Demand will exceed production by 12,000 metric tons, compared with a 36,000-ton surplus last year. Sumitomo Metal Mining Co., Japan’s biggest nickel producer, expects global output of the metal to fall short of demand in 2015 for the first time in five years as supply from China drops.
Demand will exceed production by 12,000 metric tons, compared with a 36,000-ton surplus last year, according to Hiroshi Sueta, general manager at the Tokyo-based company’s nickel sales and raw materials department. China’s production of nickel pig iron, a cheaper alternative to the refined metal, may drop 15 percent from a year earlier to 365,000 tons, he said.
“Ore stockpiled in China will be probably exhausted by around the middle of this year,” Sueta said in a Jan. 30 interview in Tokyo. “They must review their NPI production for the latter half of this year.”
The forecast deficit represents 0.6 percent of global nickel production this year, and will help London Metal Exchange prices stabilize above the current level, he said. Output is forecast to expand 1.5 percent to 1.99 million tons.
Nickel advanced 9 percent last year, the most among the six main metals on the LME, as Indonesia, the world’s biggest producer from mines, barred unprocessed ore exports in January. The metal for delivery in three months on the LME rose 1.8 percent to $15,165 a ton on Jan. 30.
China’s production of nickel pig iron dropped 4.4 percent in 2014 as the nation mitigated the impact of the Indonesian ban by destocking ore inventories and raising imports from the Philippines, Sueta said.
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