Sumitomo Metal Mining, Japan’s top nickel producer, cut its 2014 forecast for the metal’s global deficit by 43% as China produces more-than-expected volumes of nickel pig iron, a cheaper alternative. Demand will exceed supply by 17,000 tons, down from the company’s April estimate for a 30,000 ton deficit, said Hiroshi Sueta, Tokyo-based General Manager of nickel sales and raw materials. The market last year had a 109,000 ton surplus. “The pace of the drop of ore inventories in China was slower than we had expected earlier because of a jump in imports from the Philippines,” Sueta said. Nickel pig iron is a low-quality alternative for refined nickel in the production of stainless steel. China’s stockpiles of nickel ore, which is used to make nickel pig iron, have dropped this year to slightly more than 20 million tons from 25 million tons at the end of 2013, Sueta said. The company earlier forecast that China’s nickel pig iron output would begin falling this summer as inventories declined following Indonesia’s ore export ban. Sumitomo Metal raised its 2014 estimates of China’s nickel pig iron production to 430,000 tons, about 2% higher than its forecast in April. China produced 450,000 tons in 2013, the firm’s data showed. China’s nickel-ore imports from the Philippines rose 12% in the first six months of 2014 from the same period a year earlier while its imports from Indonesia plunged 47%, according to China’s General Administration of Customs.