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This page is archived news covering the period of June 2007
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Stainless Steel News and Nickel Prices

Free comprehensive information on worldwide nickel market pricing, stainless steel prices and metals market analysis and forecasts

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LME Nickel Trading Times
Pre-market 7:00 am
1st ring 12:15-12:20
2nd ring 13:00-13:05
Official price 13:10
3rd ring 15:25-15:30
4th ring 16:05-16:10
London kerb 16:15
Unofficial price 16:35
NY kerb 17:00
Tokyo kerb 22:00

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Friday, June 29

  Today's official LME nickel prices - cash - $16.26/lb - 3 month buyer - $16.24/lb (7.55% higher than 1/1/07). Prices continue to fall, with 3 month figures now at early February levels. Norilsk Nickel says 90% of LionOre shareholders have accepted their offer. BDI was up again yesterday. LME inventories were discussed earlier. US Fed left interest rates alone. Pig nickel continues to have a stranglehold on market intelligence. The production of this new supply, went from relieving the nickel supply deficit a few months ago, to a force to be reckoned with as demand has slumped. The big question for the market has now become - at what point will pig nickel production in China become unprofitable? It is an interesting situation and one difficult to monitor, as its production is a new phenomena, and gathering accurate information about its impact, sketchy. The last day of the week, month, and quarter saw 3 month nickel prices finish at $16.42/lb ($36,195/tonne)   (Dow Jones - more). While the price of nickel ended this quarter lower than last, the average price for the last three months was higher, so we will see some record breaking profit reports from nickel mining companies over the next few months. We wish you all a restful and safe weekend. And to our Canadian readers - Happy Canada Day for Monday!

   Copyright/courtesy Dow Jones Newswire - "A reduction in canceled warrants amid recent stock builds have LME nickel under pressure, says UBS. "Nickel prices have entered an adjustment phase due to the impact from a softer supply-demand situation for stainless steel globally," the bank says, noting a recent slide in European stainless steel prices. Benchmark Type 304 CRC German base prices have fallen to 1270/t in June vs 1600/t in April, the bank notes." - article here

  Update - Indications at 9:00 am CST, after AM kerb trading, show nickel down by $.27/lb. Your official closing prices for the day are cash at $16.26/lb and $16.24/lb for 3 month. (opinion - we think the market is trying to decipher the implications of what the managing director of European Nickel told the Dow Jones yesterday. We have told a few readers, that in our opinion, the stainless market could handle $12/lb nickel, albeit grudgingly. If the cost to produce pig nickel is as low as Mr Purkiss says, then....? Sorry, that is not a forecast on our part. We see more downside potential, but as the price lowers, pig nickel production is threatened on the supply side, and substitution risks are lessened on the demand side. The market is gauged by supply and demand and every price change has a cause and effect on this ratio. The market's normal summer slowdown has been exacerbated by the falling price of nickel. It is a price trend that will feed off itself and create is own downward trend until demand kicks in to stabilize the activity. Yet no stainless producer wants to buy nickel at a price that could potentially make them uncompetitive in a few weeks time. Thus the uncertainty remains.)

  Indications at 7:55 am CST show nickel selling down by $.18/lb and appears to be recovering from much lower prices earlier.  (Bloomberg - more) (AFX - more). Inventories in LME warehouses slipped overnight. Rotterdam received another 30 tonnes of nickel, but shipped 60 tonnes out. Baltimore shipped another 60 tonnes, while both the ports at Genoa and Gothenburg shipped out 18 tonnes each. Don't miss article about European Nickel below.

  TD Bank - Weekly Commodity Price Report - pdf here 

  The Bull and Bear's Resource Investor - The Resource Investor - pdf here

  Mfg Cost Of Chinese Pig Iron Sets Floor For Nickel Price-Exec - "The production cost of nickel pig iron in China has set a new floor for nickel prices, Simon Purkiss, managing director of European Nickel, told Dow Jones Newswires Thursday." - article here

  China Nonferrous Metal Group Starts Nickel Project in Burma - "Sources from China Nonferrous Metal Mining (Group) Co., Ltd. say the company has gained regulatory approval to start constructing its nickel project in Burma with the financial support from the Export-Import Bank of China and China Development Bank." - article here

  Chinese Tax Levy Fails to Lift Global Steel Prices for Strip Mill Products - "US strip mill transaction prices softened further over the last month as scrap costs continued to slide. The downturn is most apparent in the hot rolled category. Real consumption has remained lacklustre, causing service centre inventory depletion to take much longer to complete than was initially envisaged." - more here

  Risk rises for mine mega-mergers - "The global mining sector is a buzz with expectations of mega-mergers, with the likes of Alcan, Alcoa and Anglo American all said to be on the block." - article here

  US starts AD & CVD investigation on Chinese steel pipe imports - "The US Department of Commerce has initiated the antidumping and countervailing duty investigations against China for import of circular welded carbon steel pipes, a formal step that will be followed by a preliminary determination in July of whether to impose duties." - more here

  'Moly' nearing two-year high - "The mysterious metal that is molybdenum, or "moly" for short, could rise above record prices last seen in June, 2005, if reports that China may cut export quotas on moly products by roughly 50% prove correct. News is expected next week." - article here

  Today's beginning nickel inventory -  minus 156 = 8,910 tonnes (6.33% - 564 tonnes cancelled warrants/ 8,346 net stock level)

Thursday, June 28

  Today's official LME nickel closing prices - cash - $16.98/lb - 3 month buyer - $16.97/lb (12.38% higher than 1/1/07). LME inventory figures were discussed in our morning update. 3 month nickel trading was a big snooze until late afternoon kerb trading, when it began to fall, and ended as one of the few losers on the exchange. LME nickel ended Thursday's trading at $16.67/lb ($36,750/tonne) (Dow Jones - more) One more day remains to close out the second quarter of 2007.

  Barclays Capital ups Q2, Q4 2007 copper price forecasts - (quote from article) "But Barclays cuts its forecasts for tin, aluminium and nickel prices in the third quarter on softening demand from China, although it revised up its fourth-quarter forecasts on an expected recovery in sentiment." - article here

  Russia lays claim to the North Pole - and all its gas, oil, and diamonds - "Russian leader Vladimir Putin has made an astonishing bid to grab a vast chunk of the Arctic, giving himself claim to its vast potential oil, gas and mineral wealth." - article here

  Update - Nothing is happening with 3 month nickel so far, but your official prices for the day are $16.98/lb for cash and $16.97/lb for 3 month. ($25/tonne separation)

  Indications at 7:50 am CST show 3 month nickel selling, or maybe not selling, as prices are flat. Published reports of LME nickel inventory don't quite add up today, but we will give you what we have. Rotterdam shows receiving 72 tonnes and shipping 6 tonnes, Busan received in 258 tonnes, while Baltimore shipped 30 tonnes, and Gothenburg shipped another 90 tonnes. This leaves a 30 tonne shipment unaccounted for to reach the 180 tonne gain recorded. BDI increased another 1.23% yesterday. (Bloomberg - more)

  Metal Prices and Supply/Demand Balances – 2007/2008 – Fred Demler and Edward Meir – June 2007 - pdf here

  Slash prices or I'll nationalise, warns Mugabe - "Zimbabwe President Robert Mugabe has threatened to nationalise all key private sector manufacturing and retail firms if they do not comply with his order to slash all prices by half. He also threatened to seize foreign-owned mines in Zimbabwe, which he accused of engaging in "dirty tricks" by extracting the country's minerals while externalising foreign currency needed in the economy." - more here (unlike many of the recent countries nationalizing mines, this could effect nickel)

  Australian Stainless Steel Development Association on 200 series stainless steels - "Nickel prices have been relatively high over the last couple of years. As a result, there has been increased interest in low-nickel or no-nickel grades of stainless steel." - article here

  Govt to propose two royalty schemes for new Inco contract - "The government intends to propose two distinct royalty schemes for inclusion in the contract of work (CoW) of nickel mining company PT International Nickel Indonesia (Inco), whose existing contract the government is determined to see renegotiated, a senior official says" - more here

  US Jan Nickel Consumption 7,290 Tons, Up 24% On Month - USGS - "U.S. nickel consumption in January was 7,290 metric tons, 24% greater than the revised total for December 2006, the U.S. Geological Survey, or USGS, said Thursday." - more here

  Pension funds urged to invest more in commodities - "European pension funds should invest at least three to five percent of their portfolios in commodities, with some 10-20 percent of that actively managed, a conference heard on Tuesday." - article here

  UK watchdog steps up monitoring of commodity markets - "Britain's financial watchdog, the Financial Service Authority, is stepping up its capacity to regulate booming commodity markets, a senior executive said on Wednesday." - article here

  Economist Intelligence Unit Robin Bew Editorial Director and Chief Economist - "US growth forecast down on housing woes" - 8 minute audio here

  Planning commission to take testimony on chromite mining plant Thursday night - "The Coos County Planning Commission is scheduled to meet Thursday night and take public testimony on Oregon Resources Corporation's interest in mining a fine, black sand called chromite near Bandon and processing it in Bunker Hill." - article here

  Newmont responds to prosecutor in Indonesia case - "An Indonesian unit of Newmont Mining Corp. has asked the country's top court to reject an appeal by Indonesian prosecutors against a ruling clearing the firm in a pollution case, a court official said on Thursday." - article here

  (A million dollar bet) Buffett talks tax reform with Sen. Clinton - "Berkshire Hathaway chairman suggests greater taxes for private equity firm managers and super rich to presidential hopeful." - article here

  Today's beginning nickel inventory -  plus 180 = 9,066 tonnes (7.54% - 684 tonnes cancelled warrants/ 8,382 net stock level)
Wednesday, June 27

  Update - (rather interesting statement made by Xstrata executive in regards to strike at CCR refinery strike in Montreal - reference copper) "The metallurgical industry is a cyclical industry that is now in a very delicate situation, and this situation will not change in the short term. In 2007 we saw our earnings drop by more than 50%, the exchange rate for the Canadian dollar is causing some serious concerns, and we are now feeling even more the effects of the strong Asian competition. The collective agreement that we will sign with our employees must take these factors into account to ensure the medium-term viability of the refinery," concluded Mr. Dumville." - article here (Ok there IS a strike going on, and he would be expected to downplay the profitability factor, but still worth noting)

  Today's official closing prices - cash - $16.69/lb - 3 month buyer - $16.69/lb (10.53% higher than 1/1/07) (only $5 per tonne separated the two). Nickel inventories took a big jump overnight, reflecting a gain of 468 tonnes. Busan received in 432 tonnes, while Rotterdam received in 96 tonnes more, the latter shipping 60 tonnes out. The BDI also gained another 1.23% yesterday.  Market started out in another steep dive this morning, with afternoon trading seeing the price retrace its steps, as buyers took advantage of what they felt, were bargain prices. Late London, and early New York kerb trading actually saw nickel prices go into positive territory for a while, but this didn't last long. Turned out to be a ho-hum day for traders, but nickel buyers got a better price today, than they did 24 hours ago. At the end of the day, 3 month nickel ended trading at $17.01/lb (flat) ($37,500/tonne) (only $5 over yesterday's ending) (Dow Jones - more) Market seems to be having the same problem staying under the $17/lb mark as it did staying over the $50,000 tonne mark. Have we found a new floor, albeit slippery at best? Stay tuned.

  News Bites -
  • From Scotia Capital China Update - (taken from forum - full report available to Scotia customers) "China’s nickel ore imports soared 10x YOY to record 1.64 million tonnes in May. The Philippines remained the largest supplier during the month at 960,346 tonnes, followed by Indonesia (518,320 tonnes) and New Caledonia (124,535 tonnes). China’s nickel ore imports have already reached 5.49 million tones during the first five months, exceeding the total imports of 3.78 million tonnes in all of 2006. Since the weather conditions for major suppliers are normally more favourable for shipping in the remainder of the year, we believe that China’s ore imports will continue to increase from the current level. The latest data reinforced our view that China’s ore imports will easily top 12 million tonnes, enough to produce 100,000 tonnes of nickel contained in pig iron."
  • From Metal Center News June 2007 - (two blurbs) (from A Brief Calm in the Metals Hauling Storm) "For the first four months of 2007, service center steel shipments dropped by over a million tons - a 5.4% decline, from 19.24 million to 18.21 million tons, compared to the same period in 2006. A similar pattern has emerged for aluminum, copper, and other materials. In addition, the drawdown of inventory taking place at the service center level has reduced shipments from mills to distributors. Service center inventories have declined 11.3% since the start of the year, according to MSCI." (from Powerful Demand For Steel) "Wright attributes the current tightness of the structural steel market, where producers are operating at 97% of capacity or more, to this strong industrial demand, which is also fueling sales of reinforcing bar, plate, structural tubing, and stainless steel. The 100 ethanol plants currently under construction, as well as a similar building of biodiesel facilities, illustrate the enormity of demand, says Simonson. And that doesn't even take into account all the oil and gas related expansions and the rebirth of investment by the electric power industry after virtually no activity for about 5 years, he adds" - courtesy  print copy of Metal Center News

  Europe Q3 ferro-chrome deals agreed at $1/lb - sources - "Benchmark third-quarter ferro-chrome contract prices in Europe have been settled at least 18 cents up from the second quarter's level to a new record of $1 per lb, industry sources said on Wednesday." - article here

  Hexam bullish on commodities for next 10 years - "The bull market in commodities will persist for at least another 10 years, fund manager Hexam Capital Partners said on Wednesday." - more here

  Metals hit by market fears - "Metals remained under pressure on Wednesday after risk aversion led to heavy selling across the metals complex on Tuesday." - article here

  Mining heavies poised for battle - "TWO of the most intimidating miners in the industry - ousted Consolidated Minerals boss Michael Kiernan and former BHP Billiton chief executive Brian Gilbertson - are poised to go head-to-head in a $700 million battle for control of Perth's ConsMin." - article here

  Update - 9:00 AM CST Indications after AM kerb trading show 3 month nickel still selling down by $.36/lb. Your official prices today are $16.69/lb - for both cash and 3 month. Europe just agreed to a record price for ferrochrome for 3rd quarter. More later.

  Indications at 7:50 am CST show 3 month nickel selling down by $.36/lb   (Bloomberg - more) (Financial Times - more)

  Behind The Nickel Slump - "From the all time highs of around $US54,000 a tonne two months ago, nickel has undergone a significant correction, with prices down 25 per cent since early this month." - article here

  Courtesy/copyright Dow Jones Newswire - "LME nickel likely to fall more, given comments by China stainless steel mills on substitution, changes in LME spread-lending guidance to avoid market squeezes that make contract less attractive for speculative players, says ANZ analyst Andrew Harrington. Nickel has slumped more than 20% since start of June and is getting closer to "reasonable" levels; "prices in excess of 50,000 dollars a ton were never going to be durable."

  News Bite

  • Analysts at Deutsche Bank have said the correction to the nickel price is a "healthy development" for a market still facing robust growth and low global supply, with prices to stay strong until 2010.
  • The American Iron and Steel Institute, has reported that US imported a total of 3.21 million tons of steel in May 2007, including 2.77 million tons of finished steel up by 13% month on month and 25% month on month respectively against April 2007.
  • China National Development & Reform Commission has revealed in its latest report, that domestic steel price has fallen for four weeks from May 21st 2007 and reported 4.37% reduction during this period.
  • Asian stocks sank to the lowest in two weeks today, hurt by the drop in commodity prices.

  EU stainless steel export down in Q1 - "According to the Iron & Steel Statistics Bureau (ISSB), EU stainless steel flat products export figure fell by a significant 26 percent in first quarter compared to the same time in 2006." - article here

  Today's beginning nickel inventory -  plus 468 = 8,886 tonnes (6.35% - 564 tonnes cancelled warrants/ 8,322 net stock level)

Tuesday, June 26

  Today's official LME nickel closing prices - cash - $17.37/lb - 3 month buyer - $17.42/lb (15.36% higher than 1/1/07). As the official prices reflect, at one point the market was selling in contango, but not for long. Backwardation was nearly $500/tonne for much of the day. LME nickel inventories were down again, although so were cancelled warrants. For a second day, no warehouses received any additional nickel, while Busan, South Korea shipped out 24 tonnes, and Rotterdam shipped out 108 tonnes. The BDI crept back up over the 6000 mark yesterday, registering at 6,038. Much lower than its record 6,688 on May 16th, but has shown steady gains since June 18th, when it registered 5,554. Consumer confidence fell more than forecast in the U.S. and the Fed meets tomorrow and Thursday to discuss possible changed to the interest rates. Today 3 month nickel ended the day at $17.01/lb ($37,495/tonne) (Dow Jones - more) While the market ended way down, a tonne of nickel would cost a buyer more than yesterday, as the official cash price is primarily used for sales transactions. That said, it will be interesting to see if cancelled warrants changes tomorrow.  

  Recycling Magazine - (very impressive web technology) pdf here - (see pages 14 and 22)

  Behre Dolbear - Global Mining News - pdf here

  China to spend extra $300 mln in Zambia - " China will invest an additional $300 million in Zambia’s mining and manufacturing industries, a government minister said on Tuesday." - article here

  Commodities Boom Slowing - "Continuing growth in mineral and energy commodity prices and export volumes will boost Australia's commodity earnings to nearly $150 billion in the new financial year starting next Sunday, July 1." - more here

  (source Recycling International) "For the BIR Convention in Athens, stainless steel industry expert Heinz Pariser, owner of HHP Alloy Metals & Steel Market Research and Publications in Germany, provided the following forecast of stainless production (in millions of tonnes) - Austenitic Grades - 18.8 in 2006 to 19.9 in 2008 / Low Ni/Mn Grades - 3.2 in 2006 to 4.6 in 2008 / Ferritic Grades - 6.3 in 2006 to 8.7 in 2008. Overall - 28.3 in 2006 to 33.2 in 2008."

  Not nickel or metals related - but for your health - High bleach levels in tooth kits - "Tooth whitening kits have been found to contain illegally high levels of the bleaching agent hydrogen peroxide." - article here

  Correction to the Chinese analysts report from yesterday. We flipped the figures for increase and stay the same. Should read none predicted nickel would rise, but 5 felt prices would stay the same. Majority felt nickel price would fall this week.

  Indications at 7:55 am CST show nickel selling down by $.27/lb   (Bloomberg - more) (AFX - more). Updated if market shows major movement either direction.

  Reuters Metal Weekly Review - pdf here

  Rand Merchant Bank - Base Metals Weekly - pdf here 

  Canada Commodity Price Update - pdf here

  HansonWesthouse - Mining News and Views - pdf here

  Analyst News Bites -
  • Courtesy/Copyright Dow Jones Newswire - "Chinese imports of nickel ores and concentrates hit another record high in May of 1.642 million tons, leaving China on target to produce around 100,000 tons of contained nickel this year, says Macquarie. Imports of nickel ore from the Philippines, Indonesia and New Caledonia totaled 1.603 million tons, up slightly from 1.591 million tons last in April. "For the first five months as a whole, we estimate that imports of ore from these three countries for nickel pig iron production were equivalent to 43,527 tons, up from just 2,935 tons in the same period of last year and 26,180 tons for all of 2006," Macquarie says."
  • Metals Takeovers Doubled in 2006, PricewaterhouseCoopers Says - "Metal-industry mergers and acquisitions more than doubled to $77.4 billion last year as companies sought to expand to meet rising global demand for the commodities, PricewaterhouseCoopers LLP said." - more here
  • ABARE predicts rise in commodities - "Continued growth in mineral and energy commodity exports will boost Australia's commodity earnings to nearly $150 billion in 2007/08, ABARE said." - more here

  China's steel product prices continue to drop - "China's steel product prices continued to fall between June 11 and June 17, due to the increased export tax on steel products, up from 5 percent to 10 percent, which came into effect June 1, the National Development and Reform Commission announced yesterday." - article here

  China's nickel, molybdenum powder, platinum exports rise in May - "China's unwrought nickel exports in May 2007 reached 1,986 mt, which is a 54% gain compared with the 1,288 mt exported in April, the latest figures from the General Administration of Customs of China showed Monday. Nickel exports to date in January-May totaled 9,870 mt." - more here

  Concerns over High Nickel Prices Send Manganese Prices Skyward - "Although manganese is the fourth most heavily consumed metal – behind iron, aluminum and copper, most investors have failed to observe the dramatic bull market in manganese which began unfolding this past spring." - more here

  New economic tigers Brazil, Russia, India and China overtake U.S. in dominating global energy industry, new study says - "The main challengers to U.S. economic power — Brazil, Russia, India and China — have overtaken the United States in dominating the global energy industry, according to a new study by Goldman Sachs." - more here

  Today's beginning nickel inventory -  minus 132 tons = 8,418 tonnes (3.99% - 336 tonnes cancelled warrants/ 8,082 net stock level)

Monday, June 25

  Today's official LME nickel prices - cash - $17.10/lb - 3 months buyer - $17.06/lb (12.98% higher than 1/1/07). One reader wrote to remind us that nickel inventories have actually grown over the last two trading days. While the stock level fell by a robust 480 tonnes overnight, cancelled warrants fell even harder, by 528 tonnes. This gives us a "net stock level" of 8,142 tonnes today, up from 8,094 tonnes on Friday, and 7,992 on Thursday. On the physical side, no LME warehouses showed receiving any additional nickel Friday, but Busan shipped 144 tonnes, and Rotterdam shipped out 336 tonnes. The drop in material sold for later shipment (cancelled warrants) is concerning as we would have thought with Friday's increase in price, the buyers would have jumped back in. Either there are buyers gambling the price will drop again, before they have to place their orders, or there are a very limited number of buyers. We expect to see fluctuations in the CW percentile in a market where prices are falling, or a market where demand is shrinking. If any buyers were holding off to buy today, they gamble did not pay off, as prices stayed on the upside all day. For the first day of the last week of the month, and the final week of the second quarter, 3 month nickel ended trading at $17.71/lb ($39,050/tonne) (Dow Jones - more)

  Metals Insider - Week in Review - "Nickel under the cosh as bears take their revenge" - here 

  Comment - Potential price decreases on fasteners sourced from China just took a hit, with news that China will be lowering its rebate from 13% to 5% on all fasteners shipped from there, effective July 1st. Mainland China became the world's largest supplier of industrial fasteners (bolts, nuts, screws, etc) in 2005, taking the title from Taiwan, and while this is being reported as a rumor by one large U.S. fastener importer, we can confirm it is official - poorly translated article here

  Update - 10:15 am CST - indicators show nickel up by $.48/lb after its 4th ring. The days PM kerb and NY kerb trading remain.

  Update - Indications show at 9:00 am CST,  after AM kerb trading, nickel is selling up by $.22/lb. Official prices for the day posted at bottom of this page. 

  Indications at 7:55 am CST show nickel prices flat, up $.02/lb . We imagine their is a lot of calculating going on among the traders today. While inventories in LME warehouses took a dive, ABARE raised 2007 production projections for Australia substantially. (Bloomberg - more)  (Forbes - more) Updated if price of nickel makes major movement in either direction.  

  28 metal analysts responded to the weekly forecast questionnaire for Shanghai Nonferrous Metals. For this week, 5 (17%) felt the price of nickel would stay the same, while 23 (82%) felt the market would fall. None forecast an increase.

  Nickel Price Drop Causes Stainless Steel Output's Reduction - "After the dive of the prices of nickel and stainless steel, several homegrown stainless steel manufacturers prepare to fight back and will jointly reduce their output for 20% from July." - article here

  Nickel Detracted from Bulls - "The nickel prices sank below $40,000 per ton past week first time from February, while the monthly loss exceeded 30 percent. The reasons of such unhealthy performance are the bull-targeted regulations introduced by London Metal Exchange and the general reduction in nickel consumption by steel producers. But the analysts forecast no further decline, expecting the achieved benchmarks to survive till the year-end." - article here

  EU stainless steel imports jump in first 2 months - "In 2007, the amount of European Union imports of stainless steel flat products during January to February was eight times bigger than the same period in 2006. This figures are provided by the Iron & Steel Statistics Bureau (ISSB)." - article here

  Stainless steel makers to take knock on supply woes - "Ferrochrome contract prices are expected to jump by about 25 percent to a record peak in the third quarter on tight supplies." - more here

  ABARE bi-annual report - Australian Commodities -  pdf here  and Mineral Statistics - pdf here
  • Australia's Abare Raises 07-08 Nickel Production Outlook 16% - "Australia's commodity forecaster Abare Monday raised its nickel production outlook by 16% to 230,000 metric tons for the fiscal year ending June 30, 2008, as two new mines are expected to come on stream. - article here

  Commodity exports 'to grow to $150bn' - "CONTINUED growth in mineral and energy commodity exports will boost Australia's commodity earnings to nearly $150 billion in 2007-08, ABARE said today." - article here  

  Jiuquan Steel's ferrochrome JV kicks off in South Africa - "International Ferro Metals Limited, a joint venture established by Jiuquan Iron and Steel Group and its South African and Australian partners, recently commenced operation of a 267,000-ton ferrochrome facility in South Africa, a Jiuquan Steel official said today." - article here

  Chinese steel makers posts huge surge in profit in January to April - "It is reported that China's 77 medium and large steel mills have recorded a combined profit of CNY 48.6 billion in January to April 2007 up by 202.2% YoY as compared to January to April 2006." - more here

  News Bite

  • Interfax - China imported 27.62 million tons of iron ore concentrate in May, up 13 percent from the same period last year. Australia was China's largest single ore supplier in May, exporting 10.70 million tons, according to statistics released by the General Administration of Customs last Friday.

  Today's beginning nickel inventory -  minus 480 tons = 8,550 tonnes (4.77% - 408 tonnes cancelled warrants)

Saturday, Sunday, June 23 and 24

  Tokyo's Rare Metal Strategy - "Resource-poor Japan is now revving up its drive to secure rare metals, which are used in a wide range of high-technology products, including digital home appliances, high-grade steel, and hybrid and fuel cell cars." - article here

  LME Members To Complain Over Nickel Lending Guidance-Sources - "Several brokers and banks have written or plan to write letters of complaint to the London Metal Exchange over its recent handling of the nickel market, industry sources in London told Dow Jones Newswires Friday. Others banks and brokers said they plan to seek meetings with the exchange to discuss the issue and are considering whether or not to take the matter further, including possible legal recourse." - more here

  Special Report - multiple articles - "Are you for or against the coming mining boom?" - articles here

  Jubilee a nickel-plated target - "JUBILEE Mines' nickel dreams continue to grow at its Alec Mairs deposit, as sources say the company is becoming too big to ignore as a possible BHP Billiton takeover play." - article here

  Mugabe Offered Chance to End Zimbabwe Crisis - "Aging Zim­babwe leader Robert Mugabe is being offered a dignified exit before his country plunges into an economic abyss." - more here  and the View From the Palace here

  Bunye rebukes critics of mining for glossing over - "Press Secretary and Presidential Spokesman Ignacio R. Bunye rebuked on Sunday critics of the mining industry for conveniently glossing over the benefits that the country derives from the mining sector." - more here

  National Mining Association - Mining Week - pdf here

  Behre Dolbear - Global Mining News - pdf here

  Week in Review - (we use a different source than during the week) - Two weeks after a shocking drop, and a week after one that ended mostly flat, this week took a downward turn. After closing out the prior week at $19.19/lb, Monday trading opened at $19.21/lb, got as high as $19.33/lb, fell to a daily low of $18.23/lb, and ended at $18.25/lb. Tuesday, markets opened at $18.08/lb, reached $18.19/lb, fell to $17.01/lb, and ended at $17.25/lb. Wednesday, the fall resumed with markets opening at $17.14/lb, climbing to $17.63/lb, falling to $16.48/lb, and finishing the day at $16.62/lb. Thursday, nickel opened at $16.67/lb, climbed to $17.08/lb, fell to $16.40/lb, and ended at $17.01/lb, its first gain of the week. And on Friday, markets opened at $16.92/lb, climbed to $17.25/lb, saw a low of $16.83, and ended the week at $17.07/lb. For the week, the market ended down $2.12/lb ($4,687/tonne). Nickel remains 12.9% higher than it started 2007 at, and 240% higher than it was on January 1st of last year. Low price of the week, and this correction so far, is $16.40' (Wednesday), a trading price last seen on February 14th.
  Comment - On April 25th of this year, we stated the following "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." So where were we nearly 60 days ago when we made this "gutless hint of a forecast, phrased for full deniability if proved incorrect"?  It was written the day after nickel had set another all time record high, the 5th time that month alone. The price of nickel would go on to set new record's twice more after the statement, on May 4th and 9th. It was made two weeks after some analysts were quoting $60,000/tonne as a being realistic possibility. It was made two full weeks before May 7th, when a Bloomberg headline screamed "Metals Bubble Poised to Burst on Increasing Supplies", which put the market into a roller coaster ride for much of the remainder of May. And a corrective mode that would be thrown into a much higher gear, and more determined direction, after the LME announced trading rule changes on June 7th. So, while we were eventually proved correct, we freely admit, that even the worst player can throw snake eyes once in a....oh wait, May on our calendar was a .... blue moon.

  CVRD Inco projects could double Ni output - "CVRD Inco has "numerous" projects on the exploration front which could nearly double nickel output from the current 280,000t/y to a rate of more than 520,000t/y through the next decade, Deutsche Bank said in a report." - article here

  (follow-up to earlier news) China's Import and Export Figures for Lead, Zinc, Nickel and Tin - "The General Administration of Customs announced China's import and export figures for lead, zinc, nickel and tin today." - more here

  China's mixed role in Africa - "CHINA IS transforming Africa, for good and ill. The United States and other traditional trading and aid partners of Africa need to help Africans craft policies that welcome Chinese investment and trade but condemn the taking of African jobs and the destruction of African industries. Africa and the West also need to dissuade China from supporting Africa's most reviled dictatorships." - article here

  Here is a world map showing all nations who have adopted the metric system (those in red have not). (here) This inspired us to make one of our own. Here, in red, are all of the nations of the world, that voted against the United Nations bill last November (and every year), which called for the immediate repeal of the U.S. economic trade embargo against Cuba. (here)
Friday, June 22

  Today's official LME nickel closing prices - cash - $17.06/lb - 3 month buyer - $17.00/lb. Inventories slipped again overnight. The inflow all came into Pusan, South Korea, who showed a gain of 192 tonnes. Outbound went from Rotterdam, who shipped 72 tonnes, Singapore, who shipped 126 tonnes, and Trieste, Italy, who shipped 12 tonnes. Daily, a tonne of cash nickel cost a buyer $41,800 on Monday, $39,235 on Tuesday, $38,700 on Wednesday, $36,750 on Thursday, and $37,600 today. Yesterday's small gain in price, along with today's, implies that we may see some accelerated buying, if purchasers feel the market has found a floor. Media is still carrying stories that China is cutting pro...yeah a valley girl would say, we are 'so' over that story. Metals Bulletin is reporting Asian stainless prices are down $100-200 per tonne because of the drop in nickel. Nickel started positive for a second day in a row, and stayed that way till the end. Have we hit bottom? Has the correction run its course? Or are we taking a breather with more slide to come?  If anyone knew for sure, they could be a wealthy person in short order. For the rest, we just hang on for the ride. 3 month nickel ended the day's and week's trading at $17.08/lb ($37,650/tonne)  (Dow Jones - more) (Forbes - more)  

(Ok - without making any political statement, we close this week with another music video, that you might actually get to see before everyone else in the office does - here) Have a safe weekend, and we hope to see you back on Monday!!

  Metals Insider - from their daily report today - "Production figures are hard to come by but the trade figures show no slowdown in China's super-fast growth in imports of laterite ore - the raw ingredient for nickel pig iron….The three major suppliers are the Philippines, Indonesia, and New Caledonia….It will be very interesting to see whether sharply falling LME prices affect this trade. There is an argument that the structural tightness of the nickel market makes nickel pig iron still an essential part of the supply response. However, it is perceived to be ultimately price-sensitive. It's just that as a relatively new phenomenon, no-one is quit sure how far prices would have to fall before the economics of nickel pig iron are affected."

  Update - 9:30 am CST - Here are today's official prices - cash at $17.06/lb and $17.00/lb for 3 month. Indications show nickel up $.22/lb after 3rd ring.

  Indications at 7:55 am CST show nickel selling up by $.33/lb    (Bloomberg - more)  (Reuters - more) (updates if price changes significantly)

  TD Bank  Financial Group - Weekly Commodity Price Report - pdf here

  Fortis Metals Asian Metals Monthly - pdf here

  Clinton, mining industry launch anti-poverty effort - "Former U.S. President Bill Clinton on Thursday announced a plan to fight poverty in the developing world in partnership with the mining industry, which often is accused of exploiting the poor and the environment." - article here

  Stainless steel makers to take knock on supply woes - "Ferrochrome contract prices are expected to jump by about 25 percent to a record peak in the third quarter on tight supplies." - article here

  Specialty Metals Industry Group Releases First Quarter Market Data - pdf here

  Credit Suisse forecast 25% hike in iron ore prices next year - "It is reported that global iron ore minors Companhia Vale do Rio Doce, Rio Tinto Group and BHP Billiton may further increase iron ore benchmark price by as much as 25% next year an upward revision for its former forecasts of 10% as China's demand for iron ore keeps growing up driving up iron ore price." - more here

  China releases figures of lead, zinc, nickel and tin exports and imports for the first five months - "The General Administration of Customs announced China's import and export figures for lead, zinc, nickel and tin today." - article here

  Mittal to control 80% of its iron ore to counter Rio - "Arcelor Mittal, the world`s biggest steelmaker, plans to produce about 80% of the iron ore it uses within the next decade to protect itself against price increases from the three companies that dominate the market." - more here

  Philippines reforms mining fiscal regime - "The Philippines Department of Environment and Natural Resources has issued a new fiscal regime for foreign owned mining projects through the Financial or Technical Assistance Agreement." - more here

  China News Bite

  • "Tsingshan Holding Group, a stainless steel maker in Southern China, is planning to increase its production ability up to 700,000 tons in 2007, up around 200,000 tons from 2006, according to the company’s Chairman." (source - Yieh)
  • "Amid wide-spread anticipation of further tightening measures over the weekend, Chinese stocks plunged 3.29 percent today,the largest single-day slump since June 4." (source - China Daily)
  • "Global investment bank Credit Suisse recently forecasted international iron ore prices for next year to rise by 25 percent on the back of expectation that China's iron ore imports will increase 22 percent this year although Chinese steel industry officials believe that the prediction is far too optimistic, given that China's crude steel production is set to slow this year and iron ore output is on the rise." - (source - Interfax)

  Nickel, copper still left in 106-year-old mine - "Exploration drilling at the venerable Creighton nickel and copper mine near Sudbury, Ont., confirms mineralization that could extend the mine life "well into the future," CVRD Inco said yesterday." - article here

  Revisting the idea of Northern Ontario as 11th province - "The McGuinty Liberal’s policies of the past four years are destroying or severely hampering Northern Ontario’s two main industries – forestry and mining." - article here

  Today's beginning nickel inventory -  minus 18 tons = 9,030 tonnes (10.37% - 936 tonnes cancelled warrants)

Thursday, June 21

  Today's official LME nickel closing prices - cash - $16.67/lb - 3 months buyer - $16.64/lb (10.2% higher than 1//1/07). Well it appeared nickel was selling in contango for a period today, as cash took another thrashing and 3 month gained. We are seeing some speculation on certain investor forum's, that some of the more bullish investors are predicting nickel could fall to the $14-$15/lb range, before it stabilizes, and starts moving back up. We will see. Traders are a lot like fathers learning of an unplanned pregnancy. When they get the days news, some are happy, some aren't so happy, and some start looking for the nearest exit. And some will spend a lot of time thinking "if they only knew then, what they know now." But we tip our hat to them. At least they have the guts to play the game.

Inventories gained 6 tonnes overnight, with Singapore receiving 144 tonnes, Rotterdam shipping 60 tonnes, and Gothenburg shipping another 78 tonnes. Cancelled warrants increased by 108 tonnes. The Baltic Dry Index moved up again today, gaining 4.3%. Significant, in that it had been falling for the last month, but has shown steady gains in the last week. Still a lot of talk in the media about the 20% cut in China stainless steel production for July. We've given this report just about enough space, so we leave you with one final thought on the matter. On this website, on June 22, 2006, we carried the following report - " Yieh is reporting 3 major Chinese stainless steel producers have announced production cuts of 20% during July in an effort to stabilize raw material costs." Yes, 2006! Here it is (here) and if you think that is just way too coincidental, and think we might have been tempted to add it, here is the copy of our page Google archived back in January (here). So the real story here? "In top secret meetings held over the weekend, Chinese steelmakers decided to release the same announcement they made last year, but to throw the market off, they were leaking it anonymously a week earlier."

Enough of beating a dead horse. Nickel started out in the positive today, albeit with hesitation, but by the end, showed a definite gain. Three month nickel ended the day at $16.83/lb ($37,100/tonne) (Dow Jones - more)

  Brazil CVRD: Drilling Could Raise Sudbury Nickel Reserves - "Brazilian miner Companhia Vale do Rio Doce , or CVRD, said Thursday a drilling program at the company's Creighton mine near Sudbury, Ontario could nearly double nickel reserves at the site." - article here

  Update - 11:00 am CST - Indications show nickel selling up approximately $.27/lb.

  Update - 9:35 am CST After its third ring for the day, 3 month nickel shows little change from earlier. Your official prices for the day are cash at $16.67/lb and 3 month at $16.64/lb. If you are wondering why demand for nickel seems to be drying up, a tonne of nickel bought yesterday at the LME cash price, is worth $1,950 less today. With those odds, can you blame buyers for sitting on the sidelines?

  Indications at 7:55 am CST show 3 month nickel little changed, up by about $.05/lb . However, cash nickel appears to be in trouble, and after backwardation had spread to over $2000/tonne yesterday, causing some to believe the slide may be showing signs of an end, the price of cash nickel has fallen to near contango range today.  (Bloomberg - more) Updates if major changes.

  Posco to reduce 300 series stainless steel prices - "South Korean Posco has announced to cut prices of 300 series stainless steel products by 400,000 won/ton (US$431.3), effective with 11 June shipments." - article here (worth noting - "This was the first time that the company to reduce its price since December 2005, the main reason is due to a drop in nickel prices.")

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

  The global outlook for metals and mining - 'The underlying dynamic of increased demand without increased production remains the primary reason for the recent sharp increase in global metal prices." - more here  PWC report we posted yesterday - pdf here

   (we really want to let this story drop but it just won't die)

  • Demand woes hit nickel prices - "Nickel prices slid to a five-month low yesterday and are poised to head lower on reports that several major Chinese stainless steel producers are about to cut output." - article here
  • Major Chinese SS makers to cut July production by 20% to 30% - "China's major stainless steel mills have jointly decided to reduce monthly production by between 20% and 30% in July, in order to combat falling domestic stainless steel prices, a major stainless steel company official told Interfax." - more here
  • No cap on Chinese steel exports - Cisa - "A top official from the China's Iron & Steel Assn (Cisa) has denied reports in the Chinese media that the country's steel mills have pledged to restrict exports to under 10 percent of steel output." - article here
  • Domestic stainless steel production plant to be 20% nickel prices diving - "Xinhua learned yesterday, the major domestic stainless steel production plant ready in July 20% of the news enabled the market to sudden change of wind direction." - poorly translated article here (quote - "Informed sources have told reporters, one is stainless steel plant under normal plan in the middle of the year so that equipment maintenance has reduced output, on the other hand, Due to the recent domestic stainless steel market downturn, and nickel prices skyrocketing costs surge. to take measures to maintain the steel market and the normal operation of enterprises.")
  • China stainless steel mills plan 20-30% output cut - "Four major Chinese stainless steel mills, including the two largest, Taiyuan Iron and Steel (Taigang) and Baosteel , plan to cut production by 20 to 30 percent each in July, company sources said on Thursday. " - more here

(Comment - at last check - 3, now 4, or is that 5, Chinese stainless steel makers supposedly had agreed over the weekend to cut stainless steel production. One of the 3 denied any such agreement. As is seen above, another of the three was reportedly shutting down for scheduled maintenance anyway. We posted reports we had read in Chinese media that Chinese steel makers had agreed to shipping only 10% of their production in exports. Today that is being denied. Following this is like trying to figure out the plot of a bad soap opera)

  Pellet Plant - Outotec to supply world’s largest chromite pellet plant - "OAO TNK KAZCHROME has ordered a second chromite pellet plant from OUTOTEC of Helsinki, Finland. The new pellet plant, together with a similar one Outotec delivered to the Donskoy mine in 2005, will be the world's largest production unit for chromite pellets. The contract price with services and spare parts is nearly $57.2 million, reports the manufacturer." - more here

  Year old report but extensive (found link in PMPA report filed next) - The Effects of increasing Chinese Demand on Global Commodity Markets - pdf here (108 page report)

  Precision Machined Products Association - "Material Impacts Report - June 2007 - pdf here

  EU Steel Price Forecast - Long Products - "The MEPS EU Average Merchant Bar and Rebar prices have peaked. The rebar value increased €80 per tonne above its previous high in September 2006." - article here

  Potanin unsure whether he will join Norilsk Nickel board - "One of the two main shareholders in MMC Norilsk Nickel, Interros President Vladimir Potanin, is not sure that he will join the board of directors of Norilsk Nickel." - more here

  'Super' Stainless Steel Developed - "A new type of stainless steel alloy developed at Oak Ridge National Laboratory could allow for significantly increased operating temperatures and corresponding increases in efficiency in future energy production systems." - article here

  Commodities forecasting: It's all in your head - "Prices of commodities can rise quickly when production falls and supply is tight; conversely, they cost less when output rises and supply surges. Trying to gauge which way the trend is going makes forecasting tricky." - article here

  Canadian miners fall from world top tier - "Canadian companies are fading from the world's mining stage, a study said Wednesday, with the number of Canadian companies listed in the globe's top 40 miners shrinking to six last year from 12 in 2003." - article here and another

  Prony Energies, the power station which makes cough - "The first section of the power station installed on the site of Goro Nickel must enter in service four months. As for the factory as a whole, the future environmental impact makes cough ecological associations." - Translated article here

  Toledo to Complete BHP Nickel Supply Talks by October - "Toledo Mining Corp. said it will conclude talks with BHP Billiton Ltd., the world's largest mining company, on supplying nickel ore from its Berong project in the Philippines by the end of the third quarter." - article here

  Chinese duo dies in nasty highway accident - " TWO senior managers of a Chinese company, which is contracted to carry out construction work on Ramu nickel mine site in Madang province, were killed in a road accident along the Madang-Lae Highway on Tuesday." - more here

  (not nickel related) Indonesian Court To Summons Leading U.S. Paper Through Media - "The New York Times and one of its reporters is to be summoned to appear before an Indonesian court via public notice after it failed to appear at a defamation hearing at Jakarta Central Court brought by a mining executive against the newspaper according to the executive's lawyer quoted by AFP Tuesday." - more here

  (not nickel related) Mine takeover in sight - "THE Autonomous Bougainville Government (ABG) will not hesitate to take over any mining and exploration rights on Bougainville using its own mining powers." - more here

  (not nickel related) Hunger at closed Vatukoula gold mine in Fiji - "Families of the former employees of the closed down Vatukoula gold mine in Fiji are reported to be missing meals and going hungry." - article here and another and another and another  (NGO's are going to be all over this)

  Today's beginning nickel inventory -  plus 6 tons = 9,048 tonnes (11.67% - 1056 tonnes cancelled warrants)

Wednesday, June 20  LME Third Wednesday prompt

  Today's official LME nickel closing prices - cash - $17.55/lb - 3 month buyer - $17.28/lb (14.44% higher than 1/1/07). Not that anyone seems to care at the moment, but LME inventories took a hit yesterday, revealing a 234 tonne loss. While Rotterdam received 18 tonnes, they also shipped out 54 tonnes. St Louis also shipped 18 tonnes, Gothenburg, Sweden, shipped another 30 tonnes, and Busan, South Korea, shipped a whooping 150 tonnes. This could mean different things, but most likely, it would imply some producers are gambling the price of nickel won't go much lower, and placed buy orders. Or they had to buy, whatever the price. This would imply that the non-existent demand, that some analysts have been reporting, is actually still out there, just playing it smart. As we have stated before, this is not a time where it is much fun being a buyer of nickel It was much easier telling the boss the nickel you bought last week, that hasn't arrived yet, is worth $20,000 more today than what you paid for it. These days that trip to the boss' office can be a very long and lonely walk. When the market is in a fall like it has been, a few days can make a huge difference. On the 1st of this month, if you paid the LME cash price, a tonne of nickel would have cost you $50,445. Monday of this week, that same tonne would have run you $41,200. Today, that tonne will cost you $38,700. When you are placing PO's for multiple tonnes, you can see how waiting another day could save, or cost your employer, potentially hundreds of thousands of dollars. And if that doesn't convince you, take that down to a per pound price. If you can save $.30/lb over what your competitor paid yesterday, or will pay tomorrow, it can make a big difference in your profit margin if you are selling stainless steel sheet for $3/lb. And we get ticked off when we fill up our gas tank and it drops by 2 cents a gallon the next day!!

The Baltic Dry Index gained yesterday, for the first time in a while. For those of you interested in tracking this barometer, we have a link in our lower right hand column. Some economists and analysts put a lot of stock in it to gauge the worldwide flow of trade, and indirectly, the demand for base metals. We make no recommendation, just offering it to our readers as another potential source of information. Put it next to a nickel price chart, though, and you will note some uncanny similarities. Nickel started out this morning, in what appeared to be recovery mode, but by afternoon, the price turned south again. For the day, trading on 3 month nickel ended at $16.51/lb ($36,400/tonne)  (Dow Jones - more)

  The six megatrends that are changing China - "Here’s an equity call: Go long where China is short, and go short where it is long" - more here

  Record cash flows fund mining consolidation - "As a surge of mergers and acquisitions mega-deals sweeps across the global mining sector, hunt or be hunted is the challenge for cash-rich companies seeking to ride the consolidation wave." - article here

  Speculation Takeover Continues For Alcan, Alcoa: BHP, Rio Tinto Front-Runners - " By this time next year, BHP Billiton Ltd. will likely own Alcoa Inc. and Rio Tinto should own Alcan Inc., an unnamed source told the Sydney Morning Herald, adding that Alcan has opened a data room so the Anglo-Australian mining giants can examine its books." - article here (comment - gotta love these unnamed sources)

  Update - 11:00 am CST - indication shows 3 month nickel down by $.42/lb.

  Update - 9:30 AM CST - From Bloomberg - "China may produce less stainless steel than expected this year after Shanxi Taigang Stainless Steel Co., the nation's biggest producer, and other mills agreed to cut supply by 20 percent from July 1, Taigang's President Chai Zhiyong said today." From Reuters - Africa "One of the interesting things is the talk from China's stainless steel mills that they may cut production by 20 percent," ANZ's Harrington said. "That is hurting nickel prices but it remains to be seen whether they can deliver on any promised cuts. This is probably more a message for Beijing that they are addressing concerns about the rapid expansion of the industry." (source) Your official prices for the day at $17.55/lb for cash and $17.28/lb for 3 month. Indications show 3 month nickel now selling down by $.20/lb.

  Indications at 7:55 am CST show 3 month nickel selling up by $.20/lb   (Bloomberg - more)  (updates if price moves abruptly)

  China Stainless Steel Output Cut Talk Weighs Nickel Sentiment - "Output cuts by three major Chinese stainless steel producers would initially have more of an effect on sentiment in the nickel market than a material impact on demand, analysts and traders said Wednesday." - article here (comment - please read the article very carefully and note the denial - the only thing we could find in China media yesterday when it broke, was that major Chinese steelmakers agreed to limit exports of steel to 10% of their production over the past weekend. Considering it cost $50,445 to buy a tonne of nickel on the 1st of this month, and $39,235 to buy the same tonne yesterday, there is reason to believe steel makers may slow down production until nickel prices settle down. There is evidence that metal service centers have slowed down purchasing stainless steel until price stability returns. It is part of a normal cycle when prices drop, and while feeding on itself, means little more than customers are being cautious, and playing it smart.)

  Weaker LME Nickel Not A Concern As Prices Still High - "Nickel prices plunging some 20% on the London Metal Exchange since the start of June have prompted calls of an end to the party for Australian nickel miners but companies producing the stainless steel ingredient needn't worry too much, analysts said Wednesday." - article here

  Commodity super-cycle still strong - "Need proof that the commodities super-cycle is still going strong? Corporate activity in the commodity market is more than proof, while the fundamentals of platinum remain solid." article here

  PriceWaterhouseCoopers - Mine - Riding the Wave - 100 page report - pdf here

  Implats withdraws from nickel project - "Impala Platinum's (Implats) withdrawal from the $2,25bn Ambatovy nickel project in Madagascar will cost about $25mn, including the costs of an environmental impact assessment and feasibility studies, Implats manager of group corporate finance Belinda Berlin said yesterday." - article here

  Posco raises surcharges for tinplate while stainless steel price unchanged - "In order to offset the increased material cost, South Korea Posco announced to lift the surcharge for tinplates (black-plate) with thickness under 3mm on 15 June. The new surcharge soared to between 21,000 wow and 61,000 wow per ton due to the cost difference by tinplate thickness." - article here

  -China moly quotas may cut exports by 30% -traders - "China's newly adopted molybdenum export quotas may cut exports of the minor metal by as much as 30 percent, aiming to keep more of the country's mineral resources in Chinese hands, trade sources said on Wednesday." - more here

  China may swallow mining major to satisfy ore appetite - "China may yet target a mining major as it scours the world for natural resources to feed booming domestic demand for raw materials to satisfy infrastructure needs." - article here

  China media

  • "China exported 43 million tons of steel in 2006 at an average cost of $610 US dollars/ton. It imported 18.51 million tons in 2006 at an average cost of $1,071 US dollar/ton." (source)
  • China produced 50,181 tons of refined nickel in the first 5 months of 2007, up 26.6% YOY. In May they produced 10,045, up 39.4% YOY. (source)
  • China's iron ore import drops sharply in May - "China imported 27.62 million tons of iron ore in May this year, 6.64 million tons less than in April or down 17.2 percent month on month, the lowest since October 2006, according to Customs statistics." - article here
  • China's coke output, price to rise in 2007 - "China's coke production capacity planned for construction in 2007-2008 has exceeded 50 million tons, nearly four times the newly increased production capacity of coke in 2006." - article here
  • China Special Steel to focus on deep processing of nickel - "China Special Steel (CSS), the Hong Kong based company for bearing steel and spring steel producer, will focus its business on deep processing of nickel." - article here
  • Jiangsu Xihu Special Steel starts to test new stainless steel wire rod line - "China's Jiangsu Xihu Special Steel will commission its test production for a 200,000 tpy stainless drawing quality stainless steel wire rod line in next month." - article here

  Today's beginning nickel inventory -  minus 234 tons = 9,042 tonnes (10.48% - 948 tonnes cancelled warrants)

Tuesday, June 19

  Today's official closing prices - cash - $17.80/lb - 3 month buyer - $17.60/lb (16.56% higher than 1/1/107). Comment - What a difference two months makes. If we had told you 60 days ago, that inventories fell overnight, PT Antam of Indonesia was having trouble with their smelter, and first quarter production at a nickel mine in Zimbabwe had fallen by over 10%, prices could have easily added $.25/lb to $1/lb in a day of trading. Yet, today, with all that news being reported, the market pooh-poohed it as insignificant, and the price fell hard yet again. Two months ago, the bulls were blowing off demand threats and pig nickel production as meaningless, and yet today, that is all everyone is talking about. So, the question should be, have the fundamentals changed that dramatically in the course of a few months? Or is the market being driven strictly by sentiment? And if the latter is true, how much of the recent bull run-up was due to sentiment?

On the fundamental side, we are seeing little evidence of a major change. However, there are some points that are interesting. In 2006, nickel inventories started the month at 18,186 tonnes and ended the month at 10,548 tonnes. During that time, the price of nickel basically stayed the same. The prior June, 2005, nickel inventories started the month at 8,064 tonnes, and ended the month at 7,248 tonnes. The price of nickel actually slid by about $.50/lb (7%) that June, from around $7.26/lb to $6.78/lb. So far this month, inventories have grown from 7,914 to 9,276 tonnes. If this continues, it would be the first June in the last three, to show an increase. So is demand falling because of the typical slow summer season, or is it because of substitution? It would be easy to blame it all on European vacation's, but isn't that an easy cop-out? June of 2005 and 2006 were also in the "typical slower summer season", but their inventories showed declines. Could it be that the threatened substitution is having a bigger effect than many thought? We feel it is very possible, and as we have stated before, nothing motivates end-users to deviate from an established pattern, than anger. Those of us in sales, know there is no better candidate for a new customer, than one who is angry with someone else. 300 series austenitic stainless answered many corrosion problems, and had so many attributes, that after years of proving itself, it has become the industry accepted 'norm', and readily available. It will be months before we start seeing any numbers to prove if substitution is having an effect, but for those who have been dismissing the threat, we feel you would be wise to give it some attention. Pig nickel production in China is obviously making an impact. Although as the price continue to fall, that addition to the supply chain itself becomes threatened. At $20/lb, it is economical to produce nickel this way. As we near the $15/lb mark, that starts coming into question. On the supply side, the LME inventories tell the story. While the vast majority of nickel is sold directly from mine to consumer, the LME warehouses give us a gauge to monitor the amount of "extra" nickel out there. However slowly, it has gained this month, and traders are drinking it in like a tea cup of water in the desert. We say desert, because in our opinion, we don't see any major lakes on the horizon. Yesterday's "extra" inventory stored in LME warehouses gave us no gain, but the Singapore warehouse shipped out 6 tonnes, thus the decline. Cancelled warrants also increased from yesterday, hitting the double digits for the first time this month. So, have the fundamentals really changed? Somewhat, but not enough to convince us we can't be right back to where we were, in a few short months.

And thus, we give credit, or blame, depending on which side of the nickel chain you sit, for the current price correction on sentiment. If you look back at the 2005 figures we gave above, you can see why there are many of those in the stainless steel industry, that feel the current inflated prices have always been more speculative trading, than based on fundamentals. Why is nickel worth so much more today than it was 2 years ago, when we had less nickel readily available? Like many correction's, this one seems to be caught in its own gravitational momentum, much like many believe, the last balloon ride in pricing was due more to the abundance of hot air, than facts. There is also still the question out there of why the LME rule change put the market in such a panic. Is the bull run over? There are things to keep in mind; that might answer that question. The 1.3 billion people in China aren't going to suddenly decide growing rice was more fun that building skyscrapers, and that being poor was more fun than earning an income and buying new things, many made from metals. Their 1.1 billion neighbors in India are just starting to warm up to the idea of mega-growth. Economies worldwide are booming, so demand in nickel, even if tempered by substitution, even if partially met by pig nickel, isn't going to do anything but increase. And as the price declines, the desire for substitution wanes, and the pig nickel source is put into question, and we crawl right back into a sinking boat. There are some major new sources of nickel coming down the pike, but not for awhile, and there are numerous problems we expect to see happen, before they can produce significantly.

What will happen tomorrow, or the next, is anyone's guess at this point, but today, nickel took a beating. 3 month nickel fell by almost $3000/tonne, ending trading at $16.99/lb ($37,450/tonne)  (Dow Jones - more)

  Nickel hits five-month low on China steel threat - "Nickel prices fell more than five percent on Tuesday as worries about falling demand intensified after news that China may cut stainless steel output, while copper prices slipped." - article here and more

  Zimbabwe’s Bindura Nickel Corporation focuses on difficult year ahead - "Bindura Nickel has reported a 10% drop in nickel sales from 5,994 tonnes to 5,374 tonnes for the period ended March 31, 2007 because of reduce nickel concentrate output from mines." - more here

  Indications at 7:50 am CST show nickel getting hit hard again, selling down $.71/lb.    Nickel is currently winding down AM kerb trading in London. We will update if we see any major price movement from this amount.   (Bloomberg - more)

  Tomorrow is third Wednesday prompt date on the London Metal Exchange

  Rand Merchant Bank Base Metals Weekly - pdf here

  China stainless steel mills mull production cut - "Stainless steel makers in China, the world's largest producer, are considering cutting production to prevent prices from weakening further, company sources said on Tuesday. " - article here

  Indonesia Aneka Finds Minor Leakage In Feni III Smelter - "PT Antam Tbk announces today it has lowered the power load of the FeNi III smelter due to a small metal leak from the furnace wall. Based on a preliminary investigation and opinion from Antam’s external consultant, the FeNi III smelter is expected to reach its normal operating load in a maximum of three weeks. The leak is different from and not related to the previous metal tap hole leak, which occurred on July 1st, 2006. The leak occurred at 9:00pm Central Indonesia Time on Saturday night, June 16th, 2007 and no one was injured. " - more here

  • No Major Upturn in EU Steel Prices Expected for Third Quarter - "The EU strip market is relatively quiet ahead of the conclusion of price negotiations for third quarter business. Service centres are well stocked until September and are in no rush to settle. Traders are waiting for new offers from Chinese mills following the recent changes in export taxes. EU steelmakers appear to be controlling production in-line with demand quite well." - more here
  • Nordic Steel Price Forecast - Long Products - "MEPS Nordic Average Merchant Bar and Drawing Quality Wire Rod prices peaked in Spring at record levels - based on increases in scrap costs and a shortage in supply. In recent months scrap values have fallen. This is expected to result in a gradual decrease in transaction figures for over the next few months." - more here

  Stainless steel demand may hit nickel - "An expected slowdown in the stainless steel sector in the next two months may take a toll on nickel, the main constituent in stainless steel." - article here

  First shipment of ore from Sarkiniemi delivered to Hitura Nickel Mine, Finland - "Belvedere Resources Ltd. (the "Company") is pleased to announce that the first shipment of ore from the newly opened Sarkiniemi Nickel Mine has been delivered to Hitura for processing. The shipment consists of approximately 150 tonnes of ore, which has been assayed at 1.17 %Ni and 0.52 %Cu. The ore will be blended with ore from Hitura to confirm optimum mixing parameters for an ongoing Hitura - Sarkiniemi ore blend." - more here

  Corrected copyright Dow Jones Newswire - S Korea To Lower Import Tariffs On Nickel Pdts - "South Korea's Ministry of Finance and Economy will lower import tariffs on nickel products such as ferro-nickel and nickel ingot to 1% from 3%, while the import tariff on nickel powder will be reduced to 3% from 5% in the second half of this year amid surges of international prices, the ministry said last week. ("S Korea To Lower Import Tariffs On Nickel Product Imports," published at 0411 GMT June 18, misstated the change in import tariff for nickel powder.)"

  Today's beginning nickel inventory -  minus 12 tons = 9,276 tonnes (10.09% - 936 tonnes cancelled warrants)

Monday, June 18

  Today's official LME nickel closing prices - cash - $18.96/lb - 3 month buyer - $18.87/lb (24.97% higher than 1/1/07).  Physical inventories on the LME remained flat as the Rotterdam warehouse received 78 tonnes of nickel in on Friday, and shipped out 36 tonnes, with the warehouse in Busan, South Korea, shipping another 42 tonnes. Cancelled warrants rose again, so actual inventory figures slipped for the second day in a row. Cancelled warrants percentiles moving up again implies there are buyers out there. But the slow rate implies either many are gambling prices will fall further, or the number of active buyers is few and far between. Not much in the way of important supply/demand news out today. Dow Jones Newswire is quoting Barclay's as stating that nickel looked to be setup for further price declines "in light of easing tightness in the nickel market highlighted by robust Chinese low-nickel pig iron output, rising LME nickel stocks and moderating stainless steel activity in the US and Europe." Nickel started the day up early in morning trading, but by the 4th ring, began to fall. 3 month nickel ended the day's trading at $18.33/lb ($40,400/tonne) (Dow Jones - more)

  Metals Insider - Week In Review - "Nickel rides the roller-coaster" - here

  May 2007 Crude Steel Production - "World crude steel production for the 67 countries reporting to the International Iron and Steel Institute was 112.2 million metric tons (mmt) in May. This is a 6.4% increase on May 2006." - more here

  Commodity boom brings new wealth - and inflation - to Perth - "The global commodities boom has been very good to Western Australia and its capital, Perth. While the rest of Australia's economy has sputtered and property prices in bigger cities have sagged, Perth has been humming." - article here

  Rising copper prices lead to increasing thefts - "A type of copper mining is going on in Connecticut, and none of it's legal as thieves steal copper to cash in on the metal's skyrocketing prices." - more here

  S Korea To Lower Import Tariffs On Nickel Product Imports - "South Korea's Ministry of Finance and Economy will lower import tariffs on nickel products such as ferro-nickel, nickel ingot and nickel powder to 1% from 3% in the second half of this year amid surges of international prices, the ministry said last week." - source

  The Nonferrous Foundries Industry's Revenue for the Year 2006 Was Approximately $1,070,000,000 - "Research and Markets has announced the addition of "Other Nonferrous Foundries (Except Die-Casting) Industry In The U.S. (Q2-2007 Edition)" to their offering." - more here

  Molybdenum’s Diversity Keeps Demand Firm - "James Finch submits: If one believes the forecasts recently made by Terry Adams of UK-based Adams Metals and the Albemarle Corporation, then the escalating demand for molybdenum products could impact the stainless steel business of POSCO. The Korean-based steelmaker, with about 6.5 percent of sales coming from stainless steel, is the world’s fourth or fifth largest, depending upon production or market capitalization." - more here
  Update - 11:10 am CST - Indications show 3 month nickel down about $.55/lb. Market is now in NY kerb trading.

  Indications at 7:50 am CST are confusing. We monitor multiple indicators and this morning we are seeing figures from nickel selling down by $.20/lb, to up by $.22/lb. London is currently selling in its AM kerb trading, so it is possible market just shifted direction and all of the indicators have yet to pick up the movement. We will give you an update when the dust settles and we can provide a clearer picture.  (Bloomberg - more)  (Dow Jones - more)

  This week's forecast by Chinese metal analysts for Shanghai Nonferrous Metals reflects the unpredictability of the market. Of 29 analysts who participated, 11 (37%) felt the price of nickel would rise this week, another 11 (37%) felt the price would stay the same, and 7 (24%) felt the price should fall. Jinchuan Nickel # 1 ended Monday at 378000, up 500.

  What's Wrong With Nickel? - "From a price of around US$33,500 per tonne at the start of the year nickel prices rose to a level of almost US$52,000 per tonne last month, before sliding back by as much as 20% from this peak in recent weeks." - article here

  FMG predicts its iron ore production may surpass BHP's - "The iron ore explorer Fortescue Metals Group has announced an ambitious plan to raise a billion dollars so it can expand its operations to become the second biggest iron ore exporter in Australia." - more here

  Zimbabwe Bindura sees big drop in '06 nickel output - "Zimbabwe's Bindura Nickel posted a nine percent fall in processed nickel output in 2006 because of constrained production and equipment breakdowns at its two mines, a senior company official said on Monday." - article here

  Merger Complete - Sherritt-Dynatec now one - "Sherritt International and Dynatec Corp. have closed the deal by which Sherritt has acquired all outstanding Dynatec common shares. - more here

  Mining boom tips Rio shares over $100 - "ALMOST forty years after the infamous Poseidon nickel boom, the Australian share market finally has its second $100 stock." - more here

  Today's beginning nickel inventory -  plus 0 tons = 9,288 tonnes (7.69% - 714 tonnes cancelled warrants)
Saturday, Sunday June 16 & 17 (Happy Father's Day for Sunday)

  Week in Review - (using different source than during week) After coming off a shocking turn of events on the prior Thursday and Friday, with nickel opening that week at $21.38/lb and ending at $19.29/lb, markets opened with much uncertainty Monday. Nickel opened at $19.27/lb, rose to $19.75/lb, fell as low as $19.41/lb, and ended the first day of the weeks trading at $19.41/lb. On Tuesday, nickel opened at $19.39/lb, rose to $19.44/lb, fell as low as $18.04/lb, and ended the day at $18.10/lb. On Wednesday, the market opened at $18.12/lb, rose to $18.38/lb, fell to a weekly low of $17.62/lb, and ended back at $18.10/lb. While markets fell during the last part of last week, they used the last two days of this week, to rebound. On Thursday, nickel opened at $18.11/lb, also the low of the day, rose to $19.12/lb, before ending the day at $18.98/lb. On Friday, markets opened at $18.85/lb, rose to $19.28/lb fell to $18.46/lb, and ended the day at $19.19/lb. For the week, the price of nickel ended flat, down by 1/2 of 1%. Prices still finished 27% higher than they started the year.

  Domestic automakers aren't the enviro-villains - (quote from article) "Burning a cord of firewood -- the amount many wood stoves go through in a winter -- releases as many smog-causing emissions as 10 new SUV's will over their entire lifetimes on the road." - more here

  "On Wednesday, the Supreme Court  also citing the statute of limitations rejected appeals by six World War II slave laborers from China demanding 110 million yen (US$904,600; ¤677,860) in compensation for forcing them into slave labor at nickel mines in Kyoto in western Japan. The court also said the current government was not responsible for the wrongdoings of leaders who followed the wartime constitution. Japan enacted a pacifist constitution after its World War II defeat.."

  LionOre board recommends stockholders to accept Nornickel proposal - "The board of directors of Canadian LionOre recommended its stockholders to accept proposals by Norilsk Nickel Company on selling it all floated ordinary shares of LionOre at a price of 27.5 Canadian dollars per an ordinary share to the total sum of around 6.8 billion Canadian dollars, said a joint press release by Nornickel and LionOre." - more here

  Courtesy 'The News' - "“We anticipate prices to fall further as the market digests a combination of slowing stainless steel activity in the US and Europe, and rising Chinese output of low-nickel pig iron spurred by its spiralling nickel ore imports,” Barclays Capital analysts said."

  Nickel and doom - time to sell? - "Nickel finally appears to have lost some of its lustre. The price of the stainless steel material has fallen 19 per cent since reaching a record high of $US51,600 a tonne on May 4. On Wednesday, it dipped below $US40,000 a tonne for the first time since March." - article here

  Asian Stocks Rise as U.S. Retail Sales, Metals Prices Climb - "Asian stocks advanced this week after U.S. retail sales rose more than expected and the Federal Reserve said the world's biggest economy is growing without stoking inflation. Toyota Motor Corp. and Hon Hai Precision Industry Co led gains by exporters." - article here

  Nickel's golden sheen starts to dim - "Recent decreases in the price of nickel do not signal a break in the extraordinary times enjoyed by the industry, including Greater Sudbury miners, observers say." - article here

  Week in Review will be delayed as we are unable to secure figures for Friday. Will be added if we receive before Monday.

  National Mining Association Mining Week - pdf here

  Sherritt to Invest $1.25 Billion in Cuba - "Canada's Sherritt International Corp. says it plans to invest $1.25 billion in Cuba over the next two years, bolstering its position in the island's oil, natural gas, electricity and nickel and cobalt mining sectors." - article here

  On Thursday, we linked to a couple of photo's of the Pudong District of Shanghai, which has grown literally from nothing but farmfields in about a 15 year time period. In the first photo, we noted the tallest building in China, the the Jin Mao Tower, seen to the right in the photo. (Pudong, China at night) In the second photo, we showed the massive expansion which is partially responsible for the demand in raw materials (Pudong, China in the day). We have learned since, that photo #2 would now be altered, because the current construction of China's new tallest building, the Shanghai World Financial Center, will block the view from Jin Mao. Here is an article from October 2006 here, more on what it will look like when completed here. Despite the claim, it will not be the world's tallest building, as nothing currently under construction compares to the Burj Dubai here And speaking of Dubai, which many call the fastest growing city in the world, here is another comparison shot from a Dubai blog here.

  Interesting worldwide city statistics from City Mayors - here

  Non metals related - Very cool time delayed photo - here
Friday, June 15

  Today's official LME nickel closing prices - cash - $18.69/lb - 3 month buyer - $18.51/lb (22.58% higher than 1/1/07). So did you notice the interesting development this morning? First, the statistics. Nickel inventories registered an overall gain of 162 tonnes with Rotterdam receiving another 246 tonnes in, and shipping 48 tonnes out, and Singapore shipped out 18 tonnes. But let's take into consideration cancelled warrants, material sold and due to leave the warehouse soon. With those figured in, LME nickel inventories actually fell from 8,828 yesterday, to 8,658 tonnes today. Inventories are still up overall for the week, but the lower nickel price is apparently stimulating some buying interest, which in turn is getting traders attention. It's a daily cycle, of buyers, sellers, producers, distributors, end-users, and traders, each trying to figure out what will happen next, and how they can come out ahead for the day. Reuters reports that Toyota has postponed the launch of its new Prius until 2009, after it decided earlier to stick with its nickel battery after the use of the new lithium-ion battery raised "safety concerns". Apparently "spontaneous combustion" was not a feature most people desired in a new car. The media is crediting more positive economic news out of the U.S. for metals climbing today. The May CPI, without energy and food, was up 0.1%, below expectations, and undermines future inflation and interest rate concerns. Nickel was down early, but turned positive in the early afternoon trading. It ended the day and week at $19.14/lb ($42,205/tonne) (Dow Jones - more) Happy Father's Day and have a safe and restful weekend! Here is a little music video as our gift to you "CandyMan" 

  Metals - Base metals come off day lows as US inflation concerns ease slightly - "Base metals came off day lows as US inflation concerns eased slightly after core prices in the world's biggest economy rose at the slowest annualised pace in five months in May." - article here

  China Preparing to Double Resource Taxes - "Central government authorities are preparing to double resource taxes covering oil, natural gas, coal and other mineral resources by changing the presently fixed tax rates to a percentage-based scheme that would take into account resource prices, a tax expert told Interfax today." - more here

  Japanese nickel scrap prices fall 30% - "Japanese nickel stainless steel scrap prices have plummeted by 30% in the last three weeks, local industry sources said on Thursday. Spot prices of nickel stainless scrap of 304 grade were quoted at Yen 370-400 ($3-3.2)/kg Thursday by scrap dealers in Tokyo and Nagoya cities, trade and stainless mill sources said." - article posted here

  Jinchuan lowers local nickel prices by Yuan 14,000/mt on June 15 - "China's largest nickel producer Jinchuan Group has lowered its domestic electrolytic nickel prices by Yuan 14,000 ($1,836)/mt, with effect from June 15, 2007, the company said Friday. This is the third time in June 2007 that the company has reduced its nickel prices. The company has lowered its nickel price by Yuan 13,000/mt, which was effected on June 9 and down Yuan 10,000/mt, which was effected on June 1, 2007." - article here

  Update - 10:30 am CST - Indications show nickel now selling in the positive by about $.20/lb .

  Update - 9:10 am - Your official prices for the day - cash $18.69/lb and 3 month at $18.51/lb. While the market appears to be jumping around this week, you couldn't tell this by official prices, which have showed little change since Tuesday. Indication show 3 month nickel selling about the same as reported earlier.

  Indications  7:50 am CST show nickel selling down by $.23/lb  (Bloomberg - more). We will update if nickel price experiences any major change.

  TD Bank Financial Group - Weekly Commodity Price Report - pdf here

  Brazil's landless peasants protest U.S. wars - (quote from article) "At the Supreme Court they demanded the 1997 privatization of Brazil's mining giant CVRD be reversed." - more here  (nothing really new here but worth mentioning)

  Nickel ‘Chicken Littles’ say the sky is falling - "The sky is falling, the sky is falling. Or so it seems to the many metallic “Chicken Littles” out there highlighting the plummeting price of nickel. The shinny grayish-white metal hit a three month low on Tuesday briefly dipping to $39,800 per tonne (US) on the London Metal Exchange (LME) for delivery in three months." - more here

  China may try to bypass exchanges and source materials directly - "China is roaming the world to source metals directly from Africa and elsewhere in order to cut out such middleman as the London Metal Exchange (LME), says Martyn Davies, director at the Centre of Chinese Studies at Stellenbosch University in South Africa. China is trying to avoid key commodity markets while it creates markets for Chinese exports." - article here

  News Bites
  • Interfax - China's industrial output up 18.1 pct in May
  • Interfax - China's base metal production up in first five months - more here
  • SteelGuru - China’s domestic steel prices decline by 3.27% in the last 3 weeks - more here
  • World Steel in Figures 2007 - report here
  • Dow Jones Newswire - "Nickel due a sharp correction in coming months due to more supplies coming forward, but demand to remain at high levels, says Goldman Sachs JB Were; LME nickel stocks rising, with prices down around 15% over past week. Says nickel fundamentals deteriorating, incentive for producers and speculators to sell growing; also notes recent change to LME nickel lending rules to allay possibility of price squeeze as bearish factor. " (comment - this is kind of like telling everyone they are going to get wet - an 'HOUR AFTER' it started raining)
  • Reuters - "Japan's Sumitomo Corp. said on Friday it has invested about 3 billion yen or C$26.6 million to acquire an 8.7 percent stake in Augusta Resource Corp., a Canadian metals exploration company."

  Argentina sets 63% dumping tax on China's stainless steel pipe imports - "Argentina has implemented an 63 percent anti-dumping duty on welded austenitic stainless steel pipe imported from China through May 2012." - more here

  South Korea to Reduce Tariff Rates ion 39 Imported Products - "South Korea said Thursday it will cut tariff rates on 39 imported goods from next month until December, a move partly aimed at stabilizing prices." - article here

  Potanin Could Be Elected to Norilsk Nickel Board, Prokhorov Not - "Vladimir Potanin, head of the Interros holding and one of the two core shareholders in MMC Norilsk Nickel, could be elected to the metals giant's board of directors." - article here

  Today's beginning nickel inventory -  plus 162 tons = 9,288 tonnes (6.78% - 630 tonnes cancelled warrants)

Thursday, June 14

  Today's official LME nickel prices - cash - $18.64/lb - 3 month buyer - $18.30/lb (21.19% higher than 1/1/07) Despite our earlier observation that one of the indicators we monitor, showed nickel moved into contango today, we can now confirm it did not. LME nickel has spent so much time in backwardation, that the two seem to define one another. Besides, it got us to sweating after that opinion we wrote last night and posted this morning, about the bull market being far from over. Contango, if it ever rears its head again, will not be good news for the bulls. Either nickel found a new floor yesterday, or it finally hit the bottom of a trampoline, because during afternoon trading today, it bounced hard and fast. We are seeing a lot of reports it was effected by US economic data. While we acknowledge we do not have the training of most professional analysts, we are of the opinion that US data means very little to the nickel market, in its current state. Besides the economic news out of the States drove the U.S. dollar higher, which is typically negative for metals. We pay a lot more attention to China when it comes to gauging the current boom in nickel. And if you missed our earlier 'opinion' on China, don't miss those pictures we linked to. They are breathtaking. India is another country we have our eye on, but they appear to be growing a little too fast for their own good, and may be in for a rude setback, before they settle down and potentially become a major driving force for nickel. Inventory gained again today, with Rotterdam receiving 162 tonnes in, and shipping 66 tonnes out. Singapore also shipped 18 tonnes. Cancelled warrants edged up slightly. 3 month nickel wavered a little at the end of the trading day, but maintained most of the days gains. It ended the day at $18.96/lb ($41,800/tonne) (Dow Jones - more)        

  ABARE - Australian Mineral Statistics - pdf here

  The Fortis Asian Metals Monthly - pdf here

  Contractors back to work at CVRD's Voisey's Bay - "Maintenance workers and ship loaders at CVRD-Inco's Voisey's Bay nickel mine in Eastern Canada began returning to work on Wednesday night after ratifying deals to end a walkout that began in April, union officials said." - article here

  Norilsk News
  • "Volume of nickel sales increased by 5 percent at Norilsk Nickel subsidiaries, or 13,000 tonnes, and reached 257,000 tonnes during the year of 2006, is said in the consolidated financial statements for the year presented by Norilsk Nickel." - article here
  • "In 2006 personnel costs increased by $198 million at the enterprises of OJSC Mining and Metallurgical Company (MMC) Norilsk Nickel, is said in the financial statements presented by the enterprise." - article here

  Sherritt International Corporation and Dynatec Corporation Announce Closing of Arrangement - "Sherritt International Corporation and Dynatec Corporation today announced the completion of the Plan of Arrangement. Pursuant to the Arrangement, Sherritt has acquired all of Dynatec's issued and outstanding common shares." - press release here

  Update 10:00 am CST Indications show nickel now up by $1.10/lb and while one of the indicators we monitor shows the market in contango, we suspect this is a technical problem, and market should still be in backwardation.  

  Update. 9:05 am CST   Indications show nickel up nearly $1/lb. We think nickel prices might have moved into contango, but we have no way of verifying this as we do not subscribe to LME live prices. Your official prices for the day are $18.64/lb for cash and $18.30/lb for 3 month.

  Indications at 7:55 am CST show nickel trading up by $.55/lb.   (Bloomberg - more) As with the last few days, if we see any major movement in the price of nickel in either direction, we will add an update. (Comment - There are probably a few out there patting themselves on the back for predicting a bubble burst in the nickel market, so we thought we would take a moment to remind our readers that, in our opinion, the bull market is not dead. Nickel may be nearly 30% off its recent peak, but we are still nearly 460% higher than we were back in June of 2003. Here are just a few facts about the leading driver behind the demand which has put such a strain on supply - "China has 450 cities with a population of at least 250,000 - compared to 68 cities in the United States with at least a quarter of a million people." - "China has over 100 cities with a population of at least 1 million people - the United States has 9" - "Half of China’s 1.3 billion people are under age 24. Over 300 million, more than the population of the US, are under the age of 14" - "Every month, China must build enough urban infrastructure to accommodate a city the size of Houston in order to absorb the 300 million rural Chinese who will move to cities in the next 15 years." - "China has more speakers of English as a second language than America has native English speakers." (more facts can be found in "China, Inc.: How the Rise of the Next Superpower Challenges America and the World," by Ted Fishman) And since a picture is worth a thousand words, we give you the Pudong District of Shanghai, which in 1990 was no more than farmland and countryside, and housing a few old broken down warehouses. To get to it from Shanghai back then, you had to take a ferryboat. Today 6 bridges and 5 tunnels connect it to the fastest growing district of Shanghai. Here is a photo of those rice paddies today (Pudong, China at night). That building on the right is currently the tallest building in China, the Jin Mao Tower, and here is a day shot from atop it (Pudong, China in the day). (Over 3,000 skyscrapers having more than 24 floors have been built since 1990. Another 3,000 are planned.) The vegetation may have thinned a bit for stainless steel producers and users, but we aren't anywhere near the edge of the woods yet.)

  Molybdenum Expert Sees Supply Shortages Ahead - "If one believes the forecasts recently made by Terry Adams of UK-based Adams Metals and Albemarle Corporation’s Chris Knight, then the escalating demand for molybdenum products could impact the stainless steel business of POSCO. The Korean-based steelmaker, with about 6.5 percent of sales coming from stainless steel, is the world’s fourth or fifth largest, depending upon production or market capitalization." - article here

  Near-Term Nickel Cash Cow Looks Remarkably Cheap - "As we have turned our sights to nickel and given the malaise in the resource sector, we have found a number of bargains do indeed still exist. One which we believe is a takeover candidate, and is extremely cheap given their stage of development and nature of their asset, is Canadian Royalties." - article here

  Indian SS demand to put pressure on world nickel market - CVRD - "Brazilian miner Companhia Vale do Rio Doce recently said that the tight nickel market could see increased pressure in the years ahead if Indian economy increases its use of the key stainless steelmaking ingredient." - article here

  Fast industrial growth ups pressure for rates hike - "An unexpected pick-up in the industrial production in May, coupled with rising inflationary pressure and enlarging foreign trade surplus, has made a case for further monetary tightening by China's central bank." - article here

  Storms take edge off mining boom's benefits - "THE full effects of the Australian mining boom have been tempered by damaging cyclones off the West Australian coast earlier this year that cost the domestic economy $1.5 billion." - article here

  The bulls are still running - "Prices for most industrial metals are well above historical levels for the second straight year. Analysts now believe supply tightness will keep prices higher for the rest of the year." - article here

  First crushing argument on the course of nickel - "It is still too early to speak about a real inversion of tendency. But the ton of nickel, which beat all the records last May, lost more 10.000 dollars in one month." - translated article here

  New Caledonia’s Goro project faces further delays, says analyst - "An Australian-based business analyst says he expects further delays and cost blow-outs for the New Caledonian Goro Nickel project." - more here   (or) Goro project remains on target for late 2008 start-up - "CVRD Inco announced today that contrary to published reports, its Goro nickel project on the French Pacific island of New Caledonia remains on schedule to begin commissioning and production in the fourth quarter of 2008." - more here

  European steelmakers raise stainless alloy surcharge for July - "Main European stainless steel markers have increased alloy surcharges on austenitic stainless steel for July deliveries." - article here

  Ramu landowners raises concerns- "Landowners of the Ramu nickel project are claiming that they are being sidelined by the Chinese mine developer and are being made to look like spectators in their own land." - article here

  Norilsk Nickel Dudinka Port Begins Ops Early On Warm Weather - "Norilsk Nickel's (NILSY) only export outlet, the port of Dudinka, has begun receiving ships, about ten days earlier than normal, due to an unusually warm spring, and the first metal-carrying vessel will sail from the port before the end of June, the port authority confirmed Thursday." - article here

  Baltic Dry Bulk Index continues to slide. From a record high of 6,688 on May 16, the index is at 5,407, after a 131 point drop on Wednesday. The BDI is a barometer of the volume of global trade, and is used by many traders. (Article - Why you should care about the Baltic Dry Index here)

  Mining of certain resources to be banned in Tibet - "Amidst the recent heated debate on environmental and energy conservation, the local government of Tibet Autonomous Region (TAR) has decided to ban gold, mercury, arsenic and peat mining in order to make a greener contribution." - article here

  Today's beginning nickel inventory -  plus 78 tons = 9,126 tonnes (5.13% - 468 tonnes cancelled warrants)

Wednesday, June 13

  Today's official LME nickel closing prices - cash - $18.60/lb - 3 month buyer - $18.30/lb (21.29% higher than 1/1/07). Nickel appears to be attempting to establish a floor around the 40,000/tonne mark, as it spent its second day playing hit and miss with that figure. Nickel stored in LME warehouses continue to gain, while cancelled warrants retract. Today's report shows Rotterdam received 132 tonnes of nickel, and shipped out 78 tonnes, while Chicago checked in 78 tonnes, and Singapore shipped out 6. We could see more movement outbound if the price of nickel stabilizes, although the question of what is inbound remains a big question mark, and one that will continue to effect the future trading price. Today, 3 month nickel trading calmed down from yesterday and ended the day at $18.08/lb ($39,850/tonne). (Dow Jones - more)   

  Metals - Nickel comes back as stocks rally; other base metals continue lower - "Nickel came back from the sharp losses of recent days, albeit in modest fashion, as wider sentiment staged a tentative recovery ahead of an expected higher opening on Wall Street." - article here (by the time this was published, nickel had retraced its steps)

  Norilsk Nickel board OKs buying Canada's LionOre for $7 bln - "The board of directors of Russia's largest metals producer Norilsk Nickel has approved buying 100% in Canadian mining company LionOre Mining International Ltd. for U.S. $7 billion, the Russian company said Wednesday." - article here

  New Task for Shuttle Astronauts: Sewing - "The thermal blankets are used to protect the shuttle from searing heat during entry, and one part of a blanket that peeled away from the shuttle is in need of repair. Engineers have looked at using duct tape or other adhesives to secure the blanket, but are leaning toward a method which would use stainless steel wire as thread." - article here

  Team Stainless announced the release of 3 free brochures today
  • Book of New Applications 2007 -  "ISSF has published its second reference to new stainless steel applications. The Book of New Applications contains more than 60 applications from around the world. Sectors such as building and construction, industrial machinery and transport are covered." - here
  • The Ferritic Solution: The essential guide to ferritic stainless steels - "The Ferritic Solution provides an overview of the properties of ferritic stainless steels, the advantages of using them and the applications where they can be used. The Ferritic Solution is a crucial reference document for stainless steel users, specifiers and producers." - here
  • Annual Review 2007 - "ISSF’s Annual Review contains an overview of the work of the Forum in the past year" - here

  Update 9:00 am CST - After we posted this morning, 3 month nickel slumped in its second ring and AM kerb trading into negative territory. Indications show now selling down around $.12/lb. Next trade in about 25 minutes. We will update if any movement is substantial. Your official prices for the day are $18.60/lb for cash and $18.30/lb for 3 month buyer.

  Indications at 7:50 am CST show nickel selling up by $.26/lb .  If you were a buyer responsible for purchasing nickel, and needed to buy 10,000 tonnes to fill the requirements of an upcoming stainless steel production order, when would you place the order and lock in your cost? Had you placed the order last Wednesday, you would have paid nearly half a million dollars (around $485,000). Yesterday, that same order would have cost you about $412,000. If you chose to gamble and hold off one more day, what will your cost be today? Tomorrow? Next week? This is the predicament facing buyers of nickel around the world. And the inevitable, albeit temporary, effect on demand? It is a cycle that is predictable, brought about by an unpredictability in the market.

  Nickel Trades Near 3-Month Low as Use Slows; Copper, Zinc Fall - "Nickel traded close to a three month-low low in London on speculation swelling stockpiles are a signal demand from stainless-steel producers is slowing. Copper and zinc also dropped." - article here

  Nickel Faces Reality Of Substitution, Demand Erosion - "What goes up must come down. And after a stellar start to 2007, nickel prices are on their way down, facing the harsh consequences of consumers opting away from the expensive material toward cheaper alternatives." - article here

  Metals - Nickel extends losses as prices fall through key technical levels - "Nickel led the base metals complex lower for a second day, dipping below 40,000 usd in early trade, as a breach of key technical levels triggered the liquidation of long positions and as fundamentals remained weak." - article here

  Behre Dolbear Global Mining News - pdf here

  Service workers reach deal at CVRD's Voisey's Bay - "Striking support-services workers at CVRD-Inco's Voisey's Bay nickel mine in Labrador have reached a tentative agreement with their two companies to end a walkout that began in April, the union representing the workers said on Tuesday." - article here

  POSCO maintains stainless steel prices; nickel eyed - "South Korea's POSCO will keep stainless steel prices steady even though prices of nickel, a key element in the alloy, have recently tumbled after the London Metal Exchange's intervention, officials said on Wednesday." - article here

  Philippines' Berong on track for 07 shipment goal - "The Philippines' Berong nickel mine, whose inferred resource is said to be the world's fourth biggest, has shipped nickel to China equivalent to almost 40 percent of its 2007 export goal of 920,000 tonnes." - article here

  New Caledonia’s Goro Nickel builds pipeline around around activists’ base - "New Caledonia’s Goro Nickel company says opposition from a local group and environmental reasons are behind its plan to build an alternative waste pipeline." - more here

  More miners list on Middle East exchange - "AUSTRALIA'S presence on the Dubai International Finance Exchange is growing, with West Australian gold exploration minnow Monarch Gold Mining joining Queensland's Citigold on the exchange. And there are plans for four more Australian companies to list there." - more here

  Today's beginning nickel inventory -  plus 126 tons = 9,048 tonnes (4.05% - 366 tonnes cancelled warrants)

Tuesday, June 12

  Today's official LME nickel closing prices - (many readers are used to this being at the top, so we will repeat the entry from earlier update) - cash - $18.69/lb - 3 month buyer - $18.42/lb (21.99% higher than 1/1/07). First let us state emphatically we are not conspiracy theorists. Having said that, we suddenly find ourselves feeling a little like Dorothy in the movie 'Wizard of Oz', discovering that the fire burning figure before us, is really a facade, being manipulated by a little white haired man behind a curtain. We hope there is a credited investigative journalist out there, with the proper background, and whom does't have the history of seeing a wolf behind every tree, who is looking into this sudden LME rule change and the price plunge that it seems to have caused.  We hope nothing sinister comes out of any investigation, but the coincidence is troubling. And if the market was being manipulated, we would be happy to offer the services of millions of stainless steel users, who would be willing to tie the noose for the culprits. Three month nickel spent much of the day skirting around the $40,000/tonne mark, with backwardation with the cash price running around 3%. Changes in LME inventory overnight were limited to activity in Rotterdam, where 132 tonnes arrived and 90 tonnes shipped out, while cancelled warrants continue to slide. For stainless steel users, the slide in the price of nickel has offered a cool breeze on a hot, summer day. It has brought some minor relief, but the summer remains in a heat wave, and the market appears to be well entrenched in a bull market. We would have to see prices tumble much further than they have, before we could acknowledge any bubble might have burst. The overall supply/demand picture remains tight, and any significant disruption could turn market sympathy on a dime. Today's 3 month nickel price ended at $18.16/lb ($40,050/tonne) (Dow Jones - more)      

  Metals - Nickel plunges on rising stocks, dip in steel manufacturing activity - "Nickel plunged below 40,000 usd for the first time since early March, struck down by rising LME stocks and amid a dip in activity from the stainless steel sector." - article here

  Norilsk Nickel and Polyus Gold on speculation’s razor’s edge in Moscow - "The Russian market is taking contrary views on stock pricing for Norilsk Nickel and Polyus Gold, despite their being connected at the hip." - article here  (interesting info on an otherwise difficult company to get info on)

  (comment - not affecting nickel but humorous coincidence) June 11 Strikes at all-time lows - "Days lost to labour unrest hits lowest level since data kept in 1977" - June 12 - Xstrata Montreal refinery workers strike - "More than 400 unionised workers at Xstrata Plc's CCR copper refinery in Montreal are on strike after talks with the company broke off, company and union officials said on Monday." - story 1 here story 2 here

  Update - 9:00 am  CST - while the media is reporting the price of nickel slumped to $40,000/tonne this morning, by the time North America started the business day, indications show the 3 month price had positioned itself over that mark. We are going to go ahead and give you today's official LME nickel closing prices, as we can tell by an unusually high number of visitors today, there is much interest /concern out there - cash -$18.69/lb and 3 month $18.42/lb. Next trade for nickel - in 25 minutes. We will update you at 10:00 am CST "if" the price shows a major change in either direction. 

  Indications  at 7:55 am CST show nickel selling down by $1.15/lb . This is starting to take on a striking resemblance to nickel price collapses of years gone by, when everything, including the baby, was thrown out with the bathwater. Analysts are giving multiple reasons behind this sudden exodus, but we have to observe, behind all the reasons, which aren't much different than they were a few weeks ago, the one catalyst to this whole major shift downward, was the LME rule change. Are we the only ones starting to  think there is a lot more to this story than we were told? (Bloomberg - more)

  • Nickel Declines to Three-Month Low on Signs of Slowing Demand - "Nickel fell to the lowest in more three months in London on signs that demand for the metal used in stainless steel probably slowed while supply increased." - article here  
  • LME Nickel Hits 3-Mo Low Of $40,000/Ton As Inventory Rises - "London Metal Exchange nickel fell to a three-month low of $40,000 a metric ton Tuesday on technical selling and long liquidation as nickel inventories rose, said market participants." - part 1 part 2 part 3  
  • Nickel drops some 5 percent, copper down on China - "Nickel dropped by over five percent on Tuesday and copper shed more than one percent as Chinese imports fell in May, analysts said" - article here

  Haywood Securities Metals & Mining Weekly - pdf here

  Scotia Mocatta - Metal Matters - pdf here

  Hanson Westhouse - News & Views - pdf here

  China exports 6.17 million tonnes of steel in May 2007 - "As per latest report from China’s ministry of commerce China exported 6.17 million tonnes of steel products in May 2007, which is less by 0.99 million tonnes from all time high exports in April 2007. But the exports of billet & slab in May 2007 stood at 0.97 million tonne up by 0.1 million tonnes as compared to April levels. Some expert attributed export decline to 7 days Labor Day Holiday in May." - article here

  Scotia Capital in the Daily Edge today - "Reflecting the price-induced weakening outlook for nickel-consuming stainless steel and the aggressive expansion of Chia's Nickel Pig Iron  Industry, we are lowering our nickel  price forecast for the first time since late-2005. to $12.75/lb in 2008, from $13.75/lb." (comment - Scotia publishes two nickel forecasts - the one they call Nickel "Fundamental" Price Forecast for 2007 is $10.45/lb. Their "Fund Driven" Price Forecast for 2007 is $18.16/lb.)

  CEO Abbott reiterates that London Metal Exchange is not for sale - "The London Metal Exchange is still not for sale, the exchange's CEO Martin Abbott said Tuesday." - article here 

  Canadian investor bullish on Raul Castro's Cuba - "Cuba's largest foreign investor, Sherritt International Corp. (S.TO: Quote), sees business running smoothly under acting President Raul Castro and will push ahead with a $1.2 billion expansion in nickel mining, and oil and electricity production." - article here

  Mining Mergers, Acquisitions to Accelerate, UBS Says - "Mining-company mergers and acquisitions will probably accelerate because of a shortage of ``high-quality, long-life, low-operating cost'' operations, according to UBS AG, Europe's biggest bank by assets." - article here

  Czech tycoon Kellner invests in nickel mining in Kazakhstan - "Czech entrepreneur Petr Kellner has invested more than Kc1.4bn in London-based company Oriel Resources whose main business activity is nickel and chromium mining in Kazakhstan and operation of smelting furnaces in Russia, daily Mlada fronta Dnes reported today." - more here

  Mincor Resources Approves A$28 Million Australian Nickel Mine - "Mincor Resources NL, Australia's fourth-largest nickel producer, approved development of the A$28 million ($24 million) Carnilya Hill nickel mine in Western Australia amid record prices for the metal." - article here

  Blast from the Past - "The LME nickel market remains the preserve of a handful of hedge funds with the occasional skirmish from the CTA types and prop traders at the Ring Dealing Member level. Industrial users for whom the contract was initially designed for are far and few between. Consequently, with a limited number of serious players involved the term "liquid" is not one that can be easily applied to the LME nickel market." from Base Metals Outlook Calyon Financial Maqsood Ahmed, 2 June 2005. (source)

  Today's beginning nickel inventory -  plus 42 tons = 8,922 tonnes (4.98% - 444 tonnes cancelled warrants)

Monday, June 11

  Today's official LME nickel closing prices - cash - $20.01/lb - 3 month buyer - $19.53/lb (29.34% higher than 1/1/07). Has the bear come to stay, or just letting us know he is out there? That is the question on a lot of minds, as the correction that began in May, continues to drag nickel prices lower. Nickel ended in the plus today, but not by very much. The 3 month trading price struggled throughout the day, and we provide a link to a short video that might tell the story better than we can (video here). After a weekend to think about what happened last week, and more time to analyze the rule change, investors ended trading 3 month nickel today at $19.28/lb ($42,500/tonne) (Dow Jones - here)

  Metals Insider - LME stamps on nickel squeeze, correction accelerates - report here (quote about last week's LME rule change - "Was this a sign that the exchange suspected some form of collusion between dominant longs? Many thought so, even if only one—John Kemp, analyst at Sempra—went on the record to say so. In truth, there were no clues in the wording of the LME’s notice as to what it suspected was going on. But the special committee, which gets to see a raft of trading information not available to the rest of us, obviously saw something it didn’t like and decided to bring it to an end.")

  CVRD says to double nickel output in 5 years - "Brazilian miner Companhia Vale do Rio Doce will double nickel production to 500,000 tonnes in the next 4-5 years, executive director Jose Carlos Martins said on Monday. " - article here

  News from China
  • Nonferrous metal prices will continue to rise - "Australia's commodity Bank Executive Director, Managing Director Jim farmers out : non-ferrous metal prices will continue to rise" - poorly translated here
  • Nearly 100 enterprises "misappropriation" patent laterite nickel mine development companies determined to safeguard their rights - "In the global nickel ore resources becoming less urgent situation, a breakthrough in low-grade nickel oxide ore comprehensive development and utilization of technological bottlenecks advent of the patent, is expected to break the international price of nickel rising year after year." - poorly translated here (worth watching as pig nickel production is having an effect on prices, in our opinion)

Delayed Shipping Vessel To Leave Voisey Bay Monday - "A shipping vessel of nickel concentrate that was delayed by sea ice is expected to leave the Voisey Bay Nickel Co.'s port Monday, according to Bob Carter, the company's manager of public affairs." - article here

S African miners unlikely to join sympathy strike - "South Africa’s biggest mine workers union said on Monday most of its members would probably not be able to join a sympathy strike planned for Wednesday in support of striking civil servants." - article here  (comment - if they do, watch ferrochrome prices go up)

  Indications at 7:55 am CST show nickel selling up by $.19/lb . Lot of nickel movement in the LME warehouses Friday. Rotterdam received 120 tonnes, while it shipped out 12 tonnes. Gothenburg shipped out 18 tonnes, Busan shipped another 48, and Baltimore shipped 18. Net gain of 24 tonnes, plus on paper, 67 more tonnes due to lower cancelled warrants figures than Friday. While trading shows up, nickel is having a very hard time of it this morning. (Bloomberg - more) (Financial Times - more) (AFX News - more)

  Fortis Metals Monthly - June 2007 - pdf here

  Of 23 Chinese metals analysts who responded to the weekly poll published by Shanghai NonFerrous Metals, 7 (30%) felt nickel prices would rise this week, with the other 16 (70%) forecasting prices to stay the same. None of those responding felt nickel would fall further this week.

  Iron ore prices likely to fall - Merrill Lynch - "Reuters reported that Merrill Lynch World Mining Fund forecast that that iron ore prices are likely to fall but companies mining gold, platinum and uranium offer good value." - article here

  China news

  • Sluggish stainless steel market in China last week - "The stainless steel market seems to be continuing sluggish in China due to the sharp fall of nickel future price on the LME last week, closing at US$42,900/MT last Thursday." - more here
  • China’s stainless producers may cut production in June - "Many Chinese stainless steel mills are considering to reduce production in June due to slow-moving demand." - more here
  • Stainless steel scrap market to slow - "Nickel price on the LME began to fall last week and this downward situation remains this week, therefore many suppliers are starting to offer lower price of stainless steel scrap." - more here
  • China's iron ore output grows rapidly - "China's iron ore market has presented two trends at present: 1. Growth of iron ore import has dropped to a 4-year low; 2. Sharp increase in home-produced iron ore has curbed price hike of iron ore to certain extent." - more here
  • Four hidden problems with high-speed growth of China's steel industry - "China's crude steel output exceeded 150 million tons in the first four months of this year, up over 20 percent year on year." - article here

  Nickel Shipments At Esperance Remain On Schedule - Port - "Nickel concentrate shipments through the Port of Esperance in Western Australia remain on schedule, with the next shipment expected June 22, the Port of Esperance authority said Monday." - more here

  Today's beginning nickel inventory -  plus 24 tons = 8,880 tonnes (5.46% - 485 tonnes cancelled warrants)

Saturday, Sunday June 9 & 10 (updated throughout weekend)

  Statistics from April 07 - US imported 31,948,899 kilograms of nickel, down 34.5% from April 2006. Of the sources, Canada was the largest, supplying the US with 53.5% of the total. This was followed by Russia at 18.2%, Australia at 12.4%, and Norway with 12.2%. 9 other countries supplied the balance.    

  Gilbo's bid not fair but is reasonable - "A LONG-awaited independent expert's report has found former BHP Billiton chief executive Brian Gilbertson's $625 million bid for Perth miner Consolidated Minerals isn't fair - but it is reasonable." - article here

  Making things green in Sudbury for the past 30 years; Accent: Reclaiming land - "Almost 80 years later, stark remnants of the Nickel Capital's early mining practices still abound." - article here

  Norilsk to invest in $2 bln Chita rail link - "Russian metals giant Norilsk Nickel will invest hundreds of millions of dollars in building a railway link in the Chita region near the Chinese border, it said on Saturday" - article here

  Week in Review - (we use a different source for week in review than we do for daily updates)  Nickel prices took a beating this week, and while there was an air of pessimism in the base metals market as a whole, nickel's performance could be blamed primarily on two factors. First, a gradual increase in nickel inventory, which have nearly doubled in a month, is the most obvious barometer traders have for getting an idea of the worldwide supply/demand picture. Supply is growing, whether because of substitution, seasonal slowdown in demand, or the increased use of pig nickel ore. Secondly, this week traders got a surprise, that took them offguard, and sent many scampering for cover. In what one analyst termed, a move to stop collusive trading, the London Metal Exchange dropped a depth charge on Thursday, when it suddenly announced a change to its long established trading rules, and the market dove for cover. More knowledgeable individual's than us will have to analyze the why's and what for's of this situation, after the dust has settled, but it is our gut feeling that this action wasn't taken to stop anything illegal, rather a move to stop 'a few determining the course of the future, for the many'. The sudden dip in prices, was probably more of a reaction to the surprise of the announcement, rather than the change itself. Market traders don't like surprises, unless they come in an envelope with a dollar sign, followed by a lot of zero's. We expect the shock value to have worn off by Monday, and that days trading could give us a better idea of the long-term market reaction to the change. Markets opened on Monday at $21.38/lb, rose to $21.93/lb, saw a low of $21.36/lb, and ended at $21.70/lb. On Tuesday, trading began at $21.2/lb, rose to $21.77/lb, fell as low as $20.89/lb, and ended at $21.07/lb. Wednesday, the markets opened at $21.05/lb, saw a high of $21.11/lb, a low of $20.57/lb, and ended the day at $20.80/lb. Markets were in the red for the week, before Dread Thursday opened. The announcement was made by the London Metal Exchange before it opened for trading on Thursday, and the reaction was swift. Markets opened at $20.74/lb, also the high for the day, fell as low as $19.44/lb, and ended at $19.72/lb. Friday's trading did not show much of a difference. Markets opened at $19.73/lb, once again the high for the day, fell to a low of $19.12/lb, and ended the day and week at $19.28/lb. After last week's ho-hum performance, this week nickel fell by 11-1/2% from last Friday's ending price. Using the official closing prices of nickel for yesterday, compared to last Friday, the percentage drop was even more than we show. So is this the beginning of the end for the nickel bull market? Not hardly, and yes we are breaking our own rules and making a prediction. If the price of nickel was to collapse and average $9.88/lb this month, then the average price of nickel for April thru June would be basically the same as it was for January thru March. And that just isn't going to happen. Is the correction over? Maybe, maybe not....we will all have to wait and see. If there was something hinky going on at the LME, then obviously we are going to see prices continue south. If there wasn't, then we expect some stability and bargain hunting to take place next week.

This LME rule change may turn out to be nothing more than a bunch of guys who have been playing at a card table for hours, suddenly being asked by the house, to play with their jackets off and their sleeve's rolled up, to ensure there is no question later of cheating. For the honest players at the table, this totally disrupts their comfort level, and could potentially force them to play conservative for awhile, until they feel back in the groove. And if there were any cheats, their strategy for winning was just destroyed, and they will stumble while they determine a new path.

  There's trickery in base metals game - "Anyone who spends a few minutes chatting with David Threlkeld will come away convinced that the overheated commodities market — or at least the base metals chunk of it — is about to blow up and that any investors who stick around are about to lose their shirts." - article here

  National Mining Association Mining Weekly - pdf here

  AISI Monthly Steel Statistics - pdf here

  ISM Steel Buyers Forum Monthly Survey - pdf here

  News Bites

  • (comment - regardless of the lack of press it is getting in the US, it hasn't gone away. Indonesia, a major source of nickel, has already had 79 human fatalities this year) Australia - The Sunday Mail - "The deadly H5N1 strain of bird flu is mutating unpredictably and at a rapid pace, a senior WHO official has warned Asia Pacific health ministers. APEC health ministers have wrapped their two-day Sydney meeting with a pledge to address the "very real" threat of a global pandemic of bird flu or human influenza. The commitment came after a World Health Organisation (WHO) presentation urging vigilance in the face of unpredictable changes in the H5N1 virus, which poses the biggest current threat."

  Nickel Institute President Stephen Barnett delivered the keynote address to the 4th Annual China Nickel 2007 Conference in Shanghai, China. In his presentation, he outlined China's position in the world nickel market; the relative importance of the various end use markets for nickel; the growing importance of recycled nickel; and the geographic distribution of world nickel production. - presentation here

  Dynatec Shareholders Approve Plan of Arrangement With Sherritt - "Sherritt International Corporation announced today that shareholders of Dynatec Corporation have approved a Plan of Arrangement whereby Sherritt will acquire all of Dynatec's issued and outstanding common shares. The Arrangement was approved by approximately 99% of the votes cast by Shareholders present in person or represented by proxy at the special meeting called to consider the Arrangement." - article here

 This is a year old - We occasionally poke fun at those who have the dubious honor of forecasting prior collapses in the nickel market. The ones that never materialized. And we ourselves have ventured a guess or two, that have proved less than correct. (Although we will be doing a review on something we said in April in a couple of weeks) To be fair to those we quote, no one foresaw the extreme upward curve that nickel prices took over the last year. And while he doesn't give price  forecasts, and nickel was already well into a bull market when he did this interview, Jim Rogers told investors to get in on July 2, 2006, just weeks before nickel went from a bull run, to a bull stampede - Jim Rogers: "It's time to ride the next bull" -  2006 interview here. (while we respectfully disagree with Mr Rogers on the forecasted length of this bull run, we must give credit were it's due)  

  On October 20, 1944, an Liquefied Natural Gas tank exploded in Cleveland, Ohio, killing 128 people, injuring 225 more, and left 680 homeless. The incident was traced to improper tank construction because of a wartime shortages of nickel. (more)

  (comment - Are you one of those who suffer from nickel skin allergies? Tired of scratching? Well roll yourself a little Cannabis Sativa, and feel the itch disappear. Yes friends, we are talking doobie, joint, leaf, pot, reefer, buds, kiff, weed, vipe, Yen pop, thc, Mexican ditch weed, or just plain old marijuana. But be careful. In the US and elsewhere, the procurement and or smoking of ganja, is still illegal.) Chemical in marijuana can treat skin allergies: Study - "The chemicals that give marijuana its mood-altering kick might also be an option for treating skin allergies, according to a latest study." - article here  (excuse me officer, but I noticed you have a bad rash on your chin. Might I suggest "Mary Jane's Magical Scratch Relief"? Not only will you not itch, but you won't be able to feel your face for while)

  (comment - people have been cussing nickel for nearly 500 years, so you can just get in line) "Saxon miners attributed their inability to extract copper from reddish-coloured ore to the work of the devil and named the ore Kupfernickel. Originally it was a term of abuse used by the miners in the Erzgebirge (Ore Mountains), who searching for silver found this "inferior" metal. The word is derived from Kupfer standing for Copper and Nickel standing for demon, goblin, rascal (a pet form of the name Nikolaus (Nicholas), hence Old Nick "the devil"). Thus kupfernickel - Latinized as Cuprum Nicolai - can be translated as "old Nick's Copper" (or "Devil's Copper"). The word was used in the miners in Upper Saxony, as is indicated by an entry dated 1654 in a miner's register of Schneeberg, Saxony. The word is first found in a printed book in 1694, in a work describing useless ores and minerals." more and source - Elementymology & Elements Multidict by Peter van der Krogt

Friday, June 8

  Today's official LME nickel closing prices - cash - $19.84/lb - 3 month buyer - $19.23/lb (27.35% higher than 1/107). Another very healthy gain in LME nickel stocks recorded overnight. Busan, South Korea received 144 tonnes, while Rotterdam received 132 tonnes and shipped 24 tonnes. Net gain of 276 tonnes on the day, 942 tonnes so far this month, and almost double what it was just one month ago. Obviously our Norilsk theory may have played a part, but does not explain the overall influx. Had one reader who felt LionOre may be selling some nickel it was storing, to pay for some of the breakup fee they owed Xstrata. Who knows for sure? US imports of nickel, reported today, were well off 2006 figures, while China imports, over the same period, show continued growth. Today's official closing prices were the lowest since early March. And while PM kerb trading brought a halt to the decline and an attempt to recover, 3 month nickel ended the day and week at $19.19/lb ($42,300/tonne) (Dow Jones - more) If interested, you can watch tonight's 7:38 pm EST launch of the Space Shuttle here  Have a wonderful weekend and we will see you on Monday.    

  (LME steals Nickel in Broad Daylight! - by Jason Hommel here) This article, from yesterday, seems to have raised quite a bit of discussion in some of the investor forums. While we take issue with Mr Hommel's general concept that this LME rule change is a conspiracy against those who buy nickel, we will mention something about the usage of nickel in regards to the increased sales of the Toyota Prius. According to one source, the Prius uses 22 extra pounds of nickel per auto. With their recent announcement that they had sold 1,000,000 cars since 1997, that works out to an additional 10,000 tonnes of nickel that has been used - since 1997. Their is little doubt that the auto industry is experiencing a shift, and the usage of nickel will increase, but there are better examples of the increased demand for nickel. For more on why the LME made the change, read this article from the Financial Times - here or the Globe and Mail here

  China's Nonferrous Metal Trade Deficit Rose 136% in Jan-Apr - "China's deficit from nonferrous metal trading kept enlarging in the first four months of 2007, up to USD 10.577 billion, which is USD 6.088 billion or 135.62% more than that at the same period of 2006." - article here  
  • China Saw Nickel Import and Zinc Export Hike in Jan-Apr - "China imported 39,200 tons of unwrought nickel and 3.8494 million tons of nickel ore from January to April, hiking 21.9% and ten times on 2006 respectively, with the export of unwrought nickel growing 19.1% to 7,900 tons." - article here

  US April nickel exports up10.5% from March, down 24.9% from a year ago. US April nickel imports down 1% from March, and down 34.5% from year ago.

  GFMS Metals Consulting - Market Analysis Nickel - here

  ASA Materials Market Digest - pdf here

  Institute of Scrap Recycling Industries, Inc Market report - pdf here

  Philippines: Mining for the people, not for profit! - "We are rallying before the 7th Asia-Pacific Mining Conference and the Asean Federation of Mining Associations (AFMA) because we wish to protect our country, as well as other struggling countries throughout the Asia Pacific region, from the environmental tsunami brought about by foreign mining giants." - article here

  Indications show nickel continuing its slide, down $.36/lb so far today.  (Bloomberg - more) (Financial Times - more)

  TD Bank - Weekly Commodity Price Report - pdf here

  (comment - well we know at least one mining company that reads us) Voisey's Bay set to resume nickel shipments - CVRD - "Voisey's Bay nickel mine should begin shipping concentrates within a week after a bulk cargo ship that had been trapped in ice broke free, a company spokesman said on Thursday." - article here

  Rio Tinto expecting breakthrough on Sulawesi nickel venture - Global miner Rio Tinto PLC is edging closer to building a multi-billion dollar nickel venture in Indonesia, and fiscal terms on the Sulawesi project may be settled in the next few months, a company senior executive said Thursday." - article here

  Skye Resources receives environmental permits for Fenix Project - "Skye Resources Inc. ("Skye") announces that its Guatemalan subsidiary, Compania Guatemalteca de Niquel, S.A. (CGN), has received formal written approvals from the Guatemalan Ministry of Environment and Natural Resources (MARN) for the four component environmental impact assessments (EIAs) relating to the processing plant and related activities at its Fenix ferro-nickel project. Approval of the EIA for mining activities was received from MARN in January 2006." - article here

  Scrap consumption reached a record high - Volumes of scrap consumption registered in May turned out to be the highest for the past four years. - article with chart here

  Cogne intends to expand Chinese stainless CR output - "Cogne Acciai Speciali, Italian stainless steel long products mill, is planning to double its cold rolling output at its stainless steel plant in Changan, China by 2009." - article here

  Bell Potter Tips A Chinese Bid For BHP Billiton - "Who isn't going to takeover BHP Billiton (BHP)? As consolidation in the big end of the mining sector has continued to gain attention, particularly since Alcoa has bid for Alcan and Xstrata has tried and failed to take LionOre, analysts have been madly crunching the numbers and suggesting that anyone of the likes of Xstrata, Anglo American, CVRD or even Rio Tinto (RIO) could be perfectly capable of snaring the Big Australian. (Well...Big Aussie-Anglo thingy). Merrill Lynch has even gone as far as to suggest private equity is not beyond the realms." - article here

  Rostekhnadzor urges Norilsk Nickel to take tougher environmental - "Russian technical standards watchdog Rostekhnadzor has called on MMC Norilsk Nickel to take stricter measures to protect the environment, Rostekhnadzor chief Konstantin Pulikovsky said at the State Duma on Wednesday." - article here

  China Minmetals nears US$500m nickel JV deal in Cuba - "Author: dai China Minmetals Corp, the country's biggest base metals trader, is set to finalize a US$500 million nickel mining and smelting joint venture (JV) project in Cuba this year, said an official from the Chinese firm." - article here

  Norilsk Nickel profits rise 154 percent in 2006 - "The net profits of Russian mining giant Norilsk Nickel, the biggest nickel producer in the world, increased by 154 percent in 2006 to 5.97 billion dollars (4.46 billion euros), the company said on Friday." - article here

  Today's beginning nickel inventory -  plus 252 tons = 8,856 tonnes (6.20% - 552 tonnes cancelled warrants)

Thursday, June 7

  Today's official LME nickel closing prices  - cash - $20.10/lb - 3 month buyer - $19.78/lb (31% higher than 1/1/07). Well we said a few weeks ago, we would put on the dancing shoes at $20/lb. Not sure why, we are still well over the price we started this year at. Some might say the market just had a knee jerk reaction to an unexpected change in the trading rules. A conspiracy theorist might say this abrupt turn of events was timed suspiciously. After all, the head of the London Metal Exchange told a Dow Jones reporter last night that fundamentals, not trading policies or fund speculation, were to blame for higher prices, and oh, by the way, we are changing the rules tomorrow. We will let others pursue that line, if they so desire, as we find it more amusing than shady. Xstrata got a free gift for losing LionOre to Norilsk today, a $305 million(Canadian) break up fee. Kind of like being penalized for never showing up at the altar, instead of waiting for the divorce to cash out. Inventories registered another gain last night, with Rotterdam gaining 66 tonnes, and Singapore gaining 156 tonnes, and shipping 24 tonnes out. Supply is up, and demand appears to be falling, which is adding pressure on nickel. Europe has entered its slow period for stainless steel production, when workers, depending on the country, take off weeks to a month at a time. So is the decline in demand seasonably cyclical, or is pig iron or substitution making a quantified dent? We would guess it's a little of all three. In the mean time, we stainless steel sellers and consumers, will just act like we do at the gas pump, when prices drop a dime overnight, after a quarter increase the week before - slightly relieved, yet still very frustrated. Today, 3 month nickel prices ended the day at $19.44/lb ($42,850/tonne)  (Dow Jones - more) Tune in again tomorrow.   

  Nickel still a sterling bet but it will lose its shine - "On May 31, African-focused junior nickel hopeful Albidon revealed it had hedged 9020 tonnes of future nickel production between 2009 and 2013 for an average price of $US10.71 a pound." - article here

  Nickel falls after LME changes rules - "Nickel fell around five percent on Thursday after the London Metal Exchange changed lending rules to free up more metal, analysts said." - article here  Official notice here

  China's Nonferrous Metals Trade Deficit Reaches $10.58B in First Four Months - "China's nonferrous metals trade deficit amounted to $10.577 billion in the first four months this year, surging 135.62% from the same period last year, according to a National Development and Reform Commission (NDRC) announcement yesterday." - article here

  Rusina eyes $500 mln spending in Philippine mine - "Australia's Rusina Mining Ltd. said on Thursday it plans to spend around $500 million in four years to develop a nickel mine north of the Philippine capital after the project's feasibility study is concluded in at least two years." - more here

  Jindals eye mining assets abroad - "Jindal Stainless Ltd is scouting for ferro alloy mining assets abroad. The move follows the company’s plans to expand its capacity in India by three times in the future." - article here

  China may want BHP - "BHP Billiton could be in the sights of a new $237 billion Chinese state-owned investment fund, according to Bell Potter research chief Peter Quinton." - article here

  Update - (comment - price indications show nickel still hovering around $20/lb mark - next trade for nickel at 10:05 am CST. Backwardation nearly gone - less than 1% difference between cash and 3 month now)
  • Metals - Base metals weaken across the board as nickel price dips to 10-wk low - "Base metals weakened across the board in early afternoon trade, weighed down by nickel prices, which dropped to a 10-week low following the LME's implementation of new trading rules that will effectively make more metal available to the market." - article here
  • LME Nickel Falls To 2-Mo Low; Chance For Good Buys -Analysts - "London Metal Exchange nickel dropped to a two-month low on short and technical-related selling Thursday triggered by the LME's change in nickel lending rules, but the lower price levels should be seen as a good buying opportunity, said market analysts and participants." - article here

  Indications at 7:50 am CST show cash nickel selling down by $1.49/lb   - yes, you are reading that right. Nickel prices took a serious beating this morning, and we almost wonder if panic selling didn't feed off itself. At this moment, it appears cash is hovering just over the $20/lb mark and 3 month has slipped under $20/lb. Stay tuned - we still have afternoon trading left to go. If we see any dramatic changes happen before our 1 pm update, we will post updates throughout the morning (Bloomberg - more)

  News Bites - Dow Jones -

  • "Berong Nickel Corp's exports of wet nickel laterite since the start of the year have reached 350,000 metric tonnes, a company executive said.(more)"
  • "BHP Billiton Ltd. (BHP), the world's largest mining company, is exploring for nickel deposits in four areas in the Philippines on top of its previously announced exploration activity in the country, a company official said Thursday."
  • "MMC Norilsk Nickel, the world's biggest producer of nickel and palladium, plans to bring four mining and concentrating plants on stream in the Chita region between 2009 and 2015, a source on the regional industrial and natural resources committee told Interfax."
  • "Imports of nonferrous metals in China jumped 76 percent year-on-year in the first four months of 2007, according to the nation's top economic planning agency." -  "32% of Turkey’s exports in the first five months of 2007 were made by members of the General Secretariat of the Istanbul Mineral and Metals Exporters’ Association."
  • "The French government has no intention of selling its stake in nickel and manganese mining firm Eramet (13175.FR), weekly magazine Challenges reported Wednesday."
  • "MBMI Resources Inc. is pleased to advise that it’s subsidiary company, Narra Nickel which owns the Alpha nickel project in Palawan Philippines is advancing rapidly toward first shipments of raw nickel products from its project. The first shipment is anticipated within 30 days subject to weather conditions."
  • "More countries have joined Australia in warning their citizens of travels to Papua New Guinea because of the law and order problems here. The governments of New Zealand, United States and Canada have all warned their citizens of the rising crime and election-related violence in PNG."
  • "Chinese stocks formed a clear upward trend today. The Shanghai Composite Index surged 114.49 points or 3.03 percent to 3,890.80 by the closing of the day."
  • "Global miner Rio Tinto PLC (RTP) is edging closer to building a multi-billion dollar nickel venture in Indonesia, and fiscal terms on the Sulawesi project may be settled in the next few months, a company senior executive said Thursday."

  LME Nickel Lending Guidance May Pressure Prices - "The London Metal Exchange's amendment to the lending guidance for its nickel contract may continue to pressure the three-month nickel price in the short-term, analysts said Thursday." - more here

  INTERVIEW: Fundamentals, Not Funds, Driving Nickel - LME CEO - "-Supply and demand fundamentals, not funds, have driven the price of nickel to its stratospheric levels, according to the chief executive of the London Metal Exchange." - article here

  Stainless scrap price sags as mills snub nickel - "Stainless steel scrap prices have turned into a downward spiral due to mills production cuts and substitution, which may help bring down nickel prices from historic highs, industry officials said on Thursday. The traders said stainless steel mills in Europe and Asia were trying to delay or cut contracted shipment of scrap as they were reducing the use of nickel, which has doubled to around $50,000 a tonne in the past year." - more here

  SA Mining production up - "South Africa’s mining production rose 0.6% year on year in April, Statistics South Africa said." - more here

  China Baoshan to make more low-nickel stainless - "Baoshan Iron and Steel Co. Ltd. will raise production of low-nickel stainless steel to between 35 and 40 percent of its total production in 2007 versus 30 percent last year to reduce costs amid high nickel prices, a senior executive said on Thursday." - article here

  Sherritt aims to boost power output - "Canadian mining and energy company Sherritt International Corp. said yesterday it plans to increase electricity generation in Cuba to 500 megawatts using gas from coastal oil fields." - article here

  Mining industry in Indonesia burdened by overlapping claims - "Indonesia's mining sector offers huge potential for growth but must first overcome challenges such as overlapping claims and uncertainty over a pending industry bill, a miners conference heard today." - article here

  Essar and its ilk eyeing Brazilian iron ore to help meet high demand at home - "To meet the growing requirement of iron-ore, Indian steel companies like Essar are looking for iron ore mines in Brazil. “We have huge iron ore reserves unlike India and presently steel sector is at boom. Thus, to fulfil the increasing requirement of iron ore, some Indian companies, including Essar are in talks for iron ore minerals. Essar is one of them” a member of Brazilian delegation, currently visiting India told FE." - article here

  Taking the Caledonian road to nickel riches - "At the entrance to Goro Nickel, a $3.2bn mining project on France’s distant South Pacific territory of New Caledonia, a billboard is regularly updated to show how many hours have been worked without any lost time due to injury – 519,000 at the last count." - article here

  Eramet plans to start Weda Bay nickel output in 2012 - "French nickel miner Eramet plans to kick off production at east Indonesia's Weda Bay project in 2012, hoping to double the firm's worldwide nickel output once it hits full production." - more here

  Today's beginning nickel inventory -  plus 198 tons = 8,604 tonnes (6.2% - 534 tonnes cancelled warrants)

Wednesday, June 6

  Today's official LME nickel closing prices - cash - $21.95/lb - 3 month buyer - $20.68/lb (36.95% higher than 1/1/07). Although 54 tonnes of nickel left the Gothenburg, Sweden warehouse yesterday, and no LME warehouses receiving any additional inventory, nickel prices continued to slide today. Citigroup metals analysts Alan Heap and Alex Tonks raised their long term forecast on nickel from $4 to $6/lb yesterday, and we aren't sure what they define as 'long term', but if they are talking about the next few years, we would call that a fairly safe way to keep your neck out of a guillotine. They also said that current nickel pricing was an "accident waiting to happen". Now before you sell your mining stock, pack up the family, and move into a cave somewhere, let us share with you something written in Purchasing magazine back in 2005 - note that - 2005. "Nickel prices are going to slide though 2007, suggest Jim Lennon at Macquarie Bank, Alan Heap at Citigroup and Fraser Phillips at RBC Capital Markets – because of expanded supply ahead. Nickel prices are projected to average $7/lb this year (2005). Lennon sees tags sliding to $6.50/lb in 2006 and $5.75 in 2007. A more-bearish Heap sees nickel averaging $5 next year and $4 in 2007. While Phillips forecasts $7 in 2006, he sees $6 in 2007. (source)" PT Aneka Tambang's director told the 7th Asia Pacific Mining Conference in Manila today he thinks nickel will average $8.54/lb over the next 10 years. For those of you who listened to the aforementioned bearish bunch in 2005, and didn't join the metal's parade until it got into the high teens or above, there are those of us who still remember when $4/lb was considered a bull market. And before you mutter "old guys and their stories", that was 5 years ago. Today 3 month nickel ended the day at $20.64/lb ($45,500/tonne) (Dow Jones - more

  Those who trade in nickel may disregard the following - Last month we tipped you off to a possible problem at the nickel mine, Voisey's Bay, due to a delay in a shipment we noticed. The next day, the general media reported production had stopped due to a walkout by the production union over replacement workers being brought in to replace contractors, that had been on strike since the prior week. Nickel prices saw their biggest one day jump in a month. This disagreement was resolved quickly, and we thought we had scooped the majors on the news. In reality, it was just a stroke of luck on our part. While production resumed, the ore carrier, MV Umiak 1, scheduled to leave June 3rd, was rescheduled for June 7th, but is still showing delayed on the company website. We have now learned that the delay in shipment is not due to any production problems, but ice. While unusual this late in the year, much of the shipping lane is covered in Class 9 ice, making shipments from Voisey's Bay, impossible - here (so while Norilsk can't ship due to melting ice and the floods it is causing, Voisey's Bay can't ship due to unusually late ice. With two of the biggest nickel mines in the world unable to ship, and LME nickel inventories still growing, this could be very bearish, or very bullish, depending on which camp you choice)

   News Bites -
  • National Post - "Xstrata PLC, after deciding not to raise its bid in a $6.4-billion US contest for Canada's LionOre Mining International Ltd., said it's ready to spend "several billion" dollars on acquisitions to expand copper production."
  • "..among the cheapest mineral stocks ... It's just too darn cheap, too well-run....this thing wreaks of monopoly!" Jim Cramer about CVRD  - "Norilsk Nickel Offer for LionOre Receives Approval From the Swiss Competition Commission"

  North American Average Stainless Steel Prices - Forecast from MEPS - "Stainless selling values are forecast to rise again in June. Alloy surcharges are set to increase as both nickel and chrome costs climb. Further basis price erosion is expected to compensate for some of this growth. Transaction prices over the summer months should then be relatively stabile as the upward movement in the alloy surcharge finally comes to an end." - more here

  Multiple articles about Indonesia - "Indonesia Antam 07 Nickel Output To Rise 30% To 20,000 Tons" - article here "Indonesia Vice President To Decide On Rio Tinto's Nickel Project" - article here  "Indonesia May Reserve Some Metals Production For Local Market" - article here

  Australian Stainless Steel Development Association Fall 2007 Magazine - pdf here

  BHP Billiton looks at US$1b investment in Philippines: official - "BHP Billiton, the world's biggest miner, is looking to invest up to US$1 billion in a nickel project in the southern Philippines, a senior mining industry official said Monday." - more here

  A ferritic stainless claiming more corrosion resistance than austenitic 316? You be the judge - pdf here

  Analyst sees iron ore price increases until 2009 - "Iron ore prices are expected to remain on the rise for at least two more years, although it is too early to forecast specific 2008 price increases, an industry analyst told BNamericas." - article here

  Canada so short of miners it needs to import Chinese miners? - "Next wave of Chinese immigrants to be coal miners" - article here

  Indications  at 7:50 am CST show nickel selling down by $.18/lb . Nickel is in the red across the board,  this morning, with cash, 3 month, and 15 month, all recording losses so far.   (Bloomberg - more)

  Strong Chinese demand to underpin high nickel price - "Strong demand for nickel, particularly in China, will keep nickel prices at high levels, a miners conference heard Wednesday." - article here

  ASEAN miners to see strong gains amid China's rising metal demand - Citigroup - "China's rapidly expanding economy will continue to fuel growth among mineral producers in Southeast Asia, with capital inflows into the region's mining sector seen hitting more than 800 bln usd by the end of this year from just 180 bln in 2001, according to Alexander Molyneux, head analyst for metals and mining at Citigroup Global Markets Asia Ltd." - more here

  Philippines Could Become Major Nickel Supplier To China-Indus - "The Philippines could become a significant nickel supplier to China in about five years, provided planned major nickel projects come to fruition, an industry analyst said Wednesday." - article here

  Inco Raises Reserves Estimate as Technology Extends Mine Life - "PT International Nickel Indonesia, the country's largest nickel miner, raised the estimate of its mineable reserves by a fifth as the use of newer technology has helped extend the life of its mine." - article here

  Citigroup worries about sharp correction in nickel price - "Citigroup’s equity research unit Tuesday expressed worry about a sharp correction in nickel prices, calling the supply demand situation “an accident waiting to happen.” - article here

  Behre Dolbear - Global Mining News - pdf here

  Steel prices climb 7.8 pct - "The price of major steel products in China rose 7.8 percent in May from the same period last year as demand and production costs both climbed, according to the country's top economic planning agency." - article here

  Indonesia minister sees new mining law by year-end - "A new Indonesian mining law to encourage more foreign investment in the sector could be in force by the end of the year after nearly two years of debate, a top government official said on Monday." - article here
  News Bites -

  • "BHP Billiton`s Lynch, overlooked for CEO, to quit (more)"
  • "Today is options declaration on the London Metal Exchange" - Mining News - "ANALYSTS at Goldman Sachs JBWere have painted an optimistic picture for the future of copper, but the brokerage has warned of a contraction in nickel prices as the global supply of the commodity moves back into surplus."
  • AFX News - " Toledo Mining Corporation PLC said it believes that its mineral production sharing agreement (MPSA) application covering the 288 hectare Berong project will be processed shortly by the Philippines government. The company also said the government has approved its MPSA for the Berong nickel project."
  • Imports of iron ore into China up 44.5% in first 4 months of 2007 over 2006 figures. Copper ores and concentrates - up 144.4%" - Dow Jones - "LME nickel is hovering around the $45,500/tonport, vulnerable to a slide if it doesn't hold above $46,000/metric ton on a two-day closing basis, says Man Financial's Edward Meir."
  • "LionOre Mining International Ltd. announced that it will removed from the official list of ASX Limited as from the close of trading on June 5, 2007"
  • "Three Metals Poised for Blast-Off! (by Sean Brodrick) (more)

  Today's beginning nickel inventory -  minus 54 tons = 8,406 tonnes (7.07% - 594 tonnes cancelled warrants)

Poll Statistics
  Thank you to all of those who took part in our poll. Between Saturday and Monday, 25% of those who visited the site registered a vote. Here are the statistics gathered. The most common visitors to this site are those who invest in nickel or mining companies with 33.9%. This is followed by those who use, or consume stainless steel product, at 22.6%. Those who distribute nickel or stainless steel came in third at 19.8%. These 3 groups represent over 3/4 of all visitors to this site. Smaller groups include 'other' at 15.4%, nickel mines or producers at 4.3%, and producers of stainless steel at 4%. Again, we thank all of those who participated.   
Tuesday, June 5

  Today's official LME nickel closing prices - cash - $22.39/lb - 3 month buyer - $21.30/lb (41.06% higher than 1/1/07). The large gain of 504 tonnes of nickel into LME warehouses, that was recorded overnight, put the market on edge today, and prices slumped. While 3 month took the worst hit, what may give a slight ray of hope to stainless steel users, is the fact cash nickel fell below the $50,000 tonne level for the first time in a long while. It's official close today is the lowest since April 26th, and April 12th before that.  The increase came the day after the industry respected newsletter Metals Insider, had advised readers that traders were looking to the Rotterdam warehouse for some decline. So when Rotterdam recorded the entire 504 tonne gain, it took many investors off-guard, and profit taking ensued. Some may call this a new correction, others may call it a slump. We, on the other hand, don't feel the last correction has played itself out yet. It will be hard for traders to hope to ever break thru the $50,000 tonne barrier again, when they have spent much of their time recently, eyeing it in the rear view mirror. Today, 3 month nickel ended the day at $20.93/lb ($46,150/tonne)   (Dow Jones - more) Also, for those of you who have been inquiring about pig nickel ore, the article we posted this morning called  "China raises nickel pig iron production this year due to nickel price hikes" answers a lot of the frequently asked questions.    

  Citigroup ups long-term nickel price view - "Citigroup raised its long-term price view on nickel by 50 percent to $6 per pound and upgraded UK miner BHP Billiton to "buy" from "hold"." - more here

  (comment - it was bound to happen) Less than the standard stainless steel bolt into Europe - "EIFI (European Industrial Fasteners Association) stainless steel fasteners Committee has found that less than the standard stainless steel bolt into into Europe, and its use may encounter the problems expressed concern that So they sent letters of complaint to the European Anti-Fraud Office, called for action to stop further imports. EIFI GiuseppeMarzorati, The letter from stainless steel fasteners EIFI GiuseppeMarzorati Chairman of the Committee, Dr. signature, The letter points out that the use of such fasteners may have corrosion problems." - poorly translated article here

  Mining Tibet - Feeding the Hungry Dragon - "With the arrival of the trains to Lhasa –connecting the capital of Tibet to the industrial and business centres of China, the real business has only just begun. Shetongmon, a non-descript valley on the banks of Yarlung River near Shigatse in western Tibet is today bursting with activity as Chinese businessmen, western corporate investors and mining contractors have come to explore the area of its centuries old treasures of gold and copper." - article here

  Growth for revitalized Philippine mining, but far from full potential - "Revitalized mining activity in the Philippines is starting to impact on economic growth amid a surge of foreign capital, the top industry regulator said Tuesday." - article here

  Indonesia May Take Back Parts of Coal, Metal Areas - "Indonesia, the world's biggest exporter of power station coal and second-largest tin producer, may rescind parts of mining concessions to secure ``national reserves'' for future generations. Mining shares fell." - article here

  (comment - trouble for pig nickel processors?) A patented technology encountered some 100 enterprises in Zhejiang Huaguang cloning should safeguard their rights for in the end - "A nickel oxide ore by the blast furnace pig iron smelting of nickel chromium patented technology is being nearly a hundred enterprises of the group infringement. May 29, no longer sit back and the loss of intellectual property Zhejiang Huaguang Smelting Group Co. Ltd. (hereinafter referred to Zhejiang Huaguang) will be announced start action to safeguard their rights. Zhejiang Huaguang vice president, franchise Liu Shen Jie request for infringement of enterprises and individuals immediately cease violations, Otherwise, they would take legal action." - poorly translated article here

   Commonwealth Bank - The Hard Line - pdf here

  We have updated our Excel spreadsheet for those who like to make their own charts - here

  Robust turnover growth for basic metals and metal products - "In the first quarter of 2007, turnover in the metal, electronic and transport equipment branch was 17 percent up on the first of 2006; output volume increased by 10 percent over the same period, making it the best-performing branch in the manufacturing industry sector." - more here

  Gov’t warned about mining firms with poor track record - "Environmental groups cautioned the government Monday against allowing "mining giants'' with poor environmental records elsewhere in the world to operate here, even as they prepared to mount protests coinciding with the 7th Asia Pacific Mining Conference." - article here  and Mining sector asked to uphold pro-people policy - "DIFFERENT groups and a wide range of sectors on Tuesday protested in front of the Makati Shangri-La Hotel in Makati City to challenge industry players to uphold a mining policy that would benefit the people" - article here

  Indications at 7:50 am CST show nickel selling down by $.40/lb . A large gain into LME warehouses reported overnight has shaken the confidence of yesterday's bulls. Goldman Sachs backing off a little on earlier forecasts may have also drawn some attention. Thank you to all of you who contributed to our poll over the weekend. We will post results later today or tomorrow.

  Nickel Falls After Stockpiles Jump to 11-Month High; Lead Drops - "Nickel declined in London, snapping two days of gains, after stockpiles climbed to the highest in almost 11 months. Lead fell on prospects of increased supply as Xstrata Plc said it will lift restrictions on metal deliveries from its U.K. smelter after a five-month disruption." - article here

  Courtesy/Copyright - Dow Jones Newswire - "Nickel market faces significant surplus of 24,000 tons in 2008-2011, says Goldman Sachs JB Were, citing growth of low-grade ferronickel output in China; "China's low-grade ferronickel makers are now accessing higher-grade ores, which facilitate a better quality FeNi product, and hence improving demand from China's stainless steel makers." Forecasts nickel at $12.85/lb for 2008 vs expected $18/lb this year ($28,321/ton, $39,672 respectively). "Given that we expect the global nickel market to remain in surplus through 2011, and the size of the price fall that we are forecasting, nickel becomes our least preferred base metal from an investment perspective."

  Rand Merchant Bank - Base Metals Weekly Report - pdf here

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

  Canada Commodity Price Update - pdf here

  Investors - independent report on Adanac Moly by Objective Capital  - pdf here  (comment - normally we don't link to company reports unless they contain good market info, but Adanac has been a loyal sponsor of this site for sometime now - so we wanted to give them a plug)

  China raises nickel pig iron production this year due to nickel price hikes - "China's stainless steel makers have been increasing the use of nickel pig iron as an alternative to refined nickel as nickel prices have soared to all-time high levels, but increased nickel pig iron production is expected to cause nickel prices to fall in the second half of this year." - article here

  3rd world metals 'super cycle' - "An "industrial revolution" in the developing world has created a "super cycle" of unprecedented global metals demand that could sustain the industry for up to 18 more years, an Australian industry expert said Tuesday." - article here

  Panicked Buyers to Drive Molybdenum Price Higher - " There is presently a growing panic among molybdenum traders. From our sources, it appears reduced inventories have been overpowered by rushing demand for the silvery-white ‘energy metal.’- article here

  Anglo seeks to expand base metals in the DRC - "The world's third biggest mining group Anglo American Plc recently opened an office in Congo as part of a new push to find big copper, nickel and zinc deposits in Africa, a top official said on Monday" - article here

  BNP Paribas, Societe Generale extend loan to Norilsk Nickel - "Russia’s Norilsk Nickel has signed an agreement with banks – BNP Paribas and Societe Generale – to get a 3.5-billion-dollar loan to buy Canada’s LionOre Mining International Ltd, a source close to the company told the Prime-Tass economic news agency on Tuesday." - article here

  Albidon Limited Zambian Nickel Smelter Study - "Albidon Limited said Tuesday that Jinchuan Group has advised it is conducting a feasibility study for the construction of a nickel smelter to treat concentrates from Albidon's Munali Nickel Project in Zambia." - article here

  Today's beginning nickel inventory -  plus 504 tons = 8,460 tonnes (6.88% - 582 tonnes cancelled warrants)
Monday, June 4

  Today's official LME nickel closing prices - cash - $22.82/lb - 3 month buyer - $21.77/lb (44.17% higher than 1/1/07). 3 month nickel started out the first full week of June with the bulls firmly in control. Xstrata's Mick Davis, in an attempt to do some damage control after giving up his bid for LionOre, was very successful in pumping up the bullish sentiment for base metals in a speech in Switzerland. Economic news from the US last week was also bullish, although the factory orders report released this morning was lower than expected. Investors seem to be looking at the record drop in the Chinese markets overnight, as a non factor. For Monday, traders shrugged off yet another increase in nickel inventories, and the days trading ended at $21.64/lb  ($47,700/tonne) (Dow Jones - more)

  Metals Insider - Week in Review - Nickel regains composure as shorts still suffer - here

  News Bites - Dow Jones -
  • "The World Trade Organization established a panel Monday to investigate antidumping duties the United States applies on 52 European products (including stainless steel) in another trans-Atlantic trade dispute."
  • Norilsk - "Norilsk Nickel Offer For LionOre Receives Australian Foreign Investment Review Board Approval"

  Haywood Securities - Metals & Mining Weekly - pdf here

  Labourers union walks off job - "About 600 members of the Labourers International Union of North America (LIUNA) Local 493 walked off the job Monday to protest a lack of progress at the bargaining table." - article here  (comment - we thought they had already been on strike for the last month, and that was the reason the replacement workers, that caused so much trouble last month, had been brought in)

  Our stainless steel surcharge page has been updated as all three stainless steel producers we follow have published July surcharges - here

  China Undermines U.S. in Latin America - "China is undermining the U.S. agenda to advance political reform, human rights and free trade in Latin America, the China-Latin America Task Force says." - article here

  Mechel Starts Overhauling Nickel Producer - "The Mechel steel group has started to refurbish its nickel production capacity and to select equipment and technology suppliers." - article here

  Comment - It's hurricane season for the Atlantic and Gulf regions again - here are a list of nickel mines to keep a storm watch out for - here

  Super-Ferritic Stainless Steels Drive Molybdenum Use in Nuclear, Other Power Plants - "Substitution of sewage treated water or seawater and environmental concerns about discharges from copper-nickel tubing in power plant condensers could strongly impact the direction of copper, nickel and molybdenum prices." - article here

  Eric Sprott on molybdenum - here

  "Situation in storage site for spent nuclear fuel getting critical - "The report written by Rosatom, the Russian state company on nuclear energy, states that there is a significant danger of an explosion in the Andreeva Bay. The consequences could be dramatic for major parts of northern Europe. The site is located only about 50 km from the border to Norway, and less than 200 km from the city of Murmansk." - article here  (comment - notice how close that is to Norilsk Nickel's shipping port!)

  Mining will boom - "IN two of her major trips last May, President Gloria Macapagal-Arroyo had one clear but unstated agenda¯promote mining in the Philippines." - article here

  Chinese steel kingpin listens in ore - "FEW would have recognised that tucked away in Friday's extraordinary general meeting for shareholders of Australasian Resources was one of the biggest players in China's steel industry." - article here

  Indications  at 7:50 am CST show nickel selling up by $.34/lb  (Bloomberg - more). Xstrata's Mick Davis is doing a little damage control today, as his company bows out of the race for LionOre. This shows that the Xstrata leadership accepts the reality that there is a roof to nickel prices, and it would be fool hardy, something one of the Norilsk board members also claims, to pay too much for the additional nickel assets this purchase will bring. Realizing investors will be reading this into the decision, Mr Davis reassured investors that the price of nickel will remain high for sometime, thanks to China and India.  

  In our weekly survey of Shanghai Nonferrous Metals analysts forecast for nickel prices for the week - Of 31 responding, only 4 (12%( felt the price of nickel would rise this week, 11 (35%) felt it would fall over the week, and 16 (51%) felt the price would stay the same.

  News Bites

  • Financial Times - "Xstrata on Monday drew a line in the sand in its battle for LionOre, the Canadian nickel producer, saying it would not match Norilsk Nickel’s revised bid"
  • Industrial Info - "Nickel Prices Driving Stainless Steel Producers to Ferritic Grades"
  • Metal Bulletin - "Australia's Rusina Mining may construct a nickel pig iron smelter at its project on the Philippine island of Semirara rather than a ferro-nickel smelter as previously announced, a company spokesman said."
  • China - "China stock market sees biggest single-day slump in history"

  Copper The Pick of Base Metals in '08; Lead In '07 -Macquarie - "Macquarie Research foresees higher prices for copper in coming years as mine output is unlikely to increase as quickly as previously thought and global demand, led by China, will remain robust, it said in a report Monday." - article here

  Antam Studies Plan to Triple Nickel Output by 2012 - "PT Aneka Tambang, Indonesia's second- largest nickel mining company, is studying a plan to more than triple production by 2012 of the metal used to help make steel rust resistant." - article here

  Base metals prices set to remain high on demand from Asia - Xstrata CEO - "Base metals and other raw materials prices are set to maintain their current highs amid huge demand from China and India, Xstrata PLC chief executive Mick Davis said." - article here

  Today's beginning nickel inventory -  plus 42 tons = 7,956 tonnes (7.01% - 558 tonnes cancelled warrants)

Weekend Review, June 2 & 3

  Stainless oversupply continues into third quarter of 2007 - "The slow-down in global stainless steel production during the third and fourth quarters of 2006 had been less marked than anticipated, such that production jumped 11.7% over the course of last year to 28.4 million tonnes. However, “the market began to swing to an oversupply situation during the first part of 2007”, according to BIR Stainless Steel & Special Alloys Committee Chairman Michael Wright of UK-based ELG Haniel Metals Ltd. And feedback from producers in Europe suggested “this situation will continue certainly during the third quarter of 2007”, he told delegates in Athens." - article here

  News Bites -
  • "Xstrata says won't match Norilsk offer for LionOre"
  • "General Director of Norilsk Nickel, Denis Morozov, says the “Severny Glubokii” mine in Zapolyarny (Murmansk Oblast) will become one of the biggest nickel production projects in the world. Experts now speculate whether Norilsk Nickel might close down its processing plant in the town of Nikel, the sister town of Zapolyarny, and instead build a new plant further south in the Kola Peninsula."

  Comment - There has been a lot been written about what is called "sovereign wealth funds" and their effects on the markets. Here is a brief explanation and why it could matter to nickel prices from Monty Guild - "Sovereign Wealth Funds to Boost Commodities Demand? - What are sovereign wealth funds? They are the assets of sovereign countries that have been earned. Instead of holding them in government bonds as they once did, countries are investing part of the money in stocks and commodities on a global basis. The Saturday, May 26 Financial Times devoted a large section to an issue I have mentioned several times: the 2.5 trillion dollars of sovereign wealth funds from China, Norway, Saudi Arabia, United Arab Emirates and many other countries (about 16 in all) that is to be invested globally. In addition, there is probably twice that much money sitting in these countries’ reserves that has not yet been earmarked for global stock, bond and real estate investing.  Let me put it another way. These countries and others as well will use their capital to invest in stocks, bonds and commodities. Gone are the days when they would just buy government bonds with this type of money. Now they are putting it where it will earn better returns. " - Financial Times article here

  ASR Scrap Report May 2007 - here

  TD Bank Weekly Commodity Price Report - pdf here

  NMA Mining Weekly - pdf here

  Weekend Review - (different source used than during week)  It was short week for LME trading, but one that would see one month end, and another begin. Monday, the London Metal Exchange was closed for Spring Bank Holiday, and US markets were out for Memorial Day. On Tuesday, markets opened at $21.22/lb, reached a high of $21.74/lb, hit a low of $21.09/lb, and ended the day at $21.68/lb. On Tuesday, markets opened at $21.60/lb, reached a high of $21.66/lb, a low of $21.13/lb, and ended at $21.23/lb. On Thursday, the trading opened at $21.27/lb, reached a daily high of $21.72/lb, fell to $20.84/lb, and ended at $21.07/lb. Friday, the markets opened at $20.96/lb, reached a high of $21.66/lb, fell to $20.93/lb, and ended the day and week at $21.38/lb. From its opening on Tuesday to its closing on Friday, the market ended up by a whole $.16/lb, and from last Friday's close, by $.18/lb. 

  Month in Review - official mean prices for May - Cash nickel - $23.21/lb - 3 month - $22.27/lb. Cash saw a 1.84% rise over April's average of $22.79/lb, and 3 month prices rose by 2.16% over April's $21.80/lb. When comparing to one year ago, cash nickel averaged $9.55/lb in May of 2006, and was 243% higher than last year, and 3 month nickel, $9.38/lb a year ago, was 137% higher in May of 2007.

  Correction - Based off a Dow Jones report yesterday, we reported that at one point, 3 month nickel went over $50,000/tonne on Friday. That was an incorrect report by Dow Jones. In reality, the price of 3 month nickel, which Dow Jones follows daily, never came close to that mark and hit a high on Friday of $21.66/lb ($47,873). While neither is the 'official' high for the day, the disparity is ridiculous and we apologize for quoting from an otherwise, very reliable source. 

Friday, June 1

  Today's official LME nickel closing prices - cash $22.88/lb - 3 month buyer - $21.59/lb (43% higher than 1/1/07). A new month begins, new fund money finds its way into the nickel coffer. Nickel ended the first day of June at $21.50/lb ($47,400/tonne). (Dow Jones - more) (note - there is an error in this report - see weekend review for clarification) Not sure how, or if the market reacted to the news from Jindal, but as we mentioned in an update below, it would appear to be alarmingly bullish for nickel. Have a safe and relaxing weekend, and we will start all over again next Monday. And for those of you who can't make any money in this nickel business - here is a lesson on how to 'count creatively' in Blackjack (the casino will call it cheating)  video here

  News Bites -
  • (Thomson Financial) "International Ferro Metals Ltd said it expects ferrochrome sales of 58,000 tonnes for the period to June 30 ahead of an earlier internal forecast of 15,100 tonnes. IFM said it continues to ramp up production at its integrated production facility in South Africa, where it plans to reach full capacity by July 2007 to produce 267,000 tonnes of saleable ferrochrome a year."
  • (Dow Jones) - "The tight nickel market could see pressures increase further in the years ahead if India's burgeoning economy increases its use of the key stainless steelmaking ingredient, the chief financial officer of Brazilian miner Companhia Vale do Rio Doce, or CVRD, said Thursday."
  • (Dow Jones) - "The China-based Yunnan Tin Group, the world's largest tin producer, has made another foray into the Australian resources sector and taken a stake in nickel hopeful Metallica Minerals Ltd."
  • China - Chinese officials announced today, only 30 companies meet qualifications to apply for molybdenum export licenses. China is taking increasing steps to slow down the export of its mineral resources.

  Taiwan's YUSCO lifts non-nickel output as costs soar - "Taiwan's top stainless steel producer, Yieh United Steel Corp., has boosted its output of products that do not use nickel by 20 percent and plans further increases as costs soar, a company official said on Friday." - article here

  Damstahl Stainless Steel Report - May 2007 - pdf here

  Update - Comment - Ever read something that just made you shake your head? We really thought we could be in big trouble with nickel prices today, when we read that Jindal Stainless of India was reporting increased usage of nickel. You may ask, so what? Well, according to a stock analysis of the company in 2005, Jindal called itself the "global leader in chrome manganese 200 series stainless with 10 years of R&D efforts to develop such a special grade". (source) One of the producers mainly responsible for pushing a less nickel content stainless on the world, one of the stainless substitutions we are hearing so much about,  is now saying it's using more nickel! Good grief! Oh well, what should we expect from a country that thinks bulls are sacred!

  Indications at 7:50 am CST show the month of June is beginning with London traders in a buying mood, and the 3 month price of nickel is trading up by $.53/lb .  (Bloomberg - more).

  News Bites -

  • (Metal Bulletin) - "China's largest nickel producer Jinchuan Group cut its list price by about 2.5 percent on Friday as signs emerged of falling demand in China."
  •  (Steel Times India) - "Stainless steel hot rolled plate selling values are expected to continue their upward path over the next few months, while average monthly nickel prices moved up further in May. Hot rolled plate transaction values moved up again during May, 2007, in all regions as a result of further raw material price rises. In the EU, basis figures for type 304 reduced slightly to offset approximately 20% of the surcharge increase. Hot rolled plate selling values are expected to continue their upward path over the next few months."
  • (Dow Jones) - "The tight nickel market could see pressures increase further in the years ahead if India's burgeoning economy increases its use of the key stainless steelmaking ingredient, the chief financial officer of Brazilian miner Companhia Vale do Rio Doce (RIO), or CVRD, said Thursday."

  Jindal Stainless sees jump in nickel needs - "India's largest stainless steel maker, Jindal Stainless Ltd., expects its monthly nickel consumption to double to more than 1,600 tonnes when a new plant starts operation in three years, a top company official said." - article here

  China to up stainless steel prices in June - "Chinese steel mills are going to raise 304 stainless steel CR slightly by RMB500/ton in June due to decreasing nickel price and low market demand, when the increasing range was RMB1,500/ton in May." - more here

  Base metals - the funds dominate but the positive fundamentals remain in place - "This is the conclusion from the latest Base Metals interim Review from GFMS Metals Consulting limited, the division of the GFMS group that handles the base metals." - article here

  Dollar set to decide metals' next course - "Price movement in base metals especially copper and zinc, remains volatile with a bearish bias. Prices came under pressure due to subdued consumption demand for base metals coupled with a stable medium-term economic outlook in US which could move investments to dollar assets. Only lead and aluminium prices have risen due to strong demand." - article here

  The mining diagram remains in the paperboards - "Didier Leroux is in anger. For the second consecutive time, the government was not able to validate the diagram of development of the mining resources." - translated version here

  Mills to cut spot molybdenum purchases due to China export rule - "Steel mills in South Korea and Japan plan to reduce their molybdenum oxide and ferromoly purchases due to China implementing export regulations on these products, sources said this week." - article here

  In decline, dormant or resurgent? - Mining Magazine`s Paul Moore - "The mining world is full of examples of where operations – sometimes high profile – have had to be mothballed due to unrest such as a civil war in a country, only for things to improve and the mines to be restarted. Often their restart is the kickstart the economy needs as the natural resources represent a major proportion of the nation’s foreign earnings potential." - article here

  Opinion - There is an old saying, that we quote occasionally, and changed a bit to make more family friendly, that says "Opinions are like arm-pits. We all have a couple, and only we think they smell good." We monitor a few forum's for mining company investors (it is always good to see if they know something we need to know). And we sometimes dare to tread where only fools roam, and give our opinion on a subject. But we also strive to remind our readers, that our opinions are exactly that - and worth every penny that we charge for them. While we attempt to stay balanced when providing news on this site, even we get into trouble, quoting industry 'facts', because it seems, every 'expert' has their own. Just try to get two people to decide who the largest producer of nickel in the world is today, and you maybe looking for a fight, depending on what crowd you are in. Our point is, we are noticing a lot of 'incorrect' and incredibly biased 'facts' being given on some forums, by both bullish and bearish investors. We are a firm believer that there are two sides to every coin, and market neo-bulls and neo-bears, can be as dangerous to your pocketbook, as neo-conservatives or neo-liberals, can be too your way of life. In this market, what is right today, can be totally wrong tomorrow. And what may seem irrelevant today, may make a big difference tomorrow. On the internet, that faceless bull who seems to have all the right answers today, can mysteriously disappear when the market takes a dive, only to re-appear with a new identity, and have all the 'right' bearish facts tomorrow. In politics we call it the flip-flop; on the internet, it's called 'par for the course'. If our opinion is worth the time you take to read it, you would be wise to take the advise of those you respect with a grain of salt, and give far less value to those you don't know. And as one experienced investor told his board, take a vacation! If you aren't careful, some of you won't live long enough to enjoy the fruits of all that worrying! (disclaimer - The opinion above is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed are those of the author and are subject to change without notice. This site will not be liable for any injury or death you may receive on any vacation you may choice to take. And if you are still reading this fine print, you should really consider getting out of investing and choice a new line of work.)

  Today's beginning nickel inventory -  plus 42 tons = 7,914 tonnes (8.26% - 654 tonnes cancelled warrants)

May Archives

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3 month nickel averaged $11.01/lb for all of 2006, $6.69/lb in 2005 - Cancelled warrants are goods sold

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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 before 1 pm CST weekdays, with some weekend updates - Disclaimer Original content and opinions copyright


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