It was reported that nickel exports from Japan may climb to a record this year as Prime Minister Shinzo Abe’s stimulus hasn’t spurred demand in the third biggest user, adding to a global glut.

Mr Toru Higo, general manager of nickel sales and raw materials at Sumitomo Metal Mining Co in an interview said that exports will rise 10% from a year earlier to 96,000 tonne. He said that the global surplus may expand to 70,000 tonne, the biggest in 5 years.

Morgan Stanley forecast a surplus of 38,100 tonne, Macquarie Group Ltd sees 82,000 tonne and the International Nickel Study Group predicts 90,000 tonne.

The metal, used for corrosion resistance in stainless steel, tumbled into a bear market on May 1st and has lost 13% in the past year, making it the worst performer among six-base metals on the London Metal Exchange. Abe’s policy of ending deflation through unprecedented monetary stimulus, dubbed as Abenomics, weakened the yen to a 4½ year low against the dollar and improved earnings of Japanese exporters including Toyota Motor Corp and Canon Inc.

Mr Higo said that “Domestic demand from the stainless steel industry remains subdued and the benefits from the yen’s weakness and higher stock market have yet to be felt.”

He said that “Japan’s nickel production will climb 5.8% to 183,000 tonne in 2013, while demand may drop 2.8% to 139,000 tonne. The company expanded capacity by 59% at its Niihama refinery earlier this year to 65,000 tonne, the plan had been in the pipeline for year.”

Mr Higo said that “China and the US are the biggest consumers, International Nickel Study Group data shows. China’s production of nickel pig iron, a substitute for low grade ore, will increase to 350,000 tonne this year.”