Daily Nickel Market Prices

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

5-31	Nickel bucked the downward trend on the LME trading floor today and ended up at $9.94/lb. *     Inco Board of Directors did what any board under threat of a hostile takeover would do. They recommended their shareholders reject the offer by Teck Cominco. Falconbridge's board did much the same today in reference to the Xstrata offer. Both boards still recommend the marriage between the two is the best option. Anyone surprised? *     USW announced Inco agreed to a no lay off clause for the next 3 years as part of the tentative deal the two parties reached Monday. This protects the union if Inco buys Falconbridge, or is itself taken over by Teck Cominco. Job security was the key issue in this years negotiation. The union also won an hourly increase of $2.50/hour over the next 3 years, increases in pensions, $4000 signing bonus for full time employees, and a continuation of a earnings based bonus. *     Nedco Securities analyst Troye Brady told the Geological Society of South Africa that the nickel market should be at a 6M tonne deficit for 2006, 4M tonne surplus for 2007, and 35M and 24M tonne surplus' for 2008 and 2009. *    Korea's largest stainless steel producer and world's 5th largest steel producer announced price increases of 7-8 percent on stainless steel items due to increases in raw material cost. *    LME nickel inventory - minus 156 tons = 18,276 tons
5-30	The news that a strike had been averted at Sudbury drove nickel prices down and they closed at $9.80/lb. *    Inco announces it has reached a tentative deal with its union at Sudbury *    LME nickel inventory - minus 246 tons - 18,432 tons
5-28	*    US business' closed for Memorial Day 5-29 - next update Tuesday, 5-30. LME markets closed Monday due to Bank Holiday. *    Inco reports preliminary damage assessments at the PT International Nickel Indonesia furnace will cost the facility approximately six to eight million tonnes of nickel production over the next 6 -8 weeks it will take to repair the damaged furnace. *    The union representing workers at Inco's Sudbury mine will recommend their members reject the most recent Inco offer, according to United Steelworker's Ontario Director Wayne Fraser, thus setting the stage for a strike to begin midnight 5/31. The last time this union went on strike, it lasted nearly 3 months in 2003. Negotiations broke off today.
5-26	Strike news threw the nickel market into turmoil, and it ended the week at $10.43/lb. *    Representative with USW which represents the union at the Sudbury, Ontario nickel mine, tells Reuters that a "strike is imminent" and that talks have reached a stalemate? *    Inco reports fire at # 2 furnace in Indonesia at its Sorowako nickel operation- unknown what, if any effect, it will have on production *    LME nickel inventory -  minus 270 tons = 18,678 tons
5-25	LME nickel ends the day at $10.03/lb. *    Actually seeing an old word being used again by some of the more bearish world economists - stagflation? I think a better term might be specuflation. *    Yieh is reporting nickel consumption in China increased by 30% in 2005 over 2004, and while Japan remains the world's largest producer of stainless, #2 China is gaining in market share. Japan's 5 biggest stainless producers all reported drops in profit for the first quarter of 2006 because of high raw material costs. *    LME nickel inventory - minus 420 tons = 18,948 tons
5-24	All metals down, except zinc, on profit taking, and nickel closes at $9.97/lb. *    The port of Dudinka should be closing at any time (if not already), as the annual ice flows and flooding on the Yenisei River making shipping hazardous and are expected to begin around June 5th. This will effectively eliminate shipments of nickel from the world's largest producer of nickel, Norilsk, for at least 4 weeks. *    Contrary to reports in Reuters from a union official early last week, an Inco spokesman today reported that the union at Sudbury and Inco were now discussing monetary issues?? *    Teck's offer for Inco has July 24 deadline *    LME nickel inventory - minus 978 tons = 19,368 tons
5-23	Metals exploded today with many of the slumping metals regaining the upside. Nickel - just a new record high of $10.07/lb. *    Baoshan Iron and Steel Ltd official told a Shanghai conference that China's projected annual stainless steel output capacity of 16.3 million tonnes by 2010, will exceed its anticipated demand of 8 million tonnes, making it a net exporter of stainless steel by 2010. This year China is expected to produce a little over 4 million tonnes.  *    Japan's Nippon Steel raises stainless steel prices, as do South Korean and Chinese producers. *    Last Thursday's vote by unionised workers at the Sudbury mine giving their union a strike mandate should they reject a new labour contract offer from Inco has nickel traders edgy. Current contract expires 5/31. *    LME nickel inventory - minus 636 tons = 20,346 tons
5-22	LME metals recovered in PM trading, after a continued freefall in the morning. Most ended near where they started the day....... except for nickel which ended the day up at $9.49/lb. *    It appears the last Wednesday's news that consumer prices rose faster than expected, has turned markets on their ears, over fears of inflation. Investors who were betting the farm early last week, now are pulling out and putting their money into more secure bonds. This is casting a bullish shadow over the LME market. *    LME nickel inventory - minus 468 tons = 20,9822 tons
5-19	LME nickel finally felt the downward pressure of the other metals, closing at $9.30/lb. *    LME nickel inventory - minus 612 tons = 21,450 tons
5-18	LME markets saw a repeat of yesterday as all metals slid except for nickel, which closed at $9.60/lb. *    United Steelworkers Union very vocal in its support of a Inco-Falconbridge union and its condemnation of those trying to interfere with the prospect. They told Reuters on the 10th that negotiations at Sudbury were down to non-monetary issues. Is the potential for a strike a real stretch? And is an agreement being stalled to keep prices inflated? *    Iron ore - 10% price increase in 2003, 18.6% increase in 2004, 71.5% increase in 2005, and seeing new contracts being signed at a 19% increase in 2006 *    LME nickel inventory - minus 546 tons = 22,062 tons
5-17	All other LME metals down again in extremely nervous trading, but nickel still climbs, closing at $9.53/lb. *    2005 pdf annual reports (click company name for report) - Xstrata wants to takeover Falconbridge who would rather join forces with Inco who is under a hostile takeover by Teck Cominco *    Xstrata launches a hostile bid for Falconbridge - offering $17.9 billion, or $1.33 more per share than Inco's most recent offer (CAD). It already owns 20% of Falconbridge stock. Now both Inco and Falconbridge, who had agreed to merge, are under hostile takeover bids. *    North American Stainless raises prices on cold roll stainless steel 6% effective June 1st. AK Steel and Allegheny Technologies have already announced increases effective 5/22. *    BHP Biliton unloads Peruvian copper mine to Xstrata for $1.12 billion. *    LME nickel inventories - minus 378 tons = 22,608 tons
5-16	Nickel isn't done just yet - all LME metals up and nickel closes at $9.27/lb. *    German steelmaker Thyssen Krupp Stahl accepts 19% price increase for iron ore from Brazil's CVRD. *    LME nickel inventories - minus 438 tons = 22,986 tons
5-15	Nickel took a beating today as bears took over early morning trading, with bargain hunters calming things down in the afternoon. When the dust of the day settled, nickel closed at $9.05/lb. *    Inco raises its offer for Falconbridge - still under market (stock) value *    LME nickel inventories - minus 540 tons = 23,424 tons
5-12	While the rest of the metals took a rest toady and closed down, nickel kept climbing and closed at $9.59/lb. *    According to a Dow jones report today, BHP Billiton Chief Executive Officer Chip Goodyear says China alone is not to blame for the increased commodities demand, but that a worldwide demographic and economic shift is taking place, especially in so-called BRIC countries. He estimates nickel demand to grow from 180,000 tons in 2002 to 1.2 million tons by 2015 and 4.1 million tons by 2050. He also estimates oil demand will grow from 8.4 million barrels a day in 2002 to 99.4 million barrels a day by 2015. *    Apparently one Falconbridge executive feels Teck has a good chance of messing up the Inco-Falconbridge arrangement, when COO and VP Peter Kekielski leaves Falconbridge for Teck.  *    Union president negotiating with Inco sounds amenable on Wednesday, and denounces Teck's hostile takeover bid for Inco. *    LME nickel inventories - minus 594 tons = 23,964 tons
5-11	LME results are starting to sound like a broken record - and speaking of records nickel soared to a new high of $9.64/lb, before ending the day at $9.53/lb. *     The US Mint estimates it will soon cost 1.23 cents to make a penny and 5.73 cents to make a nickel. Meanwhile in England, a penny made before 1992, containing 97% copper, is now worth 50% more in scrap value than its face value. *     AK steel announces 6% price increase on hot and cold rolled stainless steel products effective May 21. *    Yieh reports a drop in demand for scrap from overseas mills has pushed prices lower for the first time in 5 months, while scrap sold domestically continues to rise. *    Falconbridge hints it may sue Teck over Teck's hostile takeover bid for Inco on condition Inco breaks its merger bid with Falconbridge *    LME nickel inventories - minus 348 tons = 24,558 tons
5-10	Encouraged by the stock piling news from China, all LME base metals were up, including nickel, which took the biggest leap and closed at $9.28/lb. *    China's Ministry of Land and Resources announced on their web site that China intends to build up strategic reserves of uranium, and will boost its stockpiles of copper, aluminum, and other minerals over the next few years, to ensure its interests are protected. *   Japanese stainless steel mill Nisshin Seiko reports  its cost of zinc, nickel and molybdenum have rise by $90 million (US) so far this fiscal year over last year. The company produced 590,000 metric tons of stainless steel last fiscal year. *   Did you know? Stainless steel production accounts for 2/3 of all nickel usage. *   LME nickel inventories - minus 312 tons = 24,906 tons
5-9	Aluminum went over the $3000/mton mark today for the first time since 1988, pulling all metals with it. LME nickel ended the day at $9.05/lb. *   Westpac economists release report in which they forecast base metal prices to increase thru 2006, fall about 15% in 2007, stay flat in 2008, and then begin to climb again thereafter. They also note base metal prices are presently 30% above levels supported by fundamentals, thanks to investments pouring money in. Last week Access Economics forecast a drop between 40 and 50% in base metal prices over the next two years. *   Allegheny Ludlum announces a 6 % price increase on all flat rolled stainless steel products, effective 5-22. *   Did you know? Nearly 50% of nickel used to make stainless steel is recycled from stainless steel scrap. *   LME nickel inventories -  minus 342 tons = 25,218 tons
5-8	LME nickel ended the day at $8.98/lb. *   At a glance (all figured CAD) - Inco had $12.251 billion in total assets March 31, 2006, against $6.868 billion in total liabilities, while Teck had $8.92 billion in assets against $4.088 billion in liabilities. In 2005, Inco had a net income of $836 million on revenues of $4.601 billion, while Teck showed a $1.31 billion net income on $4.415 billion in revenues. Teck employees 6710 and shows a 38.34% return of average assets, while Inco employs 11,707 and offers a 7.01% return. *   The announcement of Teck's offer for Inco is just the latest, and by no means, the last we have heard of the Canadian mining soap opera. Teck's interest in Inco has been known in the inner circles since it began informal talks last summer. When Swiss based Xstrata (who had lost a bid earlier for #3 nickel producer WMC Resources of Australia to BHP Billiton) made a surprise announcement in August that it had purchased nearly 20% of fellow Canadian miner Falconbridge, Teck probably thought Inco would jump at a merger. They did - just not with Teck. What neither Teck or Xstrata realized was, that Inco and Falconbridge were also talking, and announced a friendly merger in October. Many have expected Xstrata would up Inco's offer for Falconbridge later this month, if for no other reason, than to force Inco to counter-offer, making Xstrata's 20% holdings, worth more in cash. Now, out of the blue, Teck has thrown another curve ball in the mix, by saying it will buy Inco, if it breaks its deal with Falconbridge. Falconbridge is very displeased, as Inco may well be. And where is quiet Xstrata? Will it sit back and quietly watch the show and wait for the winners - or more importantly, the losers to be determined. Or will it make its own hostile takeover bid for Inco or Falconbridge - just to stir the pot even more? Stay tuned. *   Teck Cominco Limited of Canada announces offer to acquire all of the outstanding shares of Inco Limited, conditional on Inco not completing its announced takeover bid for Falconbridge Ltd. *   LME nickle inventories - minus 294 tons = 25,560 tons
5-5	LME nickel ends the week at $8.83/lb. *     From Sydney Morning Herald in article by Tom Stevenson "Merrill Lynch recently compared the price performance of commodities with listed futures, including copper, with those such as rubber and steel that cannot be traded so easily using derivatives. It concluded the influence of speculators on the market was "unprecedented" and analyst Richard Bernstein warned that "commodity prices always fell in the 12-month period subsequent to extreme commodity speculation"." *     Record high's yesterday - copper, zinc, gold (25 year high), aluminum (highest since 1988) *    Asian markets to reopen on Monday after week-long holiday break *    LME nickel inventories - minus 912 tons = 25,854 tons
5-4	BHP predicts copper won't go into the surplus column until 2008, contrary to many analysts, and this drove copper prices to new record high's today. Nickel joined the rally, closing at $8.89/lb. *    Yieh, citing analysts reports predicting a 43M metric ton surplus this year in nickel production, says even if China increased consumption over last year, they (China) do not deserve the blame for the recent spike in the price of nickel. *    Moody's Investor Service said in a report Tuesday that nickel prices should decline this year, but will remain high in the near future. *    No word out of Inco about the ongoing union negotiations. The strike 3 years ago was primarily about pension differences. At the time it was reported 45% of their work force would retire during the following 3 years. If these workers have retired since, it would seem the potential disagreements would be of a different nature, and less likely cause enough to strike.  *    Much press recently about whether this bull market is based on fundamentals - or pure speculation. LME, answering complaints, says it has no control over what is driving the market, and it only cares that the market is being driven legally. *    French producer Eramet states the nickel market could see a surplus this year, breaking with an earlier prediction by Inco. *    LME nickel inventory - minus 162 tons = 26,766 tons
5-3	LME nickel ended the day at $8.66/lb. *    Access Economics survey of brokerages and research companies predicts nickel will peak over the next few months, and then decline by possibly as much as 20%. *    MEPS warns stainless steel users to expect large price increases in June thanks to the high nickel costs, and the recent 10% increase in the cost of ferrochrome. *    Mittal Steel will loose about 300,000 tons of steel production from an East Chicago, Indiana plant due to a fire 4/28. *    LME nickel inventory - minus 66 tons = 26,928 tons
5-2	LME nickel ended down on profit taking - $8.62/lb. *     ISSI first quarter world steel production up 5.4% over this time last year... China leads the way with a growth of 18%. *    According to Scrap Magazine, MacQuarie Research agrees with Inco saying their will be a deficit this year. They predict nickel consumption at 1,370,000 metric tons with production at 1,343,000 metric tons, a deficit of 27,000 metric tons. It also forecasts 2006 average price of $7.37/lb for nickel. *    Inco announces it will suspend operation of its oil fired power plant that supplies electricity to its nickel smelter in Indonesia due to high fuel prices. *   French nickel producer Eramet expresses concern to the European Commission, which is reviewing the takeover bid by Inco of Falconbridge. Speculation that Xstrata may be waiting til mid May to make a rival offer, if for no other reason, than to force Inco to up its offer, thereby increasing the value of Xstrata's 19.9% stake in Falconbridge. *   LME nickel inventory - unchanged from yesterday due to holiday closure
5-1	LME markets closed for May Day, as is much of the world. *    LME nickel inventory - minus 180 tons = 26,994 tons

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

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