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Nickel In Balance, Russia Stopping Palladium Sales-Norilsk
May 19,2010 09:06CST
industry news

LONDON, May 18, 2010 (Dow Jones Commodities News via Comtex) -- Russian miner OAO Norilsk Nickel (GMKN.RS) said Tuesday that it expects the nickel market to remain well balanced in the coming years while the palladium market should shift to a deficit with a reduction in Russian stockpile sales.

Norilsk, the world's largest nickel producer, said nickel demand in 2010 should increase by about 10% while output will increase by less than that.

"The gap between growth rates of consumption and production might be covered from London Metal Exchange inventories and strategic metal reserves in China," Norilsk said.

In the long term it expects an annual nickel demand growth rate of 4% between 2011 and 2015 due to a recovery in stainless steel production, forecast to grow 15% in 2010.

The company said it doesn't expect many more palladium supplies coming from Russian government stockpiles between now and 2015.

"Supply from Russian government stockpiles assumed none," it said. "[There is] some evidence that these inventories could have declined to relatively low levels with limited influence on the palladium market in 2010."

In the longer term the company expects copper to be in a small deficit due to stable demand growth and a lack of new production capacity. For 2010 it forecasts the first half surplus to shift to a second-half small deficit.

The company is basing its 2010 production on an assumed nickel price of $20,000 a metric ton, copper at $7,100/ton, palladium at $450 a troy ounce and platinum at $1,600/oz.

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