London – The world’s biggest nickel producer, Norilsk Nickel, has warned that prices for the metal are unlikely to rise unless lossmaking producers start to shut mines and close production.
Up to a quarter of global nickel producing capacity needs to shut, Pavel Fedorov, vice-president of the company, said in an interview.
“If other producers are rational we shall see a market readjustment — but if other producers don’t behave rationally then prices will remain low until rational behaviour returns to the market,” he said.
Nickel, used to make stainless steel, has been one of the worst-hit commodities in the current downturn, because of weakening demand in China and excess supply.
Prices fell 40 per cent last year and about 70 per cent of global producers are estimated to be making a loss at current prices of $8,760 a tonne. A writedown at a nickel project helped contribute to a $5bn net loss last year for Swiss-based Glencore, one of the world’s largest commodities traders.
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