Antam sees strong nickel demand
Friday, June 20 2003 - 12:24 AM WIB
As the company, also known as Antam, sells 50 percent of its annual nickel production to Europe, it watches warnings from European steel makers keenly, but it is confident of the stainless steel outlook primarily because of strong demand growth in China, a company spokesman said.
Thursday, Finnish metals group Outokumpu Oyj warned that it expects to post a loss before extraordinary items for the first half of 2003.
It said there are no signs of recovery in the markets for copper, zinc or technology sales and demand for stainless steel has softened, with prices weakening in Europe, its principal market.
Outokumpu is one of the world's largest steel makers, through its ownership of Oslo-based AvestaPolarit. AvestaPolarit is one of Antam's customers, said the Antam spokesman.
Antam supplies the remainder of its nickel production to steel makers in South Korea, Taiwan and Japan, he said.
Antam is on target to produce about 9,900 metric tons of nickel metal in ferronickel this year, said the spokesman.
Ferronickel has a nickel content of 20%, while the rest is iron.
"What we've seen is that our orders aren't getting cut," he said.
"I think if we were fully dependent on Europe, we'd be concerned about that," he said.
About two-thirds of the world's nickel production goes into the making of stainless steel.
But the spokesman is bullish about the outlook of stainless steel demand growth in China.
"If you look at China alone, you're looking at a 12% annual stainless steel demand growth" in the next ten years, meaning that China's primary nickel demand could easily double to just under 200,000 tons then, he said.
With China still a net nickel importer and the nickel scrap market being tight, "you're looking at pretty robust outlook for this," he said.
These forecasts are from a metal specialist that provides analyses to Antam.
China's strong demand for stainless steel benefits Japanese and Korean manufacturers, who export their products into China, said Daniel Hynes, a nickel analyst with Sydney-based AME Mineral Economics.
"Their stainless steel production is booming because of China," in turn driving up their need for nickel, he said.
Antam also counts South Korea's stainless steel maker Posco as one of its clients, the spokesman said.
As Antam's nickel shipment to Europe is "relatively small," he said the larger nickel suppliers to Outokumpu are more likely to be affected.
In addition, Antam also supplies other European stainless steel makers, such as Germany's ThyssenKrupp AG., said the spokesman.
But he declined to offer a projection on Antam's earnings, despite the recent gains in the nickel price.(*)