Although nickel prices hit a record peak of US$48,500 on March 16, China’s demand for nickel may still rise by 20 percent in 2007 and output is likely to surge by 36 percent, senior analyst Aidong Xu who worked in a state-owned research group Antaki said.

Antaki predicted China’s nickel consumption in 2007 will reach a new high of 300,000 tons, while 250,000 tons in 2006.

The world’s top stainless steel producer and also larger user of nickel in China is expected to produce 7.2 million tons in 2007, against 5.3 to 5.6 million tonnes in 2006.

Nickel demand could rise by 20 percent this year, Xu told journalists during stainless steel conference held in Foshan city, Guangdong province.

She meanwhile conceived that high nickel price will lead to new options of steel mills, namely to produce more low –nickel grades of 400 and 200 series.

In 2006, China’s stainless steel production is composed of 60 percent of 300 series, 22 percent of 400 series and 15 percent of 200 series, 3 percent for others.