Falconbridge shortens summer shutdown period

Claiming that a planned 10-week shutdown at its Sudbury operations would have a negligible impact on soaring nickel inventories, Falconbridge has shortened the summer shutdown to two weeks.

“Falconbridge has changed its plans and, with employment and customer considerations in mind, will use its position as a low-cost producer to remain competitive in the nickel market,” the company says in a press release. London Metal Exchange (LME) inventories stand at about 90,000 tons, compared with about 13,000 tons at the beginning of 1992. The shutdown would have removed about 6,000 tons from the market.

“This (shutdown) would not make a difference one way or another,” says Cliff Carson, vice-president of nickel sales and marketing.

He adds that when Falconbridge announced temporary shutdowns late last year, it expected other nickel producers worldwide to follow suit. Since they haven’t, Carson says, it does not make sense for Falco to continue cutting.

Last October, Inco (TSE), which together with Falco produces about 40% of the world’s nickel, announced plans to reduce 1993 output to 380 million pounds from 405 million in 1992.

Falconbridge says it will produce less nickel in 1993 because of earlier closures at its Sudbury operations, its Nikkelverk refinery in Norway, and its ferronickel operations in the Dominican Republic.

In 1993, Carson believes, official and illicit exports from Russia (which have helped boost LME inventories to record levels) will match 1992 exports.