Global nickel consumption is forecast to increase to around 1.3 Mt in calendar 2010, reflecting an expected rapid recovery in consumption in Asia and forecast moderate growth in Europe and North and South America, according to market analyst group Intierra. Addressing the Paydirt 2010 Australian Nickel Conference in Perth, Intierra Resource Intelligence’s Commercial Director, Gregory Kay, said the modest 2010 growth outlook, compared to the 2009 result when world nickel consumption declined by an estimated 8% to 1.2 Mt.
“However, as a result of significant increases in nickel prices between mid-2003 and mid-2007, a number of stainless steel producers substituted other less expensive input materials such as manganese for nickel,” Kay said. Despite a significant decline in nickel prices, many stainless steel producers have not yet switched back to nickel in stainless steel production.
“If this trend continues in the short term, it could limit any significant nickel demand growth, particularly in OECD economies.” Hesaid nickel consumption in Japan, Chinese Taipei, the US and the EU declined by more than one-third, and world consumption fell by 25% in the first two months of 2009, compared with the same period in 2008.
Declining production of consumer durables, motor vehicles and industrial buildings contributed to lower stainless steel demand and falling stainless steel mill utilisation rates. Consumption also fell in China on a year on year basis, but by a comparatively moderate 7% over the same period.
“In some applications such as hot water services, the current low nickel price has resulted in some substitution back to nickeliferous stainless steel. However, in other applications, for example in cutlery, substitution is yet to happen.
“Consumption of nickel in developing Asia is expected to increase by around 10% in 2010, as economic growth recovers, particularly in applications where other grades of stainless steel are not as suitable such as in industrial kitchens.
On nickel mine production, the Intierra forecaster said that whilst rapid declines in world nickel prices hade made production at some mines uneconomic, the major nickel mines had maintained production from 2008 levels. All major nickel producers, including the Russian Federation, Canada, Australia, Indonesia and New Caledonia have been affected by the closure or downsizing of mining operations.
“In 2010, nickel mine production is expected to begin increasing in line with the forecast of a moderate rise in world prices. At these forecast prices, comparatively low cost mines are likely to begin restarting some or all of their capacity. As a result, production is forecast to increase by 6% to 1.4 Mt in 2010.
“Refined production this calendar year is forecast to increase by around 9% to 1.3 Mt, as higher prices are expected to encourage higher outputs.” Refined nickel production in Australia is expected to increase by 5% to around 110,000 t. Kay said that despite mine closures, current rates of production of nickel ores and concentrates are expected to be sufficient to meet this forecast increase in production.
At the same event, the global nickel lobby said the metal’s position as the world’s fourth largest and most innovative metal and major consumer product has reinforced its contribution to a sustainable future and should not be derailed by charges against it of toxicity in the workplace. Brussels-based Nickel Institute President, Stephen Barnett, said the industry had disputed and would continue to dispute any moves to classify soluable nickel compounds based on their carcinogen ratings.
“A major animal study with nickel metal powder completed in 2008 showed no respiratory cancer after 24-months exposure to 1.6 MMAD nickel particles,” Barnett said. “An earlier but major oral carcinogenicity study with nickel sulphate hexahydrate did not show any systemic carcinogenicity.
“We will continue to oppose any such negative classification for any nickel compounds where not supported by sound scientific data. There is inconsistent human refinery data and negative animal and mechanistic data. In terms of toxicological relevance, there are very strict safe work guidelines in place for mining and processing operations, particularly in relation to inhalation and to a lesser extent, skin contact.”
Barnett said nickel remained an exceptionally unique metal, with more than 60% of output now being consumed in stainless steel production, and corrosion and heat resisting alloy applications.
“It is fundamental to componentry in the power, chemical and petrochemical sectors, LNG tankage, electroplating, in superalloys in turbines, has contributed to aircraft fuel reduction, and is even used in sunglasses and earthquake protection measures,” he said. Nickel also has high intrinsic scrap value as most nickel-containing products have a long life, and 80% of such products in the European Union are collected and recycled at their end-of life.”