Japan’s major ferronickel producer, Pacific Metals Co., has been negotiating with one of its major nickel concentrate suppliers, New Caledonia’s Societe Minere du Sud Pacifique (SMSP), to obtain a resumption of concentrate shipment that has been halted since the beginning of this year. Despite a 10-year supply contract signed in 1997 with Pacific Metals, SMSP has stopped concentrate shipment at its own will, reasoning that it planned to increase local production of ferronickel and nickel metal in the near future. Pacific Metals had received about 1 million tons of nickel concentrates annually from SMSP for the past three years. Although Pacific Metals has secured alternative nickel concentrate shipments from other suppliers in New Caledonia, the Philippines and Indonesia, it has failed to cover all the lost shipment from SMSP. As a result, the company cut its planned ferronickel production for fiscal 2001-02 (April-March) by 16% to 35,000 tonne of nickel in ferronickel from the previous year’s level. “Although we believe we can resume concentrate purchase from SMSP, we have currently no idea about nickel concentrate shipment from the company in fiscal 2002-03, ” the official said. Ferro-nickel is used in stainless steel production. Despite the output cut, Pacific Metals has been fulfilling its shipments to clients, stainless steel makers, in Japan and other Asian countries. Demand for ferronickel has remained weak since late 2000 due to slowed production of stainless steel, the official added. Pacific Metals produced 41,500 tonnes of nickel in ferro-nickel in fiscal 2000-01, according to the company’s financial report.
