LONDON, Oct 12 Nickel’s rally is expected to be sustained by robust demand from China’s stainless steel mills, a significant factor behind recent price gains which many think are mainly due to worries about supplies from the Philippines.
Stainless steel contains nickel and chromium which slows the rate of corrosion significantly. Normal, or carbon, steel without nickel or chromium rusts easily. It is used in infrastructure such as bridges and structural beams, household items such as cutlery, drums for washing machines and kitchen sinks. Oil pipelines and medical equipment are also made out of stainless steel.
Demand has been growing due to Chinese infrastructure investment and higher living standards mean stronger consumer demand for domestic goods made out of stainless steel.
Benchmark nickel is up more than 40 percent since hitting a 12-year low of $7,550 in February.Recent data from the International Stainless Steel Forum showed Chinese output at 11.73 million tonnes between January and June, up 7.9 percent from the first six months of last year.
Beneath those numbers is another story; rising output of 300 series stainless containing around eight percent nickel at the expense of 200 series with only 1-2.5 percent nickel and 400 series which contains no nickel.
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