The extent of Philippine ore exports will be the main factor determining Chinese nickel pig iron (NPI) production levels. CRU estimates that Filipino nickel ore exports rose to 51 .Om tonnes in 2014, compared to 40.0m tonnes in the previous year. This year we are forecasting exports to rise further to almost 57.0m tonnes.

Executive summary 1

Chapter 1

Recent market trends 9

1. Investors spooked by macro concerns 9

2. Economic trends & stainless steel demand 10

      2.1 Economic headwinds slow stainless demand growth 10

3. Stainless steel production 12

      3.1 Melted production stalls in Q4 12

4. Scrap use 14

      4.1. Scrap prices pulled down by nickel price fall 14

5. Primary nickel consumption in stainless steel 16

5.1. Weaker melted production growth slows consumption 16

6. Consumption in non-stainless uses 17

      6.1. Primary nickel demand growth accelerates in 2014 17

7. Overall primary nickel consumption trends 19

      7.1. China's stainless sector is the main growth driver 19

8. Regional outlook 20

      8.1. North America 20

      8.2. Western Europe 21

      8.3. Japan 22

      8.4. China 23

      8.5. Other Asia 24

      8.6. Rest of world 25

9. Nickel mine production 26

      9.1. Philippine steps up a gear 26

10. Refined nickel production 32

      10.1. Global supply down marginally in 2014 32

11. Supply/demand balance & stocks 35

      11.1. Higher Philippine ore export spoils the party 35

12. Prices 37

      12.1. Price plummets amid wider commodity retreat 37

Chapter 2

The market outlook 39

1. 2015 deficit shaved 39

2. Economic trends and stainless steel demand 40

      2.1 Chinese demand growth to slow as economy rebalances 40

3. Stainless steel production 41

      3.1 Output growth to slow gradually 41

      3.2 Rising nickel price to lower 300- series market share 42

4. Scrap use 43

      4.1. Growth in scrap use to slow after strong 2014 43

5. Primary nickel consumption in stainless steel 44

      5.1. Primary nickel use to lag behind stainless output growth 44

6. Consumption in non-stainless end-uses 45

      6.1. Non-ferrous alloys to drive non-stainless nickel demand 45

7. Overall primary nickel consumption 47

      7.1. Primary nickel consumption growth to slow 47

8. Regional Demand outlook 48

      8.1. North America 48

      8.2. Western Europe 49

      8.3. Japan 50

      8.4. China 51

      8.5. Other Asia 52

      8.6. Rest of world 53

9. Nickel mine production 54

      9.1. Global mine production to rise by 7% in 2015 54

10. Refined nickel production 59

      10.1. Global supply to decrease in 2015 59

11. Supply/demand balance & stocks 63

      11.1. Market looking less tight for 2015 as demand trimmed 63

12. Price prospects 67

      12.1. Medium term outlook still looks bright 67

13. Recent trends in investor activity 69

      Outlook for commodity investing 73

Annendix A

Industrial and economic outlook, 2014 - 2019 75

Appendix B

Greenfield projects & Brownfield expansions 101

1. Overview 101

2. Firm Projects 102

3. Probable Projects 107

4. Possible Projects 115

Appendix C

Nickel in China 137

1. China's stainless steel outlook 137

      1.1 Slowdown in stainless steel output growth to continue 137

      1.2 China's nickel demand outlook 141

      1.3 China's nickel supply outlook 141

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