This page is archived news covering the period of April 2007
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Stainless Steel News & Nickel Prices

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(Nickel prices are responsible for over 60% of the cost of stainless steel) / Disclaimer


Monday, April 30

  Today's official LME nickel closing - cash - $22.68/lb - 3 month buyer - $22.09/lb (46.29% higher than 1/1/07). Once again, early morning trading saw nickel on the rise, and then retreating in late trading. We observed the price for 3 month nickel gain until the  PM kerb trading, when someone apparently pulled the bath plug. At day's and month's end, nickel was at $21.64/lb ($47,700/tonne). Using the "official cash closing" price for the last day of March, and comparing it to today, which is what stainless steel producers use to determine surcharges, the price of nickel rose 7.3% in April. Three month nickel rose over 11% in the same period. Cash nickel sold today for 46.2% higher than it did on the last day of December 2006. (Dow Jones - more)  

  Metals Insider - Week in Review - Nickel - here

  Haywood Securities - Metals & Mining Weekly - pdf here

  Rio Tinto wants Indonesia nickel mine under old law - "A nickel project on Indonesia's Sulawesi island involving Rio Tinto Ltd/Plc should be agreed under existing mining laws to ensure it is attractive, the CEO of the mining firm said on Monday." - article here

  (this is a few weeks old but contained an interesting quote we wanted to post) - Mine the white-hot metals - (quote from article) "A good chunk of global nickel production comes out of Chinese smelters that import laterite, the ore used to produce nickel. Chinese imports of laterite have soared, beginning in September 2006 when they reached 700,000 metric tons and were still running above 500,000 metric tons in January and February 2007. Because the production costs at Chinese smelters using imported ore are extremely high, if nickel prices were to fall, some of this Chinese production would shut down. That puts a floor -- an imperfect one to be sure, since some Chinese producers will continue to produce even if they're losing money -- under nickel prices." - more here

  End of Bull Market is Near? by Barron's - "Michael Steinhardt, who launched his hedge-fund firm 40 years ago and quickly became an industry giant, doesn't think much of some of the people making huge fortunes in the business today. " - located on investors's forum here

  Ted Fishman, author of China Inc, part of a presentation. (comment - starts out slow and bad audio, but give it a few minutes. They fix the sound and he quotes some amazing statistics) - 23 minute video here

  Indications at 7:50 am CST show nickel selling up by $.09/lb . Analysts seem to be hinting at some big movement potential in the market, although with China markets closed for holiday this week, we would be surprised. Of course, the last time the Chinese went on holiday in February, many left hoping nickel prices would fall during their break, only to return to much higher prices. (Bloomberg - more) (Reuters - more)

  Our weekly survey of China metal analysts forecast will not be published this week.

  Interview: Nickel Institute comments on the future of the industry in China - "Executives from the Nickel Institute shared with Interfax their insights on nickel use, the growth of nickel demand in China and the development of the nickel recycling industry." - article here

  News Bite - "The Jakarta Post said Rio's new chief executive Tom Albanese would visit Indonesia this week to review progress on negotiations over a contract of work. "  

  Paris wants explanations on the ousting of the chairman of Eramet - "The Minister for the Economy, Thierry Breton, did not appreciate the setting well off Jacques Barcadats of the head of Eramet. The French government asks explanations with the nuclear group Areva, holder of 26% of the shares." - translated article here

  Allegiance stocks nickel ore as it readies mine - "Australia's Allegiance Mining NL said on Monday it has stockpiled 10,000 tonnes of nickel-bearing ore and is on track to start milling operations at its Tasmanian project in the fourth quarter of calendar 2007." - article here

  News Bites - courtesy/copyright Dow Jones - "Nickel is firmly entrenched within the multi-month bull trend with underlying momentum remaining strong for further gains, notes UBS. Calls the recent pullback from April 10 $50,350/metric ton a correction "as long as the $44,700/ton low stays intact." Notes bullish moving averages point to another move higher, with $52,000/ton target in sight. "Beyond there, nickel should set up further gains towards $54,832, representing equality of $41,268 to $50,350, projected from $45,750/ton."  "Commodity trade advisory players are sitting on the sidelines with regard to LME nickel after pushing prices higher Friday, but could prove to be the impetus for further gains this week, a London-based trader notes. Thin conditions add to the potential for an upside move, he says, although the risk of profit-taking at the higher numbers remains."

  Eramet denied judicial review of Nouvelle Caledonie shareholding in unit - "The Paris appeal court has refused to order a judicial review of an operation aimed at enabling the government of Nouvelle Caledonie to increase its stake in Eramet's local unit Societe Le Nickel to 34 pct from 30, according to the court ruling, seen by Agence France-Presse." - article here

  Samancor Chrome to spend R1,4bn on local value-add projects by 2010 - "Ferrochrome producer Samancor Chrome would spend R1,4-billion on beneficiation projects in South Africa over the next two years, including a new pelletiser plant, a DC furnace and a smelter, the firm told Mining Weekly Online last week." - article here

  China optimistic about int'l iron ore market - "According to a report by Shanghai Securities News, China is pretty optimistic about the future international iron ore market, due to the current expansion of production of major iron ore suppliers in the world." - article here

  Today's beginning nickel inventory - minus 96 tons = 5,016 tonnes (27.87% - 1,398 tonnes cancelled warrants).

Weekend Review, April 28 & 29

  Courtesy/copyright Dow Jones - "LME nickel is increasingly vulnerable to a phase of stainless steel destocking although the "desperately low" level of available inventory leaves potential for big moves in either direction, says Barclays Capital.

  China's central bank to raise deposit reserve ratio by 0.5% points - "China's central bank will raise deposit reserve ratio by 0.5% points as of May 15 to 11%" - article here

  Worth remembering from Thursday - copyright/courtesy Dow Jones - "China's rapidly growing output of nickel pig iron disastrous for country environmentally, but unlikely to lead to similar tightening measures government considering for aluminum, zinc industries, as Chinese market "acutely short of nickel," says Citigroup's Alan Heap. "As far as the Chinese government is concerned, it's a disaster." Notes government in past tried to shutdown blast furnaces but these were reopened to produce nickel pig iron; industry highly polluting, energy intensive. But Chinese government has mostly targeted energy-intensive industries which overheated, or producing exports."

  Sudbury's mining industry has become world leader in health and safety: USW boss Leo Gerard - (quote from article) "To show how far the issue of health and safety has come in Sudbury's mining industry, Gerard pointed out CVRD Inco's Garson Mine last year received a national award as the "safest mine in Canada" with more than two million man hours accumulated without a single lost time accident." - article here  (opinion - cuddo's to CVRD Inco Chief Operating Officer Mark Cutifani for attending)

  Haywood Securities - Target and Price Modifications - Metals and Mining - pdf here  (2007 average nickel forecast from $13.50/lb to $19.00/lb)

  News Bite - "The Indonesia government has officially renamed West Irian Jaya province, West Papua province."

  Indonesia Delays Plan to Merge State-Owned Mining Firms - "The government decides to put off the merger plan for state-owned mining companies over the taxation issue, an official said." - article here

  Courtesy/copyright Dow Jones Newswire - "Industrial users are paying a fortune for nickel, while demand is likely to remain robust, the Nickel Institute said last week. The institute represents nickel companies, which together produce 85% of the world's output, and also liaises closely with the stainless-steel industry, which takes up 60% of total nickel demand. Tight supplies and voracious demand from stainless-steel producers drove prices to record peaks in recent weeks, taking the metal's gains since the start of 2007 to 50%."

  Do you remember? May 24, 2004 - Indonesia media reports -"A Canadian-owned mine in Sulawesi is the focus of an updated travel warning on Indonesia issued by the Australian government, which adds the area around the mine to the list of high risk regions. Death threats have reportedly been made against the head of the company, Inco, and other Westerners there, and as a result hundreds of additional Indonesian police are being requested to guard the site." "Four Australians are among more than 50 foreigners who left a Canadian-owned mine in Indonesia after a warning of a possible terrorist attack." "Indonesian police rushed 230 soldiers and elite Mobile Brigade paramilitary police to the mine site to protect it and staff. The mine, which has the world's biggest nickel smelter, is 150km south of Poso township, where Muslim extremists linked to the Jemaah Islamiyah terror network have been battling Christians for years."  and then after nickel prices had jumped over 5% higher because of the threat- "An Indonesian dentist has been arrested in connection with a series of threats made against Westerners on the Indonesian island of Sulawesi. The threats sparked a terror alert from the Australian Government which issued updated travel advice last month." "Indonesian police have revealed that the threats came from the company's dentist and not Islamic extremist groups. The dentist is an Indonesian Christian and sent 200 SMS messages threatening Westerners because he feared he was to be replaced by an expatriate." While in this case they proved fraudulent, threats of terrorism in Indonesia are a legitimate concern, and the reaction by the government's gives an idea just how serious they are taken

  We have been wanting to put together a page that lists stock values of nickel mining stock for some time for our investor readers - we saw a link given on a forum this week that does exactly that. It has now been added to the right column of links under "Nickel Mining Stock Data"

  Nickel bull looks at $25/lb - "The weekly average price of nickel slipped by barely 3¢/lb to $22.71 on Friday despite earlier speculation that makers of stainless steel, the biggest users of the metal, might reduce orders to cut costs. Nickel has risen steadily by 36% since January with the April month-to-date price average on the London Metal Exchange at $22.73 because of surging demand from China, the world's largest user." - article here

  China May Ban Steel Product Export Tolling - "China may ban steel product export tolling, just shortly after the cancellation of steel product export tax rebates, an official with China's Ministry of Commerce (MOFCOM) told Interfax today." - article here

  Vale Adds $1 Billion to Metals, Mining Spending Plan - (article here) Brazilian mining giant to build coal-fired power stations - (article here)  

  High-paid mining jobs go wanting - "That loud sucking sound heard in the canyons of the mining sector is the vacuum created by a shortage of skilled labour. There are thousands of jobs on offer now and an estimated 80,000 jobs will be up for grabs within the next decade." - article here

  Articles on Eramet this week - "Eramet shareholders shun CEO" - article here  Breton protests to Areva about removal of Eramet chairman - report - article here  His final speech to shareholders, before being fired - here  (comment - from Feb 1st release - "Eramet pursued its hedging strategy, which currently applies to 40% of deliveries planned for 2007. for an average price of about 19000 USD/t ($8.60 USD/lb)." - If you had hedged 40% of your 2007 production at $8.60/lb, when it spent the first third of the year selling in the low $20/lb range, how long would you expect to keep your job?) 

  Week in Review - (all prices are indication only and different source used than we use to post daily ending price) Coming off a prior week filled with bullish information, but only a 5% increase in nickel prices, and an inability to maintain a break thru the $50,000/tonne barrier, we started to get optimistic that the worst may behind us. While by no means claiming that the bull market was anywhere near over, we did feel there was a hint of pessimism in the nickel market, especially with the news of China importing more low grade nickel ore. The first four days of this week gave us no reason to feel our optimism that a major correction might be coming was in doubt, while Friday's movement put a damper on our hopes. (please remember, the author of this site is a consumer/seller of stainless steel product)  Monday morning started the trading day at $22.04/lb, reached a high of $22.57/lb, a low of $21.86/lb, and ended the day at $22.52/lb. The market came close to beating the 3 month record high of $22.75/lb, but not quite. Markets opened Tuesday at $22.52/lb, reach a high of $22.77/lb, a low of $21.60/lb, and end at $21.65/lb. The $22.77/lb became the new record, but the market reacted by retreating fast, with the day's final trades almost $1/lb lower than they had begun the day. Wednesday, we published our optimism, and the markets didn't let us down. Opening at $21.68/lb, nickel reached a daily high of $21.85/lb, a low of $21.35/lb, and ended at $21.48/lb. Thursday was much of the same, with markets beginning the day at $21.50/lb, reaching $21.70/lb, falling to $20.97/lb, and ending at $21.36/lb. And then Friday came, making us wonder once again, why we would even hint at predicting this market. Markets opened at $21.43/lb, rose as high as $22.40/lb, a low of $21.24/lb, and ended the day at $22.06/lb. Based off this source, the market ended last Friday at $22.07/lb, so for the week, the market ended flat. Price of 3 month nickel is still 46.16% higher than it was on January 1st of this year, and 274% higher than they were just one year ago, and 610% higher than they were this time in 2003.

(comment) A major correction of 40%, which in anyone's book is a 'huge' correction, would only take us back to January pricing levels, and still leave the price of nickel over 400% higher than they were when the bull market began in 2001-2002. But will it happen? We are hard pressed to find any legitimate reason why it should, but customers of stainless steel remain hopeful. Some of the price increases customers have seen for stainless steel product recently, are staggering, especially on projects that were quoted earlier this year. One reader told us this week, a stainless steel tank, that they had been quoted the first week in January, had just gone up by over 30%. When you are talking a $100,000 tank, that's a huge bite. Another reader advised us that he was seeing many of his major stainless steel projects put on hold, or cancelled. While the price increases are hurting consumers, the demand seems to be falling only in a few, selective areas. We spoke to someone in the plating industry a few weeks back and asked them if they were seeing current customers of stainless looking at 'plating over steel' alternatives. And while he said he was not seeing this among those already committed to providing stainless steel product in their current production and marketing brochures, they were seeing engineers responsible for designing new projects, who would have typically used stainless steel before, considering other options. The information out this week about Posco developing a new non nickel stainless got a lot of media attention, but a reader supplied us technical papers, that we posted on Friday, that show the Japanese have had a comparable product available for 25 years. At this junction in the road, there may be manufacturers that are willing to surrender some of the corrosion resistance that nickel bearing 300 series stainless steel offers, but it typically takes months or even years to test, engineer, order, and be supplied with any possible alternative material. And like the 200 series stainless steel that India is pushing, which comes in both low and high nickel content, new products do not come with the proven track record that 300 series stainless steel can provide. Talk to anyone old enough to remember, and they will tell you how difficult it was to convince customers to switch to the yet-to-be-proven 300 series stainless steel way back when. Today, one can point to the Chrysler Building, built in 1930, or the St Louis Arch, finished over 40 years ago, to prove the claims of corrosion resistance are legitimate. But it wasn't until the big push on quality hit the United States in the latter half of the last century, that manufacturers outside of the military really came to accept the increased price of 300 series stainless steel for use in civilian applications.

For the vast majority of those buying stainless, they bite the bullet and deal with the cards they are dealt. And while possible substitution changes will be a long range concern, rather than an immediate one, the price of nickel and its immediate effect on the price of stainless steel, is giving manufacturers just cause to start examining those options. Are there any immediate threats to the price of nickel? Very few, except possibly the increased importation of low nickel ore into China. But in the end, this new supply may only be a stop gap source that keeps the supply/demand deficit out of the critical level, and keeps any further talk of rationing muffled. What will happen is anyone's guess. But for those of us hoping for a major correction, it may be based more on a hope and a prayer, than the reality of the market.   

  Bottler - or miner? (comment - we wouldn't have given this story much thought until we read one particular statement) - sentence from article -"In 2005, the Framework for Responsible Mining, developed by NGOs, retailers, investors and technical experts, codified the right of communities to consent to operations on their land." - article here (so, is pumping water, a form of water mining?) - Water - The Ultimate Commodity (article here) and Drinking Water - Investors Perspective - article here  and one final - Pure water in the Desert - article here

  Resource World TV - Fundamental Research Corp - SCC Commodity Presentation - "Fundamental Research Corp Research Associate Martha Buckwalter-Davis, BA (Geology), gives a speech about the benefits of adding commodity exposure to you portfolio through an investment in junior resource companies. She also talks about how Fundamental Research Corp evaluates junior mining companies." - video here

  Book - China Inc -  released in 2005 (website here) Quote from review by Kirkus Reviews - "Fishman is a little alarmed by China’s growth, but also ready to comfort readers with the prospect of ever-falling prices thanks to its abundant low-wage labor pool. He is more alarmed, however, at a seeming codependency that is emerging, in which Americans buy Chinese goods with money that is in essence on loan from China. “The United States,” he warns, “cannot take on ever-bigger debt and amass huge trade deficits indefinitely.” A thought-provoking and accessible forecast of strange times to come."

  Not metals related - (comment - hasn't got much media coverage, for obvious reasons)  PBS Bill Moyers Reports - Buying The War - video here


Friday, April 27

  Today's official nickel closing prices - cash - $22.72/lb - 3 month buyer - $21.68/lb (43.58% higher than 1/107). We only have one thing to say about this week - and we will borrow a line from the movie 'Top Gun' to make it (audio here). Today, after gaining as much as $2000/tonne earlier, 3 month LME nickel ended the day and week at $21.96/lb   ($48,400/tonne) (Dow Jones - more)  Have a safe and restful weekend. And for those who might be on holiday part of, or all of, next week - enjoy yourself!!.

  Urgent Friday Update!! If you want to know what is happening in the nickel market these days, you can sit thru boring speeches, visit crowded seminars, read reports and books till your over-qualified for a college degree, pay hundreds of dollars a year for experts to give you their 'opinions' - or you can give us 45 seconds. Yes, friends (in our best used car salesman voice), just 45 seconds could mean the difference between utter financial desolation and misery, or unspeakable money and wealth. Yes friends, we said money. That's why you're here - either to make it, or save it.  So is 45 seconds of your time worth an opportunity to make more money? Well, you say, what will it cost me for this once in a lifetime opportunity?? Nothing! Yes friends, today and today only, we offer this never to be repeated bonus offer to you - our faithful readers - for free. So sit back, turn up the speakers, as we present to you,  - "So you came to watch me die, eh!!"  (video here)  ...................... (class dismissed)

  No End In Sight For Nickel Strength - "2006 saw an interesting development in the global nickel market. As prices surged to new, previously unthought of highs, a new market developed in "direct shipping laterite ore" which actually had the effect of reducing the 2006 deficit below that which had been previously anticipated." - article here

  The Commodities Bull is Dead - " To paraphrase an old saying, "The death of this commodities bull has been greatly exaggerated." It can be difficult to keep ones eye on the major trend when market noise blocks out just about everything in sight, but that's the most likely path leading toward financial success." - more here

  Base Metals Stockpiles and Prices 2 - "Just a few years ago, the majority of stock traders were oblivious to the excitement that base metals had to offer commodities stocks. Futures traders hustled and bustled to make a buck in their familiar base metals marketplace, yet not even they were aware of the eruption of capital that would eventually take these markets by storm." - more here

  Brazil Miner CVRD: Goro Nickel Proj Completed By End-2008 - "Brazilian mining giant Companhia Vale do Rio Doce (RIO) has received all necessary environmental licenses to move forward with the Goro nickel project and expects to complete development of the mine by the end of 2008, the company's president said Friday." - article here  and another - article here

  Rolls-Royce says no alternative to high-cost metals - "Prices of aerospace metals nickel, cobalt and rhenium are at their highest for years, but engine makers have little choice but to carry on buying them, Rolls-Royce said on Thursday." - article here

  Yusco to up stainless steel prices for May - "Due to the rising nickel price and steel mills under cost pressure, Yusco, the largest stainless steel producer in Taiwan, announced to increase its prices for May." - article here

  Dow Jones - LCH.Clearnet, which clears trades for the London Metal Exchange, has raised its initial margins for nickel from $20,784 per lot to $36,894/lot, a rise of 77%, and effective after the close of business on April 30.

  We received this from a reader yesterday in reference to our skepticism about Posco's new stainless steel, POS445NF. He shared with us some material on Nippon Steel's NSSC 180. This is a ferritic stainless, that replaces the nickel, but supplies salt spray test results to go with it. We aren't engineers, but at first glance, we can see where this material could effectively replace "some" 300 series applications, where the PREN requirement (Pitting Resistance Equivalence number) is low. For the purchasing agents who visit this site, please feel free to download the attached pdf and forward it to your engineering department. We would be curious to see what they think, and would appreciate any expert feedback. pdf here  (comment - been on the market for over 25 years according to brochure)

  Indications at 7:55 am CST show 3 month nickel trading up by $.35/lb , while cash is up even higher. Little song playing over and over in my head this morning - to the old song by The Angels called "My Boyfriend's Back" - except we keep hearing "Our bull-friend is back and he's gonna' ruin my rosy outlook... heh nah - heh nah - the bull is back!!" (Bloomberg - more) (AFX - more)

  copyright/courtesy - Dow Jones Newswire - "LME nickel jumps on technical and speculative buying after buy-stops were triggered as prices pushed through the 20-day moving average, says LME broker. Next upside target for nickel is seen at $48,000/ton and then $50,000/ton, broker adds."
  Nickel May Surpass $55,000 a Ton This Year, Standard Bank Says - "Nickel prices may surpass this year's record as supplies of the metal used to make steel resistant to corrosion lags behind demand, Standard Bank said."

  DJ Posco's No-Nickel Steel A Threat To Nickel Demand -JP Morgan - "The development of nickel-free stainless steel by South Korea's Posco in response to record high nickel prices is a "tangible threat to global nickel demand," JP Morgan said in a report Friday." - article here

  Yesterday - Wall Street Journal headline and teaser - Posco Swaps Shares, Creating Allies Against a Hostile Bid - "South Korean steelmaker Posco said it will swap shares with two local companies in its latest efforts to build a defense against the possibility of a hostile takeover. Posco, the world's third-largest steelmaker by output, is seeking to enlarge its number of friendly shareholders at a time that the fragmented global steel industry is consolidating. Many steel companies are looking to build scale to gain a better negotiating position with large consumers and with iron-ore producers." (comment - South Korea's POSCO has been doing a lot of marketing lately for its shareholders benefit. Here is a refresher. - 2/1 - POSCO to build ferronickel refinery in May - 3/13 - POSCO seeks own supply of nickel - 3/19 - Arcelor Mittal eyes hostile bid for Posco - 4/11 - South Korea's Posco, the world's 3rd largest steelmaker, raised the price on stainless steel 7 times last year, and already 4 times this year. - 4/25 - South Korea's Posco Wednesday said it has developed a new nickel-free stainless steel product, which is about 50% cheaper than current stainless steel products that contain nickel)  

  Hedge funds target exotic metals - "Exotic metals such as cobalt, vanadium and molybdenum may be the next targets for investors in the world's overcrowded commodity markets, financiers and traders said this week." - article here

  China's stainless mill to raise prices on higher nickel costs - "China's stainless steelmakers are expected to raise prices of 304 stainless steel by RMB2,400 for May deliveries as this rising is far beyond market expected a week ago." - more here

  Eramet chairman ousted - "Jacques Bacardats, chairman and CEO of French non-ferrous metals group Eramet, was ousted from his post on Wednesday in a surprise vote by the group's leading shareholders, the Duval family (37 per cent), and nuclear group Areva (26 per cent), at the company's general meeting." - article here

  The future of Eramet worries all Calédonie - "The ousting of Jacques Bacardats leaves free course to the speculations on the future of the group. The catch of being able of Areva, leader world of the industry of the nuclear power, can have like the worst consequence, a sale of the group, like best, a durable positioning of the State in the capital." - translated article here

  Rio struggling to supply booming demand - "RIO Tinto chief executive Leigh Clifford says the resources giant is struggling to meet demand for commodities being fuelled by large, developing economies such as China." - article here

  News Bites - China - "Stainless Mills Raise Prices by 5.8% in May for Nickel Pressure" - South Korea - "Posco, the world's fourth largest steel maker, and Hyundai Heavy Industries Co, the largest shipyard, will buy stakes in each other to boost cooperation and strengthen defences against hostile bids, Posco said yesterday." - China - " Shares of China Molybdenum surged 60 per cent on its trading debut in Hong Kong Thursday, making it one of the largest first-day gainers of the year." - Other - "Merrill Lynch Raises Long-Term Iron Ore Price Estimate 30%" - China - "Chinese manganese metal prices climb on higher export tax concern (more)

  Politics Played Role in Buyat Bay "Hoax" - "Earlier this week, PT Newmont and its President Director Richard Ness were cleared from of all criminal charges and regulatory violations over alleged pollution at Buyat Bay in Indonesia." - article here

  Today's beginning nickel inventory - plus 60 tons = 5,112 tonnes (28.05% - 1,434 tonnes cancelled warrants).

Thursday, April 26

  Today's official LME nickel closing - cash - $22.05/lb - 3 month buyer - $21.27/lb (40.86% higher than 1/1/07). Interesting to note that Man Financial, in its daily report today, stated "we expect light buying to come in at that level ($20.78/lb) as participants position themselves for another run to $50,000/tonne. Nickel started off on the slide today, and while we don't believe the price got as low as they thought, the light buying they forecast, did kick in around the $21.00/lb threshold. By the end of the trading day, the 3 month price ended only slightly lower, while the cash price never really recovered, and backwardation between the two slimmed to about 2/3 where it was yesterday. We have typically seen this run in the $.50/lb - $1.00/lb range during this bull run, so the pullback from Tuesday's $4000/tonne was to be expected. 3 month nickel ended the day at $21.27/lb ($46,900/tonne) (Dow Jones - more)

  Round-up of upcoming holiday's over next few weeks - On May 1st thru 7th, China celebrates its week long Labor Day holiday and business' will be closed. And on May 7th, the London Metal Exchange will be closed as Britain celebrates its UK May Day. Many other countries will also be closed for business on May 1st.

  Macquarie commodity Day commentary - (comment - sorry for the bad translation but worth posting) - translated article here

  The Joy of Mining - "After the miners trudged home from the great California Gold Rush of 1849, most of them empty-handed, history recorded this now-hoary saying: The folks that got rich on gold were the ones selling the picks and shovels." - article here

  Indonesia Is the Big Loser in Buyat Bay - "On April 23, an Indonesian court returned its verdict in the case of Newmont Mining’s alleged pollution in Buyat Bay. Although the decision was ultimately favourable toward Newmont, the verdict on Indonesia is far less positive: the country presents an unstable and unpredictable business environment for foreign investors." - article here

  Mountain America Mining - "For the first time in a number of years, the overall outlook for the mining industry in Mountain America is about as bright as it could possibly be. The only negative — and it's pushed by the "gloom-and-doom" crowd — is for coal, which is a producer of "greenhouse gases" when burned conventionally. Today, even uranium is enjoying a renaissance. And ironically, the very price increases that have been driving up the cost of construction — increased fuel and materials costs — are largely the same increases that are causing mining to grow." - article here

  Steel Prices Strengthen Around the World But Gains May Be Temporary - "Service centre inventories continue to come down in the US but the rate of decline has slowed and they remain above the desired level. Only a proportion of the recently announced flat products transaction price hikes have worked their way into the market place. Real consumption has failed to recover. Import competition continues to be low, due to the weak dollar and good demand elsewhere in the world." - more here

  Indications at 7:55 am CST, show 3 month nickel selling down by $.30/lb .  No real news out, so the market could be reacting to gains in LME stored inventory, which, when considering cancelled warrants, aren't in much better shape than they were at the beginning of the month. (Dow Jones - more) (Bloomberg - more) (AFX - more) (Reuters - more)

  China Unlikely To Curb Nickel Pig Iron Pdtn - "China's rapidly growing output of nickel pig iron disastrous for country environmentally, but unlikely to lead to similar tightening measures government considering for aluminum, zinc industries, as Chinese market "acutely short of nickel," says Citigroup's Alan Heap." - article here

  Sustainability key for metals sector - "More than 200 metal traders, brokers, refiners and producers from around the nation gathered at a three-star Shanghai hotel recently to find a strategy for more efficient use of raw materials mainly copper and aluminum, whose prices are expected to continue rising." - article here  and China's Steel Output Hits Record High in March - "According to the latest statistics released by the National Bureau of Statistics,China’s steel output continued its vigorous growth in March . Average daily output of crude steel, pig iron and rolled steel hit record high " - article here

  Ugly child born of mining boom lifecycle - "THERE'S more than a few resource analysts out there monitoring the lifecycle of the current mining boom." - article here

  The chairman of Eramet towards the exit - "The future of Jacques Bacardats to the head of the group appeared played yesterday evening. Whereas the Eramet title flies away with the purse and that nickel plays the high-speed motorboats on the international scene, this unexpected decision could predict of a great upheaval." - translated article here

   News Bites - (Australia) - "Consolidated Minerals has downgraded its nickel production forecast for the second time in as many quarters, contrasting with a resolute performance from its manganese division." - (China) - "Mining shares lead Chinese equities to fresh highs" - (Indonesia) - "Indonesia remains most dangerous for seafarers: watchdog" (more) -

  Today's beginning nickel inventory - plus 210 tons = 5,052 tonnes (28.27% - 1,428 tonnes cancelled warrants).

Wednesday, April 25 (Administrative Professionals Day in Canada and US)

  Today's official LME nickel closing - cash - $22.55/lb - 3 month buyer - $21.63/lb (43.25% higher than 1/1/107). So far, we have received very little reaction to our earlier comment. We would, however, like to clarify one point, because we apparently gave a wrong impression to some. We are not claiming that the bull market for metals is anywhere close to being over. We go back to our comment about China. They may be importing more low content nickel ore directly, which could potentially effect the demand for worldwide processed nickel, and thus the price on the London Metal Exchange, but they are importing more because the demand is still growing. How much this new source hurts the price of nickel, remains the million dollar question. 3 month nickel prices retreated today, ending the mid week point of the week at $21.45/lb ($47,295/tonne) (Dow Jones - news(cash nickel fell harder than 3 month nickel today, and pulled the backwardation from $4000/tonne yesterday, to around $2500/tonne today) 

  China won’t slow base metals demand - "Strong first quarter growth of 11.1% in China has fueled speculation the government may impose measures to slow the economy. But, if that doesn’t happen, the country’s appetite for base metals consumption will remain strong, say analysts and traders who reckon that buyers across the globe will continue to face high prices and tight supplies." - article here

  (comment) We were asked by a reader what we thought about the news that Posco has developed a non nickel stainless steel. You will notice that nowhere in today's press release did Posco claim that this 'new product' is a substitute for, or comparable to, any other grade of stainless. Stainless means the metal will "stain-less", not that it is "stain-proof". 300 series resists corrosion effectively, 200 series not as well, 400 even less so. So, the press release claim that it was 1/2 the price of 300 series stainless, does that also mean its 1/2 as corrosion resistant? We will be less incredulous and give this matter the proper attention, when someone actually starts marketing the product with some technical details and test results.

  China's Iron Ore Imports May Gain 20%, Industry Group Forecasts - "China, the world's largest iron ore buyer, may boost imports as much as 20 percent this year as demand rises, the head of the China Metallurgical Mining Enterprise Association said, doubling a forecast from December." - (article here)  and "Iron Ore Price to Rise Next Two Years on China Demand, RBC Says" - "The benchmark price of iron ore, a key steelmaking ingredient, may rise for a further two years, making it seven straight increases due to Chinese demand, RBC Capital Markets said." - (article here)

  Why BHP and Rio are still cheap - "Last week's Reserve Bank bulletin contained an article that put the relatively recent boom in commodity prices into a longer-term and quite bullish perspective, one the sharemarket doesn't appear to share." - article here

  Allegheny Technologies Announces Strong Profitable Growth in First Quarter 2007 - "Allegheny Technologies Incorporated -0- *T -- Sales increased 32% to $1.37 billion -- Net income increased 86% to $197.8 million, or $1.92 per share" - more here

  News from Eramet today - "New Caledonia Ops Need Peaceful,Constructive Climate" - more here "2007 Chinese Stainless Consumption To Overtake Europe" - more here " "Eramet: Continues To Pursue Consolidation Opportunities" - more here " Global Nickel Price Gains "Very Excessive"" - more here

  Indications at 7:50 show 3 month nickel selling up by $.20/lb . (Bloomberg - more) (Reuters - more) Comment - Ever have a nagging feeling something is in the wind? We have to admit that for the first time, in a very, very long time, we are looking forward to watching the price of nickel over the next few months, with a hint of optimism. If we were interested from a traders point of view, we could find a thousand reasons to remain bullish. But as consumers and distributors of stainless steel, the mere fact the typically bearish analysts have gone completely quiet, makes us wonder if something could be up. What we have experienced over the past few weeks, could be nothing more than the bull taking a rest. But the fact the market cowers every time it gets to the $50,000/tonne mark, could possibly mean it's losing some gas. We have to confess, if we did trade in nickel, we would find this low nickel content ore being imported into China, very concerning. China tried this with chrome, but a couple of the larger ferrochrome producers were able to convince the world's largest producer, South Africa, that it was shooting itself in the foot by allowing its chrome to be shipped overseas in raw ore form. You can't blame China for taking the lowest cost alternative, and trying to work around the established system. As the world's largest producer and consumer of stainless steel, the price increases in nickel, copper, ferrochrome, iron ore, etc, hits them the hardest. While worldwide stainless steel usage is up worldwide, and thus nickel consumption, it is apparent that if China were to sneeze, the world would catch the cold. And while some Chinese producers will huff and puff and claim they are switching customers from 300 series to 200 or 400 series stainless steel, which are not comparable in corrosion resistance in most applications, the wild card, and great unknown, is the direct importing of the low nickel ore.

It's probably nothing more than wishful thinking on our part, or maybe the bull has just gotten a little scruffy and needs a good trim, but we wouldn't be surprised to see a "major" correction in the price of nickel on the horizon. And yes, we know we are alone on this one.

  Canada's Commodity Price Update - pdf here

  Media release and update on Caldag Project - pdf here

  Sherritt gobbles up Dynatec creating a laterite powerhouse - "During the past two years, one could safely say that the only sure things in life are death, taxes, mining takeovers and a rising price of nickel." - article here

  Samancor counters pollution allegations - "Ferrochrome producer Samancor Chrome has denied claims that its measures to remove a carcinogenic substance from groundwater in the areas surrounding its Tubatse ferrochrome plant were inadequate, and that residents of the Steelport area, in Mpumalanga, were not made aware of the pollution." - article here

  News Bites - "China - Raw Material of Stainless Steel is Facing Surplus" " Philippines Exported 5.6 Million Tons Of Nickel Ore In 2006" "Combined General Meeting of 25 April 2007, Appointment of Patrick Buffet as Chairman and Chief Executive of Eramet Group" "South Korea's Posco Wednesday said it has developed a new nickel-free stainless steel product, which is about 50% cheaper than current stainless steel products that contain nickel"

  New heyday for Indonesian mining industry? - "The global mining industry is booming. Prices of mining commodities, which have been on the increase over the past several years, have sharply risen since the middle of last year thanks to rising demand from new economic giants China and India." - (article here) - Indonesia Prosecutor `Certain' to Appeal Newmont Case - "Indonesian prosecutors will appeal to the Supreme Court a verdict that acquitted a local unit of Newmont Mining Corp. of charges it polluted a bay, prolonging a case against the world's second-largest gold miner." - (article here)

  Today's beginning nickel inventory - plus 528 tons = 4,842 tonnes (29.00% - 1,404 tonnes cancelled warrants).


Tuesday, April 24 (reminder - tomorrow is Administrative Professionals Day in Canada and US) $22.77/lb - new record high
  Possible cause for today's downward trend? - from Scotia report posted on investorvillage.com "China’s refined nickel net imports rose 14.0% YOY but fell 43.4% sequentially to 5,807 tonnes in March, ... Imports of nickel ores, the majority of which were low-grade laterite ores used to produce pig iron nickel, surged sharply in March,.... China imported a total of 1.03 million tonnes of nickel ores in March, up 6.8x YOY, bringing the total tonnage in the first quarter up 12x YOY to 2.26 million tonnes. Observations: At the current pace, China’s laterite ore imports may reach 10 million tonnes this year, sufficient to produce 90,000 tonnes of nickel-in-content in pig iron in 2007, up from an estimated 32,000 tonnes in 2006. (earlier estimates had put the possible impact of laterite ore imports at 60,000 tonnes - this revision from a very respected agency, had to have come as a shock to some)

  Update - Backwardation between cash (which ended up today) and 3 month nickel now over $4000/tonne.

  Today's official LME nickel closing - cash - $23.50 - 3 month buyer - $22.66/lb (50% higher than 1/1/07). Another record breaking day for 3 month nickel - which at one point hit a new high of $22.77/lb. And then, like a flock of ducks in a pond suddenly spooked by gunfire, the market turned around with a vengeance. We aren't seeing any news that might have triggered the sudden retreat, unless the entire Natexis LME trading team walking spooked investors, so we are assuming it was profit taking time again. Price of nickel ended about 3-1/2% down, erasing its gains from last week. So while the official closing of the day, which is established after the first ring, implied a respectable gain on the day, in fact, the price of nickel fell overall. 3 month LME nickel prices ended the day at $21.59/lb ($47,600/tonne)  (Dow Jones - more) Also, we are seeing a published article out today that claims the nickel is now worth a dime in metal value. This is incorrect, and with today's official copper and nickel cash closing prices (both higher than they actually ended the day), a 2007 U.S. nickel is worth just a smidgen over 9-1/2 cents.    

  Norilsk revises 2007 nickel output up - "Russian metals giant Norilsk Nickel said on Tuesday in had revised its nickel output forecast for 2007 to 270,000-275,000 tonnes from the previous 240,000-245,000 tonnes due to acquisition of OM Group's assets" - article here and another

  (Reuters ) China's Jinchuan makes 20 percent more nickel in Q1 - (Platts) Philippines' Atlas to fund Berong nickel project with bank loans (Reuters) Morgan Stanley more bullish on copper than nickel  (AFX) Philippine Atlas says Berong venture to invest 1.2 bln pesos in new nickel plant  (Reuters) South Korea buys 300 tonnes of nickel cathode

  Natexis Metals LME trading team resign from LME ring - "Five members of the ring-dealing team of Natexis Metals at the London Metal Exchange resigned today, the company said." - more here

  Outokumpu to Cut 2nd-Quarter Stainless-Steel Production by 10% - "Outokumpu Oyj, the world's fourth- biggest stainless-steel maker, said it will cut second-quarter production by 10 percent as users of the corrosion-resistant alloy use inventories instead of placing orders." - article here

  Graph courtesy Metals Insider - Cyclically down in March - or trouble for refined nickel producers ahead? Read Metals Insider report "High prices changing the nature of Chinese nickel imports" - here


  Indications at 7:55 am CST show nickel selling at $.24/lb higher  . Well after a market last week, that seemed to move with no rhyme or reason, this week seems to be following a more established path. With all of the extremely bullish news out the past few weeks, including more last night, the nickel market soared again today, and at one point set a new all time record high of $22.77/lb, beating the old record of April 10th by a few pennies a pound. Current indication puts the market about $.14/lb below the new record. More Voisey's Bay contractors are on strike, nickel consumption figures for China show imports soaring, and Newmont is off the hook in Indonesia. Been a busy news day already, and the US markets are just opening. Could prove to be a very interesting day.  (Bloomberg - more) (Reuters - more)

  Rand Merchant Bank - Weekly Base Metal Reports - pdf here

  BHP Ravensthorpe Build Nearly Complete; Projects On Budget - "BHP Billiton (BHP) said Tuesday construction at its Ravensthorpe nickel project in Western Australia had surpassed 90% of completion, while almost all of its development projects were within budget and on schedule." - article here

  2nd group launches strike at Voisey's Bay mine - "For the second time in a week, a group of support staff at the Voisey's Bay nickel mine in northern Labrador has walked off the job." - article here

  News Bites - (Reuters from article 'Earnings Preview: United States Steel') "In industry trends, stainless steel demand in the quarter rose about 40 percent in China, wrote Prudential Equity Group LLC analyst John C. Tumazos in a recent client note." (Bloomberg) "Imports of the metal (nickel) used in stainless steel into China, the world's largest user, gained 5.5 percent in March to 7,740 tons from the same month last year, according to government data published yesterday. For the first three months, imports jumped 47 percent." (Dow Jones Newswire) - "China may satisfy nearly 60% of its nickel needs through imports of low-grade nickel ore for conversion into nickel pig iron, says ABN Amro. Notes, as low-grade ore imports in 1Q rose to 2.2 million tons from 3.78 million tons in all of 2006, annualized imports would be 8.8 million tons, displacing about 170,000 metric tons of nickel pig iron. "Just three years ago (such) imports were negligible but now they could be pivotal."

  Outokumpu first quarter 2007 interim report - pdf here

  Western Areas to become major Canadian nickel producer - update - "Australian-based Western Areas Nl positions itself as the largest Canadian-listed nickel producer, its managing director Julian Hanna says it was luck that paved the company's entry into North America." - article here

  Commodity prices to remain strong, forecasts IMF - "There will be no relief from high commodity prices anytime soon. Following last year's trend, world commodity prices are expected to continue to remain strong this year, International Monetary Fund (IMF) forecast in its latest Global Economic Outlook 2007 - Spillovers and Cycles in the Global Economy" - article here

  Oriel begins Ferrochrome production at Tikhvin - "London-listed mining firm Oriel Resources has started producing steelmaking additive ferro-chrome at its Tikhvin plant in Russia, the company said on Tuesday." - article here

  Indonesian Court Acquits Newmont, Ness of Pollution - "An Indonesian court acquitted a local unit of Newmont Mining Corp., the world's second-largest gold miner, and a U.S. executive of charges they polluted a bay in the Southeast Asian nation with mercury and arsenic." - article here and another

  Universal Stainless Reports Record Sales and Earnings for 2007 First Quarter - article here and AK Steel Reports Net Income of $62.7 Million for First Quarter of 2007 - article here

  BHP Billiton posts record base metals output for first 9 months - "Anglo-Australian resources giant BHP Billiton Tuesday reported record production of alumina, aluminium, copper, nickel, iron ore and manganese ore for the nine months ended March 31, 2007, underpinned by strong customer demand." - article here and another

  Jiji Press Ltd News Bite - "Japanese steelmakers are set to face cost increases of 700 billion yen in fiscal 2007 due to higher prices of raw materials much as zinc and nickel, Japan Iron and Steel Federation Chairman Hajime Bada said Monday." (according to Google, that is equivalent to $5.89821368 billion U.S. dollars)

  Today's beginning nickel inventory - plus 240 tons = 4,314 tonnes (31.43% - 1,356 tonnes cancelled warrants).


Monday, April 23

  Today's official LME closing - (established after 1st ring) - cash - $23.27/lb - 3 month buyer - $22.32/lb (47.81% higher than 1/1/07). With no real news except the Caldag nickel project in Turkey is temporarily delayed, nickel prices took off strong this morning, and held onto their gains throughout much of the day. Tomorrow, President Director Richard Ness of Newmont Mining, will find out the verdict in an Indonesian criminal trial for improper dumping. (the charges in the original indictment - here) While not directly related to nickel, we have followed this case closely, as it could carry implications for nickel producers on the island of Sulawesi, and might determine future investments being made in Indonesia. Tomorrow there will be two conferences that may produce market news - Mining World Russia starts in Moscow and runs through the week, and China Iron Ore 2007 and Far East Steel conferences begin. Wednesday, Beijing plays host to the AsianMetal FerroAlloys Summit 2007.  LME 3 month nickel ended the first day of this trading week at $22.39/lb ($49,350/tonne). (Dow Jones Newswire - more)

  Major Coke Producers to Raise Coke Prices to Combat Cost Growth - "China's major coke producers located in the provinces of Shanxi, Hebei, Shandong and Shaanxi will raise coke prices in the near future in order to combat growing production costs, industry insiders said today." - article here  

  Anglo American Buys Brazil Mining Stake - "Brazilian iron and steel company MMX Mineracao e Metalicos SA plans to sell a large stake in one of its mining projects to British mining company Anglo American PLC, according to a regulatory filing on Monday." - article here

  Norilsk Nickel Plans to Spend $11M on Deposits in Siberia - "Norilsk Nickel, the country's biggest mining company, plans to spend $11 million through 2009 on the exploration of its Bystrinskoye group of metal deposits in southeastern Siberia." - article here

  World Steel Production Statistics for March 2007 - pdf here

  Metals Insider - Week in Review - "Where next for super-strong nickel?" - here

  Indications  at 7:50 am CST show nickel selling up by $.31/lb . We felt somewhat vindicated in our confusion last week, when the headline in Credit Suisse's weekly Commodities Report Saturday was "Trend in base metal prices follows increasingly erratic course".  (Bloomberg - more) (The Australian - more) (Forbes - more) (Reuters- more)

  Shanghai Nonferrous Metals published its weekly Monday morning poll of metals analysts - of 26 responding, 15 (57%) believe nickel prices will rise this week, 9 (34%) believe they will stay about the same, and 2 (&5) feel they will drop.

  European Nickel: Caldag Project Construction Delayed - "European Nickel said Monday it has started construction of the Caldag project infrastructure, although construction of the main project is on hold because of a delay in the award of a Government Forestry Permit to clear trees from the site." - more here

  Specialty Metals Industry Group Releases One-Month Market Data - pdf here

  News Bites - "Gansu Province-based Jinchuan Nickel Group, China's largest nickel producer, reported an increase in copper and nickel output but lower precious metals output for the first quarter of this year, a company official told Interfax today." - China March Base Metals: Table Of Imports, Exports - here"

  The SLN opens its grids for its new ore tanker - "For Saturday, the SLN has had a new ore tanker, Doniambo. With 28.000 capacity tons, it will take part in the effort made in 2001 to reach a production of 75.000 tons nickel metal per annum." - translated article here

  European mills find it hard to sell to Asia with today's stainless highs - "304 CR base price from Europe to Asia for May shipments rises again to US$5,100~$5,300 per ton from April's US$5,000~5,200 per ton deliveries. This does not help in orders-booking at all, but almost dries up Asian market for European imports." - more here

  Industrialinfo.com Radio to Host Stainless Structurals LLC Monday, April 23, 2007 - "industrial Info Resources (Sugar Land, Texas) will host Stainless Structurals LLC (Jacksonville, Florida) as its special guest on Industrialinfo.com Radio Monday, April 23, 2007, as part of "Industry Today," a weekly internet radio broadcast featuring technology, industry trends and company executives." - more info here

  Atlas starts nickel project - "Berong Nickel Corp., a unit of Atlas Consolidated Mining and Development Corp., is infusing fresh investments of P1.2 billion into a new facility that will produce beneficiated nickel ore in Quezon, Palawan." - article here

  Today's beginning nickel inventory - plus 18 tons = 4,074 tonnes (28.28% - 1,152 tonnes cancelled warrants).

Weekend Review, April 21-22

  Persistent shortages should push nickel higher - "Expect nickel's price to rise beyond its current stratospheric level, as new supply due later this year will fail to satisfy a growing need for the metal in stainless steel, jet engines and hybrid cars, analysts said this week at ISRI's annual convention." - article here

  Nickel price hits stainless steel - "Nickel producers are responding to rising demand, which has prompted unprecedented rises in the price of the essential ingredient of stainless steel, says Nickel Institute president Steve Barnett." - article here

  Base Metals. What bubble? - "In six months the outlook has changed dramatically, and ratings reflect this. Analysts have now learned not to talk down metals like copper and nickel. In a replay of the first few months of last year, base metal prices have risen sharply, despite initial bearish forecasts and pessimism on global economic growth prospects." - article here (page has heavy advertisement but best link we could find)

  Chinese-run mine site yields shabu materials - "Personnel of the Philippine Drug Enforcement Agency seized assorted chemicals believed used in the manufacture of shabu (methamphetamine hydrochloride) at the mining site where a group of Chinese was held recently for working illegally in the country." - article here (comment - shabu is a synthetic drug that is commonly referred to as "speed", "meth" or "ice" in the West.)

  Wall Street Digs Heavy Metal - "Chunks of zinc, nickel, cobalt, bauxite and copper would be an awesome addition to any kid's rock collection." - article here

  Philippines Terror Warnings issued by Aussie and USA Govts - "AUSTRALIA and the US have warned of an impending attack in the Philippines, where militants linked to al-Qaida recently beheaded seven Christians." - article here

  China metals output surges on Q1 demand - "China's production of metals for its power, manufacturing and construction industries surged in the first quarter as investors speculated that demand in the world's fastest-growing major economy may spur further growth." - (article here) - Goldman Sachs raises China's 2007 growth to 10.8% - (article here) China may raise interest rates twice this year - (article here)

  The identity crisis that will change the TSX - "Domtar. Falconbridge. Inco. ATI. Fairmont. As the disappearing act on the TSX continues with BCE announcing it is up for sale, the exchange is redefining itself and opening its doors to the next blue-chip companies that will call it home" - article here

  Macquarie Research China Commodities Weekly - Chinese crude steel output hits another record high in March - "SHFE metal prices made strong gains last week following the price surge on the LME. The front month copper contract rose to Rmb72,300/t (US$9,269/t) by the market close on Friday, an increase of Rmb2,400/t (US$308/t), or 3.4% above the previous week's close." - article here

  Fresh allegations tarnish glittering year for Anglo - "t may have made $9bn profit, but the metals mining group stands accused of some base practices, reports Nick Mathiason" - (article here)  Sponge iron industries are lethal to life - ""I am ailing from acute bronchitis. Doctors say it is due to heavy pollution in the area. They also say that there is high risk of cancer. Only God can save me now," grieves Kishore Ekka of Sundargarh district." - (article here)

  Stainless still? # Kitchen designers doubt reports the finish is on its way out - "It was a news release that brought the bad news. Stainless steel’s dominance as the “in” metal is over." - article here

  Voisey's Bay mine not deterred by strike: company - "Voisey's Bay Nickel says it will be able to maintain production, despite a strike involving support workers and another labour dispute on the horizon." - article here

  Workers end four-day strike at Freeport Indonesia - comment - (nickel prices could potentially get caught up in a possible copper price fall on Monday, although it should only be temporary, if at all) - article here

  Indonesia court to rule on mine waste disposal - "An Indonesian court is due to give a verdict on Tuesday in a pollution trial involving Newmont Mining Corp that is seen as a test of attitudes toward foreign firms and environmental protection." - article here

  (Indications only) Week in Review - Trying to figure out what was driving the market this week was virtually impossible. Nickel traders were holding their cards hard to their chest this week, and not immediately reacting to bullish news, like they have done over the past year. We can only guess that there is a very concerning wild card out there - low grade nickel ore being imported by China, that has everyone's attention. This wasn't a week of poker, it was more like the popular U.S. game of chance - no one wants to get caught with the 'Old Maid'. Monday morning, London Metal Exchange trading opened for 3 month nickel at $21.61/lb, hit a high of $21.65/lb, fell to a low of $21.04/lb, and ended at $21.13/lb. Tuesday, trading opened at $21.16/lb, saw nickel trading as high as $21.98/lb, saw a low of $21.03/lb, and ended the days trading at $21.89/lb. Wednesday, markets opened at $21.93/lb, reached a high of $21.95/lb, fell to a low of $21.44/lb, and ended at $21.72/lb. Nickel opened at $21.58/lb on Thursday, reached a high of $21.91/lb, a low of $21.46/lb, and ended at $21.68/lb. Friday, markets opened at $21.70/lb, traded as high as $22.18/lb, as low as $21.52/lb, and ended the week at $22.07/lb. Since we use different sources for our report, the source we use for our daily reports reflected a 5% price increase for nickel on the week, while the source we use for weekend reviews, show a 3.6% increase for the week. Both, however, reflect an ending price 46.1% higher than the first day of this year, and a 9% increase on the month. The all time record price of $22.75/lb, that we witnessed on April 10th, still stands. 

  Sally Malay surge puts miner in the rich ranks - "Sally Malay became the third nickel producer to join the ranks of WA’s $1 billion companies yesterday but the champagne remained on ice as renewed concerns about China’s red hot growth sent the broader share market into a dive." - article here

  Comment - A Canadian author, whom we have great respect for, stated in an article this week "The mining sins of the father are certainly coming back to haunt the sons." According to the EPA, there are 63 Superfund "National Priority List" sites in the United States, that are former mining sites, and estimates that it could cost taxpayers as much as $7.8 billion to clean up these sites. And while environmentalists can make valid points sometimes, they seem to follow the same path most NGO's do - they loose focus and show their biased true colors. In this article they attack gold mining hobbyists - (article here) Note the statement by the Forest Service - "...miners must file plans only if they intend to clear vegetation, excavate banks, or do anything else that would require restoration on national forest lands. Otherwise, they can operate without federal oversight." Panning for gold does not harm the environment, but could potentially force a crayfish or two, to find a new rock to hide under!

This site is by no means a radical pro-mining site. In fact, nothing gives us more enjoyment in life than taking on 'radicals', no matter which side they choose. We know we can't win, because a radical defines truth in their own mind. But we can usually make them look as foolish as they are. We pass on the news as it comes, ever mindful of the fact, that there are always two sides to every coin. The media tends to give their attention to those who make the most noise, and as Mr Sudol stated in his aforementioned article, that is almost always the anti-mining groups.  Mining is a vitally important part of our world economy, and for those who are mining responsibly, it's time to show the public what you are doing. The documentary "Mine Your Own Business" caught the NGO's off guard and forced them to spend a lot of time doing damage control. If this is the best the industry has got, it should prepare itself to do a lot of damage control of its own. The world is shifting its attention to Global Warming in a big way, and this will inevitably bring back the strong environmental movements of the past. Any NGO will tell you...it's much easier to be on the offense, than trying to play defense. Sun-tzu stated in 'The Art of War' - "if your enemy is angry, irritate him". Can you think of a more angry lot than NGO's? (example - recently a Canadian mining company, Skye Resources, who has purchased a mine in Guatemala, got some very negative press when it had the local police remove squatters off its property. While not one single person had to be physically removed, or was harmed in any way, the NGO's took their video of burning huts and angry Mayan's, and decried the "violent" expulsion of these people from their native lands. In public discourses between the president of this mining company and one of the militant anti-mining witness' to the event, the following was admitted by the NGO "I have visited Cerro 400 and you are correct in stating that, had I not been told, I would never have known that the area had been mined and reforested." That is something the NGO's do not want the public to see.) 

  What do you get when you give an artist 110 tons of mirror polished 316 Stainless (containing 12% nickel)? - At Chicago's Millennium Park you get 'Cloud Gate', or as the citizen's lovingly call it, The Bean - photo's here 

  A few video clips from PBS "Indonesia's War Against Terrorism" (3 clips from an hour long show that aired this week) - video here (We watch events in Indonesia closely as a lot of nickel is shipped from our planet's youngest democracy)

  Poll Finds World Publics Reject U.S. Role as the World Leader; Majorities Still Want United States to Do its Share in Multilateral Efforts - report here

  CNN Worldwide Gun Violence Map - here  Current price of uranium - here  


Friday, April 20

  Today's official nickel closing prices - cash - $22.95/lb - 3 month buyer - $22.16/lb (46.75% higher than 1/1/07). Market climbed higher today and was able to maintain the gain. The day and week ended at $22.09/lb ($48,700/tonne). That's a 5% increase over last Friday's ending, but it was a roller coaster ride getting here. (Dow Jones - more) No one appears to be talking about the Voisey's Bay strike, except CBC and us, so we're still not sure what is going on with that. Next week, many mining companies will be at Mining World Russia, and we can expect some news. Sherritt making an offer on Dynatec today was the big news in the nickel industry. We will most likely see more nickel companies being bought-out, but who will be next? Starfire, Brilliant, FNX, Jubilee, Consolidated, the list of possible candidates is very long (please do not take as a recommendation, just company's we are watching). We hope you all have a nice, and safe weekend, and look forward to seeing you next week, or this weekend for our update. (Not sure if you noticed, but at the bottom of this page, we keep a summary of each day's prices)

  Spring thaw is dangerous time for Russian port  - "Every spring, the cranes in this Arctic port are shifted several hundred metres away from the banks of the Yenisei River." - (article here)  

  News Bite - "China's crude steel production in the first quarter of this year climbed 22.3 percent from last year to reach 114.7 million tons, with output in March rising to 40.157 million tons, up 20.4 percent from the same period last year."

  Indications at 7:50 am CST show nickel selling up by $.40/lb . (Bloomberg - more) According to the Dartmouth Toxic Metals Research Program, the average human being will ingest 170 micrograms of nickel per day. The world's population is currently over 6.7 billion people. Multiplying .00017 grams per day for 6.7 billion people, totals 1,139 kilograms of nickel. That is 1.139 metric tonnes of nickel being eaten every day. Multiple that by 365 days, and you just lost 415 metric tonnes of nickel for the year! 300 million Americans alone are eating a tonne of nickel every 19.6 days!! And what does this mean to the overall nickel market? Absolutely , positively, nothing. Bon appetite!


  Sherritt to Acquire Dynatec - "Sherritt International Corporation and Dynatec Corporation jointly announced today a transaction whereby under a Plan of Arrangement Sherritt will acquire all of the issued and outstanding common shares of Dynatec for a total value of $1.6 billion." - more here (this is not for dissemination in the U.S., so if you are in the States, please  pretend you didn't read this - this merger really comes as no surprise, although Sherritt wasn't figured in as a potential buyer)

  Good Golly, It’s Moly - "Wedged below chromium and above tungsten in the periodic table, molybdenum has at least one claim to fame in that it is arguably the hardest element name to pronounce. There is a certain irony, as it is for its hardness that molybdenum is also revered. But to save embarrassment, most in the molybdenum market refer to it as "moly"." - article here

  Scotiabank Commodity Price Index - pdf here

  Indonesia minister says key issues resolved over Rio Tinto's Nickel mine project - "Rio Tinto Ltd and Indonesia have overcome two key obstacles holding up the Anglo-Australian company's plan to build a 1 bln usd nickel mine on Sulawesi Island, Energy Minister Purnomo Yusgiantoro told the Wall Street Journal." - article here

  News bites - "Merrill Lynch : five key trends in Chinese economy - (more)" "China's foreign debt up 14.9 percent in 2006 " "China's retail sales rise 14.9% in 1st quarter"

  Machine North: Xstrata confirms its engagement - "By the voice of Domenica Dionne, his vice-president for the corporative businesses, Xstrata Nickel confirmed, yesterday, in Koné, her will to build the factory of North. And by the pyrometallurgical process." - translated article here

  Oxiana polishes Wiluna's nickel - "OXIANA boss Owen Hegarty yesterday added nickel to his list of targeted commodities in his bid to make the miner a major diversified player." - article here

  Taiwan stainless prices to raise again in May - "Japanese and South Korean stainless steel mills have announced to increase their prices for May, due to the soaring nickel price on the LME continuously. Mills in Taiwan are expected to be following." - article here

  CVMR hopes to seal Philippine nickel deal - "Canada's Chemical Vapour Metal Refining Inc. (CVMR) said on Friday it was close to finalising a deal with Philnico Industrial Corp. to reopen the Nonoc nickel mine in the south of the Philippines." - more here and more

  Brazil's Vale Do Rio To Seek Copper, Nickel In Colombia - "The Brazilian giant mine Companhia Vale do Rio Doce (RIO), or CVRD, plans to spend $2 million this year to seek copper and nickel in western Colombia, a company official said on Thursday." - article here

  Did you now? - Nickel Institute - "Although nickel is common, it is widely distributed. On average, the Earth's crust contains just 75 parts per million nickel. That's 0.0075% nickel. Taking the entire Earth into consideration (including the mantle and core along with the crust), nickel is the fifth most common element. Only iron, oxygen, silicon and magnesium are more abundant."

  Today's beginning nickel inventory - minus 210 tons = 4,056 tonnes (29.14% - 1,182 tonnes cancelled warrants).

Thursday, April 19

  Today's official LME nickel closing prices - cash - $22.73/lb - 3 month buyer - $21.86/lb (44.77% higher than 1/1/07). We may be in the 5th year of a bull market, but to the best of our recollection, we have not seen it act so confused in quite some time. The news this week would typically have given a bull trader all the ammunition they needed to buy, and drive the market higher. On the same hand, the bears have been hard pressed to find anything to make them think the market was going south. But trying to understand the traded price of nickel this week has been like analyzing the movement of a child's seesaw. One moment it's up, the next it's down. The floor established by the last correction appears to be holding, but traders can't seem to find their footing beyond that.

Let's look closely at the week, thus far. Some felt the gain in nickel inventory recorded yesterday was bearish. Really? Last Friday there was 4,374 tonnes of nickel being stocked in LME warehouses. Today, there are 4,266 tonnes recorded. Yesterday, the WBMS recorded nickel consumption grew by 20% worldwide, and production grew by 6%. That means more nickel is being consumed, than is available, and this after a year of the same situation. We thought that was the primary reason why nickel prices had been driven so high, the whole supply and demand thing? Manufacturers have been threatening to produce stainless with less nickel, but the WBMS figure mentioned before, doesn't reflect this actually happening. The dollar has been taking a beating this week, which was given by some analyst's, as the primary reason why nickel prices rose during a long period, earlier in this bull run.

Today, China reported its GDP grew faster than expected, so everyone immediately assumes that whatever step China will take to cool their economic growth down, could be bad for nickel consumption. How many times has China raised its interest rates in the last year, and what effect has it had on nickel, one way or the other? What analysts really need to be worried about, is what will happen if the 1.3 billion Chinese, decide to quit saving 50% of their new found wealth, and start spending a larger percentage of it. And today, support personnel at Voisey's Bay went on strike, after we reported last weekend that a CVRD official confirmed that any strike would effect production. The market reaction? Nickel fell. This story isn't getting any attention, which makes us feel rather foolish, as we have been keeping our readers updated on it for the last few weeks.

So why do we care? Primarily because we try to offer the news and a brief analysis on what happened during the day, and for the last few days, we have had no "analysis". And while many of our readers are those with an interest in nickel, from the producers point of view, many of our readers are, like us, looking at this situation from the nickel consumers point of view. We would like to offer something besides articles for those who come here trying to figure out where their stainless steel prices are heading, and saying "oh, it's most likely goin up", without offering some kind of practical reason, is worthless. We  kind of feel like we missed a big meeting somewhere, were the fundamentals of the market were re-defined. After all that, we apologize to our readers for expressing our frustration, and for not being able to offer any legitimate reason for why the market is presently doing what it is doing. 3 month nickel ended the day at $21.56/lb ($47,525/tonne)  (Dow Jones - more)

  Oxiana changes its mind about nickel - "OXIANA is eyeing nickel projects - including costly, complex laterite developments - after completing its $415 million purchase of Agincourt Resources." - article here

  Feeling Fuelish? The fast-growing ethanol market could lose some of its luster for producers and distributors of stainless steel. - "President George W. Bush’s State of the Union pledge to boost the supply of renewable and alternative fuels seven-fold, to 35 billion gallons by 2017, cheered not just ethanol producers, but also stainless steel suppliers whose growth last year was largely sparked by the boom in ethanol plants." - article here

  Update! Voisey's Bay support staff launch strike - "Several dozen support workers at the Voisey's Bay nickel mine in northern Labrador have launched a strike, and more may soon follow." - more here

  Indications at 7:50 am CST show nickel selling up by $.07/lb .  (all 3 indicators we monitor show up) (Bloomberg - more) (Reuters - more)

  Base metals pressured by China concerns - "Base metals came under pressure on Thursday amid concerns that China will be forced to raise interest rates to cool rapid growth in its economy." - article here and another

  Damstahl Stainless Steel Report - April 2007 - pdf here

  Piping & Equipment Inc - Quarterly Metals Bulletin - pdf here

  Rio Tinto Nickel Mine Plan Mostly OK - Indonesia Min - "Indonesia and Rio Tinto Ltd. (RTP) have overcome two key obstacles that have held up the Anglo-Australian company's plan to build a $1 billion nickel mine on Sulawesi island, Energy Minister Purnomo Yusgiantoro said Thursday. " - more here

  News Bites - "Xstrata Receives Australian Competition Clearance for LionOre Offer" "Howson selling Metal Stocks (here)" "Jupiter Mines to Purchase Dordie South Nickel Project in Widgiemooltha" "Metal Bulletin - Nickel deficit seen until 2010 - Nickel Institute"

  “New 200-series” steels: An opportunity or a threat to the image of stainless steel?" by International Stainless Steel Forum  - pdf here

  Sumitomo eyes $1-B nickel plant in Mindanao - "Trade and Industry Secretary Peter Favila on Wednesday hailed a plan of Sumitomo Metal Mining Co. Ltd. to put up a nickel-smelting project in Mindanao worth $1 billion, saying projects like it were “very welcome as long as they comply with our various laws.” - article here and another

  US ferromolybdenum prices expected to rise - "Ferromolybdenum prices have stabilized in the US market thanks to the exports restriction of the alloying material in China." - article here

  News Bite - "Shanxi Taigang Stainless Steel Co Ltd said it expects its unaudited net profit in the first quarter this year to have risen between 750 to 800% year-on-year." "Japan's 5th largest iron and steelmaker, Nisshin Steel Co., Ltd., announced that it would build a new subsidiary named Rihong Stainless Steel Co., Ltd. in Shanghai, China" "China's GDP grows 11.1% in first quarter" " Taiwanese Mills to Raise Stainless Steel Prices in May"

  Today's beginning nickel inventory - minus 192 tons = 4,266 tonnes (32.49% - 1,386 tonnes cancelled warrants).


Wednesday, April 18

  Today's official closing - cash - $22.70/lb - 3 month buyer - $21.61/lb (43.11% higher than 1/1/07). Let's see. 2006 ended with the nickel market in a worldwide deficit condition. Today, according to Forex, the WBMS reports that for the first two months of this year, demand was up by 20%, while new supply grew by 6%. Forgive us if we are wrong, but to our uneducated way of thinking, that would mean the supply situation for nickel got worse in 2007. News like that would probably shake the LME market up, wouldn't you think? Well, don't. On some days, those of us who follow the market closely, can give our readers a pretty fair idea of things that happened that have had a bearing on the days market direction. On others, there is no apparent rhyme or reason for the days movement. On these days, we usually give a generic reasoning, that we hope convinces our readers that we really do know what we are talking about. And then there are those days, where we drop our jaws, scratch our heads, and just pass on what happened. That would be today. Direct evidence that the market is falling deeper into a deficit abyss, the dollar hits a 26 year low against the British pound, only 40 tonnes of nickel are salvaged from a beached cargo ship, and nickel prices fall! Oh well, let's blame the tin man swan dive and call it a day. 3 month nickel prices were positive in morning trading, collapsed in early afternoon trading, and made up some of the losses late. Trading ended at  $21.73/lb ($47,900/tonne) (Dow Jones Newswire - here)

  Nickel demand up 20 pct, production 6 pct higher in Jan,Feb 2007 - report - "Nickel demand across the globe was 20 pct higher in the first two months of this year compared with last year, said the World Bureau of Metals Statistics (WBMS)." - article here

  Napoli Nickel Cargo Starts Trip To Consumers - Sources - "The first containers of nickel recovered from the troubled container ship MSC Napoli will make the first step in their journey to consumers this week, market sources told Dow Jones Newswires Wednesday." - article here

  Sumitomo of Japan eyes Mindanao nickel smelter - "Sumitomo Metal Mining Co. Ltd. of Japan yesterday said it will start a feasibility study for a proposed cobalt and nickel smelter project in Northeastern Mindanao that could require over $1 billion in fresh investments." - article here

  Sumitomo Metal's New Stainless Steel takes Heat at 1,000 C - (quote from article) "Sumitomo Metal's new stainless steel employs an optimized mixture of auxiliary materials like nickel and chromium that boosts its strength at high temperatures without diminishing its resistance to rusting when exposed to steam." - article here

  Mine the White-Hot Metals - "The commodity rally in metals is back. In fact, the metals sector has been on fire for three months." - more here

  A heartfelt thank you to a member on the RNO board at Investor Village for adding some exposure to Kiva.org. If you missed it, we spoke about this worthy cause on Saturday. We can complain, we can feel guilty, we can even pretend they don't exist .... or we can do our small part to make a difference. Thanks to all of those who take the twenty minutes to watch the video. Video   

  India scrap metal imports to rise on rule breather - "India's imports of non-ferrous scrap metal from Europe, the United States and the Middle East are set to pick up after the government deferred imposing stringent new rules, traders said." - article here

  Indications at 7:55 am CST show nickel selling $.46/lb lower  . Reports this morning of a nearly 10% increase in nickel inventories stored in LME warehouses, obviously caught the attention of traders.  (Bloomberg - more)  (AFX News - more)

  Mining losing the public relations battle - "The mining sector is ignoring the green light at the end of the tunnel that is attached to a 100-ton locomotive driven by the environmental movement. The collision is going to be messy. It will impact the industry at a time when the voracious metal demands of China and India could bring enormous prosperity to Canada’s northern and aboriginal communities as well as impoverished countries around the world." - article here

  Toledo Mining Corp Berong Ships 121,391 tons Nickel Ore - "Toledo Mining Corporation said Wednesday that its Berong nickel project shipped a total of approximately 121,391 tonnes of laterite nickel ore to China in three separate shipments" - article here

  Cuba to supply over 10,000 tons of nickel to China in 2007 - "Cuba is to supply more than 10,000 tons of nickel to China this year, said visiting Cuban Minister of Foreign Affairs Felipe Ramon Perez Roque on Tuesday." - article here (correction from China newspaper article yesterday that reported 40M tonnes to be shipped this year)

  News Bites - " China's steel product exports grow steadily this year, despite restraining policy" " Chinese Mils Increase 400 Series Stainless Production" " Surcharge Rise Fails to Knock American Stainless Bar Demand"

  Zambian Government considers levying mining windfall profits tax - "As the Zambian government debates whether to renegotiate development agreements with mining companies, one of the copper-rich nation's business leaders has proposed that a windfall profits tax be introduced instead." - (article here)  and "Albidon turns to China to finance Zambian nickel project development" - (article here)

  Arctic nickel miners recall Soviet days fondly - "Underpaid and isolated from an increasingly affluent Russia, workers are steadily leaving the nickel operations of Norilsk, and some of those who remain look back fondly on Soviet days." - article here

  Philippine Trade Secy: Sumitomo Metal Studying Mining Projs - "Japan's Sumitomo Metal Mining Co. (5713.TO) has launched a feasibility study on cobalt and nickel smelter projects in the southern Philippines, a Philippine government official said Wednesday." - article here

  Today's beginning nickel inventory - plus 438 tons = 4,458 tonnes (33.65% - 1,500 tonnes cancelled warrants).

Tuesday, April 17

  Today's official LME nickel closing prices - cash -$22.61/lb - 3 month buyer - $21.50/lb (42.38% higher than 1/1/07). Price of nickel began to rise mid-morning today, but instead of an afternoon spent watching earlier gains dissolve, the gains stuck. So what happened overnight that caused the market to react differently today than the last few? We really can't find anything in the news, except maybe another 252 tonnes disappeared from LME warehouses yesterday, and brought the on hand total to within a hair's breathe of falling below 4,000 tonnes (of which 1/3 is cancelled warrants). Maybe buyers felt the floor of this most recent correction had a fairly established foundation that had been polished enough, and felt the time was right to buy. Maybe it was the reports of the U.S. dollar falling to a near record low against the Euro, making commodities an even more attractive investment. Or maybe, with the third Wednesday prompt behind them, it was just time to ante up for another round. Whatever the reason, 3 month nickel ended the day at $21.95/lb ($48,400/tonne and almost a $1/lb higher than yesterday). (Dow Jones - more)  

  AK Steel CEO Gets $5.4M in Compensation - "James Wainscott, AK Steel Holding Corp.'s top executive, received compensation valued at about $5.4 million in 2006, when 2,500 workers at the Middletown-based company were locked out for most of that year, according to an analysis of a regulatory filing." - article here

  News Bites - "Cuban Foreign Minister Felipe Perez Roque advised the China Institute of Contemporary International Relations in a speech earlier today, that Cuba would provide China with more than 10,000 tonnes of nickel in 2007" (corrected)

  Copyright/courtesy Metals Insider - 4/17 daily report - "UK steel analysts MEPS said they are expecting stainless steel prices to come under sustained pressure in the second half of this year as mills in all regions are forced to discount in the face of higher stocks and lower demand. “This will lead to an inventory depletion phase which will further exacerbate price erosion,” the company said. Transaction prices have recently still been rising but in Europe this has largely been a function of higher nickel prices feeding through into the alloy surcharge. According to MEPS, basis prices in Europe have started falling and it said it expects this trend to spread to the North American market in the next few months."

  Indications are a tad different this morning. At 7:45 am CST, 3 month nickel shows about what it has the last two trading mornings, selling up by $.50/lb . Cash nickel indications, on the other hand, shows in the negative. With backwardation running around $2500/tonne lately, these indications are not totally surprising. Still no news from Voisey's Bay about any strike outcome vote. If anyone knows if this has been quietly resolved, please drop us an e-mail, so we can advise our readers.  Will nickel price gains stick today, or like Monday and last Friday, fall back to where they began the day? Some speculate that if daily price gains can not stick after a third day of trying, then the market is in jeopardy of another major correction. Others caution this bull market has proven over the last few years that it has a mind of its own. (AFX - more)

  Why Stainless Prices Continue to Climb - Comparing average price of following materials between December 2006 and March 2007. Molybdenum - $24.775/lb to $27.96/lb (+12.93%) Nickel - $15.68/lb to $21.01/lb (+34.57%) Chrome - .6588/lb to .8313/lb (+26.18%) Iron - .1049/lb to .1659/lb (+58.15%). Current prices are higher today than March average, and all are used in stainless steel production (moly in 316). March figures were used by US producers to establish May stainless steel surcharge(data courtesy of Valbruna surcharge reports)

  Rand Merchant Bank Weekly Base Metal Report - pdf here

  Behre Dolbear Global Mining News - pdf here

  Canada Commodity Price update - pdf here

  News Bites - "China to become net coal importer in 1-2 years" "Xstrata Receives Canadian Competition Bureau Approval for LionOre" "Independent Nickel Acquires Manitoba Nickel Royalties"

  Super Molybdenum Stainless Steel Vital to Global Nuclear Reactor Build Up - "Molybdenum plays a more vital role in the global nuclear renaissance than you might suspect. Without the silvery white metal, the world’s energy infrastructure would somewhat suffer. But, nuclear power plants would be set back at least two decades. The new high performance stainless steels (HPSS) contain as much as 7.5 percent molybdenum and can add more than three times the life to the world’s aging nuclear fleet condenser tubes." - article here

  Stainless Steel Makers Made Handsome Profits in Q1 - "Thanks to the strong purchase power in light of the consistent upswing of the steel prices in the international marketplace, Taiwan's listed firms of iron and steel registered handsome sales and profits in the first quarter of this year from the same period the year earlier" - more here

  Anglo American says metals outlook strong - "Anglo American Plc, the world's third-largest miner, said on Tuesday metals outlook remained strong thanks to a low level of stocks and constrained supply." - article here

  Metals & Mining Weekly by Haywood Mining Team - pdf here

  Today's beginning nickel inventory - minus 252 tons = 4,020 tonnes (33.88% - 1,362 tonnes cancelled warrants).

Monday, April 16

  Today's official LME nickel closing prices - cash - $22.73/lb - 3 month buyer - $21.61/lb (43.11% higher than 1/1/07). Today was a near repeat of Friday. Markets started out very bullish and we saw indicators showing nickel up by over $1000/tonne this morning, before traders backed off and prices fell back as fast as they had risen. No news out of Voisey's Bay yet about the strike vote that was supposed to be held Friday. We see where there are some analysts saying LME nickel inventories may start to grow in May. Sometime that month Norilsk shuts down shipping for about a month because of annual floods. And that will be during what is traditionally, one the busiest periods for stainless steel production. We are very skeptical about any substantial growth that sticks in the inventory levels anytime soon. Today's trading ended at $20.96/lb ($46,200/tonne) (Dow Jones - more)

  Observation for traders visiting this news site - We received an e-mail from a reader confused by our nickel figures and those shown on the Kitco graph. The London Metal Exchange does not allow the transmission of actual trading prices, except to subscribers. Kitco's graph, like the numbers we give each morning, are "indications only". Those who publish these indications, use their own formula's for determining and transmitting a dollar amount. While the graph we post gives a fair idea of which direction the market is heading, these are not actual prices, and are at times, not indicative of actual market movement. Please be careful making buying/selling decisions based off anything less than LME official prices, which we publish before 1 pm CST. We use three different sources to establish the indications we publish in the morning, and Comtex Financial for the ending day price, also an indication. Our week in review, published on weekends,uses indications from a fourth source. For those who follow LME closely, we will share with you one of the best sources for our morning indicator. Sempra Nickel  Also, the Adanac Molybdenum chart we post is not always up-to-date. Below it you will find a current molybdenum price, which as of 3/12, is $28.10/lb.

  Reuters China - "Pohang Korea committed to the development of non-nickel stainless steel products, in response to high nickel prices" -  translated article here

  Mining and Resources Investor Conference - Available April 18th, 2007 - here

  News Bites - courtesy/copyright Platt's - "European physical nickel: Buying picks up as LME price dips" "There's been a bit of an uptick this week, but people are still very nervous," said one European trader."Prices are volatile and [buyers]are keeping it close to their chest - they're still operating hand-to-mouth." "Consumers are trying to buy as little as possible here," said a third trader."

  Indications at 7:55 am CST show nickel selling up by $.27/lb . We monitor the website of a US distributor of stainless steel sheet and coil, who still has the guts to publish predictions. Friday they published the following - "We had previously recommended an inventory position between 60 and 90 days. We have lowered this to 30 days if that is possible. To accomplish this, you will undoubtably pay higher prices for smaller purchases from available stock, but at the current pricing levels and expected increases in May and June, our opinion is there is too much potential risk to take larger positions." We do not see the same thing in the near future as this distributor does, but felt the buyers among you should hear their perspective. (Bloomberg - more) (AFX - more) (Reuters - more)

  Steelmakers May Pay Record Iron Ore Prices Till 2013 - "Steelmakers may keep paying record iron ore prices until 2013 because Cia. Vale do Rio Doce and rival mining companies can't meet surging demand from China, Credit Suisse Group says." - article here

  Are We Currently in the Middle of a Commodities Super Cycle? - "Commodities get no respect" are the words that investment guru and Quantum Fund Co-founder Jim Rogers uses to begin his recently updated edition of Hot Commodities." - more here

  Japan Q2 ferrochrome at record high of 90c - "The term price for ferro-chrome to Japan for April-June rose by 8,4% to a record high of 90c a pound from the previous quarter due to tight supply conditions, a Japanese company official said on Monday." - article here

  Trading takes place against the London Metal Exchange (LME) 'third Wednesday' prompt date.

  Shanghai Non Ferrous publishes its weekly experts forecast for the week. Of 23 analysts responding, 19 (82%)  felt the price of nickel would rise this week, while 4 (17%) others felt it would fall.  There were none that predicted a flat market this week.

  Posco to enlarge production of no-nickel stainless steel - "In order to balance the continuously hiking nickel cost with the profit margin, South Korea Posco is now shifting its production to 400 series stainless steel in stead of 300 type." - article here

  PT Antam's Exploration Costs Increase to $US1.2 BLN in March - The exploration costs spent by state-owned diversified mining company PT ANTAM (JSX:ANTM) increased 62 per cent to Rp11.2 billion (US$1.2 billion) in March from Rp6.9 billion in the previous month." - article here

  Moly 'the wonder metal' may provide lining for pension - "FOR those who missed this year's uranium and nickel boom, there is still molybdenum. Scarce, hard to substitute, and subject to new export curbs in China, the silvery metal has freak resistance to heat, cold, and corrosion. Hedge funds view it as a leveraged play on the next looming energy crunch." - article here

  Today's beginning nickel inventory - minus 102 tons = 4,272 tonnes (35.11% - 1,500 tonnes cancelled warrants).

Weekend Review, April 14 & 15  

   Investors, miners, buyers, dealers, etc. If we could introduce you to an organization, that acts as a portal for you to loan small amounts of money to 3rd world entrepreneurs, and can offer a track record of giving you back 100% of your loan, would you be interested? No you won't make interest on the loan, and no you can't write it off as a donation, because the money is still yours. What you will get is the satisfaction of becoming part of a growing community of people, who have been blessed in life, who are looking to help those who have been born into less fortunate circumstances, stand on their own two feet. We have seen the PBS story, visited the organization's site, and couldn't be more excited presenting it to you. You can loan as little, or as much as you want. PBS Documentary here  Kiva site here  If you appreciate the information this site offers, we have never asked for a dime before, and we aren't now. No one makes any money off this except hopefully the less fortunate. Please take a moment to watch the 20 minute video and decide if this is something your family would like to become a part of. Can you imagine that stubborn teenager actually getting excited about a family project?? Please consider becoming a part...and if you do, drop us an e-mail and let us know your Kiva user name.

 News Bites on substitution - courtesy/copyright Dow Jones Newswire - "Demand destruction is inevitable at these price levels," said U.K.-based BaseMetals analyst Will Adams. "The market had best be prepared for the possibility that 50,000 tons to 70,000 tons of nickel demand could be removed if China continues to use pig iron to make stainless steel," he added." " "A seasonal pick-up, in what is usually the strongest quarter for demand, suggests that the second quarter of 2007 will see further price appreciation from current levels with the potential for price spikes of the kind seen recently in nickel spreading to other markets," Barclays said" "LME nickel price unlikely to have peaked yet, may retain some upward momentum rest of week, regain $50,000/ton, says Commonwealth Bank of Australia. "The simple fact is that the supply environment is likely to remain tight in the near term, notwithstanding some evidence of substitution towards lower-nickel-content stainless steel." ""There's a lot of substitution going on," said Lim, also general manager of Hoto Stainless Steel Industries Sdn Bhd that manufactures stainless steel tubes. "They don't want to do it, but they are forced to basically... The problem is cash flow. You need 2-3 times the money you needed in the past," he said."

  Well edited video of blasting at the Mt Keith nickel mine in Western Australia - here

  Bay Street Week Ahead-A bonanza of mining mergers - "Corporate takeovers may have been last year's story in the Canadian mining sector, but a recent flurry of announced deals combined with tight metals markets suggests the M&A bonanza will continue." - article here

  As of Sunday morning, we are still unable to find any updated information about the strike vote that was to be held at Voisey's Bay, reportedly on Friday. The United Steelworkers union had recommended that the 120 employees of  sub-contractors Torngait Services Inc. and Ushitau Maintenance Ltd., vote against an offer from the company earlier this month, citing unfair terms over a nickel bonus. A spokesman for CVRD, Bob Carter, when asked whether a strike would effect production by a Dow Jones reporter, replied "I would say".

  News Bite - "Norilsk Nickel fails to find copper, nickel at Koyevskaya field"

  Metals X puts $1.6B price tag on Wingellina - "Chinese-backed Metals X has slapped a $1.6 billion price tag on the development of its large Wingellina nickel project in the isolated Musgrave Ranges of Western Australia." - more here

  Week in Review. All prices given are indications only. Markets were closed Monday for the Easter weekend holiday. On Tuesday, the markets opened at $22.68, reached a new record high of $22.75/lb, a low of $21.91/lb, and ended the day at $22.03/lb. The $22.75/lb record still stands as the new all time high for 3 month nickel. On Wednesday, the markets opened at $21.93/lb, traded as high as $22.20/lb, as low as $21.26/lb, and ended the day at $21.33/lb. On Thursday, trading opened at $21.52/lb, reached a high of $21.90/lb, a low of $20.91/lb, and ended the days trading at $21.09/lb. And Friday, markets opened at $21.06/lb, reached a high of $21.68/lb, saw a low of $21.02/lb, and ended the week's trading at $21.30/lb. For the week, nickel ended 5.46% lower than last week, but remains 39.4% higher than it started the year at.  

  Chinese Non-Ferrous Industry Investments Red Hot, Government Seeks Cool Down - "While China is attempting to restrict inefficient production capacity expansion in its metals resource sector, the materials supply needs to be maintained to keep with the growth rate of industrial and infrastructure expansion, according to recent research by Industrial Info Resources." - article here

 Base Metals Technicals 3 - "So far this year a sense of uneasiness has gripped the financial markets. Volatility has finally peeked its head and the market players are on the edge of their seats trying to anticipate the next exciting move. While economists scrutinize every piece of data that comprises their crystal balls, the stock markets are teetering on what could be the pinnacle of their grand cyclical bull market." - article here 

  BMO Capital Markets 2007 Global Resources Conference held in February in Tampa, Florida - (numerous presentations - registration required) - here

  Response from a reader - "My Take on Nickel Supplies - Nickel market analysts have not yet realised that estimated figures for demand from China in the future are way out. Demand could be double these estimates well into the next decade. This excess demand wont be driven by the rural population moving into the cities- yes that demand will still be there. The increased demand will come from the Chinese Governments gigantic program to improve rural infrastructure. Analysts have not yet acknowledged that this massive program is being planned as we speak. There are snippets coming out now, 17000km of new railways etc, but the full extent of this program seems to be unknown.- to a degree because its still being planned, but also I suspect its not being widely advertised by the Chinese as they scramble to tie up new sources of raw material. How active has Jinchuan been lately- new contracts signed with a dozen companies in nearly all continents. But it will not be a “secret” for too much longer. Such a program can go from planning to implimentation in China without delay- no lengthy planning permissions, environmental impact statements etc which in the west hold up projects for years. At the end of the month is a Conference being held in Shanghai- The China Nickel 2007 Conference, the theme of which is “Is there enough metal to support China's growth?” (30th - 31st May 2007. Grand Hyatt Shanghai). Such a topic was once unthinkable! With nickel supplies so tight now, how on earth can there be enough nickel to satisfy the demand in China? (We appreciate all letters from our readers and will publish some of those with an opposing, or different perspective than our own. We agree with this reader that what is going on in China is beyond belief. We advised our readers last year that China was building a city the size of Houston, Texas every single month, just to handle the immigration of its population from the country to the city. Can nickel producers handle the demand? We will have to wait and see.) 

  There is an old Burt Bacharach song that goes "What the world needs know - is love, sweet love". Watch this and you may  be singing "What business needs know, is a little Doctor Evil" - story and 60 Minutes video here

Friday, April 13

  Today's official LME nickel closing prices - cash - $22.59/lb - 3 month buyer - $21.41/lb (40% higher than 1/1/07). The nickel bull had his wind back this morning, but by afternoon had "plum tuckered out". The only news that we can find that might be causing such a dramatic one day swing, would be the report from the US Commerce Department released today, that showed nickel imports into the U.S. fell 20.7% from January, and 32.2% from the same period last year. Imports from Australia fell sharply in February, falling from 1,111,383 kg in January to only 118,000 kg in February. Nickel imports from other countries saw little change between the first two months of the year. While at one point, indications show nickel was trading over $1000/tonne higher than it opened, when trading finalised for the day, 3 month nickel ended its first 'Friday the 13th' for 2007 at $21.05/lb ($46,400/tonne). (Dow Jones - more)     Have a safe and restful weekend!

  Correction - A couple of days ago we published a top 10 list of nickel producers for 2006. One of our readers to the north, took exception to our placing his employer in second place, and sent us a graph that used a Canadian Mining Research company's figures, that had been recently published in a research report about mining company Sally Malay. Since this chart ran contrary to all of the research company's we had examined, we decided to do some research of our own. We are not exactly sure what top secret info all these college educated analysts use, but our non-scientific method was rather simple - we looked at each company's website to see what they said they produced. Using this process, we discovered the graph that had been sent us was as wrong as the others we had used. So here is our own corrected and revised unofficial top 5 nickel producers for 2006. #1 CVRD/Inco at 250,600 tonnes. Hot on their heels at #2  is Norilsk Nickel at 244,000 tonnes. #3 is BHP, whom we could not find any figures on their site, but used a 175,000 tonne claim on the Yahoo Finance site. Number 4 is Xstrata, who in their recent proposal for LionOre claimed they shipped 110,000 tonnes of nickel in 2006. And rounding out the top 5 is Jinchuan, at 101,000 tonnes, which Chinese media reported a few months back. We hope this correction makes it safe for us to travel north of the border again.

  News Bites - (Reuters) "U.S. economic weakness may cast a shadow on 2007 growth prospects in Asia-Pacific countries, but China and India should lift regional growth to 8.5 percent, the International Monetary Fund said on Friday." "China's forex reserve reaches $1.2 trillion" "U.S. nickel imports fell 20.7% in February from last month, and was down 32.2% from the previous year, the Commerce Department reported Friday." "U.S. nickel exports fell 2.3% in February from the previous month, and was down 9.6% from the previous year, the Commerce Department reported"

  Indications at 7:55 am CST show nickel is selling up by $.60/lb . Apparently the nickel bull got some of his steam back and trading prices today have rebounded. At noon today we will be printing a correction to our top 10 nickel producers for 2006 that we printed on Tuesday. (Dow Jones - more)

  TD Bank - Weekly Commodity Price Report - pdf here

  Port bottleneck puts miners out of work - "THREE years ago, a massive underground fire cost miners their jobs at the Hunter Valley's Southland coalmine in NSW." - article here

   How the Global Warming Agenda Affects Critical Nonferrous Metal Demand - "Last week, I wrote an article for RI about the fact that the Federal Government’s principal advisory service on technical matters, the National Academies of Science (NAS), is now finally addressing a critical issue for America’s economic future that rarely gets any attention from the Congress or the President, the identification of the present and future impact on the U.S. economy, and on America’s security, of shortages of, or the total secession of availability of, metals and minerals without which our industrial economy cannot function." - more here

  Low cost, lower tech nickel mine projects attracting attention - "The continuing high nickel price has prompted companies to look at new solutions for mining and treating low cost lateritic ores without the need for high cost complex metallurgical plants." - article here

  The Outlook For Metals - "What BHP Billiton said in its interim profit and outlook statement in February is still the best explanation about why metals prices are currently surging." - article here

  Stainless steel price to rise again in May - "At present, the nickel price on the LME still keeps staying at high level. The market anticipants say the stainless steel price for May will be increased again as long as the average nickel price is not less than US$50,000 per ton." - more here

  RP to include nickel project in China deal - "The planned $200-million ferro-nickel processing plant of China's RockCheck Steel Group Co. Ltd. on Manicani Island in Guiuan, Eastern Samar, will be among the agreements that President Gloria Macapagal-Arroyo expects to seal when she visits China next week." - article here

  Today's beginning nickel inventory - minus 84 tons = 4,374 tonnes (36.62% - 1,602 tonnes cancelled warrants).

Thursday, April 12

 Today's official LME nickel closing prices - cash - $22.18/lb - 3 month buyer - $21.00/lb (39.1% higher than 1/1/07). Nickel had another down day, after Man Financial predicted "we could see slightly more selling before this modest correction plays itself out". Indications, at one point, showed nickel was selling well over $1000/tonne lower than it started, but at the last moment, the price rebounded to mid morning levels. Mining related news was nearly non-existent today, so we can only guess that the market swings were driven by traders jockeying for position, and taking some profits. When the dust settled, three month nickel closed the day at $21.00/lb ($46,300/tonne).   (Dow Jones - here) (Bloomberg - here

  Former Gulag metal giant shines in Russia - "It was built by Gulag slaves during World War Two and soon presented its first platinum and palladium ingots to Soviet dictator Joseph Stalin." - article here

  News Bites  - "Chromium ore price increases will trigger price blowout (China Securities) - According to Thursday "the Securities Times" report, India and South Africa have said the government might impose restrictions on exports of chrome ore. Recent tensions in the chromium ore supply becomes more tense. Chromium ore prices, since last September, have increased over 40%." "Cuba currently producing 76,000 tons of nickel, or about 46% of its total exports, the next target will be to achieve an annual output of 100,000 tons." " 24.5 Million Tons of Steel Net Export in China, 2006 - China's net exports of steel and billets may fall 30 percent this year after the government cut tax breaks, an industry official said Wednesday. But a customs official disagreed." " "The People's Bank of China (PBOC)¡¡raised lending and deposit rates by 0.27 percentage point at the weekend, the latest in a series of tightening measures by an increasingly activist central bank. The rate hike went into effect on Sunday and was the third increase in less than a year." "Chinese cuts nickel imports, seeks laterite ore"

  Indications  at 7:55 am CST show nickel selling down by $.21/lb . The bull didn't loose steam in March until the 16th, after setting new record high's for nickel on 8 of its first 12 trading days. This month, the bull seems to have tired early. After setting new record high's on 4 of the 6 trading days so far this month, the market is seeing its second day of falling prices. As of our check at 7:45 am CST, the market has lost nearly all of its gains from the prior 6 days. At 8 am CST here in the States, it's 1 pm in London, so the last 1/2 of their trading day is just getting underway. Stay tuned. (Bloomberg - more)

  Canaccord Adams released a report on March 28th called "Mid-Tier and Emerging Nickel Producer Overview". This report is available to institutional investors only, but we were allowed to read a copy. Canaccord is extremely bullish on the future of nickel prices and here are a few figures from their report. Canaccord projects a 28,000-tonne net deficit in the supply/demand ratio of worldwide nickel. This year, they project that deficit to slide to 13,000 tonnes, but in 2008, they see it jumping back up to 28,000 tonnes, and in 2009, slipping to 17,000 tonnes. They acknowledge in the report that Chinese importation of laterite ore is a legitimate threat to the imbalance, but feel they have accounted for an estimated impact. The report also states that at the end of 2006, total nickel inventories stood at approximately 86,000 tonnes, including LME, producer and consumer inventories, which represented at 3.3 week supply. This was lower than 2005's average of 4.6 weeks consumption, and they project higher, than 2007's estimated 2.6 weeks worth of consumption. Throughout the report, Canaccord came back to one key point. Quote - "This implies that significantly high nickel prices will be required through the end of this decade to reduce forecast consumption levels, in line with available inventories". (comment - rather frightening from the stainless steel users perspective and we rather wish we hadn't seen it)

  IMF outlook report forecasts weaker long term copper, zinc and other base metal prices - "In its semi-annual "World Economic Outlook" report released Wednesday, the International Monetary Fund (IMF) predicted that emerging markets and developing nations, especially commodity-rich countries, are expected to continue to grow strongly, but at a slower pace." - article here

  BMO Capital Markets - The Goods - "Commodity Index Stalls in March" - pdf here

  New Bites - (courtesy/copyright Dow Jones Newswire) "P.T. Antam's chief executive officer, Deddy Aditya, Sumanegara added that the state-owned mining company's ferronickel production is expected to rise between 30%-40%, or by between 4,000 metric tons and 5,500 tons, this year to 20,000 tons. "

  Nickel mine owners consider refining oil - "The owners of a large Dominican Republic nickel mine will consider refining oil to sell in this energy-starved Caribbean country, an Xstrata Nickel company spokesman said Wednesday." - article here

  News Bites - " China' s Iron Ore Imports Up 23.4% in Jan-March" " China's trade surplus falls to $6.87 billion in March, lowest in 12 months" "China says foreign reserves now exceed $1.2-trillion (U.S.), world's largest"

  Overcapacity causes potential danger for stainless market - "The stainless market is possible to be affected and threatened in the future due to the reasons of high nickel price, global overstock and oversupply." - article here

  Did you know? - According to Yarde Metals website, on 304 stainless steel, for every $.10 per pound increase in nickel prices, the nickel surcharge will increase by approximately $.01/lb. This means for every $1000/tonne increase, the surcharge for nickel will increase by about $.045/lb. (source - here

  Today's beginning nickel inventory - minus 36 tons = 4,458 tonnes (37.82% - 1,686 tonnes cancelled warrants).

Wednesday, April 11

  Today's official LME nickel closing prices - cash - $23.04/lb - 3 month buyer - $21.99/lb (45.6% higher than 1/107). Market started off soft, with prices falling over $1000/tonne but by mid-day had recovered most of the morning losses. But this afternoon saw another steep drop, with the market unable to sustain the earlier rebound, traders took their profits and cashed out. Not sure what the exact definition of a "market correction" is, but we have to admit it did not turn out to be the normal trading day we called it this morning. 3 month nickel ended the day at $21.26/lb ($46,875/tonne)  (Dow Jones - here

  China tops world output of nonferrous metals for five consecutive years - "For all but nickel, China had the highest output of these metals in the world." - article here

   IMF sees global growth 4.9 pct in 2007, 2008 - "The IMF said it expects global growth to moderate slightly but remain robust in 2007 and 2008." - (article here) and IMF predicts energetic world economy - "The global economy should turn in an energetic performance this year, even though its biggest player, the United States, is expected to experience its weakest growth in five years, according to a new International Monetary Fund forecast." - (article here)

  Damstahl Stainless Steel Solutions - Monthly Base Materials Price Developments - pdf here

  Structural Changes in Molybdenum Demand - pdf here

  Chinese steel exports may decline - "China's elimination and reduction of its value added tax rebates for steel exports announced Tuesday could moderate the amount of Chinese steel coming into the U.S. and world markets." - article here

  Chinese hunger keeps kicking up base metal prices - "Increasing demand from China's blast furnace of an economy and less concern about U.S. growth put the pedal to the base metals yesterday, with an assist from an apparent squeeze on short sellers." - article here

  U.S. regulator warns as margin debt soars to record - "As thousands of U.S. homeowners are realizing it's unwise to borrow more than they can afford, the National Association of Securities Dealers Inc. is offering a similar warning to investors: It's risky to invest more than you have." - article here

  Developments in the World Stainless Steel Industry and the Implications for Nickel Consumption - Presentation by Hatch_Beddows Consulting to New Caledonia Nickel Conference - March 28, 2007 - pdf here

  Indications at 7:55 am CST show nickel selling down by $.06/lb . News reports say nickel took a dive this morning, but by the time we checked in, things had calmed down and the market had recovered from earlier losses. Sudakshina Unnikrishnan, an analyst at Barclays Capital in London, told Bloomberg earlier, ``With prices being so high, a drop of $1,000 or so is a normal correction.'' We tend to feel an actual "market correction" takes a little more than one session to establish, but hey, they are the experts. What we see so far is a typical trading day.  

  Nickel Falls as Chart Shows Gains Were Exaggerated; Lead Rises - "Nickel dropped, erasing gains that earlier sent prices to a record, amid indications the metal's rally was exaggerated. Lead advanced to the highest ever." - article here

  (see correction 4/13) World's 10 top producing nickel companies for 2006 - Norilsk Nickel (18% share), CVRD/Inco (17%), BHP Billiton (11%), Xstrata/Falconbridge (9%), Jinchuan (8%), Eramet/SLN (5%), Sumitomo (4%), OM Group (3%), Cubaniquel/Sherritt (3%), and PAMCO (3%). When CVRD starts producing nickel at a new mine, it could potentially take over #1, but keep in mind Norilsk just took over #8 OM Group's nickel assets.  Interesting to note that the top 5 nickel producers account for 63% of world supply, while the next 5 account for 18%. The top 10 account for 81%. (additional sources - CRU) 

  Precision Machined Products Association - Materials Impact Report April 2007 - pdf here

  Commodity Price Update - pdf here

  Courtesy/copyright Dow Jones Newswire - "LME nickel price unlikely to have peaked yet, may retain some upward momentum rest of week, regain $50,000/ton, says Commonwealth Bank of Australia. "The simple fact is that the supply environment is likely to remain tight in the near term, notwithstanding some evidence of substitution towards lower-nickel-content stainless steel."

  Japanese stainless imports down by 26.1% - "Japan's imports of stainless steel reduced by 26.1 percent to 20,751 tons in this February, and doubled from the same period in last year of 10,269 tons, according to Japan Ministry of Economy, Trade and Industry." - more here

  News Bite 's - "South Korea's Posco, the world's 3rd largest steelmaker,  raised the price on stainless steel 7 times last year, and already 4 times this year." "Xstrata sells aluminum assets for $1.15 billion, and buys Gloucester Coal for $391 million" "Lundin Mining buys Tenke Mining"

  South Korea Seeks 300 Tons of Nickel Cathode in April 20 Tender - "South Korea's Public Procurement Service, a state-run body that manages strategic commodities, issued tenders to buy 300 metric tons of refined nickel at a premium over London Metal Exchange cash prices." - article here

  LME Nickel Stks Need To Rise Above Averages To Ease Price-BME - "Nickel stocks in London Metal Exchange warehouses will have to rise much higher than in the past for prices to return to more sustainable levels due to fund investment through long-only indices, Bloomsbury Minerals Economics said Wednesday." - article here

  Zambian Local Authorities Seek To Halt Nickel Mine Expansion - "Local authorities in Zambia's Mazabuka district in Central Province are seeking to halt the expansion of the Munali nickel mine to stop it from encroaching on the lands of local people, an industry official told Dow Jones Newswires Wednesday." - article here

  Fundamental Research Corp Research Associate Martha Buckwalter-Davis, BA (Geology), gives a speech about the benefits of adding commodity exposure to you portfolio through an investment in junior resource companies. - video here

  Today's beginning nickel inventory - minus 138 tons = 4,494 tonnes (34.05% - 1,530 tonnes cancelled warrants).

Tuesday, April 10

  Update! - Voisey's Bay Union Workers To Hold Strike Vote Fri -Union Rep - "Members of the United Steelworkers union at the Voisey's Bay nickel mine in eastern Canada will hold a strike vote on Friday, according to a union staff representative." - more here

  Today's official closing prices - cash - $23.74/lb - 3 month buyer - $22.48/lb (48.87% higher than 1/1/07). Another day, and more often than not, it seems, another record breaking day for nickel. 3 month nickel traded as high as $22.75/lb today, before calming down a little in afternoon trading, where profit takers took center stage, late in the day. Seeing nothing in the media about the 300 tonnes of nickel ore that is now housing fish in a New Caledonia bay. We see where it is being discussed on some New Caledonian forum's, although the general concern seems to be more about whether the barge pilot was under the influence or not. Either way, nickel traders apparently felt the loss of unprocessed ore would mean little to the overall supply / demand picture. At the close of day, 3 month nickel was trading at $21.95/lb ($48,400/tonne).  (Comtex - here)

  Xstrata winning in mine battles - "XSTRATA looks the likely victor in the battle for NSW miner Gloucester Coal, beating a host of rivals with a $391 million offer for the coking and thermal coal producer." - more here

  Stainless Steel Wire Rod from Sweden: Final Results of Antidumping Duty Administrative Review - more here

  Freewheeling Jim Rogers - "Jim Rogers is widely known as one of the most insightful – and irreverent – commodities bulls in the market today. Rogers, who made his (first) fortune as George Soros’ partner in the Quantum Fund, has been championing commodities to investors since at least 2004, when his book “Hot Commodities” laid out the case for a long-term bull market in hard assets." - more here

  News Bites - "South Korea seeks 300 tonnes of nickel cathodes" - "Norilsk to complete Polar shipping fleet by 2009 (more)" - "Metal Smugglers Unmasked in Russia (more)

  Indications at 7:55 am CST show 3 month nickel selling up by $.18/lb , but down from an earlier in the day trade at $22.75/lb, another new all time record high for nickel. The markets reportedly opened at $22.68/lb, the old record from last week, then immediately jumped to a new record high, before falling back on some profit taking. If there are analyst's out there that think nickel will fall anytime soon, they have apparently already played their cards, got humbled, and have decided to sit this hand out. Those that have risked forecasting, that we have found, all seem to feel nickel prices have yet to see their peak. (Financial Times - more) (AFX - more)

  Nickel, Lead Rise to Records; Copper at 7-Month High on China - "Nickel and lead rose to records and copper advanced to the highest in seven months in London on rising demand from China, the world's largest consumer of all industrial metals." - article here

  Behre Dolbear Weekly Global Mining News - pdf here

  Top company officials face 12 yrs for steel, nickel smuggling - "Russian prosecutors and customs officials have seized a group suspected of smuggling stainless steel and nickel alloys worth over $1 billion, the Prosecutor General's Office said on its Web site Tuesday." - article here

  (Comment - If you watched the CBS 60 Minutes report on Sunday, you can understand why uranium prices are headed north. But did you realize nuclear power plants need a lot of molybdenum?) "Both Molybdenum and Uranium Vital for Nuclear Reactors" - more here

  Base metals outlook very strong - "Strong growth signs from the the United States and China, top two metal consumers, lifted the industrial metals to new highs on Tuesday, with copper and zinc soaring more than 7 percent and nickel hitting a fresh record." - more here

  News Bites - (courtesy/copyright Dow Jones Newswire) - "..Shanghai-based trader says nickel unlikely to retreat from $50,000 level.."As long as the charts remain strong, I don't think we (the market) should focus on a pullback."  "Rising LME nickel prices carry little risk of substitution due to restricted capacity for replacing stainless steel additive, says National Bank of Australia analyst Gerard Burg. Says China infrastructure growth requires stainless steels with high nickel content as used in exposed applications; "it will be interesting to see to what an extent stainless steel producers can pass on higher costs."

  LionOre recommends shareholders accept Xstrata takeover - "Xstrata Plc is a step closer to becoming Australia's third largest nickel producer after LionOre Mining International Ltd recommended a $US4 billion ($A4.9 billion) takeover of the company." - article here

  New report by SSINA - Chinese Government Subsidies to the Stainless Steel Industry - (26 page pdf here)  and Remarks by SSINA counsel David A. Hartquist to American Metal Market Conference on April 10, 2007 - (pdf here)

  News Bites - "China to cancel steel product export tax rebates on April 15"  - "Industry experts forecast that shipping rates for iron ore and coal, driven by demand from China and port bottlenecks, may rise to a record this year and gain further until 2010. Mr Lee Jong Chul CEO South Korea's largest carrier of bulk commodities STX Pan Ocean Co in an interview said that “We could see a record level for moving bulk this year. The recent market sentiment, congestion at ports and unexpectedly strong demand from China will bring rates to levels last seen in 2004.'' Mr Lee said that delays at Newcastle in Australia, the world's biggest port for coal shipments, have contributed to higher rates as Vessels in Newcastle have to wait about 30 days to load because of a lack of capacity. The problem of congestion is not an issue that will be resolved quickly. As many as 300 largest bulk carriers are waiting to load or discharge at any one time, tying up 15% of global capacity.” "State-owned mining company PT Aneka Tambang Tbk will spend $90 million to expand its business this year, including developing its nickel mine in Sulawesi and acquiring more gold assets, a company executive told Dow Jones Newswires on Monday (2/4/07). The company will spend about $30 million to develop its nickel mine at Pomalaa in Sulawesi.."

  New Caledonian researcher warns of biodiversity loss because of mining - "A researcher in New Caledonia is calling for a major independent study into the environmental effects of mining in the territory amid his prediction of a possible disaster to the area’s biodiversity." - article here

  China Drives Metals Boom - "While there are signs of a rebound in the US economy after the stronger than expected jobs figures for March, the real driver for world metal prices remains China." - article here

  European stainless mills to reduce base prices - "European stainless steel mills have announced to reduce 304 CR with thickness 2.0mm base price by €200~250/mt for May delivery due to plentiful stock at mills and stockist." - more here

  Today's beginning nickel inventory - minus 180 tons = 4,632 tonnes (35.10% - 1,626 tonnes cancelled warrants).

Monday, April 9   The London Metal Exchange is closed today, and will re-open for trading on Tuesday, April 10th 

  BMO says time to book profit on base metals - "BMO Capital Markets said on Monday that a majority of the stocks in its base metals coverage universe outperformed the broader markets over the past quarter and that it was time to lock in some profits." - article here

  Looking Ahead to Metals in 2010 - by Tom Stundza  of Purchasing Magazine - pdf here (hosted by All Metals & Forge)

  Nickel play refloated in nick of good time - "WA mining veterans Ross Kennedy and Tom Bannerman showed their knack for impeccable timing when they lodged their prospectus for the refloat of Kalgoorlie nickel explorer Great Western Exploration last week." - article here

  World Bank warns of another asset bubble - "THE Philippines’ rising foreign-exchange reserves risk an overheating economy and an asset price bubble, according to the World Bank." - article here

  Indonesian tropical island torn apart by tin mining - "The coconut palms on the tropical beaches of the Indonesian island of Bangka open up to reveal a landscape so devastated by mining that it bears an eerie resemblance to the surface of the moon." - article here

  Shanghai Nonferrous Metals publishes weekly poll. Of 24 market experts polled, 14 see nickel prices rising this week, 6 see the price staying about the same, with 4 feeling they will fall.

  Our comments from Friday hit a few of the investor forum's and we have been following the responses. One of the best observations to our analysis came from user "kamchatkatravel" on an Investor Village message board. We feel our other readers deserve to see it also. "I thought this bit of reasoning, however, was somewhat curious, and reminded me of what the bears often say about the oil market: "What the system does allow, is a metal that is worth $7.36/lb on April 6, 2005, with 9,936 tonnes of nickel sitting in LME warehouses, and worth $7.70/lb a year later, with 31,668 tonnes of nickel stored, be worth $22.68/lb yesterday, with 4,812 tonnes of inventory stocked. Is this evidence of a market price being determined solely by supply and demand? Or is it the billions of dollars finding their way into fund markets, and these funds looking for a place to get the highest return on investment?" What the analysis leaves out, of course, is that the fact that it is now taking $20+ nickel to balance the market indicates that demand relative to supply is very strong. A situation where there is 9,936 tons of Ni in storage at $7.36 is very, very different from one where there is essentially equivalent storage at $22, and can't simply be chalked up to speculation. If Ni were now to magically return to $7.36, what would happen to inventory? It would no longer exist." (comment - they have us there)

  News Bite  (copyright/courtesy Hoovers) - "The outlook for nickel prices, which hit an all-time record at $50,000/ton last Thursday, will hinge on whether nickel consumers will cut purchases to the point of sending the market into surplus, Macquarie said. "Until physical availability starts to ease, prices are not going to ease." Macquarie noted signs of weakness are developing in European nickel demand. In this context, it added that manufacturing activity, gauging from purchasing managers' indices for March, may be slowing in the U.S., Europe and Japan, although China's strong productivity in 2007 has offset those slowdowns."

  Attempted Theft of Two Nickel Producers - "Last summer the base metal market was a buzz with the bidding wars for nickel producers Falconbridge and Inco. The whole affair was intriguing with multiple bids and cross bids of takeover targets. Nickel at the time was on the move and had doubled from $6/pound in January. The victors in these battles were Xstrata taking over Falconbridge for $18 Billion and CVRD claiming Inco at $17.6 Billion. Falconbridge was purchased for a handsome 15X cash flow multiple and Inco shareholders were rewarded with a 9X cash flow multiple." - pdf here (posting of any reader submitted article by this site does not mean the site endorses the information. It is provided to the reader as another source of information.)

  Upcoming Conference - China Nickel 2007 "Is there enough metal to support China's growth?" May 30th - 31st, 2007 at the Grand Hyatt in Shanghai, China (more info here)

  FinMetal has added a nice little video to their website - see it here  

  Rand Merchant Bank - April Base Metals Report - pdf here

  Institute of Scrap Recycling Industries, Inc.- Market Report - pdf here

  Posco To Up Hot-Rolled Stainless Steel Price By 8.1% Apr 23 - "South Korea's Posco (005490.SE) said Monday it will raise the domestic price of its hot-rolled stainless steel products by 8.1% later this month, due to higher nickel prices." - article here

  Jinchuan Joined in Nickel Project in Zambia - "Jinchuan Group Limited, the largest producer of nickel in China and Asia, participated in a nickel mine project Munali in Zambia, along with major investor Albidon Limited of Australia." - article here

Weekend Review

  Comment - If you were hoping nickel prices would fall on Tuesday, don't get your hopes up too high. We are reading reports in New Caledonia that a barge carrying 300 tonnes of nickel ore has sunk, and according to some witness', the barge pilot had been drinking. This is apparently some of that low content ore that China is importing from the Philippines and New Caledonia. Earlier in the week, Eramet had warned that China was trying to make itself less dependent on nickel imports, by importing more and more low nickel content ore. They warned the figures could jump from 30,000 tonnes last year, to 60,000 this year. Better make that 59,400 tonnes after this mishap! (translated article here)

  Standard Bank - 4/4/07 - "The bulls are completely in charge. However, we feel that in the spirit of getting along with the momentum, the rally seems to be overextending; too fast too soon. Buyers begetting buyers. Effect of such sharp rises in prices on consumer community is being fully ignored. It was not long ago that we saw how consumers, specifically in China, changed their consumption practices when confronted with sharp rise in metal prices. We agree that the market is tight and it calls for high prices. However, we need to wait and look for new data for knowing who’s ahead: Funds or fundamentals !"

  New Bite s- "China Molybdenum, the third largest molybdenum manufacturer in mainland China, boasts the world's largest molybdenum mine in Luanchuan, with the reserves being as many as 2.06 million tons." "Jinduicheng Molybdenum Group, the largest molybdenum manufacturer in mainland China...s Asia's largest integrated molybdenum manufacturer.... with the annual output of molybdenum metal being 12,000 tons, ranking number one in China and number three in the world."

  News Bite - copyright Thomson Dialog NewsEdge - "According to Harron Homes men and women have a very different agenda when house-hunting....Typically, ...women are lured by celebrity-style walk-in wardrobes, master en suites and designer kitchens, the builder claims....The research finds sleek, contemporary styles are a top priority in kitchens and bathrooms. The most popular choices are modern hobs and stainless steel extractor hoods in the kitchens...."

  Birds fell out of the sky as a whole town was poisoned by lead dust - "A strange silence was the first clue that something was wrong. The dawn chorus that usually woke residents of the picturesque coastal town of Esperance, in Western Australia, had stopped. Then birds began falling out of the sky." - article here  (comment - we have been posting news on this situation back before the recent nickel shipment was effected. It is worth following as it could have future effects on nickel mining/shipments in the region.)

  Hedging, whose risk? - "Paul Renken of VSA Resources offers his views on hedge positions" - pdf here

  Spike pricks curiosity into length of run - "THE upward spike that has unfolded in the world commodities market over the past week has renewed the question of just how long the run can continue." - article here

  Kanaks reject Eramet bid for New Caledonia’s northern nickel project - "Kanak leaders in New Caledonia’s north have rebuffed an offer by the French mining company Eramet to take a key role in the Koniambo nickel project." - article here

  News Bite - India - "Till 2010, the demand for nickel is seen to outstrip supply. Keeping in view the rise in prices, the industry has asked the ministry of finance to cut the import duty from 5% to zero. China has already lowered the import duty from 2% to 1%, whereas countries like Japan and Korea have no import duty on the metal."

  Mining interests eye a return to Upper Peninsula - "Like much of Michigan's Upper Peninsula, Marquette was built on mining. Thousands of Irish, German, Polish, Italian, and other immigrants arrived in the late 1800s and early 1900s to forge new lives in the copper and iron mines." - article here

  Appetite for metals is untarnished - "Metal prices rose strongly this week as concerns about supplies of copper, lead, nickel and tin combined with firm demand from China pushed some metals to record levels this week." - article here

  This week could best be described as a "Correction Rejection". Please remember these are indication numbers only.  Nickel ended the last day of March at $20.32/lb, having seen a 5.8% gain on the week. Trading on the 2nd of April opened at $20.25/lb, which was also the low of the day, saw a high of $20.93/lb, and closed at $20.71/lb. The only day of the week not to break an all-time record high record, it however set the tone for the days following. On Tuesday, nickel opened trading at $20.71/lb, saw a record high of $20.91/lb, a low of $20.65.lb, and closed at $22.02/lb. Wednesday brought much of the same, with markets opening at $21.94/lb, seeing another record high of $22.51/lb, a low of $21.88/lb, and ending the days trading at $22.29/lb. With Friday being Easter holiday, Thursday would finalize the weeks trading. And it did with an explanation point. Markets opened trading at $22.41/lb, saw a new all time record high of $22.68/lb (the magical $50,000/tonne threshold), saw a low of $2.14/lb, and ended the day and week at $22.16/lb. For the week, the price of nickel ended 9.05% higher, and for 2007, prices have risen 46.75%. This time in April of 2003, the price of nickel was selling for $3.58/lb, and the price of stainless steel was already rising.    

  Opinion only - Another record breaking week for nickel, and while we have chided Jinchuan in the past for its "motivated" statements, we have to nod in agreement when they say that the price has lost touch with industrial reality. As consumers and distributors of stainless steel product (stainless being the single biggest consumer of nickel), we are seeing the effects it is having. For consumers who must use stainless steel for its corrosion resistance, there is little choice but to accept the prices and move on. But we are also seeing customers, who chose to use stainless steel as an "explanation point of quality" for their product, considering a temporary change to a less expensive metal. We are also seeing the beginning in-roads of serious consideration of 200 series stainless steel in the US. And while most users will not be able to accept the deleted level of corrosion resistance the 200 series can offer in comparison to the 300 series in many applications, it is those customers on the fine line, that nickel producers should be worried about. We are even hearing reports that the world's tallest building under construction in Dubai, may have abandoned its plans to use stainless steel on the exterior, due to its high cost (we are unable to confirm this report).

Let's talk plain and shoot straight from the perspective of a stainless steel user. Nickel producers, while being blamed for the increase in prices, really can not be blamed. Only a fool would own a nickel producing company today and not be running flat out to produce as much nickel as possible. There are conspiracy theorists that say Norilsk, or other nickel company's may be stockpiling nickel, but this really makes no sense. Maybe they are, but we seriously doubt it. It was Norilsk who released a massive stockpile back when this bull run began, trying to keep the cost of nickel in the "reasonable" $3/lb range. The only stockpiling that we believe could be going on, might be by governments trying to guarantee access to what many classify as a strategic mineral, for future military purposes. Producers of stainless can not be blamed, regardless of what an official from Norilsk claimed last fall. That is kind of like blaming the fans because your sports team lost the game. We would like to blame stock investors, but they are just taking advantage of the record high prices and the huge profits seen by the company's they invest in. Blaming them would be sour grapes, by those who weren't smart enough to invest and take advantage of the windfall themselves. We can point our finger at China, and while their usage has taken the world by total surprise, production has kept up.

In our humble opinion, it is the system of speculation that allows prices to apparently have no ceiling. And to those stockholders, who say it is inconceivable that nickel prices will ever drop below a certain price again, due to the increases in cost of production nickel producers are experiencing, we say, the 'system" cares little about that either. What the system does allow, is a metal that is worth $7.36/lb on April 6, 2005, with 9,936 tonnes of nickel sitting in LME warehouses, and worth $7.70/lb a year later, with 31,668 tonnes of nickel stored, be worth $22.68/lb yesterday, with 4,812 tonnes of inventory stocked. Is this evidence of a market price being determined solely by supply and demand? Or is it the billions of dollars finding their way into fund markets, and these funds looking for a place to get the highest return on investment? Smarter minds than ours will have to determine that. The scary part of this whole equation is, the old saying. The harder they climb, the harder they fall. There is no reason for any practical person to see why they would anytime soon, except for minor corrections. The increase in demand has so far offset any loss to substitution concerns. There are no promises of any new substantial supply forseen for another few years. Funds haven't found a better place to stick their money yet, and its doubtful they will unless something dramatic happens.

Fingers may be pointed in all directions, and most parties can take responsibility for a piece of the blame. But in the end, its not the producer or investor of nickel producers, nor is it the producer or consumer of stainless steel, it is a system that allows prices to run unchecked, with supply/demand concerns only a part of the total picture. And finally, we blame Eduard Maurer and Benno Strauss, who in 1912,  patented the first austenitic stainless steel. Nearly a hundred years later, these two German's patent, and others research, has become such a high quality, corrosion resistant metal, that the demand for stainless steel will continue to grow, no matter what lengths are taken to slow it down. It would appear that the future for nickel, is as bright and shiny, as its largest final product.   

  Soaring Nickel Prices Spur Search for Alternates Nickel prices will remain extremely high, requiring design engineers to reconsider nickel-content specifications and examine alternatives such as coated porcelain enamel. - article here

  China-Venezuela: The Real Drama - "At the end of March, China and Venezuela formed a joint investment fund. The Chinese are to contribute $4 billion while Venezuela is to participate with $2 billion." - article here

  China News Bite - "The government is also considering increasing the export tax for most primary nonferrous metal products, including refined copper and aluminum and nickel, if there is not a substantial reduction in exports after the imminent export tax rebate policy is released, he said (more)


Friday, April 6 - Happy Easter

  London Metal Exchange closed today for Easter holiday weekend - week in review posted later today or this weekend

  Nickel price 'loses touch with industrial reality' - "The price of nickel has surged to a record $50,000 a tonne (£25,320) as world warehouse stocks fall to half a day's supply on booming demand for stainless steel and shadowy moves by "pinstripe" funds." - article here

  How far has the nickel frenzy gone? Tiny GGL in spotlight after chance find - "GGL Diamond Corp.'s meteoric stock rise says more about the fever pitch in the global nickel market than the substance of the junior miner's new discovery of the red-hot metal, industry analysts said yesterday." - article here

  Behre Dolbear Global Mining News - pdf here

  (courtesy/copyright Dow Jones Newswire) - "A total 3,372 metric tons or 64% of the 5,232 tons of nickel held on warrant in LME warehouses on March 31 was produced in Central Europe and the CIS, LME data shows. A further 1,284 tons was produced in Asia and Australasia, with 336 tons coming from producers in North America. Western Europe accounts for 162 tons, Latin America accounts for 54 tons and 24 tons was of African origin, the data notes." - "Despite signs of a slowdown in the European and US markets, Deutsche Bank estimates a moderation in total primary nickel consumption growth rates from 8.9% in '06 to 5.3% in '07 and 7.1% in '08. Notes demand is threatened by a weak housing market and "moderately abating" global stainless steel production this year, with US producers reporting fewer orders and rising stocks. Expects prices to average $40,785/ton, and notes supply side risk going forward as producers have been shaving maintenance schedules to capitalize on recent high prices. Sees a "substantial over supply of nickel by the end of the decade." LME nickel trades +0.5% at 49,600/ton."

  Nickel's rally is molybdenum's gain - "Nickel prices on the London Metal Exchange have climbed more than 200% in the past year and some of their success has been spilling over to molybdenum." - article here

  The Next Large Scale Moly Mine Who Exactly Is In The Lead? - "For many months now and even more so of late with the flock of new Moly plays emerging & endless promotions thereof, it has become very apparent to myself and to a few others who have been directly involved or writing/researching on the so-called Moly-Mania phase for over two years that there are some serious misconceptions out there regarding various junior Molybdenum projects." - more here

  Zambian environmental regulatory body approves 12 new projects - "The Environmental Council of Zambia (ECZ) has approved 12 projects in accordance with the country's environmental act, paving way for the commencement of the new projects, an ECZ senior officer has said." - more here

  Pressure mounts on Anglo's Carroll - "THE next nine months may be crucial for Canadian Cynthia Carroll, who is officially now the hands-on CEO at Anglo American. “I think she has to be fairly active to prove that she’s not just the caretaker manager,” said Peter Major, a hedge fund manager at Cadiz." - article here

  Experts Now Openly Identify Critical Strategic Minerals for Taxpayer Funded Study - "Private investors and professional purchasing staff have been given a rare opportunity this week to look at the thinking of a very experienced and successful manager with broad experience in finance and commodity, as well as nonferrous, metal purchasing at America’s largest heavy industrial manufacturer, General Motors." - article here (the article refers to a paper by Mr. Ivan Herring, but the link that is given, does not work. You can find the pdf report here)

  RUSSIA: Toxic truth of secretive Siberian city - "It took more than two months for the Russian authorities to grant us permission to travel to the secretive Siberian city of Norilsk." - article here  (comment - BBC News report copied on NGO site)

  The projects of the SLN in North make movements - "It was undoubtedly the required effect: the advertisements made day before yesterday by the Eramet group caused considerable reactions in Calédonie. The least enthusiastic being that of the Northern province…" - translated article here

  Kosovo's Ferronikeli – a successful privatisation - "Media in Kosovo reported on the visit of Acting DSRSG and Head of KTA Board Paul Acda, Minister of Trade and Industry of Kosovo Bujar Dugolli and Head of BSPK Haxhi Arifi to the privatised company "Ferronikeli" in Gllogovc/Drenas." - article here

  China News Bites - "Jinchuan starts Zambian nickel mine construction" " Yusco Raised HR Stainless Steel Export Price to S. Korea" "China to cut or cancel export tax rebates on ... (more)"

  Couple of presentations at Canaccord Adams Nickel Conference held last month - Dynatec and Ambatovy pdf here  International Nickel Ventures - Brazil Mines pdf here

  Not in my backfjord, Icelanders tell Alcan - "Perhaps the company didn't campaign hard enough among the Hidden Folk." - (article here)  Canada & Iceland. Alcan reviewing public consultation close results of Hafnarfjordur - "Alcan Inc. has announced that it will carefully analyse the close results of last Saturday's public consultation in Hafnarfjordur and assess the impact these results may have on the future of its ISAL aluminum smelter. Citizens of Hafnarfjordur voted by a small majority (50.3%) against a local urbanisation plan that included the expansion of the ISAL smelter." - (article here)

  The metal market - "On Little League opening day at Sebastopol's Polley Field, two empty posts near center field were a forlorn reminder of a crime fueled by surging global commodity markets." - article here

  Nickel - in Maine? Here is something interesting we found. "The Knox Mining Company (formerly Roland F. Beers, Inc.) continued to explore the nickel deposits of the Union area during the 1960's. In 1965 they discovered a significant nickel-copper deposit southwest of Crawford Pond in the town of Warren. Exploratory drilling between 1966 and 1974 outlined the ore body, but mining was not economically feasible." - pdf map here (please note this may be private property - check with owners before entry - and the Maine Geological Survey has core samples from the area)

Thursday, April 5

  The London Metal Exchange will be closed for trading tomorrow for Easter weekend. Today's official closing prices - cash - $23.75/lb - 3 month buyer - $22.45/lb (48.68% higher than 1/1/07). While we will be here tomorrow, many of you will be off and we want to wish you all a safe and peaceful holiday weekend. Nickel was anything but peaceful today, as the magical threshold of $50,000/tonne was finally met. That makes $22.68/lb our new all time record high for 3 month nickel. Can you imagine - someday sitting around the campfire with your grandchildren, boring them with stories about when nickel sold for $3/lb and you had to use a computer with a 20 MB hard drive. Well fire up the weiners folks, because that was just 6 years ago!

Inventories fell overnight, Minara won't meet immediate production targets,  Jubilee cut its production target, there is a labor dispute at Voisey's Bay in Canada that could lead to a strike, Xstrata wants LionOre's nickel, Lundin wants Rio Narcea's nickel, China wants all the nickel they can get, and that was just the news this week. Who knows what next week will bring. But for the first week of April 2007, nickel ended the day and weeks trading at $22.41/lb (49,400/tonne) - which just happens to be exactly where it started the days trading. And finally, Hershey's announced today that their chocolate bars will be going up by an average of a nickel! Now that's nothing to "snicker" about! (Cometx - here)

  Metals - Nickel hits all-time high of 50,000 usd as inventories fall 6 pct - "Nickel hit a new all-time intraday high for the second day in a row, reaching the psychologically significant 50,000 usd level, as inventories slid by a further 312 tonnes to 6 pct to 5,124 tonnes." - article here

  Norilsk Nickel's Net Profit Grew by More Than 110% - "GMK 'Norilsk Nickel' OJSC published official data regarding the growth of profits and the value of the company's assets in 4Q 2006. The costs of Norilsk Nickel's assets over the reporting period increased by 16.84% to RUR362,587,208 thousand." - (that was all that was written here)

  Xstrata chief tops the year with £4.2m - "Mick Davis, the chief executive of mining group Xstrata, scooped an $8.2 million (£4.2 million) pay and bonus bonanza last year after leading the group to record profits." - article here

  Inuit Communities Receive Cdn$16.7 Million in Profit-Sharing From Xstrata Nickel's Raglan Mine - "Xstrata Nickel is pleased to announce that it has presented a cheque in the amount of Cdn$16.7 million to the Makivik Corporation, representing its share of the profits generated in 2006 by the Raglan nickel mine operation, located in the Nunavik Territory of Northern Quebec." - article here

  We occasionally give our readers an idea of how nickel prices are affecting the price of a stainless steel product by following its effect on a stainless steel bolt. In 2001, the raw material cost of the nickel in a single 1/2-13 X 1-1/2 304 Stainless Steel Hex Head Cap Screw (also called a Hex Bolt and 18-8 Stainless Steel) was $.023/each (a single bolt this size weighs approximately 10.6 lbs per hundred). In 2006, that cost had gone to $.113/each. On January 1st of this year, that cost stood at $.1577/each. Today, with the $50,000 tonne threshold now broken, the cost of the 8% nickel content in this single bolt, would run $.1923. We found one US metals distributor that is advising their customers that the surcharges alone on stainless steel in May, will be more than double what their total selling price for stainless steel was just 2 years ago.

  Indications at 7:50 am CST show nickel selling up by $.14/lb. The indications we monitor are showing the price of nickel has backed off a little from the new record high that was hit earlier. Bloomberg, and others, are reporting 3 month nickel traded as high as $22.68/lb, or $50,000 per tonne, this morning. This is another huge psychological barrier for traders to break, cash having broken thru the $50,000 tonne barrier last month. We are seeing some profit taking going on right now, which is typical after these barriers are broken. What will happen next is anyone's guess. But at the moment, the month is beginning very similar to March, with a new record high being established each day, and there seems to be no stopping this bull. (Dow Jones - more) (AFX News - more)

  China Jinchuan raises local nickel prices by $1,939/mt on April 5 - "China's largest nickel producer Jinchuan has raised its domestic prices for electrolytic nickel by Yuan 15,000 ($1,939)/mt, effective April 5, 2007, the company said Thursday." - article here

  Nickel hits $50,000/tonne on stocks, demand - "Nickel prices rose to $50,000 per tonne at the London Metal Exchange for the first time ever on Thursday, boosted by falling inventories and strong demand." - article here

  Medium Term Stainless Steel Price Forecasts - "Hot Rolled Stainless Steel Coil - Transaction values went up significantly in Asia and North America to reflect higher nickel costs. In the EU these were offset by declining basis values. We see scope for further substantial increases in the short term in Asia and North America with more modest figures expected in the EU. Basis values are forecast to decline in both the EU and North America over the next few months. However, lower alloy surcharges should help to alleviate the downward pressure in the medium term. - Higher stocks and lower demand will put pressure on the mills to discount prices in all regions during the second half. This will lead to an inventory depletion phase which will further exacerbate price erosion. In the longer term, we expect stainless transaction values to decline in all regions to the end of 2007." Source: Stainless Steel Review by MEPS (International) Ltd. -  World Average Carbon Steel Prices - LAtest Forecasts from MEPS - In the flat products category, further gains are now anticipated into the second half of this year as the threat from competitively priced imports from China and Russia diminishes. Our forecast has been modified in line with the new market conditions. However, substantial quantities of new capacity are reported to be coming on stream in China in the coming months. This is likely to put negative pressure on local prices which will already be suffering from lower volumes of business into foreign markets as a result of the loss of the export tax rebate on certain products. Reduced export prices could follow - thus reversing the current positive sentiment around the world. Lower Asian values could extend into the Autumn and Winter in the northern hemisphere. In the long products sector, we expect scrap prices to remain buoyant for a few more months ahead as Chinese steel production continues to be strong. Last month's forecast has been adjusted accordingly. Decreases in the export tax rebates are likely to limit sales to foreign markets and slow the growth rate in steel output in the country. As a consequence, we believe that scrap prices will start to decrease before the middle of the year. Traditionally strong steel market demand in the late Springtime, could delay the decline in global steel prices until the third quarter of 2007 and into 2008."

  Prospector strikes gold with nickel find - "Raymond Hrkac couldn't have picked a better time than yesterday to say he hit the jackpot." - article here

  News Bite  - (courtesy/copyright Dow Jones Newswire) - "Despite signs of a slowdown in the European and US markets, Deutsche Bank estimates a moderation in total primary nickel consumption growth rates from 8.9% in '06 to 5.3% in '07 and 7.1% in '08. Notes demand is threatened by a weak housing market and "moderately abating" global stainless steel production this year, with US producers reporting fewer orders and rising stocks. Expects prices to average $40,785/ton, and notes supply side risk going forward as producers have been shaving maintenance schedules to capitalize on recent high prices. Sees a "substantial over supply of nickel by the end of the decade."

  News Bite - Export Rebate Postponed Stainless Steel becomes Protective Product  (comment - more to follow)

  Sally nickel reserves up - "SALLY Malay Mining, the best-performing stock in Australia's mining index, increased nickel reserves at its Winner deposit ahead of first production expected in August amid soaring metal prices." - (more here ) Investors shave $190m off Minara - Investors have shaved about $190 million from the market value of Minara Resources Ltd after the nickel miner recorded a dip in production for the first quarter of 2007. - (more here)

  France’s Eramet eyeing stake in New Caledonia’s Koniambo project - "The French mining company Eramet says technological improvements it has developed in France are suited in the exploitation of the nickel resources in New Caledonia’s north." - article here

  For architecture buffs, it would be hard to find a place with more impressive construction taking place in one area, than in Dubai. Included among the many skyscrapers under construction is the Burj Dubai, which has the goal of becoming the world's tallest building. Nearby, was the planned 80 story tall Infinity Tower - called by some the "world's tallest building with a twist". In February construction was nearly complete on the foundation, when it suddenly sprang a small leak. What happened next, you have to see. See here.  ("Houston, we have a problem!")

  Something to consider. Since January 1st of this year, the price of nickel has risen approximately 45%. The price of copper has risen approximately 25%. A US minted nickel contains 75% copper and 25% nickel. At 5 grams total weight, the value of a nickel yesterday (in coin form and using LME cash prices), is $.0907/each. If these two metals increase another 10%, that nickel in your pocket, will be worth a dime. Then we need some filthy rich guy, with a lawyer in his pocket,  to pay his $200 speeding ticket with $100 in nickels and tell the state its not his fault it's illegal to melt them down for their true value.

  Today's beginning nickel inventory - minus 312 tons = 4,812 tonnes (35.79% - 1,722 tonnes cancelled warrants).

Wednesday, April 4

  Today's official LME nickel closing prices - cash - $22.99/lb - 3 month buyer - $22.02/lb (45.8% higher than 1/1/07). How to best describe the market? That would probably depend on who your are. For instance, a nickel miner or investor might say "stupendous, fantastic, or phenomenal". However, a producer or user of stainless would probably describe it as "obscene, horrific, or absurd". Barclays Capital told Dow Jones Newswire today that "LME nickel (is) firmly on course to hit technical target of $50,000/ton after closing above old record high of $48,500, then $51,900 this month." Apparently someone was listening, because afternoon trading once again picked up after finding renewed energy, and the old record for 3 month nickel was soon shattered. Trading ended the day at $22.41/lb ($49,395/tonne) (Dow Jones - here) We would like to take this opportunity to wish our Australian and Asian readers a Happy Easter, as many of you will have started a three day weekend when we, here in the States, return to work tomorrow. 

  Australian Stainless Magazine - Autumn 2007 - pdf here

  Commonwealth Bank - Metals Monthly Review - March 2007 - pdf here

  ScotiaMocatta - Metal Matters - April 2007 - pdf here

  Fortis Metals Monthly -  April 2007 - pdf here

  Twiggy back in nickel via old Poseidon mine - "YEARS after leaving bondholders in the lurch at Anaconda Nickel, paper billionaire Andrew "Twiggy" Forrest has returned to the nickel business to resurrect the mine responsible for the infamous Poseidon Nickel boom of 1969." - article here

  What's Next for the Global Steel Industry? - "One hundred years ago, steel was the IT industry of its day -- a cutting edge sector that was a symbol of a country's economic might. Andrew Carnegie, U.S. Steel, and Pittsburgh were what Bill Gates, Microsoft and Silicon Valley are today. The U.S., Britain and Germany made the bulk of the world's steel until the 1970s, when competition from Japan and South Korea sent these traditional Western steelmaker-behemoths reeling. By the late 1990s, the steel business had one foot in the grave." - more here

  Articles we missed about Roger Agnelli - How a new decision-making culture helped Brazilian raw materials company CVRD join the world’s leading players - (undated article here) (we assume this was written before the Inco takeover as it is not mentioned) Roger Agnelli : China is the place we should invest - (March 8th article here)  

  Raw materials, "Yang Huojin prices," Steel how to cope with this? - "Iron ore, scrap iron, steel and other raw materials for steel smelting iron as an indispensable "food", in recent years, "Food" shortage, the price rose to become a major steel production "bottleneck". for many steel enterprises are confused on how to deal with steel materials, "Yang Huojin price." a major issue in the steel industry." - (poorly translated article here)  Steel industry has been seriously underestimated : 15 times more reasonable PE - "April 2 steel shares across the board increase, the highest increase Billboard industry first." - (poorly translated article here)

  High nickel price spawns cheap substitute- - "Record high nickel prices have spawned markets for cheaper nickel pig iron, whose production could more than double to 60,000 tonnes in 2007, French metals group Eramet said on Wednesday." - article here

  News Bite's - (courtesy sohu.com) "In recent months, China's stainless steel producers to reduce the cost of high nickel prices. increased the taste of nickel ore imports. Nickel-iron imported mainly from the Philippines, the import volume increased by 8% last year, calculate the volume of approximately 30,000 tonnes of nickel." (source) (courtesy Qinghai Daily) - "The Qinghai-Canton nickel chromium stainless steel project is an important raw material production base of nickel - chromium alloy. The project plans to invest more than 10 billion yuan, covering more than 1,000 acres. For a nickel - chromium alloy with an annual output of 100,000 tons and 10,000 tons of nickel metal production lines are expected to gradually put into operation in September 2007. Phase II expansion of nickel - chromium alloy production line to reach an annual output of 200,000 tons and 20,000 tons of nickel - chromium alloy of nickel metal scale, and to build a new annual output of 300,000 tons of stainless steel billets produced. (construction began 3/19/2007)" (sorry about the poor internet translation) (courtesy Interfax) - "Iron ore freight prices are at a two year high due to increasing iron ore imports from Australia and Brazil, caused by Chinese steel mills halting imports of Indian iron ore, industry insiders told Interfax today."

  Indications at 7:55 am CST show nickel trading down by $.11/lb . With no further news of supply disruptions, or potential disruptions out today, we may see traders settle down to a game of chicken...will the market go higher?... or is it time to take some profits? We will know later today. (Bloomberg - here)

  Eramet Says China May Double Nickel Substitute Output in 2007 - "Eramet SA, operator of the world's largest ferronickel plant, said China may more than double production of nickel pig iron, used as a replacement for nickel, as the price of the pure metal soars to record." - article here

  China Girds Metals Inflation - "China must be going nuts with growth. We are seeing metals commodity prices spike huge." - more here

  New investor interest in Dominican Republic - (quote from article) "“We are exporting US$204 million more than in the first three months of 2006, for two basic reasons: first, the 136% increase in ferro-nickel prices, and second, exportation of non-traditional products indicate that there has been a 30.84% growth in three main areas - agricultural, agroindustrial and industrial products,” said Martínez." - rest here

  For 2007, commodities look better than stocks - "Commodities prices are outpacing stocks and bonds for the first time in nine months and, according to many analysts, the quarterly rebound is likely to continue as China keeps increasing its imports of raw materials." - article here

  Lundin targets Spanish nickel mine - "Vancouver's Lundin Mining Corp. is preparing to acquire Toronto-based Rio Narcea Gold Mines Ltd. in a deal valued at approximately $800-million, continuing a buying spree for Canadian nickel miners amid record prices for the metal." - article here

  Xstrata best Anglo American suitor, say London analysts - "The voracious South Africa-led London-listed diversified mining company Xstrata plc was the most logical suitor for South Africa's iconic Anglo American plc in restructured form, three London analysts concurred on Wednesday." - article here

  Chromium stainless steel output caused short supply - "According to ISSF (International Stainless Steel Federation) released statistics, Total world crude steel production in 2006 stainless steel 28.4 million tonnes, representing a 14.3% increase in 2005 China, produced 5.3 million tons, a 68% increase over 2005. In view of the forthcoming two new plants in operation (USCO and grave Guangzhou Iron and Steel Company. stainless steel production were 600,000 tpa), in 2007 China's stainless steel production will increase significantly to around seven million tonnes per year. " - translated article here

  Half of Congo licenses may not comply - "UP to 50% of mining contracts signed in the Democratic Republic of Congo (DRC) may be unfair to the state and may have to be renegotiated, said deputy mines minister, Victor Kasongo." - article here

  Australian firm launches 100 mln dlr nickel mine in Zambia - "An Australian firm, Albidon Limited, launched the construction of a 100 million dollar new nickel mine in southern Zambia on Tuesday, a project which will lead to dozens of people being displaced." - article here

  Rebels Attack Philippine Mining Company - "Communist rebels launched a string of attacks in the central Philippines on Tuesday, setting fire to buildings and equipment at a gold mining company and killing at least three police officers in an ambush, officials said." - article here

  News Bite - courtesy/copyright Macquarie Warrants and Shaw Stockbroking - "Chinese nickel pig iron, friend or foe? The rapid acceleration of nickel pig iron production in China, to potentially as much as 80kt in 2007, was clearly recognised as the key wild-card for the industry to monitor (and given the evolution of domestic alumina production that level of attention is certainly understandable). However, it was equally interesting to note that industry participants did not view this new source of supply as a threat but rather as a white-knight that would help avert demand destruction. Quite simply, market demand continues to be constrained by the lack of availability of nickel units, which in turn has incentivised high cost nickel production. That high cost, marginal production is similarly expected to support pricing at an elevated level."

  News Bites from/about China- "Shanxi Taigang Stainless Steel Co. Ltd. (Taigang Stainless), the Shenzhen-listed subsidiary of Taiyuan Iron and Steel Group (TISCO), announced on Saturday a net profit increase of 212.04 percent to RMB2.42 billion ($313.07 million) last year" "According to a Tiomin statement, Jinchuan produces 88 percent of the total Chinese production of nickel and 90 percent of platinum group metals." "China - Lanshan Port has become the nation's No. 1 nickel ore imports." "February, only rolling Shanxi unwrought nickel imports amounted to 3,900 tons, up 2.3 times import value reached 130 million U.S. dollars, an increase of 7.5%, accounting for 31.7% of total imports in Shanxi Province in February." "On one hand, the current state of China's stainless steel are still in short supply. 2006 China's net import of 2.5 million tons of stainless steel remains." "$0.0888724 is the melt value for the 1946-2007 U.S. nickel on April 03, 2007"

  Today's beginning nickel inventory - minus 42 tons = 5,124 tonnes (36.89% - 1,890 tonnes cancelled warrants).

Tuesday, April 3

  Today's official LME nickel closing - cash - $22.57/lb - 3 month buyer - $21.59/lb (43% higher than 1/1/07). While the official closing shows a gain for the day, the afternoon trading took prices to a new record high for 3 month nickel. Why? The media seems to be blaming Jubilee's report  that it won't produce as much nickel as it originally planned. But we think the Voisey's Bay situation had more of an effect. Voisey's Bay is the last mega mine that we have seen opened, and while it is no where near capacity yet, it helped fill in a much needed void, starting in late 2005. If it stops producing because of a strike, we are in serious trouble! Nickel ended the day at $22.04/lb (48,585/tonne). That is a new record high for 3 month nickel and a one day gain of 7%. (Dow Jones here) (Reuters here)

  Horizonte acquires Nickel Project in Brazil - "Horizonte Minerals plc, the AIM listed exploration and development company focused on Brazil and Peru, is pleased to announce the acquisition of new ground highly prospective for nickel. The Lontra Ni Project is situated in the Araguaia mobile belt which flanks the eastern margin of the Carajas Mineral Province of northern Brazil." - more here

  Xstrata-Merafe secures Q2 10,7% ferrochrome price increase - "South African charge chrome producer, the Xstrata-Merafe Resources joint venture, has scored a 10,7% increase in charge ferrochrome prices, for its second quarter contracts in Asia and Europe, the firm said on Friday." - article here

  We have posted May stainless steel surcharges for Allegheny Ludlum and North American - surcharge for 304 Stainless Steel - +$2/lb and for 316 Stainless Steel - +$3/lb (this is the price of surcharge only - posted here)

  A couple of presentations given at last weeks New Caledonia nickel conference - pdf of BHP here - Xstrata here

  Indications at 7:50 am CST show nickel selling up by a whooping $1.10/lb.  Jubilee cutting its 2007 production goal by a meager 500 tonnes, backed by threats of a possible strike at the world's last opened mega mine, Voisey's Bay, in Canada, offset any calm that might have been earned by the end of a one day CVRD Sudbury strike. We have entered what is typically a busy season for nickel demand, and while there have been threats, the numbers only reflect an increase in demand. Supply can keep up, but disruptions put the balance in jeopardy. (Reuters - here)

  Rand Merchant Bank Weekly Base Metal report - pdf here

  Canada Commodity Price Update - pdf here

  Mine shuts down amid contamination probe - "The mining company at the centre of a lead contamination scare in the Western Australian town of Esperance suspended its operations, laying off three-quarters of its workforce." - article here  

  Jubilee downgrades production guidance - "Nickel miner Jubilee Mines NL has warned it may not achieve its targeted output for the 2006 fiscal year, but a surging nickel price is expected to counteract any production shortfall." - article here  (Jubilee Downgrades 06-07 Nickel Output Outlook By 500 Tons)

  Nickel Rises the Most in Three Weeks on Falling Stockpiles - "Nickel rose the most in three weeks in London on speculation falling stockpiles will fail to meet global demand. Copper rose to the highest in almost four months to more than $7,000 a ton." - article here

  Macquarie: Nickel Sector - A bullish tone but short-term concerns - "Macquarie Securities hosted their annual Global Nickel conference this week. Key presenters included: CVRD-Inco, Norilsk, Jubilee Mines, Minara Resources, ELG Recycling Processes, Brook Hunt and Zhejiang Huaguang (China’s largest nickel-in-pig iron producer). The producers presented on their outlook for the nickel market, and in the following article, Macquarie Research Equities (MRE) summarise this view." - more here

  Threat of new strike looms over Voisey's Bay - "The Voisey's Bay nickel mine in northern Labrador could become the scene of another labour dispute, with a group of workers moving closer to a strike position." - article here

  Base Metals will continue to show their mettle - "Raymond James Equity Research is predicting continual strength in base metals prices, although by 2010 the organization predicts a falling back – but even so most will remain above 2005 levels." - article here

  Aquarius planned LionOre merger - "AQUARIUS PLATINUM had proposed a merger with LionOre Mining International until the Toronto-listed firm accepted a R28bn takeover from British mining house Xstrata last month. That’s the speculation doing the rounds in London – rumours that Aquarius Platinum CEO Stuart Murray will neither confirm nor deny." - article here

  News Bites - "According to January results, deliveries of iron ore raw material to China from Russia exceeded an average level of the last year more than 2,5 times." "World consumption of long products increased by 88% during last 14 years - According to Celsa data, during last 14 years, world consumption of long products increased by 88 % from 272 mln. t in 1992 up to 512 mln.t in 2006. In the structure of visible consumption of long rolled metal about 1/3 accounts for rebar." " China's nickel output to rise up to 200,000 mt in 2007: Antaike" "Chinese Stainless Outputs Increase Triggered Chrome Supply Tension" "Denis Morozov took up the post as GOJSC Mining and Metallurgical Company (MMC) Norilsk Nickel April 3. Morozov, previously Deputy Director General and Member of the Management Board of Norilsk Nickel, was unanimously elected to the highest corporate post by the Board of Directors at their meeting on March 16, 2007, the MMC press service reported."

  News Bite - courtesy/copyright Elsevier Engineering Information - "Cuba's nickel output is projected to increase to 76,000 tonnes in 2007 from 74,000 tonnes in 2006. Nickel production is forecast to climb by 14,000 tonnes/y in the coming few years. The country intends to spend $300 M to expand the nickel industry. It has formed a $521 M partnership with Venezuela for the manufacture of ferronickel in Holguin."

  CVRD-Inco office, tech staff ratify union deal - "Unionized office and technical workers at CVRD-Inco's nickel operations have ratified the labor agreement reached earlier on Monday, ending a strike that disrupted nickel production over the weekend." - article here 

  Typically, nickel makes up about 60% of the material cost of nickel bearing 304 stainless steel. We are seeing reports from China where the price of nickel has grown so high, that in some cases, it now accounts for upwards of 80% of the cost of stainless steel.  

  Here is an article we found posted on a Chinese blog verifying that Jinchuan was covering a short when it started dumping nickel inventory into LME warehouses a few weeks back. translated article here It is old news and doesn't really matter anymore, except maybe to all the producers of stainless steel, that cancelled orders on the expectation lower prices were in the near future. Now, for those that must repurchase, they face even higher prices. 

  Today's beginning nickel inventory - minus 66 tons = 5,166 tonnes (37.05% - 1,914 tonnes cancelled warrants).

Monday, April 2

  Today's official LME nickel closing - cash - $21.59/lb - 3 month buyer - $20.73/lb (37.3% higher than 1/1/07). These prices were set/published after the first ring (about 11:30 am London time). When we arrived this morning, we glanced at the indications and the market was up big - over $1,000/tonne. Then 30 minutes later when we posted our morning update, the market had fallen off steeply. Something had obviously happened, but it didn't hit the press until about 30 minutes later, when an agreement was announced in Sudbury. Another fine example why playing on the LME is best left to professionals, who have the the contacts and 'spies' to get their floor traders the word before the general population has it. When your dealing with millions of dollars on a daily basis, you can afford to put a few people where the news is or will happen, like maybe watching some of the larger LME warehouses for shipping activity. So the strike was over, but the news for nickel traders was still positive. Demand appears to be way up, from Macquarie, the same people who are advising Xstrata in their purchase of LionOre. Apparently we missed something last week. We thought Xstrata was getting advise  from someone the market was going to go down? Demand going way up this week, price is going to go down last week? PFF? This is why we just print the news - so you all can figure it out. That said, when the dust finally settled on day 1 of April 2007 trading, 3 month nickel ended trading at $20.68/lb ($45,600/tonne). Please note, that we have added a weekly price summary to our weekend review with daily high's and low's. Today we have added a nickel forecast, published each Monday by the Shanghai Metals Network. We continue to provide the news free of charge, so please visit our sponsors(they keep it free), and if you come across something we miss, or something that might be useful to our readers, please send it to us. (Comtex Finance - here)

  No end in sight for mining's manpower crisis - "For years, with the mining industry in decline, the incentive for skilled people to enter the industry diminished substantially. Now, with the industry again booming, mining is suffering a major skilled manpower crisis, which is drastically affecting costs and production worldwide." - article here

  Mad about molybdenum - "Investors are taking a shine to a rare, silvery-white metal called molybdenum, but the durability of a market rally may hinge on looming export controls from China." - article here

  Metals Insider Week In Review - Nickel claws its way back - posted here

  China's Nickel Demand to Gain 29% This Year, Macquarie Says - "Nickel demand in China, the world's largest user of the metal, will grow 29 percent this year as its stainless-steel industry expands, Macquarie Bank Ltd. said." - article here

  Inco paying extra dividends on the back of solid profit  - "Publicly-listed PT International Nickel Indonesia (Inco), the nation's largest nickel miner, agreed here Friday to pay out dividends of US$0.50 a share to its shareholders." - article here

  London Metal Exchange - Average price for 3 month buyer for March 2007 - $19.77/lb. Average for February - $17.30/lb.

  China media polls 26 metals experts - Forecast for nickel prices the week of 4/2 - 22 say prices will rise (84%), 3 say they will stay the same (11%), and 1 says they will fall (3%). (courtesy Shanghai Metals Network)

  UPDATE! - Tentative deal reached in CVRD Inco strike - "A tentative agreement has been reached to end a brief strike at CVRD-Inco in Sudbury, Ont." - more here

  Blurb - courtesy Manila Standard - "The country’s chief privatization officer, Vicente Julian Sarza, has tendered his resignation after barely warming up in his job. The grapevine said Mr. Sarza, who was appointed on Oct. 11 last year by Malacañang as head of the Privatization Management Office, quit his post last month after disagreeing with his superiors over the way Philippine Nickel Corp. was being sold to favored Chinese investors."

  Indications at 7:50 am CST show nickel selling up by $.13/lb .  When we checked 30 minutes ago, the indications were nickel was selling for over $1,000/tonne higher, but things seemed to have calmed down since. While we weren't necessarily surprised to see the USW strike against CVRD, we are a little surprised at the market reaction. It depends on who you listen to, to learn if actual nickel production is being disrupted or not. We didn't think it would unless it became a long strike - but local Sudbury media is making many believe it might an immediate effect. Thus, we are seeing the market move up. It could be another interesting week. (Reuters - here)

  Nickel Rises Most in a Week on Strike by Vale Support Staff - "Nickel rose the most in more than a week in London on speculation a strike among support staff at Cia. Vale do Rio Doce's Canadian operations will exacerbate a shortage of the metal." - article here

  CVRD Inco workers walk out - "The Superstack’s smoke appeared to be reduced to a wisp on Sunday, as workers and contractors were turned back from strike picket lines set up outside of CVRD Inco’s mines and offices." - (article here)  CVRD Inco strike shuts Sudbury mines - "Work disruption at miner 'is going to make nickel prices soar even more' - (article here)

  Moly Plays Spike on Supply Crunch - "Since storming back into investors’ hearts a few years ago, molybdenum’s been a fairly volatile market - with prices spanning from the low single digits to highs above $40/lb." - article here

  Zambia Munali Nickel Proj On Course For Output In 08-Official - "Zambia's Munali Nickel project is on course to begin output in the first half of 2008, an official from the project's owner, Australian Albidon Ltd. (ALB.AU), told Dow Jones Newswires Monday." - article here

  News Bites - "Indonesia PT Aneka Tambang Tbk To Spend $30M To Develop Pomalaa Nickel Mine" "China's steel industry profits jump 276 pct in Jan and Feb" "Global stainless productions reach 28.3 million tons in 2006" "Russia’s steel exports to EU at 770,630 tonnes in Jan-Mar"

  Global Stainless Steel Output in 2007 Forecast to Rise by 1.6% - "Crude stainless steel production in the world is forecast to be 28.5 million tonnes in 2007 - up 1.6 percent on the year earlier figure. High prices in recent months prompted overbuying by customers through 2006 and the early months of this year. An inventory depletion phase is predicted for the next three quarters." - (more here)

  Banks upgrade metals after blip - "Stockbrokers are going bullish on metals, notwithstanding the price and equity wobbles of late February and early March this year. The most important consequence of that for investors is the positive effect stronger metal prices will have on companies such as Anglo American and BHP Billiton, the JSE’s two largest counters." - article here

  Xstrata Says China Commodity Demand Is `Phenomenal' - "Charlie Sartain, chief executive for copper at Xstrata Plc, the world's fifth-largest miner, said the growth in China's demand for all commodities ``is just phenomenal,'' and prices may rise for the next few years." - article here

  Today's beginning nickel inventory - minus 186 tons = 5,232 tonnes (36.47% - 1,908 tonnes cancelled warrants).

Weekend Review, April 1

  Rio Tinto wants to 5% of the world nickel market - "Rio Tinto Group, the third-largest mining company in the world, to win the 5% of the world nickel market through two projects agency reported Bloomberg with reference to the company." - translated article here

  China Scrap opinion - "Primary metals such as nickel and gold varieties will remain strong. It is worth noting, tin prices are at the early stage of the bull market, and gold in the intermediate stage of the bull market, while nickel is at the top of the bull market in the region."

  CVRD Inco: Sudbury Mining Continues Despite Office Strike - "Mining production at CVRD Inco Ltd. nickel operations in Sudbury, Ontario, is continuing even though unionized technical and office workers are striking, the company reported Sunday." - article here

  Analysts expect delay in New Caledonia’s two nickel projects - "Business analysts say they expect major delays in the development in New Caledonia’s two nickel projects which are among the largest in the world." - article here

  Miners rush to ride nickel's price wave - "NICKEL prices rebounded last week, and companies were losing no time trying to get on the wave. Focus Minerals (FML) started drilling its Nepean project near Coolgardie and said it hoped to get mining within 12 months. The area includes the old Nepean mine which, between 1970 and 1987, produced 32,303 tonnes of nickel at an average grade of 2.99 per cent." - article here

  Chance of BHP bid for LionOre - "THERE could be room for a rival bidder for LionOre after the Canadian nickel miner revealed Xstrata's "lock-up" of 19.5 per cent of shares as part of its $US4 billion ($5 billion) friendly offer would evaporate if a higher bid were lodged." - article here

  Vale's Canada Nickel Output May Be Reduced by Strike - "Cia. Vale do Rio Doce, the world's biggest nickel producer, said technical and office workers at its Sudbury operations in Canada began a strike, which a union official estimated may cut output 25 percent amid record prices." - (article here)  CVRD Sudbury office workers to strike as talks fail - "Unionized office and technical staff at CVRD-Inco's Sudbury nickel-mining operations are on strike after last-minute contract talks broke off late on Saturday, the union said, raising the threat of disruptions at the key nickel hub." - (article here)

  News Bite - "The net profit of Norilsk Nickel according to Russian Accounting Standards grew 110% in 2006, year-on-year, to 121.2 billion rubles ($4.7 billion), the company said Friday. In the fourth quarter, the world's largest nickel producer's net profit also grew 110% on the third quarter, to 80.5 billion rubles ($3.1 billion)."

  News Bite - "Metals X (MLX) put out a revised resource estimate for its Wingellina nickel deposit in Western Australia. It has more than 2 million tonnes of contained nickel which makes it the 16th-largest undeveloped nickel project in the world. Wingellina is about as far as you get from anywhere and with no infrastructure, so it is a long-term project. Plus, the deposit is limonite, which means it needs complex laterite-style processing. There are also 15,000 tonnes of contained cobalt at Wingellina." and 3/20 "Australia's Metals X Ltd. MLX.AX, which is developing the rich Wingellina nickel deposit, said China's top nickel producer, Jinchuan Group Ltd., would pay A$32.8 million ($26.2 million) for a 13 percent stake in the company. As part of the deal, Jinchuan would take a board seat and provide technical and construction assistance as required by Metals X to help develop its Central Musgrave Project in the Western Australian outback, the company said." - courtesy The Australian and Reuters

  Week in Review - It was interesting to note that it was not the normal crowd spreading rumors of potential market price declines this week. Usually that is reserved for the more pessimistic of the analysts. But this week it was some major nickel producers singing the blues, including Jinchuan, Norilsk, and Xstrata. Please remember the following figures are not official. They are indications and used for reference only. Last week, Friday saw trading end at $19.14/lb, while this week it ended at $20.25/lb. Monday opened at $19.26/lb, saw a high for the day of $19.91/lb, a low of $18.74/lb, and ended the days trading at $19.46/lb. Tuesday opened at $19.47/lb, hit a high of $19.72/lb, a low of $19.18/lb, and ended at $19.53/lb. Wednesday opened at $19.55/lb, saw a high of $20.05/lb, a low of $19.38/lb, and ended at $19.73/lb. Thursday was the slowest day in volume, with the market opening at $19.69/lb, trading as high as $20.11/lb, as low as $19.52/lb, and ending at $19.89/lb. Friday opened at $19.88/lb, saw trading as high as $20.32/lb, a low of $19.73/lb, and ended the weeks trading at $20.25/lb. For the week, nickel ended 5.8% higher,  +7.9% for the month, and +34.6% for the year. One year ago today, nickel was $6.89/lb and 5 years ago, it was at $3.51/lb. In the first quarter of 2007, we saw nickel trade as low as $13.64/lb on Jan 10th, to a high of $22.00/lb, on March 16th.

Stainless steel has seen numerous increases during the quarter, and the most recent increases have been incredibly depressing. What the next quarter will bring has yet to be determined. Stay tuned and we will keep you informed.

  Saturday - The contract CVRD Inco and Local 2020 of the United Steelworkers expires at midnight tonight - Local 2020's 330 CVRD Inco members include surveyors, ventilation technicians, geologists, environmental analysts, purchasing, payroll, water treatments operators and office administration.(this is CVRD's first big test in negotiating with its Canadian workers since purchasing Inco. Xstrata has successfully reached two major agreements, one with Local 2020 and the other with CAW Local 598, in the last two months)

  Analysis-New projects, mergers to puncture nickel's rally -"Soaring nickel prices have helped spark a rash of multi-billion dollar corporate takeovers and new projects in mining, though few, if any, believe such lofty metal prices will last." - article here

  Newmont mulls Indonesia future if exec found guilty - "Gold miner Newmont Mining Corp. might reconsider its investments in Indonesia if one of its executives is found guilty of dumping toxic waste there, the company said on Friday." - article here

  Mines hit by a lost generation of miners - "They are calling them the lost generation, the men and women who simply aren't around to staff the world's booming mining industry." - article here

  The Jeweled Nickel - (quote from article) ""The government is definitely resolved to acquire a portion of Norilsk Nickel stocks, and if ALROSA doesn't become the buyer, it will be some other state company," said a source close to Norilsk Nickel, specifying the parties last met in late past summer to discuss legal and economic aspects of the deal." - (article here) Ferrous Metallurgy 2000-2004 - "The four years of Vladimir Putin's presidency were very favorable for the Russian metallurgy industry. Growth began in earnest in 2001, when a surge of investments was recorded. Steel production increased 1.9% to 59.9 million tons in 2002, and production of rolled metal increased 3.8% to 48.5 million tons." - (article here

  Russian juice ad pokes fun at billionaire's detention in France - "He is one of Russia's wealthiest men and he gained notoriety over the New Year holiday when French police detained him briefly as part of a probe into an alleged high class prostitution ring." - (article here)

 Hunting for the lion's share of the nickel jungle - "The challenge Although Xstrata Nickel is just seven months old, CEO Ian Pearce wanted to expand quickly The call An all-cash deal for LionOre gives the miner a foothold in 'the global nickel play'" - article here

  China Nickel Statistics for February 2007 - Nickel Exports total - 1,831 tonnes (Destination - South Korea 1,578, Singapore 102) Nickel Imports total - Refined Nickel - 12,087 tonnes (Origin - Canada 4,944, Australia 6,594, Russia 1,766)  Nickel Ore - 573,516  tonnes (Origin - Indonesia 477,882, Philippines 46,527, New Caledonia 39,551) (source - Star Futures)

  Non metal related - Wonders of the Chinese Landscape - beautiful pictures here   Midwest US thunderstorm photo's here  


Daily Comparison         (* = per lb) or (+ = per tonne) (^ = new record high on this day)

Date

LME Stock Level +

Cancelled Warrants

Official Cash Close *

Official 3 months close *

Day's Ending *

Daily Volume

Position

4-30

5,016

27.87%

$22.68

$22.09

$21.64

4-27

5,112

28.05%

$22.72

$21.68

$21.96

10587

41968

4-26

5,052

28.27%

$22.05

$21.27

$21.27

13328

42479

4-25

4,842

29.00%

$22.55

$21.63

$21.45

16445

43047

4-24

4,314

31.43%

$23.50

$22.66

$21.59^

10601

43248

4-23

4,074

28.28%

$23.27

$22.32

$22.39

7611

43184

4-20

4,056

29.14%

$22.95

$22.16

$22.09

9732

43028

4-19

4,266

32.49%

$22.73

$21.86

$21.56

8297

43485

4-18

4,458

33.65%

$22.70

$21.61

$21.73

12291

43819

4-17

4,020

33.88%

$22.61

$21.50

$21.95

13783

43423

4-16

4,272

35.11%

$22.73

$21.61

$20.96

14794

43783

4-13

4,374

36.62%

$22.59

$21.41

$21.05

8436

43329

4-12

4,458

37.82%

$22.18

$21.00

$21.00

12283

43645

4-11

4,494

34.05%

$23.04

$21.99

$21.26

11279

43582

4-10

4,632

35.10%

$23.74

$22.48

$21.95^

15506

44367

4-5

4,812

35.79%

$23.75

$22.45

$22.41^

11515

46426

4-4

5,124

36.89%

$22.99

$22.02

$22.41^

13223

46168

4-3

5,166

37.05%

$22.57

$21.59

$22.04^

12744

46442

4-2

5,232

36.47%

$21.59

$20.73

$20.68

11515

46426

3 month nickel averaged $17.31/lb in February, $11.01/lb for all of 2006, $6.69/lb in 2005



All prices, unless marked official closing prices, are indications only of LME 3 month buyer traded prices and courtesy newswire services. To understand what our prices mean, see "A Guide To LME Trading"...pdf here or "The ABCs of a Metals Exchange" ...pdf here (Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless) (all ton listings are metric tons = 2204.6 pounds ) Updated daily before 8 am CST and around 12:45 pm CST weekdays, with some weekend updates - Disclaimer

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