SHANGHAI, Feb. 1 (SMM) --

Nickel Ore:

According to data from China Customs, China's imports of nickel ore in December were 1.62  million mt, up 3.75% MoM, and near November levels. China's imports of nickel ore from Indonesia were 964.638 kt, accounting 59.64% of total imports in December. The Philippines is experiencing its rainy season, so imports of nickel ore from the Philippines continued to down.  Recent arrivals at ports were high grade laterite nickel ores from Indonisia.

China's total imports of nickel ore during 2009 were 16.42 million mt, up 33.31% YoY.  Total imports of nickel ore from the Philippines were 8.67 millon mt, up 116.66% YoY, while total imports from Indonesia were 7.17 millon mt, down 2.99% YoY. The growth of imports were mainly from imports of low grade nickel ore from the Philippines.  As nickel prices rose and demand from stainless steel mills strengthened, more NPI producers began to resume production idled since 2Q in 2009.  NPI produces with blast furnaces resumed production and number of new NPI producers increased rapidly, pushing up demand of imported laterite nickel ore and driving many producers to  import nickel ore from nickel ore producing origins . In addtion, the number of producers with electric arc furnace increased significantly since June, so demand for high grade nickel ore from Indonesia was up significantly during 2009.

Refined Nickel:

According to data from China Customs, China's imports of refined nickel in December 2009 were 13.61 kt, relatively unchanged from November, and a result of the unfavorable domestic/LME nickel price ratio since May 2009.  Imports of refined nickel have remained low since early August.

Total imports of refined nickel were 250. 22 kt in 2009, up 111.86% YoY, and the increase was due to two reasons. First, the domestic/LME nickel price ratio was favorable for imports from February to April 2009.  Based on CBI data, profits for imports in April were as high as RMB 20,000/mt, and traders actively imported goods, increasing the amount of goods in Chinese markets. Second, nickel prices slumped due to the financial crisis, and many private investors entered the market to store goods, causing tight supply of nickel resources in domestic market and forcing the importation of large volumes of overseas nickel. Since the domestic/LME nickel price ratio has not been favorable for imports since May 2009, and as nickel prices climbed, China's imports of refined nickel gradually returned to normal.

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