Nickel ends 2015 in short supply - Sumitomo

For the first time in five years, nickel will be in short supply in 2015, as Japan's largest nickel company, Sumitomo Metal Mining Co. predicts. Metal demand will outpace production by 12,000 tonnes throughout the year. The company foresees a marked drop in shipments from China, despite the fact that global nickel production last year had a surplus of 36,000 tonnes.

Sumitomo analysts expect global growth in nickel demand to slow to 4 percent in 2015 from 7.4 percent in 2014, as a sharp drop in oil prices has reduced stainless steel consumption by energy producers for pipes and tanks. Meanwhile, global nickel production is projected to increase by 1.5 percent during 2015 to 1.99 million tonnes. In addition, on the London Metal Exchange (LME), nickel for shipments three months later jumped 1.8 percent to $ 15,165 a tonne in early February.

According to Hiroshi Sueta, General Manager of Raw Material Sales, China's ore reserves are likely to be depleted by mid-2015. Chinese Nickel Pig Iron (NPI) could cut output 15 percent from last year to 365,000 tonnes in 2015, given that China's NPI had already cut output by 4.4 percent in 2014. After Indonesia imposed a ban on the export of unprocessed ore, China increased imports from the Philippines. In order to meet the rush demand, the country created large quantities of ore reserves, but they are not unlimited.