Indian stainless steel maker sees jump in nickel needs

By Biman Mukherji

NEW DELHI (Reuters) - India's largest stainless steel maker, Jindal Stainless Ltd. (JIST.BO: 株価, 企業情報, レポート), expects its monthly nickel consumption to double to more than 1,600 tonnes when a new plant starts operation in three years, a top company official said.

Jindal, which runs a 600,000 tonnes a year plant at Hissar in northern Haryana state, is building a new factory in the eastern state of Orissa that will make 800,000 tonnes of stainless steel when it begins production in 2009/10.

"Our total nickel requirement now is about 800 to 900 tonnes per month," V.S. Jain, managing director of Jindal Stainless, told Reuters in an interview on Friday.

"When we produce another 800,000 tonnes 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 tonne 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.