Sumimoto Metal Mining: Nickel Will Fall Into Deficit This Year

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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 5 years as supply from China drops.

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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% 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 told Mineweb in an interview in Tokyo. “They must review their NPI production for the latter half of this year.”

At $15,370 per metric ton, the spot price of nickel moved up 2.2% on Wednesday, February 4, making it the day’s biggest mover on the LME. On the LME, the nickel 3-month price increased 1.8% to $15,375 per metric ton. Following a couple days of improvement, the Indian nickel cash price weakened by 0.4%. Prices closed at INR 950.70 ($15.43) per kilogram.

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Chinese stainless steel prices were flat for the day. The price of Chinese ferro-chrome saw little movement at CNY 10,950 ($1,750) per metric ton. At CNY 82,000 ($13,108) per metric ton, the price of Chinese ferro-moly was essentially unchanged.

The Allegheny Ludlum 316 stainless surcharge was unchanged at $0.94 per pound. The price of Chinese 316 stainless coil saw little movement at CNY 23,700 ($3,789) per metric ton. For the fifth day in a row, the price of Chinese 304 stainless coil remained essentially flat at CNY 16,700 ($2,670) per metric ton. The price of Chinese 316 stainless steel scrap remained essentially flat at CNY 12,950 ($2,070) per metric ton. For the fifth consecutive day, the price of Chinese 304 stainless steel scrap held flat at CNY 9,350 ($1,495) per metric ton.

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