Norilsk Nickel: Lossmaking Miners Must Cut Nickel Output

The Financial Times reported that Pavel Fedorov, vice president of major nickel producer Norilsk Nickel (MCX:GMKN), has warned that nickel prices are unlikely to rise unless “lossmaking producers start to shut mines and close production.”
As quoted in the market news:

“If other producers are rational we shall see a market readjustment — but if other producers don’t behave rationally then prices will remain low until rational behaviour returns to the market,” he said.
Nickel, used to make stainless steel, has been one of the worst-hit commodities in the current downturn, because of weakening demand in China and excess supply.

Prices fell 40 per cent last year and about 70 per cent of global producers are estimated to be making a loss at current prices of $8,760 a tonne. A writedown at a nickel project helped contribute to a $5bn net loss last year for Swiss-based Glencore, one of the world’s largest commodities traders.

But so far few producers outside of Brazil and China have cut production, showing how miners have been willing to weather lower prices for longer than many analysts expected.

Click here to read the full Financial Times report.