A global nickel surplus may soar in 2012 to the highest in four years as Europe’s debt crisis and a sluggish U.S. economy cuts demand, said Japan’s top producer.
Supply will likely exceed demand by 54,000 metric tons in 2012, the biggest surplus since 2008, said Toru Higo, Sumitomo Metal Mining Co.’s general manager of nickel sales and raw materials. Demand outstripped supply by 63,000 tons last year, the first deficit since 2006, before moving to a surplus of 11,000 tons this year, Higo said.
Prices of the metal, used for corrosion resistance in stainless steel, have fallen 25 percent this year, making it the worst performing base metal on the London Metal Exchange. The global surplus will increase to 70,000 tons in 2012 from 30,000 tons in 2011, according to theInternational Nickel Study Group. Barclays Capital expects a surplus next year, analyst Gayle Berry said on Nov. 11.
“Demand growth may slow following Europe’s debt crisis and a slowing U.S. economy,” Higo said in an interview on Nov. 11. This year’s surplus forecast was revised down from an earlier estimate of 20,000 tons in July because of delays and maintenance at major producers this year.
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