The combination of very poor demand and insufficient production cuts are expected to pull the nickel market into a material surplus of 36kt this year has prompted BMO Capital Markets to slash nickel price forecasts by 20% to $4.60/lb this year and by 21% to $5.50/lb in 2010.

BMO Capital Markets Global Commodity Strategist Bart Melek stated:

Given the weakness in nickel demand, the planned sharp production cuts will only turn a potentially large nickel surplus into a decreasing supply overhang this year-not a balanced market.

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