SMM Estimates Global Ni Supply and Demand to Balance in 2008

Sumitomo Metal Mining (SMM) estimates global nickel supply would become surplus by 26,000 tonnes against the demand through 2008. The demand is stagnant from stainless steel and nickel producers are reducing outputs impacted by lower nickel price and higher oil cost. With these backgrounds, SMM revised down the surplus range from 37,000 tonnes previously estimated in April 2008. The global nickel supply and demand would almost balance through this year.SMM estimated in July that global nickel production would increase by 2.7% to 1.375 million tonnes in 2008 compared with 2007. The previous estimation was 1.42 million tonnes. Xstrata announced 4-month output suspension at Falcondo in the Dominican Republic. Falcondo is a ferronickel smelter with 29,000-tonne annual capacity. The nickel production would decrease by approximately 10,000 tonnes by this suspension. Jinchuan Group of China plans output reduction by 10,000-20,000 tonnes, whose annual capacity is 120,000 tonnes. BHP Billiton also reduces nickel production in Kalgoorlie, Australia. SMM estimates global nickel demand would increase by 5.1% to 1.349 million tonnes in 2008 compared with 2007. The previous estimation in April was 1.383 million tonnes. Demand recovery from stainless steels is delayed due to slow down of world economy. Nickel supply and demand are expected to keep balance in 2009. Both production and consumption will continue increasing.