel consumption hit 1.232 million tons; and supply overplus arrived at 97,000 tons.

In contrast, the nickel production and sales of China nickel industry keeps growing, with the supply falling short of market demand. In 2008, nickel output and consumption of China reached 133,000 tons and 320,000 tons respectively, with a demand gap of 187,000 tons. Then in 2009, the figures rose to 216,000 tons and 447,000 tons respectively, a growing demand gap of 231,000 tons.

Nickel Ouput and Consumption of China, 2006-2009 (Unit: Kt)
 
Source: National Bureau of Statistics of China, ResearchInChina

Third, China relies upon import of nickel ore and concentrates since its scarcity of nickel resources;
In 2009, China imported 16.4 million tons of nickel ore and concentrates mainly from the Philippines (8.6915 million tons, a 52.9% share of total import volume), Indonesia (7.1743 million tons, a 43.7% share of total import volume), and other countries. Meanwhile, China’s import of refined nickel got to 250,000 tons in 2009, primarily sourced from Russia (84,400 tons), Australia (48,000 tons) and others. In the same year, China exported 33,600 tons of refined nickel and alloy to South Korea, Hong Kong (China), Taiwan (China), etc.

Fourth, nickel price runs nearly the same in China and the world at large, and it presented the uptrend of fluctuations in the year of 2009;

Next, ferro-nickel emerged in the era of high nickel prices in China, which gets wholly used in stainless steel field and depends on import;

China’s ferro-nickel industry emerged in 2005 and expanded in 2007. The nickel content of ferro-nickel improves rapidly. The output of ferro-nickel was up from 2,000 tons in 2005 to 108,000 tons in 2007. Due to the reasonable regression of nickel price as well as the influences of financial crisis, the ferro-nickel output dropped to 55,000 tons in 2008, and it  hit around 100,000 tons in 2009.

Ferro-nickel is produced from the smelting of laterite-nickel ore, and it has to rely on import since China is short of laterite nickel ore. In 2009, China imported 227,000 tons of ferro-nickel accumulatively from Columbia (a 33.4% share of total import volume), Japan (a 30.8% share of total import volume), and New Caledonia (a 16.7% share of total import volume). From January to April of 2010, China’s import of ferro-nickel from Japan increased to some extent, with the rising proportion of imports from Japan to 33%.

Last, nickel output of Jinchuan Group, as the largest producer of nickel in China, reached 130,000 tons in 2009, accounting for 60.2% of total nickel output of China and ranking second worldwide.

Nickel Output of Jinchuan Group, 2007-2010 (Unit: Kt)
 
Source: ResearchInChina