Sumitomo Metal Mining, Japan’s top nickel producer, cut its 2014 forecast for the metal’s global deficit by 43% as China produces more than expected volumes of nickel pig iron, a cheaper alternative.
Mr Hiroshi Sueta, the Tokyo based general manager of nickel sales and raw materials said that “Demand will exceed supply by 17,000 tonnes, down from the company’s April estimate for a 30,000 tonne deficit. The market last year was in a 109,000 tonne surplus.”
Nickel is up 37% this year, the most among the six main metals on the London Metal Exchange, as Indonesia, the biggest producer from mines, barred unprocessed ore exports in January.
Mr Sueta said that “The pace of the drop of ore inventories in China was slower than we had expected earlier because of a jump in imports from the Philippines. Nickel pig iron is a low quality alternative for refined nickel in the production of stainless steel.”
He said that China’s stockpiles of nickel ore, which is used to make nickel pig iron, have dropped this year to slightly more than 20 million tonnes from 25 million tonnes at the end of 2013. The company earlier forecast that China’s nickel pig iron output would begin falling this summer as inventories declined following Indonesia’s ore export ban.
Sumitomo Metal raised its 2014 estimates of China’s nickel pig iron production to 430,000 tonnes, about 2% higher than its forecast in April. China produced 450,000 tonnes in 2013.
Source – SCMP