Nickel: World Surplus

Metals Nov 28, 2012 No Comments

NickelThe International Nickel Study Group predicts an increase in the supply of nickel next year leading to a surplus of 70,000 tonnes. Several projects are either already planned or going live shortly.

This is the case with Koniambo in New Caledonia which will start commercial production at the beginning of January,  or the refinery project between Taganito Mitsui & Co and Sumitomo Metal Mining in the Philippines, despite a Japanese nickel market with an excess of 15,000 tons over three quarters.

The World Bureau of Metal Statistics reported an excess of 89,000 tons of nickel refined globally from January to September 2012 vs. a shortage of 3,000 tons in 2011. This lead to the fact that 25% of the nickel industry is currently producing at a loss.

Consequently, Vale, the second largest producer, announced it would close the Frood nickel and copper mine in Canada by the end of the year to focus on more competitive reserves as the century-old mine’s resources become depleted and make it less economical. Another example is Xstrata, the fourth largest producer, which decided to suspend operations at Cosmos mine in Western Australia and initiate a care and maintenance schedule in response to adverse market conditions, including a prolonged period of low nickel prices and a strong Australian dollar.

Pascal Blanc

Pascal has implemented numerous software solutions in the areas of procurement, sourcing, spend management, supplier evaluation and performance. His clients include Fortune 500 companies in Europe, Asia and North America. He is a co-founder of Source & Procure.

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