SEOUL, Feb. 10 -- Posco, Asia's biggest stainless steelmaker by 2008 output, may increase throughput of the product by 22 percent this year because of economic recovery.

Production of stainless steel may rise to 1.80 million metric tons from 1.47 million tons last year, Choi Youn Joung, a spokeswoman for the Pohang, South Korea-based company, said today in an interview.

"The news may provide a brief boost to help sentiment for nickel given that stainless steel usage is essential to determine nickel prices," said Yi Seong Je, an industrial metals analyst at Tong Yang Securities Inc. in Seoul.

Demand for nickel will recover on rising stainless-steel usage and restocking by consumers, Societe Generale SA said last week. The steel market will grow by 9.2 percent in 2010 as the global economy rebounds from the recession, according to the World Steel Association.

Nickel has dropped 14 percent in the last six months. The metal for three-month delivery on the London Metal Exchange gained 0.1 percent to $17,300 a ton at 1:41 p.m. Seoul time. Shares of Posco climbed 1 percent to 521,000 won at 1:42 p.m. in Seoul trading, outperforming a 0.4 percent advance in the benchmark Kospi index.

Key Raw Material

Posco last month increased domestic prices for February shipments of stainless steel by about 3 percent after a gain in the price of nickel, a key raw material. Posco last month said its total crude steel output will increase by 17 percent this year on rising demand from automakers and builders.

Stainless steel demand may recover and nickel prices were likely to stabilize in the first half, staying at about $17,000 a ton to $20,000 a ton in 2010, Posco told investors in January.

Posco is the world's third-biggest and Asia's biggest stainless-steel maker by 2008 output, company spokeswoman Choi said in a phone interview. Stainless-steel companies are the world's biggest users of nickel.