Sumitomo Metal Mining (SMM) forecasts global nickel supply would be 52,000 tonnes higher than the demand in 2012. The oversupply would increase from 16,000 tonnes in 2011. The demand is expected to increase mainly for stainless steel production in China. Meanwhile, new nickel projects will enter operations and the supply will be larger than the demand growth. The oversupply volume would hit the largest since 2008.SMM forecasts global nickel supply would increase by 7.6% to 1.71 million tonnes in 2012 from 2011. Goro nickel project in New Caledonia will increase nickel oxide production of this year. The project now supplies nickel hydroxide by operating HPAL (high pressure acid leach) process plant. The project is led by Vale with output capacity of 60,000 tonnes per year. SMM also holds the shares in the project. There are other large nickel projects such as Ambatovy project in Madagascar joined by Sherritt International, Sumitomo Corporation and other companies. Meanwhile, in China, production of nickel pig iron is expected to increase. Nickel pig iron production in China is forecasted to increase to 260,000 tonnes in 2012 from 240,000 tonnes in 2011. SMM forecasts global nickel demand would increase by 5.4% to 1.658 million tonnes in 2012 from 2011. Global production of stainless steel, the main application of nickel, is forecasted to increase by 5.6% to 34.266 million tonnes. Stainless steel production in China is estimated to increase by 8.2% to 14.1 million tonnes.
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