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World Production Of Nickel In First Half 2008 Decreased By 3%
= Owing To Adjustment Of Full Production In 2007, Disordered Operations Of Electric Furnaces, And So On
According to the data surveyed and compiled by us - The Tex Report, the world production of nickel in the first half (January - June) of 2008 came to 710,000 tons, having decreased by approximately 3% compared with that (731,000 tons) in the same period of 2007. In consequence of that nickel production in the western world ran on a full scale in 2007, the necessity to implement maintenance emerged in the first half of 2008 and some plants were driven to reduce their nickel production. In addition, owing to an accident on energy supply in Western Australia and the strikes taken place, nickel production in the first half of 2008 was decreased. As regards nickel production in the eastern world, Jinchuan Nickel of China was unable to produce nickel as planned and also Chinese enterprises were obliged to reduce their production of nickel-contained pig iron as this production became unprofitable. Therefore, nickel production in the eastern world decreased by 1% in the first half of 2008 as a whole.

The quantities (on nickel content base) of nickel produced by each company of the world in the first half (January - June) of 2008 were as per the tables attached hereto.

According to the statistics compiled and released by ISSF (International Stainless Steel Forum), the world production of stainless steel in the first half of 2008 came to 14.77 million tons, which had a decrease of 1.8% compared to that in the same period of 2007. However, this decreased production of stainless steel in the first half of 2008 did not reflect a decline of nickel demand but was due to the situation of nickel production at each company.

In the course of nickel production for the first half of 2008, (1) Vale-Inco produced nickel on a full scale at the Voisey's Bay mine of Canada and, consequently, nickel output at this mine doubled, (2) BHP Billiton started to operate the Ravensthorpe nickel project of Western Australia from October - December quarter of 2007 and QNI completed an expansion of capacity to refine nickel from this project, and (3) Sherritt International of Canada commissioned the Moa Bay nickel project in Cuba from April - June quarter of 2008. The operations at these three projects caused to increase nickel production.

However, the movements to produce nickel in the western world had rather many cases to decrease than those to increase in the first half of 2008 and the negative cases were maintenances of electric furnaces and melting furnaces implemented in the period (at Nickel West / Australia of BHP Billiton, at SLN / New Caledonia of Eramet and at Antam / Indonesia). Because of a shortage of raw material and an aftereffect of the accident of electric furnace (the work to repair electric furnace installed at the Hachinohe plant of Pacific Metals took a long time), Japan produced 79,000 tons of nickel in the first half of 2008, having decreased by 6.4% compared with that in the same period of 2007.

An influence on nickel production emerged from an accident of gas supply occurred in June of 2008 has been rather carried over to the second half of 2008 and, in the same case as that of Cawse plant of Norilsk Nickel which was driven to suspend nickel production for a temporary time, nickel plants have been shut down for the time being. The bases to produce nickel in Western Australia, being operated by BHP Billiton. Murrin Murrin Project, and so on, have been affected by an accident of gas supply. Reflecting a change of seam to mine platinum (from Merensky ore body to UD-2 seam), the production of nickel as by-product from platinum has deepened a tendency to decrease and this aspect is anticipated to continue hereafter.

Owing to the strikes taken place, Cerro Matoso of BHP Billiton in Colombia decreased their nickel production in the first half of 2008 by 30% from that in the same period of 2007 and the plant of AAC in Venezuela also decreased their nickel production by 50% compared to that in the same period of 2007.

The matter to produce nickel in the eastern world has had certain changes. Norilsk Nickel of Russia has taken over and consolidated two nickel producers in the western world during a period of the end of 2006 to summer of 2007, having resulted in an increase of nickel production. The two divisions, which are proper producers of nickel in Russia and have been located in Polar and Kola areas, strengthened the lines to melt nickel and increased their nickel production. Norilsk Nickel is scheduled to produce 305,000 tons per annum of nickel in 2008 and will be able to keep the largest producer of nickel in the world.

On the other hand, Jinchuan Nickel, which is a major producer of nickel in China, retreated from the target to produce 120,000 tons per annum of nickel in 2008 and it was known that this Chinese producer is anticipated to shrink their nickel production in 2008 to a scale of 100,0000 - 110,000 tons per annum. In order to strengthen the division for copper production, nickel production at Jinchuan Nickel in the second half of 2008 is thought to have a considerable decrease. The production of stainless steel in China for 2008 is estimated to be 7.80 - 8.000 million tons, having put the brake on its growth, and the demand for nickel in 2008 as a whole of China is supposed to decrease to a scale of 345,000 tons per annum, which is a lower level than that initially planned. The business to produce nickel-contained pig iron in China had a boom during a period of the end of 2006 to 2007 but this production has turned to be not payable for cost from 2008 and, consequently, strengthened a tendency to shrink. Apart from this production in the first half of 2008, that in the second half will deepen a seriousness. The cost to produce nickel-contained pig iron in China is said to be US$10 per lb. of Ni for a steep rise of coke price and, in comparison with LME nickel price of US$7.586 per lb., the cost price of nickel-contained pig iron is entirely unprofitable for its production.

The plans to decrease nickel production in the second half of 2008 are still sporadically seen. Xstrata Nickel has shut down the Falcondo plant of Dominicana from September and will decrease their production of nickel in ferro-nickel for 4 months (to change the source to supply fuel to electric power generation plant). On the other hand, the factor to increase nickel production is the joint venture between Posco of South Korea and SMSP of New Caledonia, which is scheduled to perform the first tapping in the middle of October and has the capacity to produce 30,000 tons per annum of nickel in ferro-nickel at the plant constructed in Kwangyang Works of Posco.
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last modified : Fri 03 Oct, 2008 [14:40]
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