Cia. Vale do Rio Doce, the world’s second-biggest nickel producer, expects demand for the steelmaking ingredient to stay “weak” after an 84 percent decline in price, Credit Suisse Group AG said.
A drop in global stainless steel production and lower demand for other alloy steels may hurt nickel, Credit Suisse said, citing a company presentation at a conference. Chinese consumption will be “critical” to boosting steel demand, with the country’s stimulus plan increasing consumption by 50 megatons in 2009, analyst Roger Downey wrote. Nickel has fallen 84 percent in the past 16 months, he said.
Talk to settle iron-ore contract prices for 2009 “could surprise the market on the upside,” the analyst wrote, citing a drop in Chinese ore inventories.
The company said January ore shipments “show a slight recovery” from December, Downey said.
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