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| Large Nickel Projects Appear All Together With 12 Cases |
| = If All Projects Progress As Scheduled, Nickel May Become Over-Production In 2010 |
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In order to cope with the matters that nickel price has risen to a considerable extent and stainless steel production has been in the direction to expand, new nickel projects, currently appeared on the market, have come to 40 cases. Among these nickel projects, large new nickel projects in the western world, which once had the problems of financing and environmental assessment and were unable to ascertain a time to complete it, have now successively had bright prospects of these points and are expected to complete in the next 3 - 5 years. New nickel projects to complete during 2012 to 2013 are counted to be 12 cases as per the table attached hereto and the total amount to invest in the 12 nickel projects is estimated to exceed US$20 billion. Also, the capacity to produce nickel as of 2010 is anticipated to increase by 251,000 tons per annum and that as of 2013 is forecasted to increase by 457,000 tons per annum. According to an estimation by INSG ( The International Nickel Study Group ), the world situation of nickel in 2007 will be <> production : 1,570,000 tons against <> consumption : 1,470,000 tons. Therefore, at this stage, nickel supply turns to become an excess but LME nickel price ( US$14 per lb. ) has still remained on a very high level in comparison with nickel production cost at present. If the 12 new nickel projects appear at once and all together as scheduled, nickel will be inevitable to become an oversupply and the persons concerned in nickel have a view that, in case of nickel project, a delay of time to complete and a disorder of nickel production are unavoidable. Accordingly, these matters are supposed to become the factors to disturb nickel supply. The matter in question is how does nickel consumption move hereafter. Even if nickel consumption grows on the basis of 5% per annum, when all nickel projects start to operate in order as scheduled, nickel is anticipated to become a temporary oversupply. A scale of nickel production as of 2013 is estimated to be more than 2,000,000 tons per annum but nickel consumption at that time is thought to be 1,970,000 tons per annum as the maximum. At the Nickel Conference held in New Caledonia in spring of this year, Brooke Hunt released a forecast on supply and demand of nickel for a long period, saying that the world consumption of nickel in 2007 and the conning years will be <> 2007 : 1,452,000 tons, <> 2008 : 1,534,000 tons, <> 2009 : 1,608,000 tons, <> 2010 : 1,659,000 tons, and <> 2015 : 1,992,000 tons. This forecast of nickel consumption has been based on a growth rate of 4.8 - 5.8% per annum for the period of 2007 to 2009 and a growth rate on a level of 3% per annum for the years of 2010 and afterwards. In addition to new nickel projects in the western world, the nickel projects in Russia, China and Cuba have to be included in the map for nickel supply but the matter in question is how does nickel production in China move hereafter. As far as LME nickel price has been kept on a level of US$7 - 8 per lb., there is a strong view in the market that China will continue to import low grade nickel ore with large quantities from Philippines and Indonesia and to produce low nickel-contained materials ( ferro-nickel and nickel-contained pig iron ). If China imports 13 - 15 million tons per annum of low garde nickel ore ( corresponding to 200,000 tons of nickel content ) and continues to produce nickel-contained materials, it will be inevitable to put a certain impact on supply situation of nickel in the world. The reason is that China is estimated to consume 250,000 - 300,000 tons per annum of nickel and a majority of this nickel consumption in China is thought to be covered by nickel-contained materials to be produced from low grade nickel ore imported by them. For a reference, Norilsk Nickel of Russia has taken over in December of 2006 the Nickel Division of OMG of the USA and also acquired on the end June of 2007 LionOre of Canada. Accordingly, it is anticipated that Norilsk Nickel will exhibit an effect of nickel resources to be supplied by these acquired companies, causing to increase nickel production at Norilsk in 2007 - 2008 ( scheduled to produce 300,000 tons / year in 2007 ). Under the circumstances which new nickel projects have flooded as mentioned above, it is wondered whether these nickel projects to require a huge amount of investment are possible to commence its operations in order or not, and this matter is unavoidable to judge superiority or inferiority of an enterprise. Among the 12 new nickel projects, six nickel projects have been based on laterite ore ( limonite ore ) as raw material for nickel production. These nickel projects are large scale ones and also planned to introduce PAL method for nickel refining but this process has still had the part as not mastered yet, leaving some opaquenesses. While it has been understood that PAL method has been improved to a large extent and substantially perfected in comparison with the cases occurred in Western Australia for 2002 to 2003 ( two refineries were suspended to produce nickel ), large nickel projects normally incline to involve unstable factors for its materialization and this anxiety is unable to sweep off. Many of the nickel projects ( to produce ferro-nickel ) adopt the dry method for refining and introduce super large electric furnaces in order to reduce production cost. These applications are able to create substantial effects for reduction of production cost but also follow with risks. No.3 electric furnace installed at the plant of Antam in Indonesia continued to emerge with troubles. This electric furnace has the capacity to produce 10,000 tons per annum of nickel but had the troubles as mentioned above. It is planned to construct one large electric furnace with capacity to produce 30,000 tons per annum of nickel ( by Posco of South Korea ) and this project has been highly interested by the parties concerned. The matter to adopt copper cooler as main equipment for cooling has become popular and this application is supposed to be a key point for stable operations. |
| last modified : Wed 31 Oct, 2007 [11:15] |
