Market and product
Major nickel market developments in July 2010
Independent consultant Mr Angus MacMillan said that "Stocks are comfortable and stainless production has not been performing that well in the second half of the year." He added that USD 15,000 a tonne was an obvious target for prices before the end of 2008.
The London Metal Exchange three months nickel price was last indicated at USD 18,650 to USD 18,850 a tonne. Prices jumped sharply as funds covered their short positions, bets on lower prices.
In its latest report, Standard Chartered said that the market should be helped by output cuts by high cost nickel pig iron producers due to tumbling prices. But nickel was expected to head lower again longer term.
Another analyst expected a recovery in prices to USD 20,000 to USD 21,000 a tonne by October 2010, boosted by improvements in the main stainless consuming markets in Asia and Europe.
Updates on production:
July 31st 2010 - Shareholders of PT International Nickel Indonesia have approved a sharply higher cost estimate for a planned hydro electric power plant, the company said. Inco has revised the cost estimate to build the Karebbe dam to USD 410 million from an initial estimate of USD 275 to USD 280 million. The dam, which is expected to start operating in the first half of 2011, will help boost the company's production to about 200 million pounds of nickel in matte annually. The company is 61% owned by Brazil's Vale.
July 31st 2010 - Australia's Albidon Limited said it plans to expand its concentrator at its Zambia nickel mine after it is fully commissioned in 2009. The company said it intended to expand the concentrator to 1.2 million tonnes per year from 900,000 tonnes per year to achieve nickel output of 10,000 tonnes per year.
July 30th 2010 - Russia's Ufaleynickel said it has temporarily suspended production from July 28 to August 6 to repair its equipment. The company did not say if output would be affected. In May, the company said it aimed to produce 14,000 to 16,000 tonnes of nickel in 2088 compared with 14,144 tonnes in 2009.
July 30th 2010 - Australia based Mirabela said it would increase the size of its Santa Rita nickel mine under development in Brazil to yield 40% more nickel after it starts up next year. Under the plan, the crushing capacity of the ore treatment plant will be increased to 6.4 million tonnes per annum.
July 29th 2010 - China has signed a production sharing deal for a nickel venture in northern Myanmar, but gave no details on the size of the investment or China's stake. The agreement between the China Non Ferrous Metal Group Company Limited and the state run No 3 Myanmar Mining Enterprise covers nickel production from the Tabeikkyin area of Mandalay division. It was not clear if the deal was the same as a USD 600 million nickel project suspended late last year amid political unrest and disagreement over the size of the government's stake.
July 25th 2010 - Pacific Metals Co Limited said it has resumed operations at its 40,000 tonnes per year Hachinohe ferronickel plant in northern Japan after an inspection following a strong earthquake in the region.
July 24th 2010 - Mirabela said it will start nickel production at its Santa Rita mine in Brazil by mid 2009. The firm made a deal this month to sell half of the mine's nickel concentrate output to Brazil's Votorantim Metais Niquel SA for five years and said it is in advanced negotiations to sell the rest to Norilsk Nickel.
July 18th 2010 - The Philippines' Berong Nickel Corporation is in talks to double its long term annual supply deal with BHP Billiton to 1 million tonnes of laterite nickel ore beginning March.
Updates on prices:
Concerns for weak demand from the key stainless steel industry weighed on nickel prices in July. The three months price ended the month at USD 18,499 a tonne, down from USD 21,905 a month earlier.
Prices rose to USD 22,599 early on, but it was downhill after that and on Wednesday they were trading around their lowest since June 2006.
In July 2010, the twice yearly Reuters base metals price poll put the median average for the LME cash nickel price MNI0 at USD 25,500 a tonne in 2008 and USD 23,000 in 2009.
A January poll generated forecasts of USD 28,660 and USD 25,000 a tonne in 2008 and 2009 respectively. In 2007 the price averaged over USD 36,000 a tonne.
Updates on stocks:
LME nickel stocks edged lower again in July to end the month at 44,442 tonnes as compared with 46,692 tonnes at the end of June. Inventories are still not far off their highest levels in over eight years. In February 2007 they were around their lowest since 1991.
(Sourced from www.reuters.com)
