In its latest commodities' report the Australian Bureau of Agricultural and Resource Economics (ABARE) predicts a continuing fall in nickel prices from the mid-May record of US$54,000/mt, with the average quotation level for the entire year of 2007 expected to be US$41,500/mt - i.e. 71 percent higher than the average 2006 level. According to ABARE, the strong rise in nickel prices in the first months of the current year was due to the gap between the growing demand for stainless steel (especially from China) and the inadequate levels of supply. ABARE expects this gap to diminish in 2008, due to the increases in supplies when new mines come on stream. As a result, quotations are expected to drop with an average quotation level of $35,000/mt forecast for 2008 - still very high compared to historical levels.
As regards world consumption levels of nickel, ABARE predicts that the figure for the whole of 2007 will see an increase of 4.3 percent compared to 2006, reaching 1,463,000 mt. In China alone, nickel consumption in 2007 is predicted to rise by 23 percent to 312,000 mt. As for 2008, an increase of 2.53 percent is predicted, representing a rise to a consumption figure of around 1,501,000 mt.
With regard to global production levels of refined nickel, ABARE forecasts a rise of six percent for the whole of 2007, reaching a total of 1,434,000 mt. New nickel mines currently being built are expected to come on stream in the second half of 2008: the predicted increase for the whole of 2008 is 4.78 percent, with total world output estimated at around 1,506,000 mt for the year.