NEW YORK (Commodity Online): The increase in Nickel supply could be much lower than expected, says Societe Generale in a report.
“Given the potential for the new projects to be delayed, or operate below potential, we believe that the actual increase to nickel supply in 2012 will prove to be much less than currently envisaged”, the report says while adding that nickel production has been on a constant rise over the past year after Vale brought back its Canadian operations.
Meanwhile, Chinese Nickel Pig Iron (NPI) production has also risen significantly. “NPI output increased by over 50% last year to an estimated 260,000 mt. Vale reported a 35.1% increase to nickel production in 2011 to 242,000 mt as output rebounded at its Canadian operations”
A report by Barclays states that “there are good reasons to suggest that there is limited upside to prices, with some potential for further downward drift. Fundamentals are not supportive, given the big picture perspective of a market surplus developing this year, or perhaps more important in the short term, likely weaker imports into China”. The bank expects prices to average $19,250/tonne in Q1, 2012.