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Ardent Listener
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 Posted - 08/21/2008 : 20:05:42
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Price drop triggers cut in nickel production
From the Star's wire services
London–Xstrata PLC said yesterday it has suspended its Falcondo ferronickel operations in the Dominican Republic after costs surged and metal prices plunged.
The suspension may last four months, said Zug, Switzerland-based Xstrata.
The operations produce 29,000 tonnes of nickel a year, equal to about 2 per cent of world primary nickel production.
Russia's Industrial Metallurgical also reduced output of the metal by as much as 40 per cent. Nickel rose as much as 4.4 per cent in London.
"The resumption of activities will be assessed based on market conditions, which are expected to improve towards the end of 2008," Ian Pearce, chief executive officer of Xstrata's nickel unit, said in a statement.
The cuts follow lost output this year from labour disputes and disruptions in Australia and South America. Nickel supply may match demand in 2008, instead of reaching a surplus as previously expected, London-based metals research company CRU said. There was a 96,000 tonne surplus last year.
Falcondo produces ferronickel, a combination of iron and nickel used by stainless-steel producers.
Moscow-based Industrial Metallurgical Holding, which produces about 5 per cent of Russia's total output of the steel-making ingredient, said present nickel prices make current production volume unprofitable.
Its cuts are indefinite and the volume will be restored when prices rise.
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Price drop triggers cut in nickel production
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