This page is archived news covering the period from July 1, 2006 to July 31, 2006.
If you are looking for current daily market news, please visit this page.

Stainless Steel & Metals News.

Daily Nickel Market Prices

July 2006

(Nickel prices are followed here daily as they are responsible for up to 60% of the cost of stainless steel)
(Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless)

(all ton listings are metric tons = 2204.6 pounds - what we use to determine closing - see bottom of page)

7-31

LME nickel ends the day at $11.57/lb ($25,495/tonne) on continued concerns of dropping inventories.
*    Teck Cominco raises offer for Inco to $72.90 US/share with an August 16th expiration. Teck's CEO Don Lindsay noted this offer was lower than the stock was currently trading, and advised he would not chase a higher bid.   
*    Friday's official closing - cash - $11.75/lb - 3 month buyer - $11.20/lb
*    LME nickel inventories - minus 402 tons = 4,272 tons
*    For weekend developments, read 7/30 entry

7-30

*    More bizarre by the moment? Globe and Mail reports Grupo Mexico SA is exploring a potential takeover of - yep, you guessed it - Phelps Dodge!
*    Toronto Star reports an investor relations official from Brazil stated that CVRD has "no interest" in Inco (Toronto Star - "The predator has become the prey" 7/29/2006) Keep in mind - the only thing in stone in the mining industry - are the miners themselves.
*    According to Reuters, since the Inco - Falconbridge merger has failed, Falconbridge now owes Inco a $150,000,000 break up fee. Inco owes LionOre Mining International $32,500,000, since the sale of Falconbridge's Nikkelverk refinery in Norway to LionOre was contingent on an Inco - Falconbridge merger. If Xstrata completes the takeover of Falconbridge, Inco will get another $300,000,000. But before you start thinking Inco has made out like a fat bandit, Inco will owe Phelps Dodge $475,000,000 if their merger falls through. And you thought divorce was expensive! This is like paying for a divorce without the marriage! More on poison pills here
*    Russian paper reports 300 series stainless losing market share in China here
*    Article - The China Syndrome here
*    The Globe and Mail in an article written by Jacquie McNish and Andy Hoffman stated that only 20% of Falconbridge shareholders tendered their shares to Inco's merger plan. Xstrata announced Friday it now holds 24.5% of Falconbridge shares.
*    The Cynics Corner - Inco Press release of 7/23 - “When you combine the price levels we are now seeing with our record production and the impact of Voisey’s Bay in our second half, our earnings and cash flow could reach levels that we’ve never approached before,” said Chairman and CEO Scott Hand."  4 days earlier in second quarterly report - "The increase in finished nickel production in 2006 was primarily due to the commencement of concentrate production at Voisey's Bay,..." ..."However, if VBNC and the union fail to reach an agreement by late July or early August of 2006, a strike could ensue that could, if such strike continues for a period beyond a few months...would materially adversely affect our earnings, cash flows and nickel unit cash cost of sales." (The union did strike within hours of Inco announcing the merger had failed. The expiration date of these negotiations, referred to as 'late July or early August", turned out to coincide with the expiration of the merger offer. An article dated June 27th by CBC News titled "Mining merger unwelcome, union says" stated that talks  between Inco and the United Steelworkers representing the workers at Voiseys Bay, had broken off two weeks prior. The workers voted to join the USW in August 2005.)

7-28

And finally - "When the customer comes first, the customer will always last". Have a nice weekend.
LME nickel ends the day at $11.20/lb ($24,700/tonne).
*    China Premier Wen Jiabao is reported by Xinhua news agency as saying that more strict measures will be taken to curb speculation in the property market and cool the sizzling fixed-asset investment growth. (courtesy Shanghai Daily)
*    Bloomberg reports nickel is up this morning on reports of the Inco strike and LME nickel inventories falling to their lowest levels since 1991.
*    Yieh reports China's Taiyuan Iron & Steel Group (Tisco), Taiwan's Yusco and Tang Eng, and numerous Japanese stainless steel manufacturers have all announced stainless steel price increases in the past few days.
*    Inco concedes fight for Falconbridge - will concentrate on union with Phelps
*    Reports that miners at Inco's new mine Voisey's Bay have gone on strike and Inco announces they are in process of shutting down the facility. This could not have come at a worst time for stainless steel consumers.
*    Yesterday's official closing price - cash - $11.79/lb - 3 month buyer - $10.98/lb
*    LME nickel inventory - minus 378 tons = 4674 tons

7-27

LME nickel ended the day at $10.73/lb. ($23,650/tonne) Considering the dollar was down today, nickel's trek downward may be signalling the beginning of a correction. With Europe, for all practical purposes on vacation in August, it could be some traders are making last minute adjustments to their portfolio's.
*    Nickel inventories in LME warehouses fell to a level lower than last year's low today.
*    Inco's offer to purchase Falconbridge expires at midnight tonight - Vancouver time.
*    Xstrata announces it will purchase up to 5% more of Falconbridge stock on the open market as it continues to pursue the company. Xstrata already owns 20% of Falconbridge stock and shareholders must decide today if they want to accept the Inco offer.
*    Associated Press in a July 24th article titled "Market Spotlight: Nickel" quotes - "Peter Goudie, Inco marketing executive vice president, called 2006 "the tightest nickel market we have ever seen." It is not only the inventories on the LME that are decreasing quickly; we observed a shortage throughout the supply chain," he said during the call. "Consumers do not want to hold nickel inventories at these high prices and this level of price volatility." (copyright AP)
*    Yesterday's official closing price - cash - $12.27/lb - 3 month buyer - $10.96/lb.
*    LME nickel inventory - minus 372 tons = 5,052 tons

7-26

LME nickel ends the day at $10.91/lb ($25,055/tonne)
*    Phelps Dodge announces its second quarter 2006 net earnings fell to $471.7 million from $678.9 million during the same quarter in 2005. While prices have soared, Phelps is being hurt by contracts that locked in sale prices of copper at levels well below current market value.
*    Xstrata receives regulatory approval from Canada for its takeover bid of Falconbridge. Xstrata agreed, if successful, it will establish a separate entity called Xstrata Nickel, to be headquartered in Toronto, and directly responsible for all Xstrata's worldwide nickel operations.
*    Phelps Dodge forecasts molybdenum will average between $22/lb to $26/lb for 2006
*    Access Economics releases report in which they forecast nickel prices to fall 45 % by 2008
*    AK Steel announces 6% price increase on hot and cold rolled stainless steel sheet & strip products, effective August 6th.
*    7/7 Greenville, South Carolina - suspected copper thief inside electric substation electrocuted and killed - 7/9 Aurora Colorado - suspected copper thief near transformer electrocuted and killed - 7/16 Dallas, Texas - suspected copper thief atop power pole electrocuted and killed - stealing copper can be hazardous to your health (update) After writing this I found a story where 6 striking workers were shot in Africa at a Chinese run copper mine. Maybe I should add - mining copper can also be hazardous to your health.
*    So how bad are nickel inventories - really? On July 25, 2002, LME held 25,056 tonnes of nickel in its worldwide warehouses. On July 24, 2003, it held 22,158 tonnes. On July 26, 2004, the amount was 10,224 tonnes, and on July 25, 2005, they held 7,032 tonnes. Yesterday, LME inventories ended the day at 5,424 tonnes. Last year, the lowest inventories fell was 4,926 tonnes on May 15th.
*    Yesterday's official closing - cash - $12.42/lb - 3 month buyer - $11.16/lb.
*    LME nickel inventory - minus 24 tons = 5,424 tons


7-25

LME nickel ends the day at $11.17/lb. ($24,625/tonne)
*    Allegheny Ludlum announces 6% price increase on hot and cold rolled stainless steel sheet & strip products, effective August 7th.
*    BHP reported it produced 90% more nickel during the last 12 months, than the year prior - 174,900 tonnes.
*    Teck Cominco announced quarterly results yesterday - profits of $613 million (C) compared to $225 million (C) for same period last year. Teck is the world's largest producer of zinc.
*    Falconbridge board of directors announces they still favor their friendly merger with Inco, over the hostile takeover bid by Xstrata. (As Gomer Pyle would have said "Surprise, surprise, surprise!" - ok, not really. It was to be expected)
*    Yesterday's official closing - cash - $12.41/lb - 3 month buyer - $11.05/lb.
*    LME nickel inventory - minus 270 tons = 5,448 tons

7-24

LME nickel ends the day at $10.90/lb. ($24,025/tonne)
*    Falconbridge released second quarter earnings today. Company announced revenues totaled nearly $3.95 billion compared to $2.05 billion during the same quarter last year. Net income soared by 260%, from $202 million in the second quarter of 2005, to $728 million this last quarter.
*    Metals Insider mentions the possibility of "demand rationing" in its nickel report today and calls LME trading last week "super volatile"
*    Norilsk Nickel announced it produced 121,000 metric tons of nickel in the first 6 months of 2006.
*    Posco of South Korea, announces price increases of 9 to 10% on cold and hot rolled 300 series stainless, effective Wednesday. Posco produces approximately 2.6 million tons of stainless a year.
*    Friday's official closing - cash - $12.06/lb - 3 month buyer - $10.85/lb.
*    LME nickel inventory - minus 384 tons = 5,718 tons

7-23

And finally, for all those raking in the big bucks from all this merger madness, here is a way to spend some of that new loot. Space Adventures is offering a ride to the International Space Station, a two week stay in less than luxurious conditions (but a heck of a view), and a 90 minute space walk - all for the low price of $35,000,000.  
*    Inco, after reporting this week that its adjusted net earnings for the first half of 2006 were $600 million(US) compared to $483 million(US) in 2005, is predicting the last half of this year will be "unprecedented".The statement could be a desperation move to recapture the momentum, which shifted to Xstrata's favor this past week, in the takeover battle for Falconbridge. The speculative nature of the statement - "Assuming second half prices equal the July month-to-date nickel price of $12.01 per pound...." (has anyone NOT heard why you should never use the word 'assume' )
*    Teck Cominco extends offer for Inco till August 16th, but will have to raise it to be competitive with Phelps. That is the same day Inco has agreed to remove its shareholder rights plan (containing the poison pill) Teck's chairman Norm Keevil talks to the press again here
*    Long arm of US Law - here
*    "Sudbury Area Mining Railways" by Dale Wilson here (has some old pictures if you are into railroads)
*    "US faces Bay of Rigs" by David Nason here
*    The Federal Reserve Bank of St. Louis Review -  read "Is the United States Bankrupt?" pp. 235-250 (pdf 146k)

7-21

LME nickel was quiet today, ending the day at $10.69/lb ($23,550/tonne)
*    Teck and Inco reach agreement - Inco to drop poison pill on 8/16 - court hearing scheduled for today cancelled
*    Article out of South Africa about the global mining industry here and a July 4th article on MoneyWeb - that lists some interesting takeover possibilities made in 2005 here 
*    US Mint advises it is costing US taxpayers 1.23 cents to produce a penny - Representative Jim Kolbe, R-Arizona introduces bill in Congress to eliminate the penny - chances of passing? - slim - why - because it makes cents! (pun intended)
*    'The Street' rates the mining mud-slinging going on in Canada as #5 in its "The Five Dumbest Things on Wall Street This Week". Special notice was given to Inco's Scott Hand, for referring to Xstrata's latest offer as a "dog biscuit". Article here
*    Norilsk Mining and Metallurgical Combine purchases OJSC Taimyrenergo electric power plant in Russia, ensuring energy security to the world's largest nickel miner. Earlier this week, Norilsk placed an order for four ice breaker container ships with a Norwegian company, worth about $320 million Euros. The ships will be built in Germany and delivered in late 2008 and early 2009.
*    Japan reports its production of stainless containing molybdenum was up for the 5th consecutive month.
*    World Bureau of Metal Statistics states production of nickel stood at 111,300 tons in May, while consumption totaled totaled 110,800 tons. For the first 5 months of 2006, they state the global nickel market was in a deficit of 12,000 metric tons.
*    Yesterday's official closing prices - cash - $12.02/lb - 3 month buyer - $10.98/lb
*    LME nickel inventory - minus 516 tons = 6,102 tons

7-20

LME nickel ended the day, down with the other LME traded metals, at $10.70/lb. ($23,595/tonne)
*    And finally, on a non related note - Coca Cola may be the world's largest producer of soft drinks, but according to an article by Xinhua, they are about to get pushed to number 2 in China. No, it's not Pepsi. It's bottled/canned herbal tea that is about to take the top spot in the lucrative Chinese market.  
*    Atticus Capital, second largest shareholder of Phelps Dodge, says it will vote against a Phelps/Inco merger. Interesting possibility? If Xstrata is successful in taking over Falconbridge, could we see any new players interested in bidding against Phelps and Teck for Inco? One thing is for sure. Companies and stock holders that weren't interested in nickel months ago, are watching the market closely now.
*    Phelps/Inco state their last offer for Falconbridge is their final and best offer, hoping stock holders will not take the better offer made by Xstrata yesterday. 
*    Inco's earnings report yesterday also advised that the cost of their Goro project in New Caledonia had swelled. Startup will now not be until 2008 and costs will exceed earlier estimates of $2.15 billion. Meanwhile, on the island, Radio New Zealand is reporting that the two native Kanak groups, Rheebu Nuu and Caugern, have issued an ultimatum for all construction work to be stopped before September the 24th. And on the north end of the island, the Canadian takeover battle is being watched closely, as the fate of any future Koniambo project, will be decided on who wins. Falconbridge has committed to the project, but many doubt Inco could afford the debt load associated with another massive mine project, with Goro still under construction, should it be successful in the takeover. French company Eramet, forced to relinquish the mine by the French government, under condition it is constructed, waits to pounce. 
*    Inco's Indonesian unit reports output of nickel matte fell 8% in the first half of 2006 compared to the same time last year.
*    Yesterday's official closing prices - cash - $11.48/lb - 3 month buyer - $10.47/lb.
*    LME nickel inventory - minus 300 tons = 6618 tons

7-19

Nickel ended the day at $10.88/lb ($24,000/tonne)
*    Xstrata complains to South Africa government that its allowing sales of raw chromite ore to China, is damaging that country's ability to sell ferrochrome, which is worth 10 times as much, to China. This just so happens to be affecting Xstrata also, who has 18 ferrochrome furnaces, with two more under construction, in South Africa.
*    Federal Reserve Chairman Ben Bernanke, in his bi-annual report to Congress on monetary policy and the economy, seemed to cast doubt on the possibility of another interest rate increase when the Fed meets on August 8. The impact of his statement, seen as positive, was immediate on all markets, including metals. (as an observer, it amazes me how many billions of dollars can be made or lost on one word, made by a single man. Let's just hope this man never mutters "that 4 letter word" behind an open mike, because world markets might nose dive before its decided he was NOT referring to the condition of our economy)
*    China analysts are predicting another interest rate increase in that country after newest economic figures out show their attempts in april to cool down their economic growth do not appear to be working. While Premiere Wen Jiabao set a goal of 8% growth this year, the actual growth was 10.3% in the first quarter and 11.3% in the second quarter (over last year). According to Bloomberg, these forecasts weighed heavily on nickel trading yesterday.
*    After Inco challenged Xstrata with what the CEO called a "hell of an offer" for Falconbridge, Xstrata announced this morning a new counter-offer, trumping the Phelps/Inco offer. It is my understanding that the Phelps offer for Inco is not predicated on Inco successfully joining with Falconbridge. Could we see Phelps/Inco and Xstrata/Falconbridge unions in the future? Xstrata's offer is $16.9 billion for the 80% of Falconbridge stock it does not already own.
*    Inco announces this morning that its second quarter profits were $472 million, compared to $220 million in the second quarter of 2005.
*    Article - "Hammering out deals at Europe's leading metal market" - here
*    Official closing prices from yesterday - cash buyer - $12.70/lb - 3 month buyer - $11.48/lb.
*    LME nickel inventories - plus 456 tons = 6,918 tons

7-18

All metals traded on the LME ended down again today - "including" nickel, which took a tumble, closing at $11.00/lb. ($24,250/tonne)
*    Mining Journal editor reports on Reuters round table discussion titled "Boom, bust or bubble in metals?" here
*    China's National Bureau of Statistics reports China's economy grew 10.9% in the first half of 2006.
*    Official closing prices from yesterday - cash buyer - $13.54/lb - 3 month buyer - $12.13/lb (see bottom for how we get the prices we list each day)
*    LME nickel inventories - minus 120 tons = 6,462 tons

7-17

All metals traded on LME ended down today - "except" nickel again - which ended the day at $11.67/lb, after hitting a high for the day, week, month, year, decade,...you get the point, of $12.14/lb. US dollar strengthened against Euro.
*    If any reader has any info on what the increase in hybrid car sales in the US is doing to the nickel demand (ie batteries) - I would like to share it with the other readers.
*    An official from China's largest molybdenum producer, Jinduicheng Molybdenum Mining, told Platts last week that consumption of molybdenum is expected to increase by 20% this year.
*    LME nickel inventories - minus 1092 tons = 6,582 tons

7-16

*    Inco/Phelps raise their offers once again, trumping Xstrata's recent raised offer.
*    Correction made to 7/14 entry - poison pill issue to be heard by OSC on Friday is a complaint by Teck against Inco. OSC has already ruled Falconbridge can keep its poison pill, in a complaint filed by Xstrata.
*    New to the site and wondering why prices are so high? This Inco quarterly report, presented 2/14/2006, is an excellent place to start here And for those forecasting, here is Abare Economics forecast published in June here and US government monthly statistical reports here
*    Japanese steel producers announce price hikes on 304 stainless steel.
*    If you are following the Canadian mine drama, this interview is a must read. here  And here is a report on the visit by Phelps Dodge officials last weekend here
*    Australian Minara Resources lowers nickel production forecast for Murrin Murrin mine from 34-36,000 tonnes to 31-33,000 tonnes

7-14

*    And finally - All work and no play makes Jack a stressed out boy. Take a break - Video - Evolution of Dance (6 minutes long) - Have  a nice weekend.
*    LME nickel ended the day at $11.60/lb. Traders are watching soaring energy costs nervously.
*    Ontario Securities Commission schedules hearing for next Friday morning in reference to Teck's request that Inco's poison pill clause in its bid for Falconbridge, be set aside to level the playing field for Teck's bid
*    Interesting piece in Asia Times - "Bush's reluctance to tackle currency issues and government incentives that give advantages to Asian industries create strong incentives for large US multinationals, such as Caterpillar, GE and GM, to move production to China, India and other Asian destinations. Now, these companies, profiting from Asian protectionism, systematically oppose strong action by Washington to reverse these practices. They become Beijing's most effective lobbyists in Washington. Similarly, large retailers, such as Wal-Mart, Target and Staples, importing goods from Asia have sought to stem US government efforts to address these policies." Entire article by Peter Morici here
*    Phelps/Inco extend deadline for Falconbridge offer till July 24. This gives them more time to analyze Xstrata's move and see if a new counter-offer is necessary. 
*    Economist Intelligence Unit (EIU) revised forecast and now states base metals prices will rise by 53% in 2006, with another 2% gain for 2007. Their former forecast had 2006 prices dropping by 26%. Well even the CIA can get it wrong. Can you say "Iraqi weapons of mass destruction".
*    Yieh reports Taiwan stainless producers expecting big increase in price for August.
*    JP Morgan raises its 2006 nickel forecast to $7.76/lb, 2007 to $5.72/lb, and $4.77/lb for 2008, according to a report by metals strategist Jon Bergtheil. So far this morning, LME traded prices are up approx 4%.
*    LME nickel inventory - minus 570 tons = 7,674 tons

7-13

All metals on LME ended down today..... "except" nickel which closed at $11.46/lb.
*    Bloomberg reports the reason for the fall yesterday was caused when LCH Clearnet increased "margin payments for nickel transactions to $16,800 from $11,400 for each 25 metric-ton lot of the metal. A margin payment is the amount of cash or other collateral such as bank guarantees that exchange members....must set aside to hold metals. LCH Clearnet previously raised margins on May 18." (courtesy Bloomberg)
*    EU regulators ok Xstrata bid for Falconbridge.
*    The bears tell their version - Reuters article here
*    Expect to hear from Inco or Phelps very soon, as their recently trumped offer for Falconbridge nears it expiration.   
*    Yieh is reporting evidence exists that Asian stainless steel production is exceeding demand, while EU producers are having trouble keeping up.
*    Macquarie Research raised its forecast for 2006 average nickel prices to $8.45/lb, an increase of 14% over prior forecasts. They also predict a deficit of 34,000 ton deficit this year.
*    LME nickel inventory - minus 174 tons = 8,244 tons

7-12

LME nickel soared to a new record high of $26,600/tonne, before afternoon profit taking drove the price down to its closing of $11.20/lb.
*    Phelps Dodge get fast tracked US regulatory approval in it bid for Inco/Falconbridge.
*    Yieh reports some European stainless steel mills booked thru October with stock running lean.
*    Nickel trading on the LME has reportedly already hit $26,000/tonne this morning.
*    LME nickel inventory - minus 486 tons = 8,418 tons

7-11

For the first time in history nickel went over the $25,000 per metric tonne mark today, and ended the day at $11.55/lb. - is this beginning to sound like a broken record yet? (Pun intended) Sorry stainless users - just the messenger.
*    A hot button issue between the US and Canadian governments - Cuba and their nickel here
*    Yieh is reporting Taiwan's YUSCO & Tang Eng are considering following China's Posco, Baosteel & Tysco's lead in reducing stainless steel production in an attempt to drive down raw material prices. This attempt could end up hurting users more than the miners, as it could cause shortages.
*    Xstrata raises its offer for Falconbridge - from $52.50 to $59.00 per share(Canadian dollars)
*    Beijing Antaike Information Development Co says nickel isn't' done yet in this Bloomberg article here
*    LME nickel inventory - minus 558 tons = 8,904 tons

7-10

For a third session in a row, nickel hit a new record high - closed today at $11.18/lb. Great for the miners, just more pain for the users of stainless steel.
*    LME nickel inventory - minus 204 tons = 9,462 tons

7-9

Sunday reading and notes....
*    One year ago - Monday, July 11, 2005 - LME nickel inventories stood at 6,666 tons after gaining 72 tons the prior Friday. Friday's inventory of 9,666 tons would not be reached last year until August 30, 2005. And the price of nickel one year ago - $6.72/lb, just 3 cents more than the average price for the entire year of 2005.   
*    If you didn't have time on Thursday to visit this site, here it is again Phelps Dodge-Inco-Falconbridge site. Lot of interesting info.
*    This link didn't work for me but it might for you. Want to learn Chinese - China is offering to help? here
*    Falconbridge accuses Xstrata of a creeping takeover here
*    International Stainless Steel Forum announced Friday that worldwide production of stainless steel was a record for the first quarter of 2006 - 6.6 million metric tons. The largest growth was not in China, but the America's, which saw an increase of 17.7% over the final quarter of 2005. This was followed by Europe, with an increase of 12.6%, and Asia with 11.1%. China led the world in production, with 50.7%.
*    Didn't get much press in the US but here are the rankings of the world's wealthiest nations as reported by the World Bank this month - #1 United States #2 Japan #3 Germany #4 China #5 Great Britain #6 France #7 Italy #8 Spain #9 Canada #10 Brazil #11 South Korea #12 India
*    Members of the G8 (supposedly made up of worlds 8 strongest economies)  United States, Great Britain, Germany, France, Japan, Italy, Canada, and Russia
*    A link for historical analysis - American Metal Market archives January 1998 to 6 weeks before current issue here

7-7

LME nickel has yet to find its ceiling, closing the day at $10.83/lb. This is a new record high, "unless" you figure in inflation.
*    Straight talk from Sudbury here, for the brass from Phelps Dodge who are in that town.
*    Yieh reports stainless steel production in China was up 21% in the first 5 months of 2006.
*    Xstrata extended its offer for Falconbridge by 2 weeks, under the same terms as the original offer. Teck Cominco gets EU regulators approval for its bid for Inco.
*    Head of China's Central Bank research bureau tells Reuters they forecast a 10.3% growth in China's economy in the first half of this year, and 10% overall for 2006 
*    China Daily reported on Tuesday  that the World Bank moved China from the 6th to 4th largest economy in the world in 2005, barely squeaking past Britain, but still behind the US, Japan and Germany, who held the top 3 positions.
*    LME nickel inventory - plus 408 tons = 9,666 tons

7-6

Metals took off today, as fresh fund money came rolling in. Nickel was again the big winner by dollars, closing at $10.68/lb, while copper was the biggest gainer at 6%+.
*    And what will Xstrata do tomorrow? article here
*    For you fact junkies, here is an interesting site Phelps Dodge-Inco-Falconbridge site
*    Interesting commentary and a different perspective here
*    Inco Indonesia announces its nickel matte output is expected to fall  to around 73,000 tons in 2006 due to a furnace fire in late May.
*    Goro costs swell and opening delayed - article here
*    Ferrochrome producers negotiate a 5 cent per pound increase for third quarter shipments - now selling for $.75 per lb to European customers, according to a Reuters article.
*    Zimbabwe's largest nickel producer announces it is in final stages of talks with foreign investors in reference to building a new $100 million dollar  mine in that country.
*    LME nickel inventory - minus 144 tons = 9,258 tons

7-5

Metals overall weakened today, except for nickel which closed at $10.32/lb.
*    China goes to Africa and Latin America to buy minerals here 
*    3 major Chinese producers of stainless steel, Shanxi Taigang, Baoshan Iron & Steel and Korean-based Posco's stainless unit slash output of cold-rolled stainless steel by 20% (120,000 tons) beginning July 1st in attempt to slow demand and possibly lower raw material costs. Cuts initially set to last month of July.
*    LME nickel inventory - minus 588 tons = 9,402 tons

7-4

LME nickel ended the day at $10.09/lb.
*    World's largest gold producer slams Inco for reaching out of Canada for help in taking over Falconbridge here
*    EU regulators give approval for proposed Inco-Falconbridge merger.
*    LME nickel inventory - minus 432 tons = 9,990 tons

7-3

LME trading was light today with most US markets closed today and tomorrow, thus tempering fresh fund investment. LME nickel ended the day at $9.88/lb as warehouse inventory fell below 10M tons.
*    Jinchuan Group, Baosteel Group Corp., and China Development Bank commit to spend $1 billion to re-open the Nonoc nickel plant in the Philippines.
*    Some analysts say Alcoa Aluminum may become a takeover target for companies like BHP Billiton or Rio Tinto, and the price tag would be bigger than the Phelps-Inco-Falconbridge or the Mittal-Arcelor takeover. The kicker? China's demand for "imported" aluminum is not of the degree it has for minerals, and thus Alcoa stock has not seen the degree of growth other stock has. This may be why some speculate Canadian Alcan, fresh off a new 5 year agreement with its CAW workers, may still decide to jump into the Canadian merger frenzy. Then again, Alcan is not much safer than the other companies, to becoming a potential target to a future takeover.
*    Happy belated birthday to our Canadian friends up north, and to the United States tomorrow.
*    LME nickel inventory - minus 126 tons = 10,422 tons

7-2

Sunday reading....
*    JP Morgan - Bullish on Gold, Bearish on Base Metals here
*    Merger Break-up Fees - are they a way to keep negotiations honest - or a way to force stockholders to see it corporate way? The Phelps - Inco - Falconbridge merger agreements include over $1.4+ billion in break-up fees. In 2003, Heath Price Tarbert wrote an article for Law and Policy in International Business called "Merger Breakup Fees: A Critical Challenge To Anglo-American Corporate Law here
*    Laterite mining - background information here
*    Did they really say that?
1.   The Sudbury Star 11/4/2005 by Denis St. Pierre - McGuinty (Canadian Premier Dalton McGuinty) said his visit to Sudbury was an ideal opportunity to speak about the Inco - Falconbridge merger, since he had not said much about the deal following its announcement Oct. 11. "We're talking about the creation of an international resource powerhouse that would be headquartered in Ontario and controlled by Canadians,' he said. "I just happen to think that is really good news and it bodes well as we assert ourselves in a highly-competitive, global economy.' The merger of two Canadian mining giants will be much better for the province and the country than a foreign takeover of either or both companies, McGuinty said. "We've been buffeted by the winds of global economic change in an era of globalization, resulting in consolidations and job losses and anytime there's a takeover that is exercised by a foreign company, they just don't have the same kind of commitment that they otherwise would to Ontario and to Canada. But this is taking two domestic companies here and I think it's going to make for a perfect marriage."
2.   Toronto Star 10/12/2005 by Sharda Prashad "It is, in Scott Hand's words, "a great Canadian solution." The chairman and chief executive officer of Inco Ltd. yesterday hailed his proposed takeover of Falconbridge Ltd. as a move that will form a global mining powerhouse based in Canada. "What it creates is a company headquartered in Canada, that's committed to Canada and all that that means to the industry and the communities, in Sudbury, Thompson, Man., Northern Labrador and Newfoundland," Hand said. "With the critical mass we have here, whether it's engineering firms, geologists, IT or financial people, those opportunities exist here and get exported to other parts of the world. It preserves one of Canada's great competitive strengths. Think of the reverse. Suppose Falconbridge disappeared, or Inco disappeared. You would have hollowed out the corporate headquarters and Canada would be lesser as a result and the people of Canada would be less well off."


Closing price - you may notice different sites giving different "closing" costs. I use the price LME uses, which Joanna James at the Global FX Desk graciously explained, is the settlement price for 3 months nickel after the 2nd ring close offer. LME shows on their site the closing price taken after the last kerb.

Every effort is made to provide factual information in a timely manner as a convenience to the reader. Any opinion given on this web site is just that - a mere opinion, and the author is not responsible for any action taken based off that opinion. Multiple sources are used for obtaining this info and there is no guarantee of its accuracy. Any reproduction without written permission from the author is prohibited.



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Nickel charts do not reflect official prices

Nickel Graph Temporarily Down

1 and 5 year nickel chart


Molybdenum - $26.25/lb


Numerous Metals/Mining Charts


Nickel
(average annual price)

2001 $2.70/lb
2002 $3.07/lb
2003 $4.37/lb
2004 $6.28/lb
2005 $6.69/lb

Molybdenum
(average annual price)

2001 $2.36/lb
2002 $3.59/lb
2003 $5.21/lb
2004 $15.92/lb
2005 $32.51/lb

Ferrochrome
(average annual price)

2002 $ .30/lb
2003 $ .47/lb
2004 $ .68/lb
2005 $ .73/lb


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