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| Reduction In Nickel Production For First Half / 09 Permeated Into Market On Worldwide Scale |
| = Sudden Increase Of Nickel Demand From China Became Factor To Relieve Nickel Price |
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In view of the facts that nickel producers in the Western Countries reduced their nickel production by 13,000 tons in total for the first half (January - June) of 2009 and also Russian producers reduced their nickel production for the same period, a reduction in nickel production for the first half of 2009 permeated accordingly into the markets on the worldwide scale. According to a survey made by our company, in the first half of 2009, the Western World produced 420,700 tons of nickel and the Eastern Block, including such countries as China, Russia, and so on, produced 246,000 tons of nickel, having totaled to 667,000 tons which had an increase of 5.7% (or 40,000 tons) compared with that (707,000 tons) in the same period of 2008. Almost of major nickel producers in the Western Countries, such as Xstrata, Eramet, AAC, and so on, reduced their nickel production in the first half of 2009 and, owing to a depression of domestic demand for nickel, nickel producers in Japan also reduced their nickel production in the same period. However, in preparation for summer holidays continued for 8 weeks from June, Vale-Inco increased in advance their nickel production and, in addition, SNNC, which is a joint venture company established by SMSP of New Caledonia and Posco of South Korea to produce ferro-nickel at the Gwangyang refinery in South Korea, commenced its operation from October of 2008, resulting in net increase of nickel supply. Furthermore, BHP Billiton increased their nickel production in the first half of 2009. Consequently, these increases in nickel production had sporadically diluted an effect of the decreased nickel production at major producers. There was an opinion in the market at the beginning of this year that, in order to cope with a substantial reduction in production of stainless steel, the world output of nickel in 2009 would be decreased by a scale of 200,000 tons on an annualized base, but the reality to reduce nickel production in the first half of 2009 was not so large as anticipated. The reason was due to an effect brought in from China. Namely, the unexpected circumstances, which China extraordinarily imported nickel after Lunar New Year was over, caused a temporary surge of nickel demand from China. China imported 180,000 tons of nickel (including 100,000 tons of nickel metal) in the first half of 2009 and these active imports of nickel by China had revived the nickel market in the Western World. An evidence of this aspect was that ferro-nickel was under the state to be an oversupply until the end of 2008 but the business to export ferro-nickel for China with substantial quantities had caused to revive the market of ferro-nickel. The price of ferro-nickel contracted with Chinese customers from the end of 2008 to the beginning of 2009 was on the level, corresponding to 98% of LME nickel price, as discounted somewhat but this price level has been improved from spring of this year. At present, ferro-nickel has been sold out up to shipments within. 2009. It was viewed at the beginning of this year that, owing to a considerable reduction in production of stainless steel, the quantity of nickel to be produced in Japan for 2009 was anticipated to decrease to half of normal output. However, by means of shifting a 60% of nickel production in Japan to the exports for China, Japan was able to shrink an extent of the reduction in nickel production. In relation to national finance, it is difficult for the Eastern Countries to decrease their nickel production and, therefore, their nickel has been formed with the nature of national product but Norilsk Nickel of Russia has determined to reduce their nickel production. In addition, the Government of Russia has enforced from January of 2009 to revoke the duty of 10% imposed on export of Russian nickel (the duty on nickel export is nil at present) in order to maintain nickel production in Russia and nickel exports from Russia. In expectation of the case, which China will produce more than 8.00 million tons per annum of crude stainless steel in 2009 (compared to 6.94 million tons produced in 20008), the demand for nickel from China, including speculative imports, in the first half of 2009 had expanded considerably. Among the cargoes of nickel imported into China in the first half of 2009, about 100,000 tons of nickel are estimated to have been stocked in distribution sector. The production of nickel-contained pig iron in China, which has been known as wild card, had been on a low level in the first half of 2009 but, in anticipation of a revival of this production from the second half, China is supposed to be able to produce nickel-contained pig iron on a scale of 70,000 - 80,000 tons per annum on nickel content base in the calendar year (January - December) of 2009. China has been rather suffering from the difficulties to secure nickel ore as raw material. Jinchuan Group decreased their nickel production in 2008 but has currently planned to increase their nickel production in 2009 and, accordingly, the output of nickel in China for the second half of 2009 is anticipated to increase in comparison with that for the same period of 2008. The active production of stainless steel in China had caused to surge the demand for nickel to import into China and this substantial requirement of nickel from China had resulted in having diluted an oversupply of nickel in the world by 60,000 tons at least in the first half of 2009. However, the matter in question is how long does this stable activity of nickel production in China, based mainly on an expansion of demand for stainless steel, last hereafter. Many of the parties concerned have wondered a continuity of nickel production for a long period. Under the present situation, reflecting the active exports of stainless steel products for China, stainless steel mills in South Korea, Taiwan and Japan have revived their operations but a continuity of this favorable tone on production of stainless steel in these three countries has been questioned. The quantities (on nickel content base) of nickel produced in the Western and Eastern Countries for the first half (January - June) of 2009 were as per the tables shown below ; |
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| last modified : Tue 01 Sep, 2009 [10:44] |
