Inco cuts '97 nickel output plan

Inco cuts '97 nickel output plan

TORONTO (Reuter): Inco Ltd revised yesterday 1997 nickel production plan down to 413 million pounds from a previous estimate of 430 million pounds.

Toronto-based Inco said the revision took into account the 26- day strike at its Ontario division, which ended on June 28.

"As we look at it today, our estimate for production this year, taking into account the strike, will be 413 million pounds or in that area," Inco President Scott Hand told a conference call with analysts.

Inco earlier reported that net income for the second quarter fell to US$16 million or US$0.05 a share from year earlier US$61 million or US$0.47 a share.

The strike resulted in an after-tax cost of US$20 million or US$0.12 a share in the second quarter.

Inco also tied the drop in second-quarter earnings to lower prices for nickel, cobalt and copper, and costs associated with the rebuild of furnace no. 1 at PT Inco in Indonesia.

Peter Goudie, Inco's executive vice-president of primary metals marketing, said the overall nickel market is very healthy with strong industrial production growth expected to support continued growth in nickel demand.

Goudie said total nickel inventories are now at such low levels that any further reduction could result in a sharp increase in price.

"Certainly looking at supply and demand for the rest of this year, I believe that we are in a market that is in deficit," Goudie said, adding those conditions are expected to continue into 1998.