TOKYO -- The global nickel market will swing into a deficit this year for the first time since 2010 as Indonesia, the world’s biggest miner of the metal, bans ore shipments, according to Sumitomo Metal Mining Co.
Demand will exceed supply by 30,000 metric tons, compared with a January estimate for a 55,000-ton surplus, said Toru Higo, the general manager of nickel sales and raw materials at Japan’s biggest producer of the metal. The shortage was 63,000 tons in 2010, he said.
Nickel, used in corrosion resistance in stainless steel, has gained 31 percent this year, the most among the six base metals traded on the London Metal Exchange, and touched a 14- month high today. Demand may exceed supply as early as next quarter, OAO GMK Norilsk Nickel, the world’s biggest producer of the refined metal, said April 7.
“We underestimated the impact of Indonesia’s ban on global supplies in January,” Higo said in an interview yesterday in Tokyo. There were also unexpected output cuts by producers in China and Australia, while heavy rain in January reduced output at the company’s Taganito project in the Philippines, he said.
Indonesia banned shipments of raw ore in January in an effort to foster a domestic processing industry. Macquarie Group Ltd. said in a report this month that it sees a “small” deficit this year and “enormous deficits” from 2015 to 2018, on the assumption that the restriction remains in place.
The metal for delivery in three months on the LME climbed 1.4 percent to $18,169 a ton at 12:03 p.m. in Tokyo. The price earlier reached $18,260, the highest level since Feb. 18, 2013.
Barclays Plc raised its forecast for LME cash average prices to $16,661 a ton for 2014 from its previous estimate of $14,974. Goldman Sachs Group Inc. said nickel will average $17,500, up from its previous projection of $14,800.
China’s nickel output, including nickel pig iron made from low-grade ore, may fall 7.8 percent to 590,000 tons in 2014, while demand will probably grow 8.3 percent to 962,000 tons, Higo said. The country’s NPI output may decline 6.7 percent to 420,000 tons as Indonesia’s ban is expected to affect production from July, he said.
Editor : Muhammad Sarwani
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