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"There seems to be no relief for nickel producers following the release of a study by International Nickel Study which predicts a global production dec..."
There seems to be no relief for nickel producers following the release of a study by International Nickel Study which predicts a global production decline of 9.3% to 1,26-million tons in 2009 due to depressed pricing for the commodity.
The news definately will not provide any relief to local producer Bindura Nickel Corporation (BNC) which has already published two cautionary statements to its shareholders regarding the impact of the current pricing to its operations.
The projected decline follows previous years figures were nickel production slid 2,1%, to 1,39-million tons, compared with 1,42-million tons in 2007.
The 2009 figure does not include any adjustment figure for possible production disruptions, the study group said.
Nickel consumption fell 1,5% last year, to 1,29-million tons, and is expected to decline to 1,18-million tons in 2009.
This would result in a market surplus of around 80 000 t.
In October, the study group said it expected a refined nickel surplus of some 110 000 t, but the difference between supply and demand has been narrowed after nickel miners responded to weak prices and demand by curtailing production at mines around the world.
World primary nickel usage in 2008 started strongly, but as the global economic crisis unfolded, including tightening of credit facilities resulting in lower nickel prices, demand and production of stainless steel declined from the middle of the year, the study group said.
Nickel traded above $22/lb in 2007 but has since fallen sharply, to around $5/lb, after slowing global economic activity dampened demand for the metal, which is used to make stainless steel.
“It remains unlikely that any substantial improvement will take place this year. No recovery in primary nickel demand and stainless steel production is anticipated until at least the second half of 2009,” the INSG forecast.
The current global economic crisis has created “a large degree of uncertainty” and its impacts on both the supply and demand for nickel are not fully known, the group said.
“The study group cautions that future market developments could significantly alter the forward-looking market balance.
BNC meanwhile traded firmer putting on US 1c to close yesterdays trade at US$ 9C
(13%) to US 9c.
The news definately will not provide any relief to local producer Bindura Nickel Corporation (BNC) which has already published two cautionary statements to its shareholders regarding the impact of the current pricing to its operations.
The projected decline follows previous years figures were nickel production slid 2,1%, to 1,39-million tons, compared with 1,42-million tons in 2007.
The 2009 figure does not include any adjustment figure for possible production disruptions, the study group said.
Nickel consumption fell 1,5% last year, to 1,29-million tons, and is expected to decline to 1,18-million tons in 2009.
This would result in a market surplus of around 80 000 t.
In October, the study group said it expected a refined nickel surplus of some 110 000 t, but the difference between supply and demand has been narrowed after nickel miners responded to weak prices and demand by curtailing production at mines around the world.
World primary nickel usage in 2008 started strongly, but as the global economic crisis unfolded, including tightening of credit facilities resulting in lower nickel prices, demand and production of stainless steel declined from the middle of the year, the study group said.
Nickel traded above $22/lb in 2007 but has since fallen sharply, to around $5/lb, after slowing global economic activity dampened demand for the metal, which is used to make stainless steel.
“It remains unlikely that any substantial improvement will take place this year. No recovery in primary nickel demand and stainless steel production is anticipated until at least the second half of 2009,” the INSG forecast.
The current global economic crisis has created “a large degree of uncertainty” and its impacts on both the supply and demand for nickel are not fully known, the group said.
“The study group cautions that future market developments could significantly alter the forward-looking market balance.
BNC meanwhile traded firmer putting on US 1c to close yesterdays trade at US$ 9C
(13%) to US 9c.
