Nickel prices forecast to surge on strong demand, tight supply
Source: Hoovers
metalsplace.com
World nickel prices are forecast to rise 52% on year to an average of $36,750 a metric ton in 2007 on demand growth and supply constraints, a report by the state-run Australian Bureau of Agricultural & Resource Economics, or Abare, said Tuesday.
The report added that even in 2008, prices may remain high, despite some slowing in demand and some increase in mine output, as stocks would still remain low.
It added that world nickel consumption is forecast to rise 5% on year to 1.46 million tons in 2007, led by increased demand for stainless steel, especially in China and India.
Nickel is mainly used in the production of stainless steel.
On the supply side, the report notes that labor disputes in the nickel industry have been a common feature over the past few years and will remain that way, as high nickel prices strengthen the bargaining position of unions.
The report added that in the medium term, costs for producing nickel would remain high on increasing extraction of nickel from laterite ore, which is more expensive than producing nickel from sulfide ore.
Around 72% of the world's nickel deposits are held in laterite deposits.
Turning to Australia, Abare said mine production of nickel is expected to increase by 36,000 tons in the fiscal year ending June 30, on the back of a range of mining projects. |
