Japan's pacific metals says has secured enough nickel ore fo

Bareksa.com - Pacific Metals Co Ltd, Japan's biggest ferronickel maker, said it had secured enough supplies of nickel ore for this financial year, amid surging nickel prices as supply concerns grip the market.

London nickel hit a 27-month high on Tuesday as worries mount over a worldwide shortage that has sent buyers of the metal scrambling to secure supplies.

Ferronickel smelters have been hit by Indonesian bans on exports of unprocessed mineral ores that took effect in January. Japan imported 51 percent of its ferronickel materials from the Southeast Asian nation in 2013.

Nickel is highly resistant to corrosion and is mainly used in the production of stainless steel. Ferronickel is an alloy made from iron and nickel ore and is a raw material for stainless steel.

Pacific Metals, the world's No.3 ferronickel producer, plans to cut output by almost 16 percent to 32,500 tonnes in the financial year through March 2015, from 38,530 tonnes a year earlier, Senior Managing Executive Officer Takao Niwayama said on Tuesday.

But that is due to maintenance of facilities, rather than any potential shortage of supplies, he said at a media briefing after the company's earnings were released.

London nickel rose as far as $21,625 a tonne on Tuesday - the highest since February 2012. It has gained about 55 percent this year.

Niwayama described the recent gains in nickel prices as "sharp", but declined to comment when asked if they were excessive.

The company has no immediate plans to build a smelter in Indonesia, where the government is trying to encourage the growth of a local smelting industry with its ban the export of unprocessed ores.

Vale last week shut down nickel production in New Caledonia after an effluent spill, pressuring global supply.

Tensions over Ukraine and fears that an increasingly out of control conflict might eventually result in sanctions against Russia's Norilsk Nickel, a top nickel producer, have also boosted the metal. (Source : Reuters)