The nickel production in 2009 is anticipated to be strengthened to reduce at nickel producers, who are less competitive on its cost wise. On the other hand, in view of starting up operations of new nickel projects, it is marked how extent does an effect of the decreased nickel production put an influence on supply and demand of nickel.
According a survey based mainly on settlements of accounts for 2008 released by major nickel producers in the world, the quantities of nickel produced in 2008 were 1,407,000 tonnes, down by 3% YoY as compared with that of 1,444,700 tonnes in the preceding year of 2007. Owing to the fact that nickel prices in the first half of 2008 were still maintained on the levels to be payable for costs at nickel producers, each company produced nickel on a high level in that period.
The first case to reduce nickel production was announced in October of 2008 by Xstrata Nickel and their nickel refining plant in Dominica has been shut down by maintenance for an indefinite period. The production activities of nickel in 2008 by each nickel producer were as per the table shown below.
Following the first case as mentioned above, such major nickel producers as BHP Billiton, Xstrata, Eramet, and so on announced successively their plans to reduce nickel production. These plans to decrease nickel production have been influenced by a secondary effect of the crisis in financial market arisen from autumn of 2008, having caused to reduce successively stainless steel production and to fall nickel price, and these problems have been carried over to 2009.
As regards nickel production in Eastern Countries, China once increased considerably to produce nickel contained pig iron but currently turned to decrease seriously this production. China is estimated to have produced nickel contained pig iron in 2008 on a scale of 60,000 tonnes per annum on nickel content base as compared to 85,000 tonnes produced in 2007.
According to a survey by Sumitomo Metal Mining, the quantities of nickel planned to be reduced in 2008 to 2009 are estimated to be 160,000 tonnes on an annualized base in 2008 and 300,000 tonnes on an annualized base in 2009 respectively. However, Sumitomo Metal Mining said that these decreases of nickel production will be offset substantially by starting up operations of new nickel projects.
Among new nickel projects scheduled to be started up in 2008 to 2009, the project to produce 30,000 tonnes per annum of nickel in ferronickel in South Korea as a JV between POSCO of South Korea and SMSP of New Caledonia has been operated from October of 2008 at the Kwangyang Plant of POSCO and is scheduled to produce 15,000 tonnes of nickel in ferronickel in 2008.
Also, Vale Inco has planned to operate the Goro nickel project with capacity to produce 60,000 tonnes per year of nickel in New Caledonia in the first half of 2009. The second phase of the Coral Bay nickel project in Philippines to produce 10,000 tonnes per year of nickel, being proceeded by Sumitomo Metal Mining, is expected to commence its operation in 2009. These operations of new nickel projects as planned to start in 2008 to 2009 have a possibility to offset an effect of the reduced nickel production to be implemented in 2008 to 2009.
Japan decreased the nickel production in 2008 by a small extent of 4% but is the country to produce nickel metal or ferronickel from imported nickel ore and, therefore, it is questioned how extent is possible for Japan to maintain nickel production. Also, the so called National Nickel, in which governmental authorities have been concerned, is strong for a depression of the nickel market and takes a negative attitude to decrease nickel production in many cases.
However, Antam of Indonesia already announced to decrease their production of nickel in matte in 2009 to 12,000 tonnes per annum and it was also informed in last week from the influential source concerned in nickel that Cuba produced 70,000 tonnes of nickel in 2008 but has a possibility to reduce their nickel production in 2009. The Moa nickel project in Cuba, which is a joint venture between Sherritt of Canada and Cuba, will maintain a scale of nickel production in 2009 but other nickel refining plants are supposed to decrease nickel production. LME nickel stocks are approaching a level of 100,000 tons and one of the influential survey organizations forecasts that the world supply of nickel in 2009 will still have a surplus.
(Sourced from www.texreport.co.jp)
