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Japan’s largest nickel producer, forecast a “substantial recovery” in demand in the six months starting October as the company’s output returns to full production.

“Demand for electronics materials is recovering and stainless steel mill output is improving,” Akira Nozaki, general manager at the nickel sales and raw material division, said yesterday in an interview in Tokyo. The company has already announced plans to boost production by 42 percent in the six months ending March 31 compared with the first half.

Japan’s economy is recovering from its worst recession since World War II, boosting demand for raw materials. The government on July 13 upgraded its view of exports, business sentiment and consumer spending. Nickel prices in London have gained 36 percent this year as customers including stainless steelmakers, the biggest consumers, increase output.

“Demand is gradually improving this summer and we forecast a substantial recovery in the second half,” Nozaki said. The company mainly sells its nickel in the domestic market, he said.

Nickel for delivery in three months on the London Metal Exchange gained 0.1 percent to $15,965 a metric ton at 1:57 p.m. in Tokyo. The price reached $16,600 a ton on July 1, the highest intraday price since Sept. 29.

Sumitomo Metal Mining plans to produce 19,500 tons of refined nickel in the fiscal second-half, compared with 14,901 tons a year earlier, Nozaki said. The company forecasts first- half output of 13,700 tons, down 23 percent from a year earlier after the recession curbed demand.

Bloomberg