China is expected to raise its nickel pig iron (NPI) output by between 25-50 percent to 250,000 to 300,000 tonnes this year from 200,000 tonnes in 2010, said Tsingshan Holding Group, the country's largest private stainless steel mill.

China's NPI production capacity is also expected to increase by 100,000 tonnes in 2011, said Allen Cao, general manager of Tshingshan Mineral, the mineral procurement arm of the group, at the SBB-WZSSE Stainless Raw Materials Summit in Shanghai.

China's growing hunger for NPI saw its stainless steel makers use 78 percent more of the product in 2010 than the year earlier.

Many stainless steel mills have been building NPI facilities as the low-cost nickel product becomes an increasingly popular alternative to traditional primary nickel, he added.

"NPI will take up a higher and higher proportion of China's nickel production," he said.

"We estimate the average ratio of NPI in nickel raw material feed in stainless steel production to increase to 52 percent this year from 39 percent in 2010."

In April, the Lisbon-based International Nickel Study Group (INSG) said it expected the global nickel market to record a 60,000-tonne surplus this year, compared with a deficit of 30,000 tonnes in 2010. It would be a reverse of the situation in the first half 2011, when the market was in a supply deficit by 2,600 tonnes, the INSG said on Monday.

Source: Reuters