Nickel Shortage Limits Stainless Steel Growth General News - 2004 December 8 A shortage of nickel will limit production from stainless steel mills in the coming decade, said London-based industry consultant Andrew Mitchell at Mining Journal's Nickel Conference in London.
Nickel demand will exceed production by 29,000 metric tons this year, said Mitchell, a consultant at the Addlestone, England based company. The deficit will narrow to 2,000 tons next year as more stainless steel scrap becomes available before widening to 16,000 tons in 2006 as new mills start in China and Finland.
Stainless steel production may only increase by 3.5 percent a year until 2010 amid a lack of raw material. Some producers may produce Series 200 stainless steel, which contain less nickel than traditional austenitic grades of stainless.
This substitution is unlikely to lower nickel prices as the markets will still remain in deficit because consumers in the U.S. and Europe prefer higher quality products that stay rustproof longer, Mitchell said.
"There really is a need for a lot more nickel," he said. BHP Billiton Plc, the world's largest mining company, and Toronto-based Inco Ltd., are building new mines in New Caledonia, Canada and Australia to meet the shortfall of metal.
Norilsk Nickel, the world's largest nickel producer, can only boost production from the Taimyr Peninsula by around 48,000 tons in 2008, Mitchell said.
This may not be enough to meet the shortfall, he said. Norilsk last year sold a 60,000 ton stockpile used as collateral against a loan to the market to ease the deficit.
"We don't think Norilsk is sitting on this kind of tonnage anymore" Mitchell said.
