DJ UPDATE: Nickel Supply Cuts "Rapid And Significant" - Xstrata
 
  (Adds quotes from Xstrata and details) 
 
 
 
  LONDON (Dow Jones)--The nickel industry has made "particularly rapid and
significant" efforts to cut production in response to deteriorating demand with
around 350,000 metric tons of refined output being taken out of the market in
2009, Anglo-Swiss miner Xstrata PLC (XTA.LN) said Thursday. 
 
   This represents approximately 21% of the previously expected level of global
supply in 2009, and is expected to stabilize the market this year, Xstrata
noted. 
 
  In addition, growth projects and exploration expenditure continue to be
canceled or deferred, Xstrata said, and this is introducing significant
constraints to future supply. 
 
  "Nickel production from Chinese pig iron has now largely ceased, due to the
impact of low metal prices on these high-cost producers," Xstrata said. 
 
  "Supply from Chinese nickel pig iron and other high-cost facilities is
unlikely to resume given the prevailing economic climate and lack of visibility
into near-term market conditions." 
 
  But while the supply side response continues to gain momentum, production
curtailments in the fourth quarter were not sufficient to fully mitigate the
impact of the sharp fall in demand, the company added. 
 
  However, looking further ahead, Xstrata said the outlook was expected to
improve as global demand recovers and the physical availability of nickel
tightens. 
 
  -By Andrea Hotter, Dow Jones Newswires; +44 (0)20 7842 9413;
andrea.hotter@dowjones.com 
 
 
 
  (END) Dow Jones Newswires
 
  01-29-09 1048ET
 
Copyright (c) 2009 Dow Jones & Company, Inc.
 
DJ info: 
N/DJCS,N/DJME,N/DJOS,N/OSCM,N/OSME,N/OSOV,N/OSTR,N/BNEU,N/CMD,N/CNW,N/DJPN,N/DJ
I,N/FCTV,N/MET,N/NCK,N/TSY,N/WAER,N/WEI
 
FSN61812 CMOT FINANCIAL GENERAL METALS STOCKS 
2009-01-29 15:48:45 UTC
^^^^^^