Nickel market may swing into deficit

Sumitomo Metal Mining Co. has predicted that the nickel market may swing into a greater deficit than expected in 2010 because of supply disruptions and greater Chinese demand, which could boost prices. Mr Toru Higo GM of Sumitomo Metal’s nickel sales and raw material department said that world demand may exceed supply by 40,000tns in 2010, up from the company’s forecast in April 2010 of 36,000tns. He added that this would be the first deficit since 2006, after a surplus of 27,000tns in 2009. The price of nickel has tumbled 28% to USD 19,550 a tonne after touching a two year high on 16 April 2010, as concern that Europe’s debt crisis and Chinese steps to curb property prices will hurt global growth, reducing demand for stainless steel in homes and buildings. About two thirds of nickel production is used to increase corrosion resistance in stainless steel.

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