China Jinchuan to Produce 130,000 T Nickel in 2010 - Report

BEIJING, Mar. 16 -- Jinchuan Group, China's largest nickel producer by output, plans to produce 130,000 metric tons of nickel and 6,000 tons of cobalt this year, largely unchanged from 2009, a report Monday by the state-controlled Xinhua News Agency cited the company's chairman as saying.

Yang Zhiqiang also told Xinhua that global nickel prices are expected to fall to $18,000 a metric ton this year.

"I don't think nickel demand has improved much," the report quoted Yang as saying. "Though the stainless steel industry is recovering, it still hasn't yet resumed pre-crisis levels."

Nickel prices have rallied since late February after languishing much of last year, though analysts attribute much of that to speculative positioning. Three-month nickel on the London Metal Exchange was at $21,530/ton around 0600 GMT.

The company doesn't have a capacity expansion plan, the report said. Jinchuan didn't respond to a call for comment Monday.

Jinchuan has begun trading LME cobalt futures in small volumes, Yang told Xinhua.

China is the world's largest cobalt producer and Jinchuan accounts for a third of the country's output. Cobalt is used in the manufacture of plane engines and hybrid car batteries, among other uses.