Nickel market unlikely to recover until well into 2009
October 17th, 2008 | by mantrionline |The International Nickel Study Group (INSG) says that the nickel market, which started 2008 on a high note but has experienced softening demand since the middle of this year as stainless steel production declined, is unlikely to see an improvement until well into 2009.
World primary refined nickel production was 1,43-million tons (Mt) in 2007, and is expected to decline to 1,41 Mt in 2008. A “substantial” recovery to 1,55 Mt is expected in 2009, and this tonnage does not include any adjustment factor for possible production disruptions.
However, world primary nickel consumption is expected to increase to 1,38 Mt this year compared with 1,31 Mt in 2007. A slow recovery of nickel con-sumption to 1,44 Mt is expected in 2009. The group says that most of this con-sumption will occur in Asia, and that, as in the last few years, the key factor in the 2009 forecast remains the increase in demand from China for nickel and nickel-containing products.
Chinese stainless steel producer Tsing-shan Holdings Group (THG) president-general Jiang Xinfang said that nickel ore imports dramatically increased in China for the first half of 2007 stimulated by high nickel prices and the nickel pig iron (NPI) production boom, but then declined until the end of that year.
Speaking at the INSG meeting, in Portugal, earlier in the month, he said that the slight recovery of the nickel price in the first quarter of this year created a high expectation, and excessive importation occurred in the second quarter. Total imports in China reached 9 150 000 t in July this year, and nickel ore, coke and electricity supplies were the main factors influencing NPI production costs.
“Nickel ore will be in oversupply in 2008, and market prices will be kept at low levels. “The consistent growth of the Chinese stainless steel industry will create a promising demand for NPI, and new projects with advanced equipment and processes will ensure the competitiveness of production costs, product quality and environmental protection in the future. “There is sufficient nickel ore supply, which has been secured through active international investment,” said Jiang.
The meeting, attended by more than 70 government and industry representatives from across the globe, stressed that, as a result of the current economic challenges, it was necessary for industry to “be care-ful” with regard to nickel production and consumption.
