TORONTO The global nickel
market should move back into a supply deficit after 2015 due to
a lack of new mining projects coming online, attendees at the
International Nickel Conference of AMM sister publication Metal
Bulletin were told.
Dmitry Kuznetsov, chief analyst
at Russias MMC Norilsk Nickel, estimated the global
nickel surplus at 72,000 tonnes this year, with the trend
likely to tail off in the third and fourth quarters.
Nickel consumption in the
Americas will increase by 3,000 tonnes to 183,000 tonnes in
2013, with China accounting for 47 percent of that total, he
said at the Toronto event.
"That growth is continuing and
continuing and continuing, and hopefully will not end,"
However, Jerome Baudelet, market
research analyst at Frances Eramet SA, estimated the
surplus at only 48,000 tonnes in 2013, down from
71,000 tonnes in 2012.
London Metal Exchange stocks
will total 14.3 weeks of consumption in 2013, which is
"not as bad as it looks," he said.
"Some stocks are in warehouses
where you cant get them out. There is high inventory, but
not everything is readily available," Baudelet said. "Not one
of my customers are carrying more than one week of
Inventories in LME-listed
warehouses totaled 175,566 tonnes April 25 with facilities
in Rotterdam, the Netherlands, holding over 71,000 tonnes
and those in Johor, Malaysia, holding more than 46,000
The global supply picture is
also likely to change in a matter of years, Baudelet said.
"After a wave of new production
projects coming online up to 2015, there is nothing coming. So
there is a potential deficit of supply," he said.
Such a deficit is likely to give
strong support to pricing, Macquarie Bank Ltd. head of
commodities research Jim Lennon said.
"Growing deficits by mid-decade
will lead to a need for new capacity, which could push prices
above $10 per pound," he said.
The London Metal Exchanges
three-month nickel price closed the official session at $15,255
per tonne ($6.92 per pound) April 30.
While the cyclical nature of the
industry means that the current lull in pricing is unlikely to
continue for the long term, Baudelet estimated that one-third
of nickel produced at current LME prices is sold at a loss or
He also noted that the stainless
steel industry is experiencing a global surplus of capacity,
estimated at 17.2 million tonnes in 2012.
"One of our major concerns as a
producer is that we are supplying an industry in overcapacity
and losing money," Baudelet said.