The TEX Report Topics < Ferro Alloys > Home
HOME >> Topics List >> September, 2008 >> 02 (Tue)
Nickel Supply Is Being Whirled In Minus Factors
= China Reduces To Produce Ni-Contained Pig Iron And Fe-Ni, Progresses Of New Nickel Projects Are Marked
The world production (supply ) of nickel had been on a favorable tone in the last 3 years but minus factors for this matter have been sporadically seen at present. Xstrata announced in late August that Falcondo, which is an affiliated company of Xstrata in Dominicana and produces ferro-nickel, has shut down the plant for 4 months. Consequently, Falcondo has to reduce their production of nickel in ferro-nickel by 10,000 tons per annum in 2008 (produced 29,000 tons in 2007). In Japan, Pacific Metals and Nippon Yakin Kogyo have been decreasing their production of nickel in ferro-nickel and, therefore, the output of nickel as a whole of Japan in the first half of 2008 came down to 32,000 tons on nickel content base. In view of this decline, the total quantity of nickel to be produced in Japan for the calendar year (January - December) of 2008 is anticipated to have a decrease of more than 5,000 tons in comparison with that (68,000 tons) produced in the preceding year of 2007. The Murrin Murrin nickel project in Western Australia has been influenced from late June by the reduced supply of natural gas, causing a decline of their nickel production.

More bigger impact than these decreased productions of nickel, putting on the world supply of nickel, is the fact that China is withdrawing from production of nickel-contained pig iron as this production is not profitable for producers. China imported 530,000 tons of nickel ore in July of 2008, having decreased to half of that imported in the previous month of June. It is also informed that approximately 8,000,000 tons of nickel ore already imported into China have been accumulated at ports. For a reference, China imported 15.60 million tons of nickel ore in the preceding year of 2007. It is supposed that China produced 70,000 - 80,000 tons of nickel in nickel-contained pig iron (including low grade ferro-nickel) in 2007, but their output in 2008 is thought to decrease to half of that in 2007.

In view of the fact that LME nickel prices once fell to a lower level than US$20,000 per ton, the parties concerned have been interested again in knowing the latest cost for nickel production, which is generally said to be expensive. According to the list compiled by an analyst, the plants to produce traditionally ferro-nickel by an expensive cost have existed in Macedonia,, Greece, Japan, Dominicana, Indonesia, and so on. However, many of these plants are being managed as state-owned enterprises and, therefore, their operations are not concerned with its profitability.

When LME nickel prices fall to a lower level than US$20,000 per ton, the production of nickel-contained pig iron in China turns to be not profitable but nickel producers in other countries than China have been still placed under the umbrella of higher nickel price. However, the factors to decrease nickel production are coming up to the surface with problems, which are difficulties in Japan to secure nickel ore, higher oil price in Dominicana, reduced supply of natural gas in Western Australia, and so on. Therefore, these problems are still not due to a profitability for nickel production and the nickel industry of the world has still held a margin to produce nickel.

According to the data compiled and released by Eramet of France, the total quantities of nickel produced in the world during 2005 to 2008 were on the way to continue an increase as follows ; <> 2005 : 1,283,000 tons, <> 2006 : 1,351,000 tons, <> 2007 : 1,436,000 tons and <> 2008 (estimated) : 1,455,000 tons. Also, according to a survey by INSG (The International Nickel Study Group), a balance on supply and demand of nickel in the world has come to an oversupply from an early part of 2007 and this aspect has been carried over to 2008 but the increased production of nickel-contained pig iron in China played the substantial role of an oversupply of nickel.

The plans, which will play the remarkable role of increasing nickel supply in 2009, are the project by Posco of South Korea (to produce 30,000 tons / year of nickel in ferro-nickel), the Goro project in New Caledonia to produce nickel metal and the Onca Puma project in Brazil to produce ferro-nickel. Posco of South Korea completed to construct new plant in the site of their Kwangyang Steel Works for production of ferro-nickel and is scheduled to perform the first tapping on the end September of 2008. The ceremony to celebrate this completion of new plant will be taken place on the 3rd November of 2008, inviting Mr. Paul Neaotyine, Chairman of Northern Province Assembly, and other executives from New Caledonia as the country to supply nickel ore for Posco. The commissioning of a large electric furnace will be carefully treated and, therefore, the matter to produce ferro-nickel on a full scale of 30,000 tons per annum of nickel content is anticipated to start from autumn of 2009.

On the other hand, Vale-Inco has been proceeding the two nickel projects and one of them is the Onca Puma project in Brazil, which is planned to produce 58,000 tons per annum of nickel in ferro-nickel, and new plant is scheduled to be commissioned in July - September quarter of 2008 to start production of ferro-nickel in the first half of 2009.

Also, the Goro nickel project in New Caledonia has nearly completed, excluding pipe line to build on sea, and the capacity is to produce 60,000 tons per annum of nickel metal as a power to increase the nickel supply in 2009. According to an announcement so far made by Vale, the work to construct all facilities for this project is expected to complete by the end of 2008.

However, New Caledonia has been officially nominated in mid July of 2008 by UNESCO as the World Heritage. Among the lagoon of 25,000 square meters spread over the whole land of New Caledonia. the part of 15,000 square meters has been approved as the World Heritage. Even nickel production has closely related with this nomination. The Poom area of Northern Province and the Goro area of Southern Province have been included in the zone of the World Heritage as nominated by UNESCO. This nomination is a factor to create a stir in the nickel production of New Caledonia.

The Poom area is the neighboring place to the Tiebaghi nickel mine possessed by Eramet of France and the Goro area is the place to develop a large nickel project as mentioned above. According to an information from New Caledonia, the parties concerned said that, in the course of the investigation performed by UNESCO, a full explanation of the circumstances of lagoon, neighboring to nickel mine and nickel refinery, was delivered with necessary data and, consequently, an approval of the World Heritage has been granted to New Caledonia.

The problem of workers has been still left in the Goro nickel project as a potential subject. The workers, who had been engaged in construction of plant, once exceeded 5,000 employees in a peak time, including 4,500 workers from Philippines, but a majority of these Philippine workers already returned to their country, when the construction approached its completion. The remaining workers are Kanak (New Caledonians) and 1,500 workers born in New Caledonia are negotiating with the operator of this project on a further job and an extension of period to work.

The countermeasures to treat waste water to arise from nickel production as announced in summer of 2007 by Vale-Inco are (1) sewage disposal is implemented in Havannal waterway by means of abandoning in sea, (2) this sewage disposal has to be finally confirmed by having cleared the severe standard as stipulated by the Government of France and the Government of Southern Province of New Caledonia, (3) treatment of manganese will confirm its final content by using lime and, in advance of sewage disposal by abandonment into sea, manganese is diluted in order to measure exact content of manganese, and (4) 200 holes are drilled in the place, where has a distance of 4 kilometers from the shoreline and located 35 meters below the surface of the water, to abandon sewage.

The investigation to approve as the World Heritage was cleared by cautious arrangements but, when the Goro project starts nickel production from January - March quarter of 2009 as planned by Vale-Inco, the world supply of nickel in 2009 will be loosened by this new production of nickel and further developments of this nickel project in the next several months left in 2008 are marked.

In view of large nickel projects scheduled to be commissioned in 2009, nickel price has been influenced by an increase of the supply. However, large projects will frequently have the factors to make troubles in time of start-up and, therefore, it is thought to be necessary to have a careful way of looking at the pressure on nickel supply to generate as calculated.
last modified : Fri 05 Sep, 2008 [11:12]
Copyright (C) 2004 The TEX Report Ltd. All Rights Reserved.