The Nickel market, going weak this year, is likely to recover in 2009 due to the excess supply of nickel ore in 2008, low prices and the completion of new projects in 2009.
According to the International Nickel Study Group (INSG), the nickel market, which began 2008 extremely well but is currently facing weakening demand on account of falling production of stainless steel, is not expected to recover until 2009, as per the news published by miningweekly.
In 2007, primary refined nickel production was 1.43 Million Tones (Mt) that would probably decline to 1.41 Mt in 2008. A significant recovery of 1.55 Mt is anticipated in 2009 and this figure does not consist of any adjustment factor for probable disruptions in production. However, the global primary nickel consumption is likely to go up to 1.38 Mt in 2008 as compared to 1.31 Mt in 2007. Nickel consumption is expected to show a sluggish recovery in 2009 to reach 1.44 Mt.
The major reason that would lead to the recovery of nickel market is the oversupply of nickel ore in 2008 and the lower market prices. Also, constant growth of the Chinese stainless steel industry is likely to produce higher demands for Nickel Pig Iron (NPI).
Further, new projects with sophisticated equipments and processes would promote the competition in production costs, quality of products and the protection of environment in near future. Also, active international investment has protected the sufficient nickel ore supply.
Moreover, a significant growth in the production of nickel can be seen in coming times. This is evident from the fact that several nickel production projects are scheduled to be completed from the commencement of 2009 itself. Thus, in near future, global nickel production capacity will be able to match up with the growing demand of nickel worldwide.
According to a Research Analyst at RNCOS, “The illusion regarding worldwide growth of stainless steel manufacture is going to be broken. There is a robust outlook in the market that a depression in the production is prevailing since the second half of 2008. The market is expected to show reverse trend in the second half of 2009 only. As there are no signs of increase in demand for nickel from the stainless steel industry, the market would probably face even more pressure.”
Related Market Research Reports:
US Steel Industry Outlook
China Aluminium Market Analysis
UAE Steel Industry Analysis
