Tsingshan Holding Group said that China is expected to raise its nickel pig iron output by between 25% and 50% to 250,000 to 300,000 tonnes in 2011 from 200,000 tonnes in 2010.

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

He added that China's growing hunger for NPI saw its stainless steel makers use 78% 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.

Mr Allen Cao said that "NPI will take up a higher and higher proportion of China's nickel production. We estimate the average ratio of NPI in nickel raw material feed in stainless steel production to increase to 52% in 2011 from 39% in 2010."

In April 2011, International Nickel Study Group said that it expected the global nickel market to record a 60,000 tonne surplus in 2011, 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.