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UPDATE 1-Russia's Nornickel says could miss 2017 output forecast by 3 pct
April 27, 2017 / 12:13 PM / 8 months ago

UPDATE 1-Russia's Nornickel says could miss 2017 output forecast by 3 pct

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MOSCOW, April 27 (Reuters) - Russia’s Norilsk Nickel (Nornickel) could miss its 2017 production forecast for nickel and platinum group metals (PGMs) by up to 3 percent after first-quarter output fell, it said on Thursday.

Nornickel, one of the world’s largest nickel and palladium producers, added its management was looking at ways to mitigate this risk and confirmed its previous 2017 production guidance.

This year Nornickel, part-owned by Russian tycoon Vladimir Potanin and aluminium giant Rusal, plans to produce from Russian feedstock 206,000-211,000 tonnes of nickel, 377,000-387,000 tonnes of copper, 2.6-2.7 million troy ounces of palladium and 581,000-645,000 ounces of platinum.

Its first-quarter consolidated nickel production fell 16 percent year-on-year to 53,487 tonnes and palladium output was down 14 percent to 553,000 ounces.

“The decline in metal production volumes in the first quarter was scheduled as it was resulting primarily from the reconfiguration of downstream production facilities progressing to its completion,” Sergey Dyachenko, Nornickel chief operating officer, said in a statement.

Nornickel also said it planned to complete processing of previously stored pyrrhotite concentrate this year.

“Taking into account its natural dilution, which has already negatively affected the first quarter production results, we see a downside risk to our annual production guidance for nickel and PGMs by up to 3 percent of their total volume,” Dyachenko added.

Analysts at BCS Investment Bank said Nornickel’s production results were a moderately negative surprise, noting the company expects its metal production volumes to recover by the third quarter.

Its shares were down 1.1 percent in Moscow, compared with a 0.7 percent fall in the broader MICEX index.

Nornickel’s copper production, however, rose by 8 percent to 94,191 tonnes in the first quarter due to higher copper content in feed and the start of processing of concentrate purchased from state conglomerate Rostec in late 2016. (Reporting by Polina Devitt; Editing by Kevin O‘Flynn and Mark Potter)

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