Pacific Metals to Increase FeNi Sales by 24% for F2009

Pacific Metals, Japanese largest ferronickel maker, plans to increase the sales volume of ferronickel by 24% to 36,000 tonnes for fiscal 2009 ending March 2010 from fiscal 2008, which is as same as the recent peak in fiscal 2006. The plant in Aomori is at full capacity operation since April to respond the demand from China planning 37,000 tonnes of production in fiscal 2009. However, the firm is prepared for demand decrease in the second half and efforts to reduce the energy cost when the demand in China is unforeseeable after October.

The ferronickel export to China surged from the beginning of 2009 while Japanese stainless steel makers cut the production significantly. The export rate increased to 80% for the sales recently from 62% for fiscal 2008. Stainless steel demand in China seems to increase due to the economic stimulus package and expectation for nickel price increase.

Pacific Metals is operating 2 electric furnaces of three when no.7 furnace is idle. The capacity of the plant is maximum 9,000 tonnes in July-September as a result of outage to replace the inner refractory firebricks of the furnaces and limited electric power supply. The firm estimates the probability of output reduction in the second half of fiscal 2009. At the same time, the firm tries to improve the operation for cost minimization. The cost of raw materials and energy is lower than in fiscal 2008 but still higher than in several years ago.