The Chinese are coming - "When the Chinese government opened up its economy in 1978 and embarked on a policy of reforms, China has come a long way since then. In less than three decades, it has become an economic powerhouse, showing phenomenal growth the likes of which had never been seen before. It has $1 trillion foreign exchange reserves, registering a trade surplus of $177.5 billion in 2006 alone. China is awash with so much cash - it just keeps on flowing into the country. Last year, $70 billion foreign direct investments poured into China. The Chinese government has freed up control measures to allow companies and individuals to take the money abroad. China is expected to invest as much as $5 billion every month for the next two years." - article here

  SMC strikes new 'vein' - Recycling business bolsters the bottom line - "Under the foothills of the Beartooths, miners labor day and night to pry precious metals from the J-M Reef. But Stillwater Mining Co. has discovered another source of platinum and palladium, a source that runs on four wheels and can be found above ground." - more here

  Belvedere Acquires Outokumpu Mining Oy's Hitura Nickel Mine - "Belvedere Resources Ltd. is pleased to announce that it has now signed the Final Agreement to acquire the Hitura Nickel Mine from Outokumpu Mining Oy and the remaining 55% of Finn Nickel (Suomen Nikkeli Oy)." - press release here 

  Metal thieves knock Vancouver radio station off air - "A Vancouver radio station was knocked off the air for several hours Thursday after thieves raided its transmitter, stealing copper and other metal." - article here   Rise in Ag Theft Has Farmer's On High Alert - "A rise in Ag theft around the Valley has both authorities and farmers on high alert. One fed-up farmer told Action News he had a 1,000 gallon tank of diesel fuel stolen. Many more have run into problems just trying to water their crops." - article here   Manchin vetoes metal theft bill, says it went too far - "In vetoing a House bill, Gov. Joe Manchin said the Legislature went too far in its quest to deter scrap metal thieves." - article here   Thieves targeting valuable metals in catalytic converters - "It turns out there's a gold mine under every vehicle, and enterprising thieves are starting to cash in by stealing catalytic converts from parked cars." - article here  How to prevent metal theft - "The best way to prevent metal theft, Porter County Sheriff Dave Lain says, is the same way to prevent any theft: secure your property." - article here  (comment - just a reminder to those in the Northern Hemisphere with summer approaching - test your air conditioner. We reported late last year, that over the winter, thieves were stealing the insides out of air conditioner compressors and replacing the outer shell - thus making it nearly impossible to discover until you try to turn your air conditioner on, and nothing happens. We met a person last month that was victimized by this. )

  Cramer back on the Base Metal Bandwagon - "Everybody hates Jim Cramer. That may be so, but don't underestimate him. His personality may put your TV on mute, but he does have a nose for sentiment. He knows when the crowd is getting in and when they are getting out." - more here

  (not sure how they figure 7%) LME nickel drops over 7 pct, tin hits new high - "Nickel shed over 7 percent on the London Metal Exchange on Friday as investors took profits ahead of what analysts predicted would be a more balanced market in the second half of 2007. " - article here

  Zimbabwe: Mugabe says government to redistribute mineral resources - "President Robert Mugabe says the Western attacks on Zimbabwe and the demonization of the its leaders is nothing new as revolutionaries of the struggle faced serious denigration at the hands of some Westerners during the liberation struggle." - more here

   Nickel prices to remain soft - "Nickel prices in the domestic market may remain weak in near term following the global markets reports of fund selling and higher LME stocks data." - article here

 Quote from Dow Jones article - Confirmation to Metal Bulletin report on Thursday - "Recent deliveries into LME warehouses in Asia is by China's Jinchuan Group Ltd. against a nickel short position. But traders said this is natural, given the requirements of Chinese accounting. "If Jinchuan has sold material to the LME and the market is above it, it has to deliver it because it can't have a difference account," one physical trader said. He noted Jinchuan is a major nickel producer and a short position would be covered by its own output. "It's the naked shorts that have been caught out," he added.""

  DJ Steelmakers Cancel Nickel Ahead Of Surcharge Fall - Traders - "Steelmakers are canceling deliveries of nickel from producers in anticipation of a collapse in the stainless surcharge, physical market sources told Dow Jones Newswires Friday." - article here

  (our two cents) Week in Review - Brutal for nickel investors. Source used for the following is different than Comtex, where we get the daily ending number, and the LME, where we get the official prices. Until Monday's trading began, 8 of the preceding 12 trading days of March, had seen new record high's for nickel, with Friday, March 16th's $22.00/lb for 3 month nickel, being the most recent all-time record to beat. Over the weekend, reports began to surface that implied stainless steel producers were cancelling orders for nickel, with China's largest nickel producer announcing Monday, the market was out of control. When traders showed up Monday they were a little unnerved by all the news, including the weekend interest rate hike in China, and the markets opened at $21.70/lb, saw a high of $21.75/lb, saw a low of $21.09/lb, and ending the day at $21.23/lb, a loss of 2.25% for the first day of the week. Tuesday didn't fare any better for traders, with the market opening at $21.19/lb, hitting $21.27/lb for the high, falling to a low of $20.09/lb, and ending at $20.11/lb, another bigger loss of 5.3%. Wednesday saw the slide slow down, which was interesting considering the nearly 18% increase in nickel inventories reported at the beginning of the day. The market opened at $20.14/lb, rose to a high of $20.25/lb for the day, fell to a low of $19.37/lb, and ended at $19.91/lb, just shy of a 1% loss. Thursday saw the bulls return, on news the Fed had decided to leave interest rates alone and a report from a respected metals site reported Jinchuan was attempting to cover a short bet it had made. Markets opened at $19.87/lb, also the low of the day, rose to as high as $20.66/lb, and ended the day at $20.47/lb, a gain of 2.8%. Friday, the market opened to news that Jinchuan was denying the report, and the market would tumble all day, confirming the market was in a correction mood. Markets opened at $20.64/lb, snuck up to $20.71/lb for a high point, fell to a low of $19.20/lb, and ended at $19.26/lb, a loss of 5.9%. The 3rd week of March closed approximately 12-1/2% lower than the record high it had hit on the Friday before. But the market is up approximately 2-1/2% on the month, and a whooping 21-1/2% for the year. For the 12 month period, the price of nickel is up 277% from March 23rd, 2006. The difference between the highest traded price (Monday) and lowest (Friday) for the week, was about 12%. Inventories started Monday at 3,702 tonnes, and on Friday morning LME was reporting they had gained 25% so far for the week.

So, was Jinchuan motivated by a bad bet to scare the market into a freefall? Who knows, and at this point, it really doesn't matter. If they lied, they are still too big a consumer for the nickel market to mess with. If they didn't, they succeeded in bringing about a correction, that was overdue to happen anyway. Now things will get interesting. We are posting a report above that shows consumers of stainless, are cancelling orders, knowing surcharges will probably drop for May. This could potentially force the stainless steel producers, that weren't cancelling orders for nickel already, to delay future shipments. The producers of nickel will take the extra nickel that they haven't had for months and possibly send it to the LME warehouses. Growing inventories in LME warehouses, after the drought we have seen, could scare the market into further price declines. We say could, potentially, and possibly, because no one really knew what will happen for sure. A thousand things could happen to change everything.

It is is worth noting that much of the supply/demand news that came out this week, would have in any other week, drove the market higher.  The first two weeks of this month, the market hit new records on far less news. On the supply side, The Port Authority in Esperance has temporarily banned the shipments of tin after a large bird kill, and when they checked the local water, they found high concentrations of nickel. This may cause shipping troubles for Australia's third largest producer of nickel, LionOre Mining, just days after it reported record profits for 2006. For demand, besides Jinchuan's proclamation of doom and gloom, Chinese officials released figures, showing nickel imports into that country surged 84% in February. And on Thursday, China government owned Antaki, projected nickel imports would increase by 20% on the year, rising from 250,000 tons in 2006 to 300,000 tons in 2007. On Wednesday, the executive president of China’s Stainless Steel Council Li Cheng, admitted the market share for low nickel stainless steel had actually fallen since 2004, a period which saw nickel prices rise. He reported the production of 200 series stainless steel had fallen by 2-3% to approximately 17%, totally opposite of what others had been threatening. A day later, Antaki reported the market share for 200 series stainless steel was more like 15%, but 'destined to increase due to higher nickel prices'(these two should probably compare notes in the future).  

Maybe the title for the week should have been a question? "Has the nickel market finally found the price ceiling that forced stainless steel producers to openly revolt?"   

  Not nickel related - interesting article - Global Ruling Class: Billionaires And How They ‘Made It’ - "In India, which has the highest number of billionaires (36) in Asia with total wealth of $191 billion USD, Prime Minister Singh declared that the greatest single threat to ‘India’s security’ were the Maoist led guerrilla armies and mass movements in the poorest parts of the country. In China, with 20 billionaires with $29.4 billion USD net worth, the new rulers, confronting nearly a hundred thousand reported riots and protests, have increased the number of armed special anti-riot militia a hundred fold, and increased spending for the rural poor by $10 billion USD in the hopes of lessening the monstrous class inequalities and heading off a mass upheaval." - article here

  A tattoo for the educated man - here  Have a safe weekend!!

  Public Broadcasting's Frontline is an in-depth weekly news investigation program, and our favorite. PBS archives their 50 most recent broadcasts for viewing online here

  (courtesy/copyright Chicago Tribune) "An Alabama mining company on Thursday denied any relationship with right-wing death squads in Colombia and said it has no intention of settling a related U.S. lawsuit. A federal judge in Alabama last month allowed a civil suit to go forward against Drummond Co. Inc. for allegedly paying a hit squad to kill three union leaders in 2001 at one of its Colombia mines. Colombia's chief prosecutor announced a formal criminal investigation into Drummond on Tuesday for alleged ties to paramilitaries."

  Indications  at 7:55 am CST show nickel selling down by $.58/lb . In the last 4 days, nickel inventories have grown by 75%. While still critically low, the market is reacting as expected, and some profit takers are cashing out. (more - Bloomberg report here) (more - Dow Jones report here)

  Treasures in her hold - "More than a million dollars worth of nickel is aboard the stricken MSC Napoli, it was confirmed this week." - article here

  New Caledonia Nickel Gathering May Provide New Insight - "Nickel, a key component in the manufacture of stainless steel, has continued its meteoric rise that started in 2006 amid project delays, low stocks and strong demand, rallying 54% since the start of the year to a record $48,500/ton on March 16." - more here

  Wheeling-Pittsburgh Steel announces raw materials surcharge - "Wheeling-Pittsburgh Steel Corp. has announced that, effective April 1, 2007, it will institute a $53 per ton raw materials surcharge on orders scheduled for April shipment." - more here

  Esperance bans lead concentrate shipments - "The Port Authority in Esperance has banned shipments of lead concentrate after thousands of birds died in and around the town." - article here

  Chinese Firm RockCheck Steel Group To Invest $200-M In Philippine Mining - "A leading Chinese corporation on Wednesday pledged to invest an initial $200 million in the Philippines for the construction of a ferro nickel plant in Eastern Samar, south of the capital Manila." - article here

  News Bite (from Investor Village forum, verified) - "Detailed China import-export numbers were released today for February....Nickel net imports were up 84% to 10.3 kt."

  PT Newmont Slammed With New Lawsuit Over Buyat Bay - "Indonesia's largest environmental non-governmental organization (NGO) Wahana Lingkungan Hidup Indonesia (WALHI) has launched a civil suit against Newmont’s Indonesian subsidiary PT Newmont Minahasa Raya (PTNMR) over alleged pollution from the disposal of mine tailings into Buyat Bay - now the fourth litigation of its kind." - article here

  Cuba plans JV with Sherritt to help expand nickel and cobalt output - "Havana's Center for Research and Projects at the Mining-Metallurgical Industry (CIPIMM) is developing new technologies to expand the Cuban nickel industry." - article here

  Mining law to change as lawsuits rear up - "THE South African government has made a critical amendment to its mining legislation in an effort to block potentially damaging lawsuits later this year alleging expropriation." - article here

  Indian ore tax to help Australia - "AUSTRALIA is set to be the major beneficiary, with Brazil, of India's export duty on iron ore - which has already caused Chinese buyers to divert more than 20 ships from India." - more here

  Mills to produce low nickel grades stainless - "Although nickel prices hit a record peak of US$48,500 on March 16, China’s demand for nickel may still rise by 20 percent in 2007 and output is likely to surge by 36 percent, senior analyst Aidong Xu who worked in a state-owned research group Antaki said." - article here

  Jinchuan Denies Report It Has `Large' Nickel Wager - "Jinchuan Group Co., a company controlling 90 percent of China's nickel production, denied a Metal Bulletin report that it has a ``large'' bet on lower prices for the metal used in stainless steel." - article here (this could get interesting - last year Posco of Korea denied similar reports, which later proved to be true)

  Philippines MacroAsia, China's Jinchuan In Nickel Deal - "Philippine investment holding company MacroAsia Corp said Friday that it has signed a deal with China-based nickel producer Jinchuan Group Ltd. to explore and possibly develop mining claims." - article here and another

  Today's beginning nickel inventory - plus 618 tons = 4,932 tonnes (33.33% - 1544 tonnes cancelled warrants).