Sumitomo Metal Mining Co. Ltd expects a global surplus in nickel in 2008 of 26,000tns, citing a slow recovery in stainless steel demand. Sumitomo said that production of nickel, which is used to add strength and sheen to stainless steel, is expected to amount to about 1.38 million tonnes, up by about 2.8% YoY from 2007. Consumption in 2008 is expected to total about 1.35 million tonnes, up by 5.1% YoY. Sumitomo revised down its production estimate due to a reduction in production at various smelters. This includes the shutdown of BHP Billiton Ltd’s 100,000tpy Kalgoorlie smelter in Australia for four months for repairs. Most recently China’s top nickel producer, Jinchuan Group Ltd, cut its annual production target by 10,000 to 20,000tns, down from an earlier plan of 120,000tns, due to delays to a new smelter among other reasons. Meanwhile, Sumitomo Metal also said it expects the 60,000tpy Goro nickel project in New Caledonia to begin production in the fourth quarter of this year as scheduled. The target for full production at Goro is 3 years. Sumitomo Metal and Mitsui & Co. together own a combined 21% stake in Goro.
