Sumitomo Metal to Cut Nickel Output 23% to September

By Jae Hur and Yoshifumi Takemoto

April 1 (Bloomberg) -- Sumitomo Metal Mining Co., Japan’s top nickel producer and second-largest copper smelter, will cut refined nickel output by 23 percent in April to September compared with a year earlier on slumping demand from steelmakers.

The Tokyo-based company forecast refined nickel output will drop to 13,700 metric tons in the first half starting today from 17,734 tons produced in the year-earlier period, it said in a statement. It will also cut ferronickel output in the period by 20 percent to 8,900 tons, it said.

Sumitomo Metal is reducing production of nickel, used in electronics and stainless steel, as Japan heads for its worst recession since 1945, slashing demand from customers. The Organization for Economic Cooperation and Development yesterday projected the country’s economy will shrink 6.6 percent in 2009.

Sumitomo Metal plans to produce 33,200 tons of refined nickel and 16,800 tons of ferronickel in the year to March 31. The company, which last fiscal year planned to produce 36,000 tons of nickel and 22,400 tons of ferronickel, has yet to release output figures for the second half ended yesterday.

The smelter forecast copper production of 200,000 tons for the first six-months, up from 165,884 tons a year earlier, it said. This year’s copper output will total 401,000 tons versus last year’s plan of 394,000 tons, it said.

Sumitomo Metal Mining plans to shut its Toyo copper smelter, in Ehime prefecture, western Japan, for maintenance for 30 days between September and October, it said.

Last year’s copper output was reduced because of lower grade ore and maintenance at Toyo smelter, company spokesman Hiromasa Ooba said.

The following table summarizes the company’s metals output. Figures are in metric tons, except for gold and silver, which are in kilograms.

===============================================================
Metal                      2009                    2008
                      H1         H2          H1         H2
===============================================================
Copper               200,000    201,000     179,000    215,000
                                          (165,884)

Electrolytic Nickel   13,700     19,500      17,900     18,100
                                           (17,734)

Ferronickel            8,900      7,900      11,500     10,900
                                           (11,157)

Zinc                  35,300     32,800      42,700     42,500
                                           (43,526)

Electrolytic Lead     11,500     12,100      12,700     14,700
                                           (12,742)

Gold (kg)             17,000     18,000      18,000     22,000
                                           (18,618)

Silver (kg)          135,000    135,000     151,000    153,000
                                          (166,282)

Note: 2008 figures give planned output. Actual production in the
first half of 2008 is in parentheses. Output plans in the second
half did not include the company’s Jan. 5 announcement of cuts
for January to March.
===============================================================


To contact the reporters on this story:
Jae Hur in Tokyo at
jhur1@bloomberg.net;
Yoshifumi Takemoto in Tokyo at
ytakemoto@bloomberg.net