French miner Eramet said on Thursday that it estimates nickel ore stocks amounting to 8.5 million tonnes could be found in warehouses in Chinese ports because of poor profit margins to produce the metal.
Bertrand Madelin, managing director for Eramet's nickel division said: "At the price of today, a lot of nickel pig iron producers are not able to have good results."
Nickel pig iron is used to produce low-grade stainless steel.
Key three-month nickel on the London Metal Exchange MNI3 closed at $21,150 per tonne on Wednesday, down about 20 percent from the beginning of the year and down nearly 60 percent from a record high of $51,800 reached in May 2007.
"Today, we have more than 8.5 million tonnes of nickel ore in the harbours in China, which means we have 100,000 tonnes of nickel but it is only left in the harbour," he told reporters.
Nickel is essential in the production of stainless steel and other corrosion-resistant alloys.
At same news conference, Eramet Chief Executive Patrick Buffet said the company aims to boost its manganese ore production in Gabon to 4 million tonnes by 2010.
This is up 14 percent from its outlook to produce 3.5 million tonnes this year.
The company operates mines in New Caledonia, Gabon and Indonesia. Buffet also said that while Gabon would remain an important asset for the company where a lot of profitable work could still be done, the company was also looking elsewhere for future mining prospects.
He named South Africa, Australia and Namibia as possible candidates.
Eramet officials were in Tokyo for a regular visit to meet Japanese customers.
Source: Reuters
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