" Nickel 'well supported' at $25 000/t going forward" (Source: Mining Weekly)

By: Matthew Hill
Published: 4 Feb 08 - 19:24

The market for nickel, mainly used in stainless steel production, would support a price of $25 000/t going forward, VM Group CEO Jessica Cross said on Monday.

Mine supply problems, including increasing costs and start-up delays, boosted the price, but customers cut back use at higher levels.

"Figures suggest a fine supply/demand balance to support prices of $25 000/t, she told a mining conference in Cape Town.

This was after the shiny metal's price traded at levels above $50 000/t in 2007.

Chinese imports showed a 18% increase in 2007, Cross said.

In 2006, there was a supply deficit of 41 000 t, while 2007 saw the situation reversing to a 100 000-t surplus.

This was out of the year's total production of 1,45-million tons.

"There was evidence of a price response in the stainless steel industry," stated Cross.

However, the price should be stable at levels around $25 000/t.

"We are looking at a well-supported price of $25 000/t," she said, adding that there was the potential for price spikes to $40 000/t.