SHANGHAI, Apr. 12 (SMM) -- Data shows that nickel ore imports via Jingtang port exceeded 500,000 mt in 1Q despite the rainy season in the Philippines, with goods mainly laterite nickel ore from the Philippines and ocher nickel ore Indonesia.
SMM believes some steel mills in Hebei Province replace iron ore with nickel ore to cut raw material cost, which is the major reason behind rapid growth of imports of low grade nickel ore at Jingtang port.
According to statistics from the Hebei Entry-Exit Inspection and Quarantine Bureau, imports of nickel ore via Jintang port reached 6.36 million mt in 2011, accounting for 13% of China’s total nickel ore imports which hit 48.25 million mt.
Sources report that some steel mills in Hebei used nickel ore (Ni 0.7%, Fe 49%) for production in an effort to cut costs after technical renovation amid bearish steel markets. The highest price of low grade nickel ore was only RMB 410/mt in 2011, while the price of Indian iron ore fines (Fe 50%) were as high as RMB 800/mt during the same period.
As a portion of low grade nickel ores were used for common carbon steel production and this part of demand was strong, purchases of low grade nickel ore by low grade NPI producers decreased. In addition, low grade nickel ore supply was limited by the rainy season in the Philippines, also keeping its prices firm. Some low grade NPI producers have to lower requirements on iron content in low grade nickel ore in the face of limited nickel ore supply, and one producer in Shanxi Province said it is ok for production to use nickel ore with iron content above 45% since arrivals of nickel ore with iron content above 48% at ports are limited.