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1、Analysis on Chinas Production, Market Demand and Price of Ferronickel by PyrometallurgyGeneral Manager: Mr.ZhongYongqi General Manager: Mr.ZhongYongqi Xuzhou Jinxiang Metallurgy Co.,LtdXuzhou Jinxiang Metallurgy Co.,Ltd1 1n n1、Development Status of Ferronickeln n2、Production of Ferronickeln n3、Marke
2、t Demand of Ferronickeln n4、Analysis on Ferronickel Pricen n5、Trend of Development of Chinas Ferronickel Industryn n6、Suggestion2 21、 Development Status of Ferronickeln n1 LME nickel price fluctuated severely, but generally performed upwardly.1 LME nickel price fluctuated severely, but generally per
3、formed upwardly.n nNoticeNotice：Nickel price arrived at the highest of RMB51,500 on May 9Nickel price arrived at the highest of RMB51,500 on May 9thth ,2007. ,2007.3 3n n2 2 、China has outstripped Japan to be the world biggest producer of stainless steel, China has outstripped Japan to be the world
4、biggest producer of stainless steel, which promotes the development of ferronickel industry.which promotes the development of ferronickel industry.n nNoticeNotice：*2007 is an estimated data.*2007 is an estimated data. 4 4Chinas Output of Stainless Steel from Jan to Sept 2007n nIt is estimated that C
5、hina already has a production capacity of 10 million tons of It is estimated that China already has a production capacity of 10 million tons of stainless steel. Demand for nickel has been increasingly powerful, which results in stainless steel. Demand for nickel has been increasingly powerful, which
6、 results in tight supply, high price and growing production.tight supply, high price and growing production.5 5Apparent Consumption of Chinas Stainless Steel6 6n n3 3 、Manufacturing technique of smelting ferronickel from lateritical nickel Manufacturing technique of smelting ferronickel from laterit
7、ical nickel ore has gradually matured these years, with lower production cost and ore has gradually matured these years, with lower production cost and better quality. Ferronickel that is smelted by electric furnace could be better quality. Ferronickel that is smelted by electric furnace could be di
8、rectly used in stainless steel production. As long as theres abundant directly used in stainless steel production. As long as theres abundant supply of nickel, stainless steel producers prefer ferronickel to electrolytic supply of nickel, stainless steel producers prefer ferronickel to electrolytic
9、nickel and stainless steel scrap. Ferronickel has great advantage in nickel and stainless steel scrap. Ferronickel has great advantage in production cost over electrolytic nickel and stainless steel scrap. In China, production cost over electrolytic nickel and stainless steel scrap. In China, ferron
10、ickel price is usually decided by giving a few discount based on spot ferronickel price is usually decided by giving a few discount based on spot nickel price, 75% for rough ferronickel and 80% for refined ferronickel, nickel price, 75% for rough ferronickel and 80% for refined ferronickel, and iron
11、 element contents are not taken into consideration. Even if you and iron element contents are not taken into consideration. Even if you purchase by spot nickel price, you can save more than RMB30,000/mt from purchase by spot nickel price, you can save more than RMB30,000/mt from the free iron. This
12、is one of the reasons that most stainless steel producers the free iron. This is one of the reasons that most stainless steel producers prefer ferronickel at present.prefer ferronickel at present.7 72、Production of Ferronickeln nChina began to widely produce ferronickel by the end of 2005. Both the
13、manufacturing technique and production capacity have made great progress in the recent 2 years.8 8Raw Materials for Productionn nLateritical nickel ore is a main raw material both in blast Lateritical nickel ore is a main raw material both in blast furnace and electric furnace of ferronickel product
14、ion. At furnace and electric furnace of ferronickel production. At present, China mainly imports lateritical nickel ore from present, China mainly imports lateritical nickel ore from Philippines, Indonesia and New Caledonia. During Jan to Sept Philippines, Indonesia and New Caledonia. During Jan to
15、Sept 2007, China imported 12million tons lateritical nickel ore, 2007, China imported 12million tons lateritical nickel ore, 6.357million tons from Philippines, 4.79million tons from 6.357million tons from Philippines, 4.79million tons from Indonesia and 813,000 tons from New Caledonia. Up to Indone
16、sia and 813,000 tons from New Caledonia. Up to October 2007, aggregate stock of lateritical in ports is October 2007, aggregate stock of lateritical in ports is 3.95million tons. China has imported 100,000 tons nickel 3.95million tons. China has imported 100,000 tons nickel metal, with ferronickel o
17、utput about 70,000-80,000 metal tons.metal, with ferronickel output about 70,000-80,000 metal tons.9 9Chinas Import Volume of Lateritical Nickel Ore Chinas Import Volume of Lateritical Nickel Ore from Jan to Sept 2007from Jan to Sept 20071010Chinas Import Volume of Lateritical Nickel Ore Chinas Impo
18、rt Volume of Lateritical Nickel Ore from Jan to Sept 2007 by Countriesfrom Jan to Sept 2007 by Countries1111Lateritical Nickel Ore Stocks in Chinas Main Ports Lateritical Nickel Ore Stocks in Chinas Main Ports on Nov 2on Nov 2ndnd 2007 20071212Potential Output of Ferronickel Based on Import Potentia
19、l Output of Ferronickel Based on Import Lateritical Nickel Ore from 2005-2008Lateritical Nickel Ore from 2005-2008 Years YearsCountriesCountries20052005200620062007200720082008 Philippines Philippines1.91.925.125.157.357.364.764.7 Indonesia Indonesia0 00.20.243.043.050.350.3New CaledoniaNew Caledoni
20、a0 00.70.78.68.619.419.4TotalTotal（k k tonstons）0.260.2626.026.0108.9108.9134.4134.4n nNotice: Counted as dry tons, assuming the grade of nickel ore is 1.3%, Notice: Counted as dry tons, assuming the grade of nickel ore is 1.3%, 1.5% and 2.0% for Philippines, Indonesia and New Caledonia respectively
21、. 1.5% and 2.0% for Philippines, Indonesia and New Caledonia respectively. Coefficient recovery of ferronickel production is counted as 85%.Coefficient recovery of ferronickel production is counted as 85%.1313Manufacturing Techniquesn nThere are mainly two ways of producing ferronickel: high furnace
22、 There are mainly two ways of producing ferronickel: high furnace process and carbon-thermal reduction process. High furnace process use process and carbon-thermal reduction process. High furnace process use nickel ore with low nickel grade (0.9-1.5%) and high iron (20-40%). It nickel ore with low n
23、ickel grade (0.9-1.5%) and high iron (20-40%). It has low production cost, with a coefficient recovery of around 85%, but has low production cost, with a coefficient recovery of around 85%, but makes great pollution and consumes high energy, which is restricted by makes great pollution and consumes
24、high energy, which is restricted by the government. Ferronickel produced by high furnace process usually the government. Ferronickel produced by high furnace process usually has a nickel grade of 1.6-6%, with high P and S, which requires further has a nickel grade of 1.6-6%, with high P and S, which
25、 requires further refining. At present, China has more than 25 smelters who use high refining. At present, China has more than 25 smelters who use high furnace process, mainly located in Shanxi, Shandong, Jiangsu and furnace process, mainly located in Shanxi, Shandong, Jiangsu and Zhejiang. Carbon-t
26、hermal reduction process use nickel ore with high Zhejiang. Carbon-thermal reduction process use nickel ore with high nickel grade (1.4% and above) and low iron (12-20%). It costs more but nickel grade (1.4% and above) and low iron (12-20%). It costs more but has a coefficient recovery of above 90%,
27、 with low impurities and could has a coefficient recovery of above 90%, with low impurities and could be directly used in stainless steel production. Ferronickel produced by be directly used in stainless steel production. Ferronickel produced by carbon-thermal reduction usually has a nickel grade ab
28、ove 12%. Chinese carbon-thermal reduction usually has a nickel grade above 12%. Chinese government has also restricted some electric furnace with low power. At government has also restricted some electric furnace with low power. At present, electric furnace producers spread in many regions, with Sic
29、huan present, electric furnace producers spread in many regions, with Sichuan has the most.has the most.1414A Brief Introduction to Smelting Process of Lateritical Nickel OreSinterCarbon-thermal reduction furnaceHighfurnaceBlastfurnaceRefining furnace（Eliminate impurities like S, P etc.）Base materia
30、l of SS(Nickel 15%, low impurities）Electric furnace（Eliminate impurities like S, P etc.）Low grade nickel matte（above 10）High grade nickel matte（above 10）Lateritical nickel oreElectrolyticnickelBase material of SS(8%Nickel 5%, low impurities）HighfurnaceRough ferronickel(6%nickel4%, higher impurities)
31、1515Comparison of Pyrometallurgy Techniques for Lateritical Nickel OreColumeColumeBlast furnaceBlast furnaceHigh furnaceHigh furnaceElectric furnaceElectric furnaceCost (RMB per Cost (RMB per ton ores)ton ores)900RMB900RMB1000RMB1000RMB800-1000RMB800-1000RMBNickel grade Nickel grade required require
32、d 1.41.4 0.9-1.50.9-1.5 1.41.4 Coefficient of Coefficient of recoveryrecovery8787 8585 9090 PollutionPollutionHighHighHighHighLowLowProduct Product Low or high grade Low or high grade nickel matte nickel matte Rough ferronickelRough ferronickel(4-6(4-6） Fine ferronickelFine ferronickel（8 8） Use Use
33、Electrolytic nickel Electrolytic nickel Fine ferronickel Fine ferronickel Directly used in SS Directly used in SS production production Location Location Henan, Liaoning, Henan, Liaoning, Inner Mongolia, Inner Mongolia, Hunan, SichuanHunan, SichuanHunan, Shanxi, Hunan, Shanxi, Jiangsu, Zhejiang, Jia
34、ngsu, Zhejiang, ShandongShandongSichuan, Jiangsu, Sichuan, Jiangsu, Inner MongoliaInner Mongolia1616Distribution Histogram of High Furnace Ferronickel Smelters1717Distribution Histogram of Electric Furnace Ferronickel Smelters1818Distribution Map of Ferronickel Smelters1919Output Statisticsn nAccord
35、ing to rough statistics, Chinas ferronickel output was about 800,000 tons in 2006. In 2007, output is expected to arrive at 1.3million tons, which equals to 110,000 tons nickel metal.20203、Market Demand for Ferronickeln nIn China, ferronickel is mainly used for austenitic stainless steel, and a few
36、for 200 In China, ferronickel is mainly used for austenitic stainless steel, and a few for 200 series stainless steel as well. For advantage in price, it has been widely used in series stainless steel as well. For advantage in price, it has been widely used in stainless steel industry. It is said th
37、at ferronickel industry could develop well as long stainless steel industry. It is said that ferronickel industry could develop well as long as LME nickel price stands above USD25,000 (RMB190,000). It is predictable that as LME nickel price stands above USD25,000 (RMB190,000). It is predictable that
38、 nickel price will keep upward trend in the coming years. Suggest that Chinas nickel price will keep upward trend in the coming years. Suggest that Chinas stainless steel output arrived at above 9million tons in 2010, while austenitic stainless stainless steel output arrived at above 9million tons i
39、n 2010, while austenitic stainless steel took up 60% (5.4million tons), demand for nickel metal will be more than steel took up 60% (5.4million tons), demand for nickel metal will be more than 400,000 tons. Comparing with the present level of production capacity, there would 400,000 tons. Comparing
40、with the present level of production capacity, there would be 100,000 tons gap, which means that demand for ferronickel would be more than be 100,000 tons gap, which means that demand for ferronickel would be more than 2million tons in 2010. Theres no doubt that ferronickel is a sunrise industry wit
41、h 2million tons in 2010. Theres no doubt that ferronickel is a sunrise industry with great potential in China.great potential in China.n nHowever, theres also some uncertain factors for ferronickel industry:However, theres also some uncertain factors for ferronickel industry:n nA Industrial policy b
42、y Chinese government, especially that restricts high furnace will A Industrial policy by Chinese government, especially that restricts high furnace will influence the industry.influence the industry.n nB Whether the supply and price of import lateritical nickel ore will be stable. B Whether the supp
43、ly and price of import lateritical nickel ore will be stable. n nC The developing 400 series and duplex stainless steel will influence the demand for C The developing 400 series and duplex stainless steel will influence the demand for nickel.nickel.2121Estimated Output of Chinas Stainless Steel Esti
44、mated Output of Chinas Stainless Steel from 2007 to 2010from 2007 to 20102222Chinas Demand for Nickel from 1999 to 20062323Nickel Supply and Consumption in 2006-200724244、Analysis on Ferronickel Pricen nFerronickel price is mainly decided by the following factors: n n1 Price of nickel metaln n2 Pric
45、e of nickel oren n3 Production cost of smelting2525LME Spot Nickel and Ferronickel Price LME Spot Nickel and Ferronickel Price from Jun to Oct 2007from Jun to Oct 20072626Average Price of Ferronickel and Nickel Ore Average Price of Ferronickel and Nickel Ore from Jun to Oct 2007from Jun to Oct 20072
46、727n nWe can conclude from the graphs above that as a We can conclude from the graphs above that as a substitute for nickel metal, ferronickel price is closely substitute for nickel metal, ferronickel price is closely related with nickel metal price, which is just the LME related with nickel metal p
47、rice, which is just the LME nickel price. Nickel ore price also influences nickel price. Nickel ore price also influences ferronickel price, but since Chinas nickel ore ferronickel price, but since Chinas nickel ore purchase is always based on short-term contracts, the purchase is always based on sh
48、ort-term contracts, the price is also closely related to LME nickel price. In price is also closely related to LME nickel price. In addition, price of coal, coke, electricity power and addition, price of coal, coke, electricity power and other accessories influence ferronickel price as well. other a
49、ccessories influence ferronickel price as well. Generally, ferronickel is mainly decided by LME Generally, ferronickel is mainly decided by LME nickel price. Producers can improve the technique or nickel price. Producers can improve the technique or quality for better profit.quality for better profi
50、t.28285 5、 Influence and Trend of Development of Chinas Influence and Trend of Development of Chinas Ferronickel IndustryFerronickel Industryn nInfluences:Influences:n n1 Demand for lateritical nickel ore grows stably. 1 Demand for lateritical nickel ore grows stably. n n2 Effectively ease the tight
51、 supply of nickel in China.2 Effectively ease the tight supply of nickel in China.n n3 The advantage in ferronickel price reduces production cost 3 The advantage in ferronickel price reduces production cost of stainless steel.of stainless steel.n n4 Manufacturing of ferronickel changes the pattern o
52、f nickel 4 Manufacturing of ferronickel changes the pattern of nickel consumption in China, which results in lower import volume consumption in China, which results in lower import volume of nickel and stainless steel scrap.of nickel and stainless steel scrap.2929Pattern of Nickel Consumption in Chi
53、na in 2007Pattern of Nickel Consumption in China in 2007n nIn 2007, Chinas estimated total consumption of nickel is about 310,000 tons, In 2007, Chinas estimated total consumption of nickel is about 310,000 tons, domestic output is about 120,000 tons and import volume is 85,000 tons, while the domes
54、tic output is about 120,000 tons and import volume is 85,000 tons, while the rest of 105,000 tons is all from the high quality ferronickel.rest of 105,000 tons is all from the high quality ferronickel.3030Comparison of Chinas Import Volume of Steel Scrap in 2006 and 2007n nAccording to statistics by
55、 China Customs, import volume of steel scrap was 5.38million tons According to statistics by China Customs, import volume of steel scrap was 5.38million tons in 2006, decreased by 4.76million tons (47.0%). In 2007, the import volume continues to in 2006, decreased by 4.76million tons (47.0%). In 200
56、7, the import volume continues to decrease. From Jan to Sept, the total import volume was 2.4246million tons, decreased by decrease. From Jan to Sept, the total import volume was 2.4246million tons, decreased by 46.83%. Development of ferronickel industry is one of the main reasons.46.83%. Developme
57、nt of ferronickel industry is one of the main reasons.3131Trend:Trend:n nHigh pollution, high energy-consuming and high impurity content restrict High pollution, high energy-consuming and high impurity content restrict high furnace processing of ferronickel. High furnace is expected to be high furna
58、ce processing of ferronickel. High furnace is expected to be replaced by electric furnace in the future.replaced by electric furnace in the future.n nMinor smelters with poor technique or equipments will be eliminated. Minor smelters with poor technique or equipments will be eliminated. Enterprises
59、with large scale and advanced equipments will dominate the Enterprises with large scale and advanced equipments will dominate the industry, especially for high furnace smelters. industry, especially for high furnace smelters. n nMarketing and supply channels of ferronickel will be completed. Mills a
60、nd Marketing and supply channels of ferronickel will be completed. Mills and major ferronickel smelters will have long term cooperation. major ferronickel smelters will have long term cooperation. n nHigh grade and low impurity will be the main trend of ferronickel. High grade and low impurity will
61、be the main trend of ferronickel. Ferronickel products will be improved to satisfy the demand of mills.Ferronickel products will be improved to satisfy the demand of mills.32326、Suggestionsn n1 Establish professional association of ferronickel to improve cohesion of the industry.n n2 Formulate industrial standard for nickel ore and ferronickel.n n3 Encourage and support powerful enterprises to purchase or hold stocks of mines abroad to save cost of raw materials.n n4 Strengthen research and innovation on lateritical nickel ore.3333 Thank you！3434
