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Feb 12 (Reuters) - Canadian miner Sherritt International Corp reported a much wider-than-expected quarterly loss as nickel prices fell due to a supply glut and weak demand from China.
Nickel prices fell 15 percent in the fourth quarter, from the third, and are down nearly 30 percent since May.
The company said a strong dollar also contributed to the fall in nickel prices. The U.S. dollar strengthened to C$1.14 on an average in the quarter, from C$1.05 in the year-earlier period.
Sherritt, however, is betting on a rebound in the nickel market later this year as a sustained period of excess supply ends due, in part, to Indonesia’s continuing ore export ban.
The company, which gets a majority of its revenue from its nickel operations, also mines cobalt and produces oil and gas, and power.
Sherritt raised its nickel production forecast for 2015, as it expects to ramp up production from its Ambatovy joint venture. It now expects to produce 80,000-86,000 tonnes of nickel in 2015, up 19 percent from 2014. (bit.ly/1CYGnxC)
The nickel and cobalt Ambatovy joint venture in Madagascar, 40 percent owned by Sherritt, had been plagued by higher operating costs, unplanned outages and mechanical problems, and had weighed on results in the past few quarters.
On an adjusted basis, Sherritt posted a net loss from continuing operations of 27 Canadian cents per share. Analysts had expected a loss of 19 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Up to Wednesday’s close of C$2.11, the Toronto-based company’s shares had fallen 38 percent in the last 12 months, steeper than the 23 percent fall in the S&P/TSX capped diversified metals and mining index.
$1 = 1.26 Canadian dollars Reporting By Tanvi Mehta and Narottam Medhora in Bengaluru; Editing by Sriraj Kalluvila