July 31, 2017 / 3:32 PM / 3 years ago

UPDATE 1-Russia's Nornickel confirms 2017 output forecast due to strong Q2

    * Q2 nickel output down 15 pct y/y, palladium output up 14
pct y/y
    * Q2 palladium, platinum output surges q/q
    * Shares up 1.3 pct in Moscow, outperform broader market

 (Adds details, quotes, context)
    MOSCOW, July 31 (Reuters) - Russia's Norilsk Nickel
(Nornickel), the world's second-largest nickel and the
largest palladium producer, has confirmed its previous 2017
output forecast on Monday after a strong second quarter.
    Nornickel planned to increase its nickel and palladium
output from Russian raw material this year. However, after 
first-quarter output fell it said it could miss its 2017
production forecast for nickel and platinum group metals by up
to 3 percent.
    "We were still experiencing certain issues with lifting and
processing of previously stored pyrrhotite concentrate and also
had to run some short-term suspensions of our smelting
operations in the Polar division due to unfavourable weather,"
Nornickel Chief Operating Officer Sergey Dyachenko said in a
statement.
    "Our management team is doing their best to minimise the
negative impact of the above on current full-year production
targets through more efficient ore processing and optimization
of smelting capacity utilisation and we, thus, confirm our
initial 2017 production guidance," he added.
    Nornickel, part-owned by Russian tycoon Vladimir Potanin and
aluminium giant Rusal, competes with Brazil's Vale SA
 for the rank of the world's top nickel producer.
    Nornickel's nickel output was down 15 percent on a
year-on-year basis at 49,418 tonnes in April-June, while its
palladium output rose 14 percent from a year ago to 781,000 troy
ounces. 
    Copper production totalled 100,804 tonnes and platinum
output was 190,000 ounces. The bulk of Nornickel's output comes
from Russian raw material. 
    Compared with the first quarter of this year, its nickel
production fell 8 percent due to scheduled repair works at its
Harjavalta refinery in Finland and copper output was up 7
percent.
    Meanwhile, its palladium and platinum production surged 41
percent and 46 percent, respectively.
    "Our platinum group metals production increased
substantially owing to the processing of built-up
work-in-progress material which enabled us to offset the
previous quarter decline," Dyachenko said.
    Its shares were up 1.3 percent in Moscow, compared with a
0.3 percent growth in the broader MICEX index.
    Nornickel's production is expected to rise in the second
half of 2017 compared with January-June, BCS analysts said in a
note.
    Nornickel's current 2017 production guidance from Russian
feedstock:    
 Metals                                   2017 output forecast
 Nickel, 000 tonnes                                    206-211
 Copper, 000 tonnes                                    377-387
 Palladium, 000 ounces                             2,636-2,732
 Platinum, 000 ounces                                  581-645
    - To see Nornickel's 2016 consolidated production results
and output from Russian feed 
    - Nornickel also produces other metals including cobalt and
gold as by-products but discloses their output in its full-year
annual reports only.

 (Reporting by Polina Devitt and Jack Stubbs; Editing by Katya
Golubkova)
  
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