Jindal expects its monthly nickel consumption to double after its new SS plant starts operation
India - 2007 June 2
India's largest stainless steel maker, Jindal Stainless Ltd., expects its monthly nickel consumption to double to more than 1,600 tons when a new plant starts operation in three years, a top company official said.
Jindal, which runs a 600,000 tpy plant at Hissar in northern Haryana state, is building a new factory in the eastern state of Orissa that will make 800,000 tons of stainless steel when it begins production in 2009/10.
"Our total nickel requirement now is about 800 to 900 tons per month," V.S. Jain, managing director of Jindal Stainless, told Reuters in an interview on Friday.
"When we produce another 800,000 tons of stainless steel, our nickel consumption would double," he said, adding the projection was based on its product mix remaining the same.
Nickel, whose prices have more than doubled to about $46,000 a ton in the past one year, is mostly used sparingly at 1-4 percent in stainless steel but the metal accounts for half the cost of all inputs.
India's nickel consumption is met through imports, which attracts a 2 percent duty. India does not produce the metal.
Two-thirds of nickel output is used to make stainless steel, and world demand from the industry is expected to grow 7.5 percent this year, industry says.
India's demand for stainless steel is growing at about 12-13 percent annually, Jain said, adding high prices have triggered a shift to low nickel content in stainless steel in products such as kitchenware.
"The prices have gone up very high. I believe it is unrealistic and so they must come down," Jain said.
Many global stainless steel makers were shifting a bulk of their manufacturing to 1-4 percent nickel content, he said.
More than 70 percent of Jindal's stainless steel production falls in the 1-4 percent nickel content, Jain said.
It also makes products with up to 8 percent nickel and some with no nickel. High nickel content steel is mostly used for making industrial appliances.
Jindal aims to eventually raise its total capacity to 2.5 million tons to feed India's fast-growing economy, but it has not set a time frame for the expansion that will include raising the capacity at its Hissar plant to 900,000 tons, Jain said.
Source: Reuters
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