NICKEL (Data in metric tons of nickel content, unless noted) Domestic Production and Use: The only nickel mining and smelting complex in the United States, near Riddle, OR, reopened in March 1995. On a monthly or annual basis, 187 facilities reported nickel consumption. The principal consuming State was Pennsylvania, followed by West Virginia and New Jersey. Approximately 44% of the primary nickel consumed went into stainless and alloy steel production, 35% into nonferrous alloys and superalloys, 14% into electroplating, and 7% into other uses. Ultimate end uses were as follows: transportation, 29%; chemical industry, 14%; electrical equipment, 10%; construction, 9%; fabricated metal products, 8%; petroleum, 8%; machinery, 7%; household appliances, 6%; and other, 9%. Total estimated value of apparent primary consumption was $1.3 billion. Salient Statistics--United States: 1991 1992 1993 1994 1995e/ Production: Mine 5,520 6,670 2,460 -- 1,650 Plant 7,070 8,960 4,880 -- 8,200 Imports:1/ Ore 371 3,580 2,970 -- 8,200 Primary 132,000 119,000 126,000 127,000 151,000 Secondary 6,210 9,510 6,710 6,060 8,400 Exports: Primary 9,100 8,560 7,180 7,440 9,900 Secondary 27,800 25,300 26,000 34,500 41,900 Consumption: Reported, primary 109,000 101,000 105,000 107,000 126,000 Reported, secondary 53,500 55,900 54,000 58,600 65,600 Apparent, primary 125,000 119,000 122,000 134,000 159,000 Price, average annual, London Metal Exchange Cash, dollars per metric ton 8,156 7,001 5,293 6,340 8,245 Cash, dollars per pound 3.699 3.176 2.401 2.876 3.740 Stocks: Government, yearend 33,800 33,800 31,600 26,800 16,500 Consumer, yearend 15,900 17,400 14,400 10,200 10,800 Producer, yearend2/ 11,800 10,100 15,700 10,200 10,500 Employment, yearend: Mine 8 10 2 1 15 Smelter 277 250 33 22 250 Port facility3/ -- 23 5 3 25 Net import reliance4/ as a percent of apparent consumption 61 59 63 64 61 Recycling: About 66,000 tons of nickel was recovered from purchased scrap in 1995. This represented about 34% of reported consumption for the year. Import Sources (1991-94): Canada, 47%; Norway, 15%; Australia, 11%; Dominican Republic, 6%; and other, 21%. Canada, Mexico, and Tariff: Item Number Most favored nation (MFN) Non-MFN5/ 12/31/95 12/31/95 Nickel oxide, chemical grade 2825.40.0000 Free Free. Ferronickel 7202.60.0000 Free 6.6›/kg. Nickel oxide, metallurgical grade 7501.20.0000 Free Free. Unwrought nickel 7502.10.0000 Free 6.6›/kg. Waste and scrap 7503.00.0000 Free 6.6›/kg. Depletion Allowance: 22% (Domestic), 14% (Foreign). Government Stockpile: Stockpile Status--9-30-95 Uncommitted Committed Authorized Disposals Material inventory inventory for disposal Jan.-Sept. 95 Nickel 18,000 3,650 16,800 7,980 Events, Trends, and Issues: Demand for nickel-bearing stainless steel has improved substantially in the United States since 1992. However, a large part of the increase was being met by imported stainless, in decreasing order, from the European Union, Japan, and Canada. U.S. production of stainless steel increased 3% between 1993-94, with nickel-bearing grades accounting for 65% of the 1.83 million tons made in 1994. Domestic shipments of stainless sheet and strip were at an all-time high in 1995. Prepared by Peter H. Kuck, (703) 648-4965. NICKEL Growing demand for austenitic stainless steel in the developing countries and an improving global economy have turned nickel prices around after 3 years of recession. Nickel supply and demand have been closely balanced since early 1995, lifting prices to more traditional levels. On Nov. 27, 1995, the London Metal Exchange (LME) cash price for 99.8%-pure nickel stood at $8,497 per metric ton ($3.85 per pound), up significantly from late 1993. Increased speculation in cut cathode and briquets has caused the price to be more volatile than in the past. LME inventories peaked at 151,000 tons on Nov. 24, 1994, and have been falling ever since. Some analysts are forecasting an undersupply situation for the 1996-99 period. Prices continue to be kept in check by large exports of cathode and powder from Russia to the West. The prospects of undersupply have encouraged producers to open new mines in Australia and New Caledonia and upgrade older operations elsewhere. The discovery of a world class nickel-copper-cobalt deposit at Voisey Bay, Labrador, drastically altered the nickel supply picture and changed long-range thinking about future exploration targets in other parts of the Subarctic. In June 1994, a Canadian company entered into a joint venture with the Government of Cuba to upgrade mining and beneficiating operations at Moa Bay. Since then, two other prominent companiesÄone based in Australia and one in South AfricaÄhave begun actively exploring for nickel in Cuba. Programs were underway in the European Union, Japan, and the United States to develop advanced nickel-based batteries for electric vehicles. Beginning in 1997, 2% of all motor vehicles sold within California must have zero tailpipe emissionsÄa requirement only electric vehicles can presently satisfy. World Mine Production, Reserves, and Reserve Base: Mine production Reserves6/ Reserve base6/ 1994 1995e/ United States -- 1,650 23,000 2,500,000 Australia 79,000 80,000 2,200,000 6,800,000 Botswana 20,600 22,000 480,000 900,000 Brazil 32,000 34,000 670,000 4,300,000 Canada 150,000 150,000 6,200,000 14,000,000 China 36,900 37,000 730,000 900,000 Colombia 26,100 27,000 560,000 740,000 Cuba 26,900 28,000 18,000,000 23,000,000 Dominican Republic 30,500 31,000 450,000 680,000 Finland 7,190 7,100 80,000 100,000 Greece 18,800 19,000 450,000 900,000 Indonesia 81,200 83,000 3,200,000 13,000,000 New Caledonia 96,000 100,000 4,500,000 15,000,000 Philippines 9,850 10,000 410,000 11,000,000 Russia 240,000 235,000 6,600,000 7,300,000 South Africa 30,100 32,000 2,500,000 2,600,000 Ukraine 4,000 4,000 90,000 90,000 Zimbabwe 13,500 14,000 77,000 100,000 Other countries 3,800 4,400 160,000 10,000,000 World total (rounded) 906,000 920,000 47,000,000 110,000,000 World Resources: Identified world resources in deposits averaging 1% nickel or greater contain a total of 130 million tons of nickel. About 60% of the nickel is in laterites and 40% is in sulfide deposits. World resources of lower-grade nickel deposits are very large. In addition, there are extensive deep-sea resources of nickel in manganese crusts and nodules covering large areas of ocean floor, particularly in the Pacific Ocean. Substitutes: With few exceptions, substitutes for nickel would result in increased cost or some tradeoff in the economy or performance of the product. Present and potential nickel substitutes include aluminum, coated steels, and plastics in the construction and transportation industries; nickel-free specialty steels in the power generating, petrochemical, and petroleum industries; titanium and plastics in severe corrosive applications; and platinum, cobalt, and copper in catalytic uses. e/Estimated. 1/Imports for consumption. 2/Stocks of producers, agents, and dealers held only in the United States. 3/Employment at port facility in Coos Bay, OR, used exclusively for drying and transhipping imported nickel ore. 4/Defined as imports - exports + adjustments for Government and industry stock changes. 5/See Appendix B. 6/See Appendix C for definitions. Mineral Commodity Summaries, January 1996