World nickel deficit at 85,000 t in 2010- Macquarie

By Svetlana Kovalyova
ROME, Sept 8 (Reuters) - Global metals markets are expected to have a nickel deficit of about 85,000 tonnes this year and return to a demand/supply balance from next
year due to new capacity coming on stream, a leading analyst said on Wednesday.
Global nickel demand is estimated at about 1.4 million tonnes this year, Jim Lennon, executive director of commodities and mining research at Macquarie Securities told
an international conference on stainless steel.
Lennon said he expected nickel prices to average at about $20,000 per tonne this and next year, and stay in a range of between $15,000 and $20,000 a tonne in the next three
to seven years depending on new capacity starting up.The price of nickel reached this year's high of $27,290 per tonne in April, but has since slipped to around $22,000 a
tonne.
About 0.5 million tonnes of new nickel production capacity is due to come on stream from now to 2015 due to $25 billion investments in the industry, according to Macquarie
estimates.
Lennon said global nickel demand would have been some 350,000 tonnes higher this year if not for a substitution of the metal with other materials, which was caused by tight
supplies and high price volatility. Increased nickel production capacity in the next five years should ease substitution pressure in the stainless steel industry,
a major consumer of nickel, he said.

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Jim Lennon is speaking at the 4th New Caledonia Nickel Conference
in Noumea on 15-19 November 2010.