Bloomberg, 11:21 (New York) 04-Feb-2008
By Antony Sguazzin

Feb. 4 (Bloomberg) — The nickel market may have a supply shortfall of 500,000 metric tons by 2012 because of the slow pace of mine development and rising demand, Jessica Cross, the chief executive officer of VM Group, said.
Such a deficit would reverse a likely supply surplus of 100,000 tons last year with total production of about 1.45 million tons, she said.
While demand probably contracted by 2 percent last year after nickel prices rose to a record $51,600 a ton on the London Metal Exchange in May, it is expected to rebound this year, Cross said at the Mining Indaba conference in Cape Town today.
“Stainless-steel producers showed that they can’t stomach a price of $51,000 a ton,” she said. “But they are caught between a rock and a hard place.”
Prices will average between $20,000 and $25,000 a ton for the next three years, she forecast. — Editor: M. Shankar, Stuart Wallace.
To contact the reporter on this story: Antony Sguazzin in Johannesburg at +27-11-286-1934, or asguazzin@bloomberg.net
To contact the editor responsible for this story: Simon Casey at +44-20-7673-2631 or scasey4@bloomberg.net

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