Ni Oversupply to Narrow to 39,000T in 2009: Sumitomo Metal Mining

Sumitomo Metal Mining forecasts 39,000 tonnes of nickel oversupply in the world market for 2009, which decreases from 66,000 tonnes for 2008. The nickel consumption would increase by 2.2% to 1.318 million tonnes for 2009 from 2008. However, the firm forecasts the supply would exceed the demand for 3 years in a row when some smelters including Sumitomo Metal Mining start the new facilities and the production would stay at 1.357 million tonnes as same as for 2008.

The major smelters in the world progress the inventory adjustment. The output reduction by Vale Inco, the largest nickel producer, totals at 32,000 tonnes as a result of the production cut at Sudbury in Canada, PT Inco in Indonesia and postpone of operation at On?a Puma in Brasil, which was originally planned to start from January 2009. Norlisk Nickel of Russia cut overseas production while the firm keeps the domestic operation.

On the other hand, Sumitomo Metal Mining started the second High Pressure Acid Leach plant at Coral Bay Nickel, Philippines. The capacity increased to 22,000 tonnes per year from 10,000 tonnes and plans 17,000 tonnes of production for 2009. New projects of Vale Inco and POSCO also increase the production.

World nickel consumption declined by 6.3% to 1.289 million tonnes for 2008 from 2007 due to the economy slump. Forecasted consumption for 2009 would be less than the demand for 2007 though it showed year-to-year increase when the production of stainless steel, which accounts for two-thirds of nickel application, remains low.