The trade conditions for nickel reflect very closely those of stainless steel, since the dominant use of nickel is for this application. Use of stainless steel has shown a steady growth over many years, recently, but in 2001, the trend was reversed and showed a 3% decline. The demand of stainless steel has increased sharply in China over the past few years, and the nickel price at the London Metal Exchange has also increased rapidly since the historically low level (below 5,000 USD/tonne) at the end of 2001 to above 9,000 USD/tonne in early 2003 (SGU, 2003). The production capacity of both nickel ore and nickel metal is rapidly being reorganised, partly due to the very important changes taking place in the traditionally very big producer, Norilsk Nickel, both within and outside Russia.

The global production of nickel from ores has grown by almost 14% between 1999 and 2001 (to a level of 1.2 Mt), which is much more than the simultaneous growth in consumption, which was less than 4% (to 1.12 Mt in 2001) (SGU, 2002). However, in 2002 and early 2003, production of refined nickel rose, so that the global production estimate for the whole of 2003 was set at 1.24 Mt, while the consumption of the same grade was projected at

1.26 Mt (SGU, 2003). Figure 2.1 gives an overview of recent temporal trends in global production and use of refined nickel.

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