By Bloomberg News May 26 (Bloomberg) -- Global production of primary nickel may climb 9.3 percent to 1.53 million metric tons in 2011, pushing the market into surplus, said John Barkas, director of Metalytics Ltd. Consumption may be 1.51 million tons next year, Barkas said at a conference in Shanghai today. Consumption this year may be 1.435 million tons, outpacing 1.4 million tons of supply, he said. Nickel prices have dropped 22 percent from this year’s high of $27,595 a ton on April 16 on speculation European efforts to curb government debt will erode economic growth and China may step up measures to reduce asset bubbles. Demand for the metal, used to help protect steel from corrosion, will probably exceed supply by 36,000 tons in 2010, the first deficit since 2006, Sumitomo Metal Mining Co. said last month. Stainless steel production may be 31.5 million tons in 2011, growing from 29 million tons this year, Barkas said. --Li Xiaowei. Editors: Richard Dobson, Jake Lloyd-Smith. To contact the Bloomberg News staff on this story: Li Xiaowei in Shanghai at Xli12@bloomberg.net

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