New Delhi: India’s nickel imports are set to rise 10% this year, helped by a sharp fall in world prices and rising consumption of stainless steel in the fast growing economy, a top industry official said on 18 September.
Two-thirds of nickel output is used to make stainless steel. India, which does not produce the metal, is likely to buy 45,000 tonnes in 2007, N.C. Mathur, president of the Indian Stainless Steel Development Association, said.
Last year, India had imported about 40,000 tonnes of nickel. Mathur said India’s heavy investment in construction of high-rise buildings, heavy machineries and bridges was boosting demand for stainless steel.
A sharp slide in nickel prices from an all-time high of $51,800 (Rs2,099,920) a tonne in May has also boosted demand. Three-month nickel was trading at $29,400 on 18 September.
“I think the prices will average $25,000 to $28,000 per tonne for the rest of the year. For 2008, it will probably be between $20,000 to $25,000,” Mathur said.
Russian supplies of nickel scrap and a worldwide trend to move towards low nickel content stainless steel is likely to keep prices down, he said.
Domestic sales of stainless steel are likely to rise to 550,000 tonnes in the December quarter from an estimated 500,000 tonnes in the current quarter, Mathur said. He said the prices of stainless steel had fallen by 20-30% since May, which should help boost demand for kitchenware.
The majority of India’s consumption is of low nickel content stainless steel, which use 1-4% of the base metal. It still accounts for almost half the cost of all inputs. The outlook for demand in India is strong with plans underway to build airports, underground and elevated rail lines all of which needs large quantities of stainless steel.
“We are expecting India to make 6,000 railway wagons over the next one year. Each wagon consumes about 11 tonnes of stainless steel,” Mathur said.
India’s annual stainless steel consumption is expected to expand by about 12% in the coming year from about 2 million tonnes now, he said.
Nearly 75% of stainless steel in India is used for kitchenware, but this will drop to 65% in five years when the share of construction, automobiles and railways rise to about 10% from 4%, he said.
Another 12 to 14% is used for making industrial machinery and other applications, while the remaining is used for the pipes and tubes industry.