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Stainless Steel News and Nickel Prices

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Thursday, May 31

  Today's official LME nickel closing price - cash - $23.09/lb - 3 month buyer - $21.63/lb (43.25% higher than 1/1/07). Another day on the teeter-totter for nickel prices. Two days ago we reported the market was quiet until the PM kerb, when it suddenly found some optimism. Today, markets started out with the optimists in control of nickel, but when the PM kerb trading period hit, once again, emotions changed. For a time, they changed in a big way, with earlier gains evaporating, and the price moving into the deficit column. Watching cash and 3 month nickel prices over the last 5 days has been like watching an adult and a child, sitting in a parked car. While the 3 month juvenile dances around in the back seat,  trying to open the locked doors, impatiently wondering aloud when the car will move, the cash adult just sits there, seemingly content at where the car idles (for cash that has been around the $51,000/tonne mark). For the day, and month, 3 month nickel ended at $20.87/lb ($46,000/tonne). (Dow Jones - more) We will have to wait for the official numbers to be released later, but we showed 3 month nickel ending the last day of April at $21.64/lb. So while much of the month was spent well above these two marks, nickel finished the last day of May 3.7% lower than it did on the last day of April, and 12.6% lower than its all time record high set on May 9th. We do estimate the average price of nickel for May will be higher than April, though. See you next month.

  HansonWesthouse Metals & Mining News & Views - pdf here

  USGS Mineral Industry Survey - Chromium in February 2007 - pdf here

   Investment in Nonferrous Metals Industry Jumps 48% in First Four Months - "China's investment in nonferrous metals industry fixed assets, excluding independent gold enterprises, reached RMB 29.38 billion ($3.84 billion) in the first four months of this year, up 48.39% from the same period last year, according to a roundup report recently released by the National Development and Reform Commission." - more here

  China Iron-Ore Demand, Steel Output May Beat Outlook, Vale Says - "China's iron-ore imports may exceed expectations in 2007 as rising steel production increases demand, said Vale doe Rio Doce's finance chief." - article here

  Brazil Miner CVRD To Reduce Debt To Pre-Inco Levels In 3 Yrs - "Brazilian mining giant Companhia Vale do Rio Doce (RIO), or CVRD, expects to return to the same debt levels the company had before its acquisition of Canadian nickel miner Inco in the next three years, the company's CFO said Thursday." - article here

  Toledo Mining Ships Nickel Ore Directly To China - "It is amazing how the market invents solutions to problems. The current shortage and high price of nickel has prompted Toledo Mining to ship laterite ore directly from the Philippines to China for smelting. It wasn’t so long ago that laterite ores were regarded as high cost because of the high energy required to smelt them." - article copied here

  News Bites - "Australia exported a record 25.3 Mt of iron ore in April, according to the latest trade data. This represents a sizeable increase of 4.7 Mt on the same month last year and also marks a jump from the weather-affected March 2007 export total of 17.6 Mt. The latest data bring the total for the first four months of the year to 86.6 Mt, compared with 77.2 Mt in the same period last year." -

  Indications at 7:50 am CST show nickel selling up by $.41/lb . New direction - or just the upside of a see-saw market? While there is little doubt the price of nickel will remain bullish for at least a few more years, we are a little surprised that traders seem to be shrugging off the gains seen in the LME warehouses. (Bloomberg - more)

  Stainless Steel Producers Set to Actively Promote Nickel-Free Grades - "The global stainless steel scene is changing rapidly. Customer backlash against the rising cost of nickel has been taken on board by the producers. Mills are now taking seriously market demand for low or non nickel grades." - article here

  Stainless Steel Plate and Nickel Price Forecasts from MEPS - "Hot Rolled Plate transaction values moved up again this month 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 percent of the surcharge increase." - more here

  News Bites - (Asia Today) "The World Bank has raised its growth forecast for China's gross domestic product this year from 9.6 to 10.4%, warning that the widening trade surplus, which requires measures to address excessive liquidity, remains a key economic issue." - (Dow Jones) "LME nickel's long-term price outlook remains positive, partly due to a structural shortage of the metal, says Numis analyst John Meyer." - (Metal Bulletin) "Nickel will be in oversupply in the global market this year, predicts Chen Shufang, senior analyst at Beijing Antaike Information Development Co."

  BIR Speakers Feel Stainless Oversupply Will Continue - "According to several speakers at the recently concluded Bureau of International Recycling’s spring convention, the slowdown in global stainless steel production during the last half of 2006 had been less marked than anticipated, such that production jumped 11.7 percent over the course of last year to 28.4 million metric tons." - article here

  CRU foresees upward pressure on iron ore prices - "Strong iron ore demand worldwide is likely to continue to put upward pressure on prices in the short term, according to Calum Baker, raw materials research manager of business analysis and consultancy group CRU." - article here

  Ramu nickel project being rushed - "Nickel price has soared in recent years following an increasing demand spurred by China’s industrialisation programme. " - article here

  Young, Aggressive Exec Named BHP Billiton CEO - "The world’s largest mining company, BHP Billiton, on Thursday chose a youthful and aggressive new chief executive, 44-year-old Marius Kloppers, to lead it forward in an increasingly competitive, consolidating global market that is likely to require greater risk-taking." - article here

  Norilsk Investor Prokhorov Says Its LionOre Bid Is `Too Risky' - "Russian billionaire Mikhail Prokhorov, who holds 22 percent of OAO Norilsk Nickel, said the company's C$6.8 billion ($6.4 billion) bid for LionOre Mining International Ltd. is ``too risky'' as nickel prices will drop." - article here (we mentioned this in our weekend update - figured it would get some media attention sooner or later)

  To anyone who cares to know, the proper pronunciation for molybdenum is "muh-lib-duh-nuhm".

  According to a Outokumpu January report, the top 6 stainless steel producers in the world, will switch places in 2007. Listed in the order of largest for 2006, and their 2007 forecasted ranking in parenthesis are...1. ThyssenKrupp of Germany (#4) 2. Arcelor of Luxembourg (#1) 3. Acerinox of Spain (#2) 4. Outokumpu of Finland (#6) 5. POSCO of South Korea (#5) 6. Taiyuan Iron&Steel (TISCO) of China (#3) (comment - we get into trouble when we try to do these rankings, so we borrowed someone else's this time.)

  From Stainless Steel Producers 1st quarter conference calls - Carpenter Technology 4/27/2007 - "Demand for nickel-based alloys slowed during the quarter due to the escalation in nickel prices. As a result, many customers became more cautious about inventory balances." - Allegheny Technologies 4/11/2007 - "We remain sensitive to our customers' concerns with the dramatic increase in the cost of nickel. As a result we continue to assist customers in switching to lower nickel bearing alloys, a process that has changed our product mix and continues to gain momentum." - AK Steel 5/3/2007 - Chairman James Wainscott reports 300 series stainless steel sales have been impacted by lower demand and record high nickel prices, sales of 400 series stainless was experiencing record shipments. - Outokumpu Oyj 4/24/2007 - "The strong increase in demand that characterized stainless steel markets in 2006 began to slow during the first quarter of 2007. After having increased throughout 2006, global apparent consumption of stainless steel flat products remained on the fourth quarter 2006 levels, but was still 8% higher than in I/2006......Due to shortened order book Outokumpu has decided to cut production by some 10% in the second quarter."

  Metal Center News - According to an article in the May 2007 edition of Metal Center News, Markus Moll, director, of Steel and Metals Markets Research, gave a presentation at the Metals Service Center Institute's Specialty Metals Division meeting in March. A few quotes from the article - "The stakeholder with the greatest potential to deflate the nickel price bubble is the stainless steel producer, Moll said. "If the stainless steel industry decides to produce less in the third quarter, and there are signs that producers are doing it, that cold have a key impact on the nickel industry. The nickel price is a bubble, " he concluded, "and bubbles burst." ...."...But Moll wasn't making any definite remarks about the price of nickel this year - other than that a drop is "inevitable". "I cannot tell you when it will happen. Everybody has to draw their own conclusion," said Moll, who joked about wearing a bulletproof vest to this year's convention as a consequence of an errant prediction last year." (Metal service centers can subscribe to Metal Center News for free here)

  Today's beginning nickel inventory -  plus 174 tons = 7,872 tonnes (7.62% - 600 tonnes cancelled warrants)
Wednesday, May 30

  Today's official LME nickel closing prices - cash - $22.95/lb - 3 month buyer - $21.18/lb (40.26% higher than 1/1/07). Whatever optimism found its way onto the LME trading floor yesterday, apparently evaporated overnight. News was actually a little bullish today, with estimates of nickel demand in China blossoming over the next 4 years, and CVRD putting its Vermelho nickel project on hold because of power supply problems. On the flip side, Norilsk's economist David Humphreys, told reporters at the China Nickel 2007 conference, that the nickel market had moved into a slight surplus situation and indicated nickel pig iron is more of a concern to the supply chain than substitution is on the demand side. Overshadowing all of this was another gain in nickel inventories, although today's reported growth was caused by yesterday's cancellations, not physical receipt.  Today, 3 month nickel ended the day at $21.16/lb ($46,650/tonne) (Dow Jones - more)  Comment - the market seems to have entered a Mexican stand-off period. Bull wants nothing more than to get back in the game, while the bearish bullfighter is standing in front of him, with a large red warning blanket and sword in hand. The consumers of nickel are obviously ready for a steak dinner and cheering on the bear, but how it will play out, is anyone's guess. The bull wants to charge, but not really sure how much pig nickel is in that sword. Enough to hurt him or not? The LME inventory level that we post each morning is adding support to the bear, but if anything newsworthy about supply being effected comes up, you could see our single biggest clue for the direction of the market, mean nothing, and our bear decide its healthier watching from the sidelines. Stay tuned.    

  Quote from AFX News article here  Reference nickel - "Demand is softening, we believe, due to high prices," said Bhar at UBS. "There has been a lot of anecdotal information pointing to weaker demand for austenitic stainless steel."... "Nickel will trade sharply lower in the near term," said Bhar, adding 40,000 usd is a likely price for the metal in three months.

  Worker Safety Issue At Voisey Bay Mill Resolved - "Issues surrounding worker safety at the Voisey Bay Nickel Co.'s mill have been resolved, but production from the mill remains suspended pending the draw-down of stored product, according to an official with Voisey's Bay Nickel Co. on Wednesday." - article here

  Brazil CVRD Delays Projects On Long-Term Pwr Concern - Report - "Brazilian mining giant Companhia Vale do Rio Doce (RIO), or CVRD, is delaying certain investment projects due to fears of shortages of electric energy by 2012 or 2013, company President Roger Agnelli said Tuesday." - more here

  Indications at 7:50 am CST show nickel selling down by  $.35/lb. For those who may be wondering why the market is softer today, look at the all important LME nickel inventories figures we post each day. They show losing 24 tons since yesterday, right? Technically, yes. But in reality, there is more to the equation. Look at the cancelled warrants, the "sold" inventory. On Tuesday, we showed 762 tonnes of cancelled warrants, and today we show 552 tonnes. That's a gain of 210 tonnes, and subtracting the 24 tons that physically left the warehouses, it reflects an actual gain of 186 tonnes for the day. (Bloomberg - more)

  Behre Dolbear - Global Mining News - pdf here

  Norilsk Chief Economist: World Nickel Market In Small Surplus - "The global nickel market has already moved into a surplus, despite the low London Metal Exchange inventory level, said David Humphreys, chief economist at Russia's Norilsk Nickel." - article here

  Inco Wants Indonesian Govt Guarantee For Contract Extension - "Nickel mining company PT International Nickel Indonesia (Inco) has asked for guarantee that the government will extend its contract after it expires in 2025." - article here  Govt to renegotiate Inco royalties deal - article here

  China 2010 Nickel Demand To Far Exceed Output-Govt Researcher - "China's nickel consumption will grow to more than 400,000 metric tons in 2010, but its domestic output capacity will only reach about 124,000 tons, said a government researcher Wednesday." - more here

  Yusco to up export prices by $200/ton in June - "Though the nickel price falls, the new list prices from Taiwan's Yusco keeps rising in June." - article here

  Stainless scrap prices plummet in USA; buying in lull - "Stainless steel scrap has lost its lustre, at least as far as many stainless mills and major specialty scrap brokers and processors in the USA are concerned." - article here

  News Bites - Steelguru - "Germany weekly Die Welt citing an unpublished study by Boston Consulting Group reported that global crude steel output will advance 3% to 4% a year to 1.7 billion tonnes by 2015 with the world's biggest steelmakers gaining combined market share." - "According to industry experts, Brazil's crude steel capacity could grow to some 65 million tonnes to 70 million tonnes by 2015 from the current 37 million tonnes as Brazilian steel industry plans to invest USD 22.7 billion and more investments are under consideration" -

  China's nonferrous metal sector continues to invest heavily in fixed assets - "China's non-ferrous metals industry continued to invest heavily in fixed assets in the first four months of the year." - article here

  Mindoro seeks ECC for nickel project - "Mindoro Resources will make an application for an Environmental Compliance Certificate (ECC) for the Agata nickel laterite project in the Philippines." - article here

   New mining complex strengthens Norilsk Nickel in Murmansk Oblast - "The Kolskaya GMK, the regional subsidiary of Norilsk Nickel in the Kola Peninsula, has opened a second plant complex on its “Severny Globokii” mine. The underground mine, which is to boost extraction of nickel and copper ore to an annual six million tons, is intended to replace the falling production of existing open pit mines." - article here

  Antam to invest $2.9 billion - "In a bid to add value to its mining operations, PT Aneka Tambang (Antam), the country's second largest nickel producer, revealed Tuesday that it would build five alumina and nickel smelters at a total cost of US$2.9 billion." - article here

  FINEX technology saves costs, reduces pollution - "POSCO yesterday began steel production at its FINEX plant here, using new technology for an annual output of 1.5 million metric tons." - more here

  Today's beginning nickel inventory - minus 24 tons = 7,698 tonnes (7.17% - 552 tonnes cancelled warrants)
Tuesday, May 29

  Today's official LME nickel closing prices -  cash - $23.13/lb - 3 month buyer - $21.27/lb (40.86% higher than 1/1/07). Markets started off quiet and edgy today, but in PM kerb trading, finally settled on a direction. Cash nickel ended the day flat, but 3 month and 15 month nickel were both gainers.  With the all important and watched inventories growing, the dollar down on the day, LionOre production goals lowered, and Voisey's Bay re-opened with its next shipment scheduled for June 3rd, we really aren't finding anything newsworthy that brought on the spurt of optimism among nickel traders. We can't offer a possible reason, but 3 month nickel ended the day at  $21.59/lb ($47,600/tonne)  (Dow Jones - more

  Metals Insider - Week in Review - Nickel loses foothold but still clinging on - here

  We  have received word that Taiwan stainless steel mills have raised their price on 304 (A2) stainless steel by 4% for June delivery.

  Indonesia seeks better royalty payment from Inco - "Indonesia's government is negotiating with PT International Nickel Indonesia to revise the current royalty system to seek more revenue from rising nickel prices, a senior mining official said on Tuesday." - article here

  China to increase rare metals' export tax - "China will raise export taxes on a range of rare metal products, including tungsten, rare earth, and molybdenum, from June 1, in a bid to protect resources from running out, said Wu Rongqing, an official with the Customs Tariff Commission of the State Council." - article here

  China's red-hot market - "Tian Tingting, a 22-year-old university student, has heard all the gloomy predictions from the experts and the stern warnings from the government. But she has no intention of getting out of China's red-hot stock market." - article here

  Canadian opposition attacks foreign takeovers - "The Canadian opposition party has called for a block on foreign acquisitions of large local firms as mining companies Alcan and LionOre and telecoms firm BCE all face overseas bids." - article here

  Aussie troops, mining firms not welcome in Mindanao: group - "Southern Philippines a hotspot for foreign war games and giant mining projects" - more here

  Indications at 7:55 am CST show nickel selling up by $.18/lb . Considering the sudden and unexpected closure of Voisey's Bay received much of the blame for Friday's rise in price, we are a little surprised the sudden and unexpected re-opening of the mines operations didn't have a reversal effect on nickel prices today. And while nickel inventories gained once again, much of it in Busan, South Korea, markets are up so far today. We will see if it lasts.  (Bloomberg - more) (AFX News - more)

  Scotiabank Commodity Price Index - pdf here

  Canada Commodity Price Update - pdf here

  Mining boom fuels jobs bonanza - "North West, Limpopo and Mpumalanga are on a roll, thanks to platinum and chrome, writes Julie Bain" - more here

  (comment - First Venezuela, then Bolivia, now Zimbabwe - who is next?) - "Financial: Mugabe ready to seize foreign companies: Law could force firms to hand over 51% of shares: Wealth would reward supporters, say analysts" - more here

  Courtesy/copyright Dow Jones Newswire - "LME nickel near-term price outlook uncertain following "turbulent" trade last week, expects prices to decline further by end-2007 but upside risk remains due to tight market conditions, says Commonwealth Bank of Australia; threat of substitution also a factor dragging down prices." -

  News Bites - "Canada's Teck Cominco and International Nickel Ventures Corporation (INV) began a 8.5 million dollars work program, effective November 1, 2006, on their Santa Fe/Ipora nickel laterite joint venture in Brazil to be completed by mid-2007." - "LionOre Mining: Norilsk Nickel Offer Is Superior Proposal" - "China high nickel pig iron output eases metal tightness" -

  New Caledonia provinces set to get bigger nickel stake - "New Caledonia’s three provinces are likely to raise their respective stake in the French SLN nickel company." - article here

  The Rio Tinto nickel project - "The protracted negotiations over the contract for Rio Tinto's US$2 billion nickel mining and processing project in Sulawesi are further evidence that the government does not have a sense of urgency, nor a sense of priority, about restoring investor confidence in the mining industry." - more here

  Today's beginning nickel inventory - plus 270 tons = 7,722 tonnes (9.86% - 762 tonnes cancelled warrants)
Monday, May 28 (LME markets closed)

  Too highlight the uncertainty in the market, our weekly poll of Chinese analysts published by Shanghai Nonferrous Metals shows forecasts of growth versus loss nearly dead even. Of 34 analysts polled, 14 (41%) believe the price of nickel will rise this week, 16 (47%) believe the price will fall, and 4 (11%) believe it will end where it starts.

  News Bites - "About 600 working places at the Polar Division of Norilsk Nickel will be created for school children for summer season. Rasul Elkanov, deputy-chief of the directorate for personnel and social policy of the company's Polar Division, announced it to REGNUM-KNews. Elkanov told the Polar Division had been forming school labor squads for a few years. Norilsk Nickel enrolls children aged from 14 to 18 for two months – from June 15 to August 15. The teenagers will be engaged in construction. The schoolchildren get wages for their work from three sources: Norilsk Nickel, local and federal budgets." - "Jindal Stainless Q4 profit jumps sharply" - "Xstrata extends bid for LionOre in nickel merger, but not price" - "The Berong Nickel Corporation in Barangay, Berong, Quezon, Palawan is planning to build a P1.2 billion (US$25.9 million) nickel processing plant to process 1.47 million metric tons of nickel ore annually. The processing plant is similar to the Coral Bay Nickel Corporation in Barangay, Rio Tuba, Bataraza, which will process nickel raw materials before shipping to China and other foreign countries. Palawan has a large deposit of nickel ore totaling about 414 million tons." - "Philippine President Gloria Macapagal Arroyo is set to formally meet up with executives of BHP Billiton and other mining executives from the Australia-New Zealand Chamber of Commerce in the course of her visit to Australia. BHP Billiton is now eyeing a multi-million dollar nickel project in Pujada Peninsula, Davao Oriental province in partnership with local mining firms Hallmark Mining Corp. and AustraAsia Link Mining Corp, Bautista noted."  - "Stainless steel scrap price drops in Taiwan" - "According to the Demographic Tendencies study, disclosed today by the Brazilian Institute for Geography and Statistics, the life expectancy of the Brazilian population was 42.7 years in 1940, and reached 70.4 years in 2000....In 1940, women aged between 15 and 49 had an average of 6.2 children. In 2000, Brazilian women had on average 2.3 children." -

  Sluggish nickel affects stainless steel market - "Last Friday, LME 3 months nickel price dropped to US$46,000-47,000/mt, which is down from the highest price level of US$50,000/mt." - more here  

  World crude steel production up in April - "According to figures released by the International Iron and Steel Institute (IISI), global crude steel production reached 109.3 million tones in April 2007, an increase of 7.6 percent on yearly basis." - more here   Global steel consumption keeps climbing except in US - more here

  LionOre downgrades FY07 nickel forecast - "Takeover target LionOre Mining International Ltd has downgraded its nickel production forecast for calendar year 2007 following delays at its Maggie Hays mine in Western Australia. LionOre, which is Australia's third largest nickel producer behind BHP Billiton and Minara Resources Ltd, has cut its production forecast from 44,300 tonnes to 43,000 tonnes of nickel for 2007." - more here

  Shanghai launches daily nonferrous metals price index - "The Shanghai Nonferrous Metals Index (SMMI) is to be based on the spot prices of the six nonferrous metals - copper, aluminum, nickel, lead, zinc and tin - published on the Shanghai Nonferrous Metals Website. The combined output of these six metals accounts for 90 percent of the country's entire non-ferrous metal output." - more here  (if they published it on their website today, we can't find it - here)

  Stainless steel consumption rose 29% last year - "Domestic consumption of stainless steel grew by 29%, to 192 647 t in 2006, driven primarily by the many capital projects in progress in Southern Africa, the Southern Africa Stainless Steel Development Association (Sassda) said in a statement." - article here
Weekend Review, May 26 & 27 (updated throughout weekend)

  Week in Review - Bombarded with bearish forecasts, for nearly 3 weeks straight, the market finally buckled to the pressure. It will be remembered as a week that put the market into a major corrective mode, or just another bleep in an otherwise bull market continuation. We tend to believe there is some truth to both. Unless China locks up their doors and takes the summer off, the bull market will continue. But we also agree with those who feel the market is due for a major correction. The price increases the nickel market has experienced this year, and specifically in February, have been dramatic, and there is evidence surfacing that threats by the stainless steel industry of old, are now becoming reality. Change is something industry generally resists. But when any product reaches a point where its economical value is questioned, then considerations for change become practical. Stainless steel customers were groaning in early 2006, when the price of nickel was double its low of 2001, and surcharges were nearing the base cost. In late 2006, they were complaining when nickel had doubled again, and surcharges became higher than the base price. Now that nickel has nearly doubled again, and surcharges are double the base cost, they are angry. And stainless steel producers know that anger is a prime motivating factor for change, second only to a reactionary response to a competitor's change. As we stated last week, the nickel industry knows this, but at the moment, is too busy trying to keep up, to care. There is tons of money to be made, and like historical cycles of past, there will be time for PR when supply finally exceeds demand. There is little evidence that is happening anytime soon.

(different source used than daily updates) The week began when markets opened Monday at $22.91/lb, reached a high of $23.00/lb, a low of $22.61/lb, and ending at $22.88/lb. Tuesday, markets would open at $22.97/lb, climb to $23.13/lb (the high for the week and shy of the $23.50/lb record), then tumble to the low of $21.82/lb, where it would end the day. Wednesday, markets opened at $22.32/lb, which was as high as it would get, fall to a low of $20.76/lb, and end at $20.93/lb. Thursday, would prove the low point of the weeks trading, with markets opening at $21.00/lb, seeing a high of $21.46/lb, a weekly low of $20.42/lb, and ending the day at $20.59/lb. Friday would open at $20.59/lb, climb to $21.39 after seeing a low of $20.50/lb, and ending the day and week at $21.20/lb. Based on ending prices, the price of nickel fell approximately 8% from last Friday, but still remains 40.4% higher than it started the year at. One year ago today, nickel was $10.43/lb, two years ago, $7.47/lb, and four years ago tomorrow, nickel would breech the $4.00/lb mark.

The CRU Stainless Steel index shows during this same period the cost value of stainless has gone from 97.38 in May 2003, to 136.58 in May of last year, to 238.91 this month. For those who like to draw parallels, the price of crude oil contributes 42.6% to the retail price of gasoline, while nickel is normally responsible for around 2/3 the cost of 300 series stainless steel (proportionately higher now). In 2003, a barrel of oil averaged $32.51 and the price of gas in the US reached a seasonal high of $1.73/gallon. A barrel of oil Friday would cost you $65.54 (down from $79 barrel last summer) and the average price of gasoline in the US is $3.23/gallon (peaked at $3.11 gallon last year). While there are parallels between the two, there are numerous differences, the biggest being the direct effect politics plays on the price of petroleum. And while politics has an impact in any international trade, nickel included, if our memory is correct, World War Two was the last time the world saw major battles fought over nickel mines.

Then again, there is Cuba. Yes, we speak of that tiny, half occupied, nearly bankrupt island, just miles from our own coast, and its vast resources of nickel. Nickel, we might add, that is forbidden by U.S. law, to find its way into any product purchased in the United States. And if you think we are kidding.... we aren't. No matter what - we have to keep our principles! :-)

   Two reports - Fortis Metal Monthly - pdf here  and the Fortis Asian Metals Monthly - pdf here

  NMA Mining Week - pdf here

  Vale Says Voisey's Bay Nickel Refinery Resumes Production - "Cia. Vale do Rio Doce, the world's second-largest nickel producer, said nickel production at its Voisey's Bay project in eastern Canada resumed last night after safety concerns shut a refinery." - article here   RCMP probe labour spat at Voisey's Bay mine - "The RCMP are investigating an incident of labour friction at the strike-bound Voisey's Bay nickel mine in Labrador, amid an ongoing walkout and an NDP call to outlaw replacement workers." - article here

  Stock analysis by Galaxy Securities for Taigang Stainless Steel - (translated online, but you'll get the point) "Although nickel price increases contributed to nickel stainless steel prices continuing to rise, the escalation of consumption among domestic high-end clients including petrochemical, automotive, liquor and other industries, can still digest nickel stainless steel price increases. Meanwhile nickel stainless steel price increases driven non-nickel stainless steel market sales brisk." In another article on the company and posted on China Finance Net -  Taigang estimates the ratio of 400 series to other types of stainless they will sell will climb from "31% in 2006, to 40% this year". And more interesting forecasts for the stainless steel industry as a whole in China - translated article here

  Arroyo brings 1 million US dollars in investments from Tokyo - "President Gloria Macapagal-Arroyo arrived Friday afternoon from her four-day visit to Japan bringing home with her more than US$1 billion worth of investments, mostly in mining." - article here

  Behind The Big Nickel Bidding War - "No wonder Norilsk Nickel and Xstrata are fighting over LionOre Mining International; according to the international investment bank, Credit Suisse, world nickel prices could continue to rally and even reach $US65,000 a tonne this year." - article here  (we would be surprised if the little blurb we posted Friday doesn't get some more attention in the coming weeks - "Kommersant - Norilsk shareholder and former CEO Mikhail Prokhorov, the only board member to vote against upping the bid for LionOre, thinks a deal on such terms is too risky for the Russian mining giant". Takeovers are a generally a positive sign for long term commodity prices, but when a company executive of this caliber disapproves of a takeover, it could be seen as bearish.)

  Comment - Possible problem on the horizon for Xstrata in New Caledonia? On May 6, Radio New Zealand mentioned a study that had  just been published by the University of New Caledonia, which found cases of mesotheliomas were 30 times higher in New Caledonia than in France, and particularly, extremely high among tribal members in the northern part of that country. There are numerous reports posted online that show the mining of nickel  itself, does not increase cases of mesotheliomas, a cancer brought about by inhaling asbestos fibres. It does appear, however, that northern New Caledonia contains many deposits of asbestos rock. When this rock is cleared, the air is filled with asbestos fibers, which have been found to be harmful to humans. Will the construction of the Koniambo mine, with its infrastructure requirements, cause these deposits to be disturbed? We don't know, but if they are, you can bet we will hear more about it.  

  LionOre shortsighted on Xstrata break fee - "Suppose the bright lights at Inco had done things differently. Suppose, when they tried to buy Falconbridge a couple of years ago, they'd used an iron fist instead of velvet gloves." - article here

  China's share-buying binge could get ugly -  (quote) "The stock market bubble has now pulled in so many of the emerging middle class - the number of trading accounts has risen to nearly 100 million - that a crash will be a political problem." - more here

  PBS reports - Frontline - 63 episodes now online here / Nova episodes online here / Watch Al Jeezera English, and other news and tv channels online for free here

Friday, May 25    (LME markets will be closed on Monday, May 28, for Spring Bank Holiday. US markets also closed for Memorial Day.)

  Today's official LME nickel closing prices - cash - $23.13/lb - 3 month buyer - $21.34/lb (41.32% higher than 1/1/07).  LME inventories figures showed another gain today, but this time, the majority of the addition was registered in their Baltimore warehouse. This now puts a crimp in our Norilsk /Dudinka beating the flood theory. Market is still incredibly cagey, with traders looking around desperately for clues. News was split today, favoring both the bearish and bullish. As mentioned before, inventories reflect another substantial gain, while figures released today from China, show their imports of the so-called "pig nickel", continue to accelerate. On the other side of the coin, these same statistics show China is still importing more and more refined nickel to feed its ravenous demand. There are also mixed signals coming from Voisey's Bay about when future shipments of ore will ship, and the percentage of cancelled warrants edged up a tad from yesterday's yearly low figure. And while the bears seemed to be losing their grip in today's tug-of-war, they haven't grown quiet yet. Nickel ended the day and week at $21.00/lb ($46,300/tonne). (Dow Jones - more)  Have a safe and relaxing weekend. We will have a weekend review, but with the LME closed on Monday, our daily update will return on Tuesday.

  News Bites - (courtesy Metals Insider) "China’s imports of refined nickel and alloy remained strong at 9,649t in April. Cumulative imports over the first four months of this year were 39,208t, up 22% on the year-earlier period....There is also little doubt that the country’s new source of nickel - nickel pig iron made from imports of ore - is also seeing continued robust production growth. Imports of ore and concentrates - the country’s customs department does not provide a breakdown - hit a fresh monthly record of 1,593,772t in April. They totalled 3.849 million tonnes in the Jan-Apr period, compared with just 337,400t in the year earlier period. However, it is clear that despite super-high prices and a faster flow of nickel pig iron domestically China remains a significant importer of refined nickel" - (courtesy Dow Jones Newswire) - "Trade buying and some short covering lifts LME nickel by 4% Friday, says a London-based broker. "There have been a lot of people who've been living probably hand to mouth," he says, in the context of recent high prices. "My guess is that it will be a rally supported by physical buys and some short covering," he says. Adds base metals likely to trade in a sideways range over the next few weeks before moving downward again" - Kommersant - "Norilsk shareholder and former CEO Mikhail Prokhorov, the only board member to vote against upping the bid for LionOre, thinks a deal on such terms is too risky for the Russian mining giant"

  Lead (and nickel) fears ease at Esperance - "Latest results from soil sample tests have eased fears of widespread lead contamination in Esperance." - more here

  Xstrata Mulls Ivory Coast Touba-Biankouma Nickel Proj Restart - "Xstrata PLC is considering the resumption of Falconbridge's nickel project in northwestern Ivory Coast, the project's geologist said." - article here

  Don't call the correction over yet - indications at 9:10 am CST show nickel selling up by only $.22/lb with backwardation between cash and 3 month, still over $5000/tonne.

  Indications  at 8:10 am CST show nickel selling up by $.88/lb   Backwardation was over $5000/tonne yesterday, and while cancelled warrants moved up this morning, for the first time all month, they stayed below 10%. (Bloomberg - more) (Reuters - more)

  Roundup of Daily Pontifications - Pick your own poison (see yesterday for numerous others)
#1 View of the day: Jeremy Gray, Credit Suisse - "Nickel prices could continue to rally and even reach $65,000 a tonne this year, according to Jeremy Gray, head of the mining research team at Credit Suisse. That would represent a sharp jump from Wednesday’s nickel price of about $47,000 a tonne." - article here
#2 courtesy Dow Jones Newswire - "LME nickel likely to "continue its fall from grace," albeit at slower pace, says Standard Bank; rising LME stock levels, though from critical levels, weighing on sentiment despite temporary shutdown at CVRD's Voisey Bay nickel mine."
#3 courtesy Dow Jones Newswire - ""Nickel prices look likely to exceed 50,000 usd per ton in the coming days or weeks on strong global stainless steel production, particularly in China, with nickel supply struggling to match consumption, Numis Securities said."
#4 courtesy Dow Jones Newswire - "LME nickel is looking vulnerable to a further decline after the market's slump Thursday, with pressure coming mainly from system-based selling triggered by the breach of key technical support levels, a London broker says" and "LME aluminum, nickel likely to test lower if copper fails to regain strength, as technical charts encouraging trend traders to offload positions, says Hong Kong-based trader."

  News Bites - "LionOre Determines Increased Norilsk Nickel Offer of Cdn$27.50 in Cash Per Share to be a Superior Proposal" - "RESOURCE Mining Corporation will start a drilling program over its Wowo Gap nickel project in PNG on May 28, with the arrival of two diamond drill rigs after a one-month delay." - "PERTH-based explorer Marengo Mining has upgraded its JORC-compliant resource estimate for its Yandera copper-molybdenum project in PNG by 78% to 660 million tonnes at 0.48% copper equivalent." - (from MB) "Russian imports of stainless steel have declined in the last two months after an anti-dumping duty of 840 ($1,128) per tonne was imposed on austenitic stainless steel sheet, SpetsStal the Russian stainless steel association said" - "Stainless steel companies' efforts to move their inventories by offering discounts off their base prices have not yet spurred demand, sources said." - "Striking contract workers at CVRD Inco Ltd.'s Voisey's Bay nickel mine are waiting for advice from the United Steelworkers union on a new three-year contract proposal delivered earlier this week, according to a lawyer for Torngait Services Inc. (TSI)." - "SteelBenchmarker™ reported that the U.S. hot-rolled band (HRB) spot price for May 14 dropped 1.9 percent to $513 per metric ton, FOB the mill for the second consecutive drop." -

  China steelmakers plan joint investment in Cambodia iron ore projects to cut costs - "Four Chinese steelmakers have agreed to set up a joint venture to explore and develop iron ore mines in Cambodia, seeking to improve their control over supply and pricing." - article here

  New Caledonia News - The SMSP trains from now on its own sailors - "The regulation forces to the sailors to be titular driving licence lagonaire. The SMSP decided to be put at the standards by training its flight crew, titular and intermittent, that is to say seventy-five people. On five the five weeks sessions envisaged in the four centers of the SMSP, two already took place, in Poya and in Ouaco, another is currently held in Ouaco." - translated article here  and Goro Nickel advances, the expires approach - "The building site of Goro Nickel is carried out to 60%. The industrialist drew up, yesterday, an inventory of fixtures of the progress of the work and evoked the crucial expires which await it. The project with is crossroads." - translated article here

  Today's beginning nickel inventory - plus 252 tons = 7,452 tonnes (9.82% - 732 tonnes cancelled warrants)
Thursday, May 24

  Nickel Falls on Speculation Demand May Slow; Copper Declines - "Nickel fell for a second day in London on speculation rising stockpiles signal slowing usage as producers seek alternatives to the metal in stainless-steel manufacturing. " - article here.

  Today's official LME nickel closing prices - cash - $22.82/lb - 3 month buyer - $21.23/lb (40.6% higher than 1/1/07). Another drop in the price of nickel for the day. Buyers thought the floor to this correction had been established early on, with prices rising for a short time, but afternoon trading saw prices slump. A fourth day of inventory gain is weighing heavily on the minds of traders, and even if it proves to be a fluke, it has been enough of a catalyst to put the market into a corrective mood. Three month nickel ended the day's trading at $20.41/lb ($45,000/tonne). (Dow Jones - more) And fair warning - we will be dancing at $20! See you tomorrow.

  Chinese moly oxide rises to $32-34/lb FOB on steady demand - "Chinese molybdenum oxide price appeared to have firmed up to $32-34/lb FOB China this week, up from $31-32/lb the previous week, industry sources in Chan said." - article here 

  Canada Voisey's Bay Nickel Co: Shipments To Resume Sunday - "Nickel-concentrate shipments from Canada's Voisey's Bay will resume on Sunday despite an ongoing labor dispute between two contractors and their employees, according to an official with Voisey's Bay Nickel Company on Thursday." - (article here)  and Vale Nickel Output at Canada Mill Shut After Incident - "Cia. Vale do Rio Doce, the world's second-largest nickel producer, said nickel production at its Voisey's Bay mine in Canada was halted after an ``incident'' yesterday that raised safety concerns." - (article here)

  News Bites - courtesy Dow Jones - "LME nickel is at risk of substantially more downside, despite its modest bounce this session, says Man Financial's Edward Meir. Adds: "also lurking in the background is the glaring failure of the Chinese stock market to have a correction," which he sees spilling over into commodity markets before decoupling." (comment - the latter is possible, although the last time Greenspan opened his mouth and the Chinese stock market fell harshly, nickel never reacted.) - "LME 3-month nickel's recent pullback likely only a correction in an uptrend, prices should remain near $50,000/ton in 2007 as LME stocks remain extremely tight, says Fortis' director of metals Gerry Schubert. "We would expect prices to be moving quite volatile with a forecast around $50,000." Notes high prices accelerating substitution, but prices in immediate term shouldn't be affected; with visible stocks on LME at low levels, investor buying strong, prices can regain recent losses quickly. "All you need is one afternoon of fund buying and we're back at $52,000." LME 3-month nickel last at $46,000/ton, down $100 on London PM kerb." (comment - pick your own poison - lot of disagreement from the analyst's about what is going to happen here) - "At an extraordinary general meeting on July 23, shareholders in French mining group Eramet are to vote on the plans of New Caledonia to increase its stake in the group's New Caledonian subsidiary, Societe Le Nickel (SLN)."

  Quote from Wall Street Journal article today - "Charles Bradford, a metals and mining analyst in New York with Bradford Research/Soleil, expects demand for the metal to ease as manufacturers find ways to curtail its use. While widely used in stainless steel, nickel isn't the component that gives the metal its sought-after corrosion resistance. Rather, nickel is used to make stainless steel look better and more pliable." (article posted here) While we understand the point Mr Bradford is trying to make, his quote, as given, is very misleading. Chromium is the ingredient that makes stainless steel corrosion resistant, but nickel plays an important sole/support role. Even the much talked about 200 series stainless steel requires nickel. Here is an interesting article that explains the different elements making up stainless steel, and what role each plays - "Alloying Elements in Stainless Steel and other Chromium-Containing Alloys" - pdf here  and where nickel is used can be found in "Nickel - For a Sustainable Future" by Stephen Barnett - presentation here

  Indications at 7:45 am CST show nickel selling up by $.10/lb . A fourth day of gains in LME warehouse nickel levels, three of which have been substantial, and prices are struggling again today. The influx is still arriving into Rotterdam, so we aren't ready to say we were wrong about our theory, that this is primarily inventory that shipped from Norilsk, before their port of Dudinka shut down for spring flooding last week.  Now if Pusan or Baltimore would show a large gain, this would get some attention. In the mean time, we will keep you advised on this ongoing correction in the market.  (Bloomberg - more)  (AFX - more)

  FOCUS:Demand Destruction To Force Nickel Prices Down Further - "Nickel's wobble on the London Metal Exchange this week could be the first sign of prices succumbing to mounting evidence of demand destruction as a result of skyrocketing prices, market participants said Thursday." - article here

  News Bites - "XFN-ASIA reported that China's 4 steel companies Wuhan Iron and Steel Corp, Baosteel Group Corp, Anshan Iron & Steel Group Corp and Shougang Group have signed an agreement to set up a JV ahead of a planned iron ore project in Cambodia." - Fortis' director of metals Gerry Schubert tells Dow jones this morning that "nickel's recent pullback likely only a correction in an uptrend, prices should remain near $50,000/ton in 2007 as LME stocks remain extremely tight" - John Meyer of Numis Securities Limited told Dow Jones that "nickel prices will remain at very high levels versus historic levels amid an ongoing shortage of supply with limited relief expected in the next few years."

  Jyske Bank Morning Report - pdf here

  Japan's NSSC sees stainless output down - "Japan's stainless steel production could slow slightly from the second half of 2007 as domestic mills adjust stocks after a sharp build-up last year, a senior official of Japan's top stainless producer said on Wednesday." - article here

  China Inc - The Rules Change - by Citigroup - pdf here

  Hunan Loudi a nickel smelting furnace explosion injured 10 people - "May 23, medical staff in the rescue smelting furnace explosion injured personnel. 13 pm the same day, Hunan Loudi City Howard Chong Holdings Ltd. nickel smelting furnace explosion, 10 people were injured." - poorly translated article here

  Stainless-steel production keeps growing - "Production of crude stainless steel could set another record this year at 29.8 million metric tons, the International Stainless Steel Forum forecast at its annual meeting this week in Kyoto, Japan." - article here

  Investors make hay as nickel slumps on LME stocks - "Nickel inventories on the London Metal Exchange (LME) have risen by over 50% in the last two weeks, leading to a decline in prices. This has opened up a good opportunity for local investors to unload their positions." - article here

  Tax office denies rift over Rio Tinto's taxation proposals - "The government is still discussing the tax and fiscal arrangements to be applied to global mining giant Rio Tinto's US$2 billion nickel project in Sulawesi, says the Finance Ministry's director general of taxation, Darmin Nasution." - article here

  (comment - looks like one of our hunches was right yesterday) Voisey's Bay mine shut downs amid worker walkout- "Workers at the Voisey's Bay nickel mine in northern Labrador walked off the job Wednesday, forcing the mine to shut down." - article here

  Norilsk says Australia regulator clears LionOre bid - "Russian metals giant Norilsk Nickel said on Thursday it has received clearance from the Australian Competition and Consumer Commission regulator for its offer to buy Canadian miner LionOre." - article here

  Lundin sees metals staying strong, nickel to star - "Lundin Mining Corp. takes a bullish view of base metals prices and sees nickel as the star performer amid delays in new supply and rising global demand, its vice chairman said on Wednesday." - article here

  Philippine Vulcan Industrial To Supply Nickel To Chinese Firm - "Vulcan Industrial & Mining Corp. said Thursday it recently signed an agreement to supply 50,000 metric tons of nickel a month to China's Goldcorn Investments Ltd." - article here

  Today's beginning nickel inventory - plus 366 tons = 7,200 tonnes (8.42% - 606 tonnes cancelled warrants)
Wednesday, May 23

  LME Nickel Seen Sliding Further; Modest Rebound Possible - "Speculative liquidation is likely to pressure London Metal Exchange nickel lower, although a price rebound can't be ruled out even as the peak season for demand wanes, traders and analysts said Wednesday." - more here

  Today's official LME nickel closing prices - cash - $22.77/lb - 3 month buyer - $21.32/lb (41.19% higher than 1/1/07). Well fellow stainless steel buyers, is it time to polish the dancing shoes? Batter not yet. Besides, they are are so polished from past days of hope gone bust, you'd probably slip and hurt something. It is amazing how a price of $21/lb would have horrified us a few months ago, but today, actually gives some hope of relief. Cash nickel stubbornly threw the brakes on at the $50,000/tonne mark and spent most of the day just above it. As sellers of stainless, a job once painless, we won't be fickle, and admit we'd be tickled, to see the price of nickel, go right in the pickle. Ok, we will leave the poetry to others and let you know the price of nickel ended today's trading at $20.91/lb ($ 46,100/tonne) (Bloomberg - more) (Dow Jones - more)  Lot's of good reports below and for those interested in what pig nickel is, Jim Lennon's report is worth reading. Late reports just coming in of an explosion at a small nickel smelter in Loudi City, China, owned by Xiaochong Industry Co. Ltd. 10 workers reportedly injured, and this 'could' impact prices tomorrow as more is learned. See you tomorrow.

  Behre Dolbear Global Mining News - pdf here

  Base Metals Outlook - by Fred Demler - pdf here

  Nickel - The Bedevilled Metal - by Heinz Pariser - pdf here

   Stainless Steel Scrap Market Status - by Heinz Pariser - pdf here

  The Chinese Nickel Outlook and the Role of Nickel Pig Iron - by Jim Lennon - pdf here

  (very difficult to read with online translator but we think you will get the idea of frustration levels in the stainless steel industry) Stainless steel enterprises "breaking" London Pricing Right - "In the recently held "International Stainless Steel Forum", Some stainless steel manufacturers began to question the collective London Metal Exchange (LME) pricing," - translated article here

  Hexavalent chromium (Cr[VI]) - OSHA Settles Hazcom Dispute - "Days after the U.S. Court of Appeals for the District of Columbia dismissed a petition made by the National Association of Manufacturers (NAM) and other industry groups claiming that OSHA amended its Hazard Communication (hazcom) standard without notice or comment, OSHA and the petitioners reached a settlement.: - article here

  Still bullish on base metals - "Don Coxe has a theory about cyclical sectors that have been in hibernation for a long, long time. Those companies that survive "are left in a sustained state of shock and fear," the global portfolio strategist for BMO Financial Group says." - article here

  The Allure Of Nickel - "All that glitters isn't gold. Sometimes it's nickel." - article here

  Brazil CVRD sees China iron ore demand up 8 pct/yr - "Brazil's Companhia Vale do Rio Doce (CVRD), the world's top iron ore supplier, sees Chinese demand for the mineral growing at an average annual rate of 8 percent through 2012, Macquarie Research said on Wednesday." - more here

  World Bureau of Metal Statistics puts first quarter nickel deficit at 42,000 tonnes. Mine production up 16% over 1st quarter of 2006, and refined nickel production up 5.7%. Demand up 68,000 tons.  

  FACTBOX-Nickel in profile - "Norilsk Nickel and Xstrata continue to battle it out for Canadian miner LionOre Mining International Ltd. with Norilsk raising its bid on Wednesday for the world's 10th largest miner." - more here

  Indications  at 7:55 am CST show nickel selling down by $.39/lb .  Call this nickel shock, more nickel showing in LME warehouses than all year. And with cancelled warrants next to nothing, inventory is in better shape than before the first of the year. But... and yes, there is always a but. If you are a user of stainless steel, we would caution you not to get overly excited about the big gains seen the last two days, and the subsequent drop in the price.......yet. Our theory, and we hope we are proved wrong, is these are large shipments from Norilsk, into Rotterdam, shipped prior to the closure of its Dudinka port. If the growth rate is maintained over the next few weeks, then we are wrong and the market may have turned a corner. But the arrival of this material could not have come at a more convenient time for Norilsk, as they have raised their offer for miner LionOre today in the bidding war with Xstrata.  Stay tuned - it's going to be an interesting day. (Bloomberg - more)

  Metal prices boom 'may not end gently,' DBRS warns - "It's not different this time, debt-rating agency DBRS Ltd. is warning investors who think that the boom in base-metal prices still has much higher to go and reflects a fundamental long-term change." - article here

  (comment) It is interesting to note that while CVRD officials have denied any impact from the strike at Voisey's Bay, their first shipment since April 4th, appears to be delayed - here (then again, it's possibly weather related. Either way - the much needed nickel ore isn't getting shipped)

  Nickel in orbit - "At $50,000/ton, nickel is headed for a perfect summer, but then what?" - more here  // $200bn commodities "super cycle" intact - "Investors to pour a further $15 to $25bn into commodities, metals & related indices, during 2007." - more here

  China Special Steel Takes Over Indonesia-based Mining Firm - "China Special Steel Holdings Co. Ltd. (2889, HK) has just acquired Indonesia-based mining company S.E.A. Mineral Limited (S.E.A.) for HKD 2.73 billion." - article here

  Finance Minister serious about Rio Tinto, official says - "Finance Minister Sri Mulyani is working hard to resolve the impasse over the taxation arrangements to be applied to Rio Tinto's proposed US$2 billion nickel mining project in Sulawesi, a senior official says." - article here

  Stainless steel prices to surge again in June on higher nickel cost - "Taiwan's Yusco is expected to raise stainless steel HR/CR prices again in June in order to offset the hiked nickel price due to its tight supply and strong demand." - article here

  Norilsk Increases Offer for LionOre to Trump Xstrata - "OAO GMK Norilsk Nickel, the world's largest producer of the metal, increased an offer for LionOre Mining International Ltd. by 28 percent to C$6.8 billion ($6.3 billion), trumping an improved bid from Xstrata Plc." - article here - Reuters (more)

  Russia to increase nonferrous output in 2007 - ministry - "Russia could increase primary aluminum, refined copper and nickel production 4.8%, 3.2% and 1.1%, respectively, in 2007, a Russian Industry and Energy Ministry official told Interfax." - article here

  Posco to Limit Price hikes to Help Local Manufacturers - "South Korea's top steelmaker POSCO (KSE:005490) said Wednesday that it will try to restrain price hikes to help local manufacturers struggling with rising costs of raw materials." - article here

  News Bites - "Newmont CEO blasts Indonesian appeal (more here)" - "BHP Billiton looking to buy, says Goodyear (more here)

  Today's beginning nickel inventory - plus 1446 tons = 6,834 tonnes (8.42% - 576 tonnes cancelled warrants)
Tuesday, May 22

  Today's official LME nickel closing prices - cash - $24.38/lb - 3 month buyer - $22.75/lb (50.67% higher than 1/1/07). Year to date average price for 3 month nickel is $20.38/lb, $11.01lb for all of 2006. The second trading day of the week started out looking like it might be a snoozer repeat of yesterday, but the pressure of the new inventory added into LME warehouses, finally put too much pressure on the equation, and backwardation thinned with both cash and 3 month nickel prices falling in the later half of the day. Today, nickel ended the day at $21.86/lb ($48,200/tonne) (Dow Jones - more) As you can see at the bottom of the page, this is the lowest ending price for the month so far.

  Quotes from the week - Citigroup report - "Nickel demand has proved stubbornly resilient despite spiraling prices....The supply threat comes from low-tech Chinese  nickel pig-iron, rather than much-vaunted PAL hydromet mega-projects. The irony is rich." - Metals Insider Week in Review posted yesterday - "The temporary closure of Dudinka, the far-northern export port for Norilsk Nickel, may mitigate against a sharp rebound in LME stocks any time soon, but the way that this news item was used by some traders to explain nickel’s steadiness last week was disingenuous. It happens every year—it’s called “spring”—and really shouldn’t surprise anyone (make a note in the 2008 calendar, it will happen again)."  (nice to see we aren't the only facetious ones out there)

  Average price for molybdenum so far this year, is $26.98/lb, compared to $25.56/lb for all of 2006. Still below the $32.51/lb it averaged in 2005, but well ahead of 2001 average of  $2.36/lb (and yes, that is two dollars).

  Haywood Securities - Metals & Mining Weekly - pdf here

  (Few weeks old) UBS Quarterly Commodity Connections - pdf here

  News Bite's from Metal Bulletin - "Privately-owned Chinese company Jiangsu Weida Petrochemical Group is near to commissioning the first stage of its 18,000 tpy electrolytic nickel project next month, aiming to become the second-largest nickel producer in China" - "A cut in stainless steel scrap buying from European mills is expected to continue into Q3, according to Michael Wright of ELG Haniel UK, speaking at the Bureau of International Recycling congress in Athens." - "Japanese crude steel production rose 4.1 percent year-on-year to 9.74 million tonnes in April, according to preliminary figures from the Japan Iron & Steel Federation (JISF)"

  Indications  at 7:55 am CST show nickel selling down by $.36/lb . Media reports tin has already set a new record high today, but nickel looks to be adjusting to the influx of inventory recorded overnight. Today's 5,388 tonnes is the most recorded since March 28th, and the cancelled warrants percentile is lower than it has been all year.  (Bloomberg - more) (AFX - more)

  Rand Merchant Bank - Base Metal Reports - pdf here

  Reuters Metal Weekly - pdf here

  Global stainless steel output may grow 5,1% in '07 - "The International Stainless Steel Forum (ISSF) expects global stainless crude steel production for 2007 to reach 29,8-million tons, the organisation said this week." - article here

  ThyssenKrupp May Buy Less Nickel as Price Increases - "ThyssenKrupp AG, the world's biggest stainless steelmaker, may reduce nickel purchases to cut costs as prices of the raw material rise to record highs." - article here

  Rio Tinto, ministry on collision course - "Rio Tinto, the world's third largest mining company, and the government are at odds over the taxation arrangements to be applied to the giant miner's planned US$2 billion nickel project, according to an official" - article here

  New Bites - "Stainless steel mills, already reeling from record nickel prices, will have got a nasty shock to read that ferro-chrome producers are looking for increases in third-quarter deliveries of as much as 20 cents per lb." - " China cancels coal import tariff" -

  Global crude steel production in April up by 7.6% YOY - "International Iron and Steel Institute reported that the total crude steel production in April 2007 for the 67 countries was 119.3 million tonnes up by 7.6% YoY as compared to April 2006. The global crude steel production in January to April 2007 was 428.225 million tonne up by 9.8% YoY." - more here

  Stainless steel prices may fall: Posco - "Stainless steel prices may fall driven by increased global market competition between Chinese and European producers, Posco, South Korea’s largest steelmaker, said." - article here

  JP Morgan says "crazy" to ignore commodities plays - "Investors who think it is too late to get into commodities-related stock because the market has risen so much are "crazy" as prices will only go higher due to tight supply and growing demand, JPMorgan Asset Management said" - article here

  Chinese steelmakers increase long-term imports of Australian iron ore - "Chinese steelmakers are continuing to increase long-term contracted imports of iron ore from Australia as a result of the recent export tax on Indian iron ore concentrate and increased domestic demand." - article here

  Today's beginning nickel inventory - plus 402 tons = 5,388 tonnes (12.03% - 648 tonnes cancelled warrants)
Monday, May 21  Victoria Day in Canada

  Today's official LME nickel closing prices - cash - $24.52/lb - 3 month buyer - $22.86/lb (51.39% higher than 1/1/07). Three month nickel did a whole lot of nothing today, considering all the news, while cash nickel soared. Backwardation between the two is back near the $4000/tonne mark, with no new records set today. Three month nickel ended the first trading day of the week at $22.86/lb ($50,400/tonne)  (Dow Jones - more) Canada will return to work tomorrow, and it will be interesting to see any affect that might have on trading. In the mean time, do you need some excitement in your life? Check out this photo taken atop the Empire State Building. here

  One of the most common requests we get from readers, is where to get good pricing charts for internal reports and/or presentations. We added a page over the weekend, with links to some of the best we know of, and also have added an Excel spreadsheet that can be downloaded, so you can make your own. The excel spreadsheet includes monthly average prices of nickel, chrome, molybdenum, and iron ore back to 2005. The new page can be found here

  South Africa: Strong Demand Cranks Up Spot Ferrochrome Prices - "SPOT prices for ferrochrome, of which SA is the single largest producer in the world, are running well ahead of contract prices, a promising indicator for local producers about to enter negotiations for third-quarter contracts." - article here

  Metals Insider - Week in Review - “He who sells what isn’t his’n…" - here

  News Bite - "MMC Norilsk Nickel increased nickel output 1.7% year-on-year to 61,000 tonnes in the first quarter of 2006, the world's biggest nickel and palladium producer said in a statement." - "Norilsk Nickel has commissioned a new production complex at its Severny-Glubokii underground nickel mine at the Severnoe deposit in the Kola Peninsula, which will increase ore output to 6 million metric tons a year by 2010 from the current 1 million tons, the company announced Friday."

  China ups tax on metals, steel exports - "China will impose or increase taxes on a range of metal exports in an effort to control exports by energy-intensive industries and ease its huge trade surplus, the Ministry of Finance said on Monday." - article here

  Metal now really 'hot' commodity - "It used to be that stereos, jewelry and high-value imported cars were among the items most desired by thieves plaguing area businesses and neighborhoods." - article here

  Philippines's rich deposits ticket to economic growth: Reyes - "The Philippines is a logical choice for many prospective mining investors because of the country's potentially high mineral wealth, and the country should take advantage of this interest to generate funds needed for economic development, said Environment and Natural Resources Secretary Angelo T. Reyes in a speech before members of the Philippine business community during the JP Morgan Philippines Corporate Access Days forum held on May 18, 2007 in Makati City, Philippines." - article here

  We need your help. One of our readers is needing to track weekly stainless steel prices on the world market, specifically hot rolled coil 304 grade. We are unable to find a free or pay source for this information. Anyone know of a place we can recommend?  

  The Mining Industry in British Columbia — 2006 - full report here

  Bolivia Plans To Hike Mining Taxes To 50 Pct - "Bolivia plans to hike taxes on mining companies to 50 percent of profit, from 35 percent now, as leftist President Evo Morales moves to reap more benefits from the country's mineral wealth, a mining official said." - article here

  Extreme pollution in Murmansk rivers - "A new study on water quality in rivers and lakes in the Kola Peninsula shows a high level of heavy metals. In several of the rivers adjacent to Norilsk Nickel’s plants in the area the pollution is characterized as “extreme”." - more here

  Indications  at 7:55 am CST show nickel selling $.06/lb lower . Three month nickel prices may be dragging today, but indicators show 'cash nickel' way up, possibly at a new record level.  (Bloomberg - more) (Reuters - more)

  Nickel May Rise 20% on Smelter Shortage, Credit Suisse Says - "The price for nickel, used to make stainless steel, may rise 20 percent as a shortage of smelters to process ore into metal constrains supply, Credit Suisse Group said in a report." - article here

  Stainless steel mills may hit from shortage of chrome ore - "India’s stainless steel industry noticed that they not only confront to severe situation which caused by soaring nickel price, but also facing short supply of another critical input, chrome ore." - article here

  Stainless steel production to grow further – but at a slower rate - "The International Stainless Steel Forum (ISSF) expects that stainless crude steel production in 2007 will be higher than the record-level of production in 2006, mostly driven by recovery from 2005 and some restocking." - article here

  MEPS: Stainless HR price to stabilize in summer - "The transaction price of stainless steel grade 316 hiked again for all areas in May, according to MEPS." - article here

  SSINA - Specialty Metals Industry Group Releases Two-Month Market Data - pdf here

  Nonferrous Metals Market Conference - "The 2007 China International Nonferrous Metals Market Conference will be held in Hong Kong from May 29-31." - article here

  Indonesia's Antam sees end to nickel's run - "An undersupply of nickel that has sent prices soaring has another 18 months or so to run until supply catches up, Indonesia's PT Aneka Tambang Tbk (Antam) said on Monday." - article here

  Goldman Sachs raises nickel, zinc price forecasts for 2008 - "A likely tight supply of metal has forced Goldman Sachs to review price forecasts for some of the base metals complex." - article here

  Copyright/courtesy Dow Jones - "A likely reduction in pig-iron and stainless exports from China, due to a hike in export duties there, will be supportive for nickel, a London-based broker says. Notes higher stainless steel scrap availability and rising pig-iron production have been displacing primary nickel units in consumption, "but this process could now slow." - "Nickel prices remain extremely difficult to forecast, says Goldman Sachs, although the return to balance by year-end leaves the market vulnerable to a "sharp reversal of the demand rationing premium currently embedded in the price." "It is difficult to determine how high is high enough when inventories are exhausted and demand remains unmet," Goldman notes. But on the flipside, the use of ferronickel in China and substitution away from nickel in stainless steel "could prompt a quick reversal in the deficit and thus prices."

  China Nickel Pig Iron 07 Output To Pass 100,000 Tons-Macquarie - "New developments in China's nickel pig iron production could easily push output well above 100,000 metric tons this year, 20,000 tons more than expected, research house Macquarie said in a report Monday." - more here

  Standard Bank - Commodity Research - pdf here

  Shanghai Nonferrous Metals analysts nickel forecast for the week - Of 22 experts polled, 8 (36%) felt prices would rise, 6 (27%) felt they would fall, and 8 (36%) felt they would stay the same.

  China miners may need to polish global image - "As China's mining companies increasingly cross international borders, concerns are growing over their conduct as good global citizens." - article here

  Baoshan Stainless Margins Rise on Nickel-Free Output - "Baoshan Iron & Steel Co., China's biggest steelmaker, said it has improved stainless steel profitability this quarter compared with the first three months of the year by producing more nickel-free products." - article here

  Today's beginning nickel inventory - plus 162 tons = 4,986 tonnes (14.08%  - 702 tonnes cancelled warrants)
Weekend Review, May 19 & 20

  Canadian-owned mining sector becoming endangered species - "If U.S. aluminum giant Alcoa succeeds in its hostile takeover bid for iconic Canadian metals giant Alcan Inc., few publicly traded Canadian base- metals companies with international presence will remain on Canada's main stock exchange." - article here

  Iron ore news -Australia - "It's official: $1.2bn deal makes Twiggy the third force in iron ore" - (article here) - India - "Steel bodies want cap on iron ore exports at 90 mt/yr" - (article here) - Australia - "The remarkable rise of a paper billionaire" - (article here)

  (comment - we are not the conspiracy types, but this bubble article is now appearing as 'new' for the third week in a row.) Metals could be bubbling - "Copper, nickel and lead, the best performing commodities in the past four months, may be the worst by year-end." - re-published here

  (for our invester readers) Preaching to the choir - "Commentary: Hire an adviser to make you money, not to make you feel good" - more here

  NMA Mining Weekly - pdf here

   China raises interest rates, bank reserve requirments - "China will raise the one-year deposit and loan interest rates by 0.27 and 0.18 percentage points, respectively, to 3.06 and 6.57 percent as of May 19, the central bank of China announced on Friday." - more here

  More News Bites - " Taiwan' s Stainless Steel Prices may Keep High in Q2 & Q3 (this author deserves a raise for stating the obvious)" - "China is likely to replace the United States as the world's third most popular tourism destination next year, a United Nations World Tourism Organization (UNWTO) official said. At present, China ranks fourth, after France, Spain and the United States. (why not - they take everything else!) - Jinchuan about stainless conditions -"Downstream industries which have reacted too high nickel prices, have been, and are being hastened to stimulate and accelerate the alternatives, for the damage will be incalculable....the frequent increase in stainless steel prices...harmful to the stability of the market..." (we have called them on this type of threat before, but evidence is growing the threats have become reality) - "It is reported that China will hold the yearly steel talks with US, EU, Japan and South Korea in early June 2007 in the hope of easing tight trade relations resulting from booming steel export."

  How to (still) get rich in mining - "So you want to get ahead in mining? True, it might seem like you're late to the party. No doubt you watched, dismayed, as all those long-suffering investors of Falconbridge Ltd. and Inco Ltd. (yes, the same ones you thought were chumps) doubled their fortunes in the span of mere months, thanks to last year's installment of the Great Canadian Mining Sale. You can't believe you sold your Alcan Inc. shares after the CEO said the company wasn't up for sale, only to see the stock catch fire following a hostile bid from Alcoa Inc. You've lost track of how many times you've heard that rich foreigners are gutting Corporate Canada, and that our precious natural resources are little more than chum for the sharks from Brazil, or the United States, or even Switzerland." - article here

  News Bites - "Brazil's CVRD is unlikely to launch an offer to acquire Anglo-Australian miner Rio Tinto in the short term, Pedro Galdi, an investment analyst with ABN Amro Corretora, told BNamericas." - "Kawasaki Heavy Industries Ltd. will soon mass-produce a prototype nickel-hydrogen storage battery that can be used as a power source for light rail transit or to help maintain stable output from wind-power and solar-power generators." -  "U.S. imports of stainless and specialty steel products in the first two months of the year increased 15 percent from the same period a year ago, according to the Specialty Steel Industry of North America (SSINA), a Washington-based trade association." -

  QuantumDirect Commodities Insight - pdf here

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

  ScotiaMocatta Metal Matters - pdf here

  Week in Review - (sources used different than daily) While it was the third week of May, it was the first full week of trading with all worldwide players working all five days. Monday saw 3 month nickel trading open at $22.86/lb, reach a high of $22.95/lb, a low of $22.20/lb, and ended its first day at $22.34/lb. Tuesday, markets opened at $23.02/lb, reach a high of $23.09/lb, fall to a low of $22.65/lb, and end near its low point at $22.66/lb. Wednesday, the markets opened at $22.45/lb, reached $23.22/lb, fell to $22.29/lb, and ended at $23.08/lb. Thursday the markets slumped after opening at its high point for the day at $22.70/lb, falling to $21.85/lb, and recovering to end at $22.16/lb. Friday was the reversal of Thursday, with markets opening at $22.07/lb, reaching a high of $23.05/lb, a low of $21.77/lb, and ending the day at $22.93/lb. When the dust finally settled, the market had actually lost a little from last Friday' end of $23.02/lb. While it never reached last Wednesday's record of $23.50/lb, Friday's low of $21.77/lb was the lowest the market had fallen since May 1st, when it fell to $21.64/lb. Prices end the week 51.85% higher than they started the year.   

  Opinion - In April 2004, then WMC Resources CEO Andrew Michelmore, advised company investors at an annual meeting, that the market could not sustain nickel prices above $6/lb for much longer, or the high costs could have a long term negative impact on the industry. While Mr Michelmore's warning has proven erroneous, it would be wise not to completely dismiss his concern. The market has seen the average price for nickel go from $2.70/lb in 2001, to $4.38/lb in 2003, to $6.69/lb in 2005, to $11.01/lb last year, to double that the last few months. For those producing nickel, there remains a mad scramble to find and produce as much as possible. This isn't motivated out of the goodness of their hearts, but the realism of business, and the financial bonanza available for those who can sell their product while the market is forced to pay such a high premium.

With 2/3 of nickel going to stainless steel producers, those who mine nickel, pay close attention to the reaction of this important customer base. While investors demand the highest return possible on their investment, the mining company, who will be in business long after the shareholder has taken their profits and bailed, must look at business thru binoculars, instead of a shareholder's microscope. The economic revolution in China, the likes of which has never been witnessed in human history, has been the primary cause for the incredible price increases. This sudden shift, from a fairly predictable trend of supply and demand, established over years of statistics, to one of such dramatic extremes, has forced the industry to scramble to find its way. Amongst this chaos, those who can produce nickel, and even those who hope too someday, have reaped the financial bonanza. On the other hand, the users of nickel, have been forced to endure the negative effects of the supply and demand spectrum, with no immediate relief in sight.

The situation has forced stainless steel users and producers worldwide to look at their options. Not yet a century old, the numerous years it has taken to convince a hesitant market of its higher priced economic value, is now being tested. While the substitution warnings of the past could best be described as idle threats, the extreme nature of the price increases in nickel witnessed by the market since last fall, have left many with no alternative. Even those who scoffed at these options last year, have grown silent, as the situation worsens. The stainless steel industry as a whole, suddenly in jeopardy of losing a hard fought for market share, is being forced to redefine itself. China, the largest consumer of nickel, and largest producer of stainless, is pursuing two primary paths. First, it has sought alternative sources of nickel, importing low content ore that for years has been discarded in stockpiles as too uneconomical to process. Second, it has begun to push alternative grades of stainless steel containing less nickel. The list of both grows larger by the week.

Old beliefs are being questioned and market alliances are under sudden strain. The scrap industry, a major source of recycled nickel to stainless producers, fears the lower nickel 200 series stainless will contaminate their recycling system, as its non-magnetism will make it nearly impossible to distinguish from the nickel containing 300 series. Distributors of stainless steel have been reluctant to add another grade to already expensive inventories, and the financial risk involved with introducing a new line to reluctant customers. There are also concerns about availability, with some producers equally reluctant. Users of stainless steel and their engineers find the price difference appealing, but the lack of a track record, puts many in the position of waiting to see what their competitor does. Now there is growing evidence that some of the competitor's are starting to switch, and the risk that Mr Michelmore warned of years ago, could snowball into the reality nickel producers fear. Nothing could be worse for the nickel industry than to see demand begin to wain, just as future sources of supply are on the horizon.    

Anyone familiar with the corrosion resistance abilities of 300 series stainless, must acknowledge that there is a market for 200 series stainless steel. The proponents for this metal, largely ignored for years, have suddenly found an audience. Allegheny Ludlum, which has produced the grade for years, is so confident of the market potential it has recently trademarked the phrase "The Switch Is On™" for marketing purposes. Allegheny CEO Patrick Hassey, told Maria Guzzo of American Metal Market , that "It's doing nothing but gaining traction and growing. We've more than doubled our shipments in the first quarter (versus 2006)." According to the AMM article, North American Stainless has recently added 200 series to its product line, and ThyssenKrupp AG is considering it. Depending on which report you read, 200 series accounts for about 10% of world stainless consumption. Few would dispute that share is on the rise, and cutting into the 65% share currently held by 300 series, especially in the Asian market.

With evidence mounting that the nickel industry could potentially be biting off their nose to spite their face, will it matter? Doubtfully. Stockholders, even those who invest long term, hold the option to pull their financial investment at anytime they see the risk growing. Unconcerned about the long term picture, they want the price of nickel to go higher, and their company to sell more...now. Commodity managers, fund managers, and those controlling billions upon billions of dollars for mostly passive and disinterested IRA investors, seem to thrive on the volatility of the market. Except for the commodity managers, they are only here as long as they can make money, whether the market moves up or down. In the real world, nickel producers are mining as much nickel as possible to keep up with current demand requirements. While some may be legitimately concerned that the future market share of their biggest customer base could potentially dwindle, just at a time when new supply becomes available, the growing use of low grade nickel ore, and the loss of some stainless steel in today's market, may actually add some temporary breathing room. The question remains... at what future cost will this temporary relief come?           

  Ok it's a little slow in the news department, so here is some sports for the nickel miners out there - "A date with history beckons for Mwana Africa today as the Bindura miners seek to wipe out a one-goal deficit and overcome giants TP Mazembe in a Caf Confederation Cup third round tie at Rufaro....Mwana Africa are still unbeaten at home in the Confederation Cup. The gold and nickel miners have actually conceded only one goal at home so far in the competition..." - here

  And finally - Deep-sea mining can irreversibly damage marine ecosystem - "Undersea habitats supporting rare and potentially valuable organisms are at risk from seafloor mining scheduled to begin within this decade, according to a new study by a University of Toronto Mississauga geologist." - article here


Friday, May 18  Happy Victoria Day to our Canadian readers for Monday!

  Today's official LME nickel closing prices - cash - $23.68/lb - 3 month buyer - $22.23/lb (47.22% higher than 1/1/07). The day started out with promise, with our bull acting as if he had suddenly discovered he was walking on an icy pond. Unsure of its footing, and avoiding any thin ice, it crept its way to shore. By afternoon trading, it was obvious he was back on dry land, or should we say at the base of another hill, and began to climb. He didn't walk uphill, he didn't trot, he ran. If the market hadn't closed when it did, the all time record might have been in jeopardy again!  And all nickel consuming, stainless steel users, in one harmonious accolade, shouted "*%^#$*!!" (censored). When the dust had settled, 3 month nickel had cut yesterday's backwardation in half, and ended the day and week at $22.82/lb ($50,300/tonne). (Dow Jones - more)

Well it's already the weekend on the other side of the globe, and in a few hours our neighbors to the north, begin an extended one. We leave you with a film clip to give you something to laugh about (video here) and wish you all have a safe and restful weekend.

   Russia's Norilsk Nickel Eyes Nickel Asset Buys - "Russia's largest metals producer, Norilsk Nickel Mining & Metallurgical Co., plans to acquire new nickel assets, Chief Executive Denis Morozov said Friday, according to Prime-Tass news agency." - article here

  (couple days old) Shortage of chrome ore further hits steel makers - "India’s estimated Rs20,000 crore stainless steel industry, already reeling under the effect of soaring nickel prices in the global market, is now facing shortage of another critical input, chrome ore, with the mineral’s largest producer in the country, Tata Steel Ltd, stopping supply from 1 April." - article here

  CISA urges steel makers to increase control on iron ore purchase - "It is reported that China Iron & Steel Association is greatly concerned about the upcoming benchmark ore talks in view of soaring ore imports in the first quarter amid ever-increasing freight rates." - article here

  China's iron ore imports up by 23% YoY in 4 months - "Xinhua citing China’s General Administration of Customs reported that China's imports of iron ore has been recorded at 133.6 million tonnes in January to April 2007 up by 23.36% YoY as against 108.3 million tonnes in January to April 2006." - article here

  Tidal Wave of Steel - "What motivates the continued huge surge in Chinese steel production? Is it market ineptitude, policy paralysis or a determination to swamp the rest of the world with unneeded metal?" - article here 

  (comment - this article is making its way around metals sites, and forums, as if it were new...notice the date on the original publication) China’s Hunger for Nickel Growing, Imported 3.78 Million Tons of Nickel Ore in 2006 - re-hashed article here

  Indications  at 7:50 am CST show nickel selling up by $.10/lb . (Bloomberg - more) Looks like nickel traders are taking a breather today, after yesterday's corrective movement. Have we found a new floor, or is there more correction coming? Stay tuned. 

  Some nickel timbits for the holiday weekend - "The current Canadian angst about selling out the country’s corporate gems reminds me of the old saying, “Closing the barn door after the horses have already escaped.” Where were these business nationalists when the extraordinary metal treasures of the Sudbury Basin – the richest mining district in North America and among the top ten most significant globally – were being sold?" - article here

  Courtesy Hoover's Inc - China base metal production - nickel production in April 18.2% higher than same month 2006 - 23.8% higher in first quarter of 2007 compared to same quarter in 2006.

  News Bites - Finnish stainless steel group Outokumpu Oyj to participate in Talvivaara nickel mining project in Finland" - "China's iron ore import prices rise on booming demand and tight freight" - "China to further raise bank reserve ratio 0.5 pct points to cool investments" - "Taiwan' s Stainless Steel Prices may Keep High in Q2 & Q3" -

  Steel cost high as demand falls a bit - "Steel prices remain stubbornly high even as demand for the raw material has weakened and there have been some dips in prices in recent weeks." - article here

  Korea starts first molybdenum smelter, eyes exports - "South Korea, the world's fifth-largest steelmaking nation, opened the nation's first smelter for molybdenum, used to strengthen the alloy, to cut costs and export to Japan and Taiwan amid surging prices." - article here

  MEPS: Stainless HR price to stabilize in summer - "The transaction price of stainless steel grade 316 hiked again for all areas in May, according to MEPS." - article here

  Today's beginning nickel inventory - minus 42 tons = 4,824tonnes (18.0 %  - 876 tonnes cancelled warrants)

Thursday, May 17

  Today's official LME nickel closing prices - cash - $23.81/lb - 3 month buyer - $22.31/lb (47.75% higher than 1/1/07). The bull got wet today, with prices falling hard thru much of the day. We reported backwardation was down to $3000/tonne at 8:00 am CST, but by day's end it was back out to nearly $3700/tonne. For those of us who do not trade, here is a simple explanation of what backwardation means, posted on numerous financial sites. "At times it is possible that price of futures contract of a commodity prevails below its spot price. Such a situation is known as Backwardation. This may happen when the cost of carry is negative, or when the underlying asset is in short supply in the cash market but there is an expectation that the supply of the commodity will increase in future." For those who are really interested in what this tells us about how the traders see the future coarse of nickel pricing, here is an article that explains the difference in backwardation and its opposite, contango (Investopedia article here). We may be somewhat off base here, but copper trading this week gives a good example of just how nervous the market is. China reported earlier this week that its imports of copper surged last month. So why has the price of copper dropped since? Traders are betting they bought too much and now will buy less. This has the hardcore bull's scratching their heads and rolling their eyes, and the bears giggling. Of course, there is a lot more involved than that, so call that a 'layman's lopsided overview'. Today, 3 month nickel ended the day at $22.11/lb ($48,750/tonne). (Dow Jones - more)  

Opinion - There appears to us to be three basic types of traders. The first is the all-the-time bull. They are the kind that can stand in chest high water, during a flood, and tell you this will really make their yard green when it finally subsides. They are the eternal optimists, and for the last 4 years, have had things pretty much go their way. And then there are the eternal pessimist's, who standing in the same chest high water, will complain about the ten year drought, that is sure to follow. The bears have been dragged kicking and screaming into this bull market, and there are some out there, so radical, that they have never acknowledged the increase in nickel from $3/lb to $23/lb is anything more than a 'really, really big bubble'. And finally, there are the free-thinkers, those who maintain their perspective, and are open to market conditions. They don't see a greener yard, they don't see a drought, they just worry about keeping their head above the water. And the market, for them, has entered one of those nerve wracking periods. The overall fundamentals for nickel remain strong, but the list of "unknown's" is growing. China's direct importing of low grade nickel ore and gains in low or no nickel substitution are legitimate demand concerns. On the other hand, nickel inventories are lower today than they were at the beginning of this month, and there are no new sources that can add to the supply parameters anytime soon. So what will happen in the next 30 days? We recommend you flip a coin. Your chances of being right are probably better than paying an expert for their opinion.       

  Anti-Mining NGOs Most Serious Threat To Industry - IMC Exec - "Anti-mining non-governmental organizations, or NGOs, are the most serious risk facing the mining industry today, the president and chief executive of Canadian mineral resource company International Minerals Corp. said Wednesday." - posted on forum - more here

  News Bites - "Asian hot rolled and cold rolled stainless prices have surged $300-$400 per tonne as nickel prices continue to rise" - "Jinchuan's April nickel output exceeds target by 4.62%" - "US April steel shipments of 4.5 million tons were 1.5% lower than 2006 volume marking the eighth consecutive month of YOY monthly shipment declines. Shipments for the first four months of 2007 at 18.2 million tons were down by 5.4% during the same period in 2006. Steel inventories declined for the sixth consecutive month to 14.6 million tons the lowest level since May 2006 although still 4.5% greater than the April 2006 inventory total." - AISI Monthly Steel Statistics (here) -

  Indications at 7:55 am CST show nickel selling down by $.30/lb . Cash nickel is down even more, which is helping to narrow the backwardation between the two. Over the past few days this level had become quite extreme, and at the current time, indications show it is still running at about $3000/tonne. On the other hand, cancelled warrants fell below 20% today, for the first time in a very long time. So with the positive news, comes the negative...how it will affect the market, is anyone's guess.  Tune in later and we will let you know. (Reuters - more)

  New Bites - "China imported 35,620,000 tons of iron ore valued at 2,591.585 million US dollars in March 2007. The import in January-March reached 100,180,000 tons valued at 7,079.949 million US dollars, up 23.4 percent and 39.7 percent respectively year on year." - "According to the National Bureau of Statistics (NBS), China’s crude steel production has reached 40.32 million tons in April, up by 20.4 percent compared to the same month last year, however, the figure only up by 0.4 percent compared with that in March this year." - "American ferromolybdenum price has also increased to US$34~36/lb when molybdic oxide price also reached US$30~32/lb." - "India's Jindal Stainless (JSL) has announced to set up a 800,000 tons per year stainless steel plant in Orissa." - "China's ferro-chrome prices to stay high on strong stainless demand" - "ThyssenKrupp developing lower or non-nickel products" - "China's industrial production was up 17.4 percent in April compared with the same period last year, according to the National Bureau of Statistics (NBS)." - "Shortage of chrome ore further hits steel makers" - "Digging Into Big Miners(more)

  Young people trained in the middle of Goro Nickel - "The center of formation of Goro Nickel was inaugurated yesterday. Located in full heart of the factory site, it is pressed in particular on the installations of the old pilot factory." - translated article here

  Standard Bank to Dow Jones - "..High prices a concern for stainless steel market, suggestions market starting to witness demand destruction; "with this in mind we continue to remain very cautious towards nickel with a move lower expected to manifest in the short term."

  Norilsk Nickel announces production figures for 1Q 2007 - "Norilsk Nickel has announced preliminary consolidated production figures for 1Q 2007. The company has fulfilled its 1Q production plan. The group produced 61,000 tonnes of nickel, 101,000 tonnes of copper, 716,000 ounces of palladium and 169,000 ounces of platinum from Jan-Mar 2007." - article here

  Today's beginning nickel inventory - minus 6 tons = 4,866 tonnes (18.74% - 912  tonnes cancelled warrants)

Wednesday, May 16

  Today's official LME nickel closing prices - cash - $24.54/lb - 3 month buyer - $22.86/lb. Nickel trading ended Wednesday at $22.84/lb ($50,350/tonne), maintaining a closure above the $50,000/tonne level, after spending much of the day bouncing around that level.  (Dow Jones - more) (apologies for late update - on road today with no internet access, back to normal updates tomorrow)

  Indications at 7:55 am CST show nickel selling down by $.30/lb . (Reuters - more)  (Bloomberg - more) (on the road today so not sure when we will be able to do afternoon update - official closing prices are already posted at bottom of page)

 Treating Nickel Like Gold - "Two trends in the flurry of recent merger and acquisition activity have been metal miners eager to consolidate and international companies eyeing takeovers of North American companies to benefit from favorable currency rates." - article here

  Sumitomo Metal Unit Boosts Philippine Nickel Exports - "The Philippine unit of Sumitomo Metal Mining Co., Japan's biggest nickel maker, shipped 35 percent more nickel concentrate in the first four months of 2007 than a year earlier, according to customs data." - article here

  NSSC to increase stainless CR prices - "Japan’s largest stainless steel producer, NSSC has launched a hike for cold rolled stainless sheet by ?50,000/ton (US$416/ton) because of an increasing surge of nickel." - article here

  Russian nickel giant's revenue up 59% in 1Q07 - "Norilsk Nickel, the world's largest producer of palladium and nickel, boosted revenue according to Russian Accounting Standards by 59% in the first three months of 2007, year-on-year, to 69.6 billion rubles ($2.7 billion), the company said Tuesday." - article here

  Two articles - "The CSTNC in general strike Monday?" - translated article here   and "Anxious contractors block Koniambo" - translated article here

  News Bites - "China produces 155.09 mln tons of crude steel in first four months, up 21.2 pctChina produces 155.09 mln tons of crude steel in first four months, up 21.2 pct" - "China Retail Sales Rise 15.5% As Wages Grow"

  Newmont boss files lawsuit against 'NY Times' and award-winning journo - "Fresh from being acquitted last month of pollution charges in a high profile trial in Manado, North Sulawesi, PT Newmont Minahasa Raya president Richard Ness filed a lawsuit Tuesday against The New York Times and its journalist Jane Perlez." - article here

  Norilsk is reportedly disappointed by Xstrata's increased bid for LionOre and will announce shortly whether it intends to counter-offer (more here)

  Today's beginning nickel inventory - plus 198 tons = 4,872 tonnes (20.15%  - 942 tonnes cancelled warrants)
Tuesday, May 15

  Today's official LME nickel closing prices - cash - $24.49 - 3 month buyer - $22.75 (50.67% higher than 1/1/07). It's hard to convince nickel traders that the good times they have been having, will come to an end soon, when two of the largest producers of nickel in the world, are willing to get into a bidding war over a smaller nickel producer. Keep in mind that it was the nickel producers that were forecasting this bull market long before the 'analysts' finally got on board. For a while today, it appeared the all time record of $23.50/lb, set just last week, might be in jeopardy. But as trading for three month nickel rolled over the $51,000/tonne mark, it lost its upward momentum. LME nickel ended the day around $22.95/lb ($50,600/tonne). (Dow Jones - more)

  Did you know? According to Eramet, China will overtake Europe in the consumption of stainless steel this year. Yet, the average Chinese citizen still consumes 1/3 the amount of stainless steel a year that a person in Europe does, and only 1/4 that of a Japanese person.

  Norilsk halts Dudinka shipments on seasonal floods - "Norilsk Nickel , the world's largest nickel miner, has suspended shipments from its Arctic port of Dudinka due to seasonal flooding and plans to resume loading in mid-June, the company said on Tuesday." - article here

  (from an  analyst that we respect) Bill Cara in his 'Cara's Daily' today -  (excerpt) "Apparently, the fear of a slowdown in China's metal imports triggered profit-taking in copper futures and shares of miners BHP, FCX, RTP and TCK (downgrade). Goldman Sachs, which is probably behind that story as they downgraded China a week ago, yesterday downgraded the aerospace and defense industry from Attractive to Neutral, also because of valuation.....We now have to watch the China story evolving here. This China slowdown story is clearly being fabricated by Goldman Sachs, who must be over the moon with their trading profits from shorts and put options. If it can be shown that such tactics preceded their research call, and they are taking their clients and the rest of us to the cleaners in order to dress up their quarter, then it’s only a matter of time before the market responds. Putting their people into the key positions as Treasury Secretary and as head of the FOMC trading desk is just too close for comfort." - source Bill Cara

  Anglo's Carroll Says Looking to China as Revamp Ends - "Anglo American Plc, the world's second- largest mining company, expects to have largely completed by year- end an overhaul to focus on the metals demanded by China's expanding economy, Chief Executive Officer Cynthia Carroll said." - article here

  Chinese Steel Mills to Lower Costs Through Long-Term Contracts - "Chinese steelmakers are beginning to jointly purchase iron ore and charter ships, heeding earlier suggestions from the China Iron and Steel Association, a top CISA official said. " - article here

  Indications  at 7:55 am CST show nickel is selling up at $.55/lb . Stainless steel users can put the champagne back in the cupboard. Yesterday is looking like nothing more than a reaction, and not a new trend. (Bloomberg - more) (Reuters - more)

  Tomorrow is Third Wednesday prompt for LME traders

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

  Canada Commodity Price Update - pdf here

  Rand Merchant Bank - Weekly Base Metal Reports - pdf here

  Behre Dolbear Global Mining News - pdf here

  Mining investments coming only in trickles - "Mining investments in the country have been coming only in trickles since the passage of the controversial Mining Act of 1994 that was initially thought to make a difference in reducing mass poverty in rural communities." - article here

  News Bites - "Sunday Telegraph reports BHP Billiton Ltd, Rio Tinto Ltd, Brazil`s CVRD and OAO Russian Aluminium are considering bids for aluminium producer Alcan Inc." - "US economy to pick up speed in last half of 2007 per NAM report" - "China' s Stainless Steel Output May Up 21% to 6.5MT This Year " - "China' s Power Equipment Industry Boosts Stainless Demand" - "China May Develop More 200 Series Stainless Steel " - "China's non-ferrous metals prices rose by 6 percent in April compared with that of last month and 16 percent higher over the prices a year ago, the People's Bank of China (PBOC) said Monday." - "Sandvik sells 11.6 pct stake in Outokumpu Stainless Tubular Products" -

  The Forecast Factory: Are metals really losing their shine? - "RISK was Business Day’s buzz word on the international economy page, one day last week. It seemed that some experts were trying to scare us out of commodities and financial markets." - article here

  Nickel price is predicted to start losing its shine soon - "UBS has provided the biggest leap of faith in the nickel price remaining high by lifting its long-term forecast 55 per cent to $US7 a pound, or $US15,400 a tonne." - article here

   Courtesy/copyright Dow Jones Newswire - "Global nickel prices are seen staying strong for several years due to very low supplies, although a pullback is "inevitable and desirable" over the long term, says Standard & Poor's analyst Don Marleau. Notes strong demand from stainless steel sector, which account for two-thirds of nickel consumption, with stainless output growth of 6%-7% a year against 2% annually in nickel. Substitution has had an only marginal effect so far, Marleau adds."

  Xstrata Raises Offer for LionOre to Repel Norilsk - "Xstrata Plc increased a cash offer for LionOre Mining International Ltd. by 35 percent to C$6.2 billion ($5.6 billion) to become the world's third-largest nickel producer." - article here

  Today's beginning nickel inventory - minus 66 tons = 4,674 tonnes (21.57%  - 1,008 tonnes cancelled warrants)

Monday, May 14

  Today's official LME nickel closing prices - cash - $24.09/lb - 3 month buyer - $22.54/lb (49.27% higher than 1/1/07). Interesting trading day, but the movement was to be expected. The INSG report out today that forecasts a nickel surplus this year would have had an effect on its own, without all the bearish talk still ringing in traders ears from last week. Profiteers took center stage today and nickel prices slid for most of the day. By days' end nickel had given up 3%, but maintained a price higher than it started the month with. Three month nickel ended the day at $22.25/lb ($49,050/tonne). (Dow Jones - more) (reuters - more) Dow Jones is reporting today that "Goldman Sachs upgraded the base metals sector to Attractive from Neutral."  Go figure! Three month nickel will have to fall by 32% before we get back to the price of January 1, and there are those who still believe reaching $25/lb isn't out of the question. We would be surprised to see prices go skydiving this week, as LME inventory levels are still extremely low. And until they show significant gains, we don't expect anything more than a correction. With Norilsk unable to ship for the next month, chances of that happening aren't very promising. For stainless steel users, this week could potentially offer some hope for relief. Or it might just turn out to be a Monday tease. The bears are restless, but will the bull keep them at bay? Stay tuned.

  Metals Insider - Week in Review - "Storm clouds gather but nickel oblivious for now" - here

  As mentioned in Week in Review above - "The International Nickel Study Group (INSG) has forecast the refined nickel market to record a production-consumption surplus of up to 70,000t this year." - statement from INSG website - pdf here

  Haywood Securities - Metals & Mining Weekly - pdf here

  Citigroup M/Metals Prospects - pdf here

  NMA Mining Weekly - pdf here

  Miners suffer bad day at the pit - "Miners led the market lower today, on a combination of falling metals prices, a possible strike in South Africa and broker downgrades." - article here

  Central bank: non-ferrous metals prices surge - "China's non-ferrous metals prices rose by 6 percent in April compared with that of last month and 16 percent higher over the prices a year ago, the People's Bank of China (PBOC) said here Monday." - article here

   Indications at 7:55 am CSt show nickel selling down by $.24/lb on profit taking.  (Bloomberg - more)  (Reuters - more)  (AFX News - here)

  22 Chinese analysts polled give the following forecast for this week - 9 (40%) forecast nickel price to rise, 9 (40%) forecast it to drop, and 4  (18%) forecast it to stay the same. (courtesy Shanghai Nonferrous Metals)

  Copyright/courtesy Dow Jones Newswire - "Norilsk Nickel's (NILSY) only export outlet, the port of Dudinka will be closed to shipping between May 15 and June 15 because of the annual break up of ice on the Yenisey River, the Prime-Tass news agency reported Monday, quoting a source in the port administration."

  BMO Capital markets - The Goods - "Commodity Prices Bubbling in April" - pdf here

  Watkin moves into nickel - "North entrepreneur Karl Watkin has bolstered his Chinese mining interests with the acquisition of a nickel mining company with an estimated $5bn in reserves." - article here

  Credit Suisse prefers gold as base metals prices due for correction - "Credit Suisse warns that base metals markets are becoming increasingly overheated with a potential price correction looming. The prospects for gold, however, continue to improve with lower central bank sales, and reduction of hedgebooks." - article here

  Rio declines to comment on report may have hired Morgan Stanley - "Rio Tinto Group, the world`s third-largest mining company, declined to confirm or deny a report it may have hired Morgan Stanley to help defend against possible unsolicited takeover bids." - more here

   News Bites - China - "China's stainless scrap prices have dropped in Jiangsu province, as buyers are adopting a wait-and-see attitude." - Taiwan - " FeMo soaring to $80/kg this week" -  Australia - "MINCOR Resources will add the Otter Juan nickel mine to its list of Kambalda-based nickel operations after today announcing its intention to purchase private outfit Goldfields Mine Management for $68.5 million cash. - China - "The import price of chrome ore in China has increased because of the strong demand." - China - "China's inflation eased in April, but barely meeting the government's target of three percent, increasing the pressure on the central bank to raise interest rates." - China - "China' s Stainless Steel Imports in Q1 Fell Sharply to 98000 tons" - Indonesia - "Proposed changes to the system of mining licenses are in the final discussion process in parliament, an Indonesian government official said Tuesday (8/5/07)." - China - "Iron ore stockpiles in China's 23 major ports fell to 42.23 million tons on Friday May 11, down 1.95 percent from April 27." - Dow Jones - "Nickel prices remain extremely vulnerable to a downward correction as supplies catch up with demand and substitution kicks in at higher numbers, says Goldman Sachs."

  Commodity Investments to Rise 20 Percent, AIG Says - "Investments in commodity indexes and related products may rise between 15 and 20 percent annually in the next three years as pension funds and other investors diversify from stocks and bonds, according to American International Group Inc." - article here

  Today's beginning nickel inventory - plus 42 tons = 4,740 tonnes (23.52%  - 1,115 tonnes cancelled warrants)

Weekend Review, May 12 & 13

  Just a note to our friends 'down under' - the story "The Australian" is running today called "Crash looming as copper, nickel pile up" - is a duplicate of one that was run last Monday by Bloomberg. Not sure why it took them so long to run it , but we thought you might like to know. (here)

   Metal prices are high - some say too high - ""Every boom," it used to be said, "has a copper roof." - article here

  If you are a regular reader, you will remember we have mentioned for the past few months, the annual spring floods that make it impossible for Norilsk Nickel to ship nickel. On Friday, UBS forecast they believe this annual event will begin around May 20th, although we feel it will begin sooner (we are betting on the Global Warming effect). Here is a little background on what happens, for those who are interested. Norilsk Nickel ships its nickel and other mined minerals by rail to the river port of Dudinka. From there the metals are shipped on the Yenisey River to the seaport of Murmansk. From there, they are shipped to consumers worldwide. The Yenisey River, the largest in Russia, and the largest river in the the world that flows into the Arctic Ocean , is icebound for about half the year. Each spring brings extensive flooding, as ice and snow melt back up behind frozen portions of the river. During this period, it is far too dangerous for shipping. Wikipedia reports the Yenisey is the fifth longest river in the world, and typically carries about 1-1/2 times more water than the Mississippi River. (Nasa satellite photo of past flood here) (article from April here) Dudinka and Norilsk are classified closed cities, requiring governmental permits for visitation.   

  Arctic Muslims - "Mukum Sidikov’s grandfather left Norilsk after surviving the labor camps of Soviet dictator Josef Stalin." - article here

  Federal Customs Service report nickel exports for first quarter of 2007 were 57,600 tonnes ($2.159 billion). - source article here

  Base metals set for bear phase - "Base metals, barring zinc, are likely to see a slump this week on rising stockpile in China, the world’s largest user of the metal, thus indicating slower demand growth." - article here

  Base metals may surpass their heady levels a year after hitting record highs - "Singapore: A year after hitting a record high, base metals may yet surpass their heady levels, but China's efforts to rein in demand and the prospect of rising supplies will prevent prices from holding on to gains." - article here

  (Copyright/courtesy Philippine Star wire service) "Shipments of nickel laterite ore from the southern Philippines to China more than tripled in April from a year earlier as Chinese companies sought alternative supplies. Exports rose to 492,002 tons from 144,547 tons, according to Bureau of Customs data obtained yesterday. The southern Philippines mines most of the nation’s low-grade ore, which competes with easier-to-process nickel sulphides."

  (comment - all you people out there praying for stainless to fall, you might want to be a little more specific. Free stainless steel is now falling from the sky) - Alleged meteor just hunk of steel - "The flying object that came crashing through a township house in January was not a meteorite, as initially thought..."Basically, it's a piece of stainless steel," said Jeremy Delaney, a Rutgers University meteoriticist who became involved in analyzing the item Jan. 3, the day after it fell and when the homeowner notified township police." - article here

  Wachovia Quarterly Metals Forecast Chartbook - pdf here

  Credit Suisse Weekly - "Base Metals Markets are becoming increasingly overheated" - pdf here

  Heavy metal trading - "The London Metal Exchange still clings to old-fashioned floor trading, but times at the venerable institution are changing, Lisa Wright reports" - article here

  Week In Review - (we use a different source for the weekend review than the daily. All amounts given are indications, and only those prices published by LME are official) It was a short week for trading on the London Metal Exchange as the market was closed for a Spring Bank Holiday on Monday. With its re-opening on Tuesday, we also saw the return of the Chinese from their week long Labor Day holiday. The week was coming off a gainer, the price of 3 month nickel having increased nearly 3%, with the last day of that week, seeing a new record high set, of $23.45/lb. On Tuesday, traders arrived with a copy of a Bloomberg article, that had been published the day before, in which 12 experts forecast the base metal bubble was about to burst. Trading opened Tuesday at $23.22lb, got as high as $23.31/lb, fell to a low of $22.97/lb, and ended the day at $23.15/lb, only the second time in history, Friday being the first, that 3 month nickel closed over the $50,000 tonne mark. On Wednesday, nickel opened at $23.18, set a new all time record high of $23.50/lb, retreated to a low of $22.32/lb, and ended the day at $22.40/lb, slipping below the $50,000 tonne mark again. On Thursday, the market opened at $22.52/lb, rose to $22.84/lb, fell to $22.35/lb, and ended the day at $22.63/lb. On Friday, the markets opened at $22.52/lb, reached as high as $23.05/lb, fell as low as $22.41/lb, and ended the week at $23.02/lb, once again ending the trading week over the $50,000/tonne threshold. For the week, 3 month nickel prices fell by 1.48%, but for the month have gained 6.38%, and for the year, have risen by 52.45%.     

  (A trip down memory lane) Read this and then note the date - "What’s the difference between a boom and a bubble? The answer is a simple one. A market is showing signs of being in a bubble when prices reach levels that are entirely unjustified by the fundamentals. But it is booming when prices are rising fast but those price rises are justified by the fundamentals.....Next consider the huge rise in the prices of metals over the last three years or so (they have climbed on average around 100%). There are plenty of voices out there claiming that this too is a bubble, and pointing to the recent falls in prices – which have seen copper fall 5% from its highs and zinc come off over 10% - as a sign that it bubble is collapsing. But those voices are wrong." - article dated Feb 21, 2006 here

  (Need some background on molybdenum? - Here is an excellent presentation of what it is, what is used for , and why prices are so high) - "Molybdenum – Where to from here - presentation here (thanks to user MontyHigh of Investor Village)

  CEO's of Two Up-And-Coming Canadian Companies Update the Investor Community On the Oldest and Newest Hot Mineral Commodities At Wall Street Reporter.Com  - here

  (comment - If you think corrosion is nothing more than a cosmetic problem, read this. It can be deadly) - Corrosion caused culvert to collapse - "Severe corrosion from acidic creek water caused the culvert collapse which resulted in a teenager driver being killed almost one year ago to the day." - article here 

  China faces labor shortage in 2010 - "China's ample supply of low-cost labor, one of the mainstays of China's remarkable economic transformation, could start shrinking by 2010, a state press report said Saturday." - article here

  And if you are looking to visit the world's tallest free standing structure, which for over 31 years, has been the CN Tower in Toronto, Canada, you may want to make it soon. Last week, the Burj Dubai passed Chicago's Sears Building, and is expected to become taller than the CN Tower sometime in the next 3 months. The planned height of the world's tallest building, currently under construction in Dubai, is still a closely guarded secret.  

  "Hans Rosling: Debunking third-world myths with the best stats you’ve ever seen "- video here (hosted by TED, a site worth bookmarking) (thanks to user sandgrey2 of Investor Village)

  And in our weekend attempt to give the NGO's their moment, we welcome the industrial nation of China to their targets... China banks' investment strategy slammed - "Green groups have slammed Chinese banks for increasing investments in environmentally hazardous and controversial projects both in developing nations around the world and at home." - article here

Friday, May 11

  Today's LME nickel official closing prices - cash - $24.22/lb - 3 month buyer - $22.75/lb (50.66% higher than 1/1/07). While the 12 analysts that Bloomberg interviewed got the most attention this week, with their "doom-and-gloom" forecast, the traders of nickel seem to be of the mindset that there is still "room-in-the-boom". The stainless steel industry would love to believe the nickel pessimists, but have learned over the last few years, that these so-called "bubble's", are apparently now made of some elastic material, that just won't pop. Some of the reasons the analysts are giving for their forecasts are questionable, and we have grown to become concerned when the analysis comes from Wall Street. The stock market and the LME seem to be as different as night and day, and trying to apply the rules of one to the other, just don't seem to work anymore. If these guys have some little black book that they use to come up with their guess', we would suggest they re-write, and make it in Mandarin Chinese this time, because what happens here in the old USA, doesn't seem to matter to the price of nickel, as much as it used to. Dow Jones reported nickel imports into the US rose from 29.3% from February to March, but compared to March last year, when nickel was a whooping $7/lb, imports fell by 30.6%. Negative news for nickel, right? Well, someone forgot to tell the traders in London that they should care, because after slumping early today, nickel re-gained its balance, and climbed higher in afternoon trading. For the day and week, 3 month nickel closed at $22.86/lb ($50,400/tonne)  (Dow Jones - more) Have a safe and restful weekend, and thanks for spending part of your week with us.

  INSG:07 Nickel Demand Seen Up 20,000 Tons On Yr; China Demand - "Global primary nickel demand is expected to rise by 20,000 metric tons during 2007 to 1.41 million tons from 1.39 million tons in 2006 due primarily to strong Chinese nickel demand, the International Nickel Study Group said Friday." - (more here) INSG: 2007 Nickel Demand Seen Up 20,000 Tons On Year -2- - (more here)

  Country's richest take an interest in mining - "Miners that aren't yet producing anything are apparently more attractive than miners that are selling their product. At least that's according to two of Australia's richest men, James Packer and Andrew Forrest." - article here

  Mobile County wins ThyssenKrupp plant - "ThyssenKrupp AG of Dusseldorf, Germany, has chosen north Mobile County for a steel mill now valued at $4.19 billion, ending a fierce bidding war over incentives between finalists Alabama and Louisiana." - article here

  (few days old) Scrap and waste metals tempt hedge fund - "A hedge fund firm has bought $3.4 million (1.7 million pounds) of scrap and waste for a company that will extract strategic and base metals for resale in a deal that could lead to a private equity investment." - article here

  Canadian Mining Hall of Fame calls for inductee nominations - more here

  News Bites - "Norilsk Nickel to take out $4.5 bln syndicated loan to buy LionOre"

  UBS estimates dates of annual port closure at the port of Dudinka from around May 20-25 to June 17. This is an annual event due to spring flooding on the Yenisei River, and shuts down Norilsk's ability to ship nickel.  

  Indications  at 8:00 am CST show nickel selling up by $.19/lb . Market direction has shifted since earlier media reports. (Bloomberg - more)

  Metals may rally to new peaks, but unsustainable - "A year after hitting a record high, base metals may yet surpass their heady levels, but China's efforts to rein in demand and the prospect of rising supplies will prevent prices from holding on to gains." - article here

  China demand to spur base metal prices - "Increasing metal demand in power, automobile and infrastructure sectors of China is likely to drive the prices of base metals like copper and aluminium with its international trade in base metals." - article here

  Behind the Mining Merger Mania - "Industry players are combining to gain greater clout in the global marketplace, but the M&A rush has left shares at unattractive valuations" - article here

  Evening Standard, London, market report column - "Harry hedge fund and his mates were suffering from burnt fingers today after embarking on a disastrous spending spree in shares of mining giant Rio Tinto." - more here

  Jindal Stainless to set up Rs 5,600-cr Orissa plan - "In a major expansion drive, Jindal Stainless (JSL) plans to spend Rs 5,600 crore to set up a 0.8 million tonne (mt) per annum stainless steel plant at the Kalinga Nagar Industrial Complex, Orissa." - article here

  News Bites - China - "Jien Nickel starts construction of 15,000-ton nickel smelting facility" - China - "Shanghai-listed Jilin Jien Nickel Industry Co. Ltd. commenced construction of a 15,000-ton nickel smelting project in Panshi City, Jilin Province recently" - Australia -"Australia's Minara Flags A$150M Nickel Expansion OK By September" -  Canada - " Lundin Mining Q1 profit more than doubles" - Germany - "ThyssenKrupp's Profit Drops 49% on Record Cartel Fine"

  Stainless steel price may rise again in June :Yusco - "The stainless steel industry is suffering badly from the increasing price of nickel as higher stainless steel production cost has boosted the transacted price to keep climbing, commented by Lin Yi-show, the chairman of Taiwan Yieh United Steel Corp (Yusco)." - more here

  Ferro-molybdenum price expected to rise in Europe - "European ferromolybdenum price is going to rise in May due to the lack of supply." - more here

  US Mar Nickel Imports +29.3% From Feb, -30.6% From Yr Ago - (article here) - US Mar Nickel Exports -1.0% From Feb, +4.3% From Yr Ago - (article here)

  Australia's Minara: Major Shut Down Of Nickel Ops Oct-Nov - "Australian nickel producer Minara Resources Ltd. (MRE.AU) announced a "major shutdown" of operations in October-November of 2007 at the company's annual general meeting Friday." - article here

  Russia Jan-March Nickel Export Dn 7.4% On Year At 57,600 Tons - "Russia exported 57,600 metric tons of nickel in January-March, 7.4% less than in the corresponding period last year, the federal customs service reported Friday." - more here

  Today's beginning nickel inventory - plus 252 tons = 4,698 tonnes (25.15%  - 1,182 tonnes cancelled warrants)

Thursday, May 10

  Today's official LME nickel closing price - cash - $23.90/lb - 3 month buyer - $22.68/lb (50.2% higher than 1/1/07). Nickel traded in a narrow band around the $50,000/tonne mark today, making some wonder if the psychological barrier had returned? US dollar strengthened today, but nickel prices still found a way to increase from yesterday. Three month nickel ended the day at $22.63/lb ($49,900/tonne) (Dow Jones - more)

  Source - Macquarie Commodity Comments/Shida Public Research Department(China) - (figures from article) Global stainless steel production stays strong, although figures slip from last two quarters of 2006. Preliminary estimates show worldwide production of stainless steel in the first quarter of 2007 rose by 17.8% over the same period in 2006, from 6.6 million tons to 7.78 million tons. China lead the gainers at 91.5%, and France lead the decliners, with a drop of 49.7%. China net imports of stainless steel during the same period fell from 500,000 tons to just 98,000 tons in the first 3 quarters of 2007. Without China, the rest of the world saw a 5.4% increase in stainless steel production. (translated article here)   

  China '07 Stainless Steel Output Likely Up 21% -Indus - "China's stainless steel production may rise 21% on year to 6.5 million metric tons this year, said Liu An, president of Baoshan Iron & Steel Co. Stainless Steel Branch." - article here

  Metal Bulletin reports China imported 340% more ferrochrome during the first 3 months of 2007, compared to 2006, and exported over 16 times as much. 

  Articles from today's Purchasing Magazine - "Metals buyers want more services" (article here) - "Steel sheet buyers and mills face off over first-half market prices" (article here) - "Annual Top 100 Metal Service Center's based on 2006 revenue" (list here

  Requests since 4/26 from a Chinese global trade site - (China) We are now purchasing large quantity Nickel ore, need 1.5% above content and phosphorus content - (China) We want to buy nickel laterite ore every month with big quantity, requesting Ni: 1. 5-1. 8% , Fe (China) We are Chinese importer that mainly import nickel ore and chromite ore, if you can supply, please (Thailand) Hello every supplier of nickel! We have a very large demand on nickel mineral with about 100, 000 (China) We desire to import a large quantity of copper / zinc / nickel ore / skimming / dross / ashes / mud (Nigeria) We need nickel ore of Ni 1% above we need 100, 000 tons per month or any quantity (China) Now we are interested in the Nickel ore, the HIcontent above 1.6 percent. (China) We want to import nickel ore in the year 2007. We prefer to trade with the owner of the nickel ore. (China) We are going to buy 30000-50000 MT each month Nickel Ore (all grades) (China) We are seeking suppliers of lateritic nickel ore for long term cooperation. Content of Ni 0. 9% -1. (China) Our company wanna import chromium ore with 52%-54% chromium contained(from India is better). (China) We are Chinese importer that mainly import chromite ore, please contact us (Germany) We have orders for lateritic nickel ore the qty is required is as much as available. (comment - interesting to note how many are looking for nickel ore now , not processed nickel)

  Indications at 7:50 am CST show nickel selling up by $.09/lb . Nickel is the only gainer on the London Metal Exchange so far today.  (Bloomberg - more) (Reuters - more)

  Baosteel targets 2007 stainless steel output at 1.35m tons - "Baoshan Iron & Steel Co Ltd (Baosteel) has set a stainless steel output target in 2007 at 1.35 million tons, a senior official said." - more here

  Global Steel Output Expected to Rise 5.5% in 2007 - "World crude steel production in the first quarter of this year is expected to expand by around 10 percent compared to the same period in 2006. This rate of growth is not likely to extend for the full year." - article here

  Air of Goro Nickel placed under monitoring - "In partnership with Prony Energies, the industrialist set up an inspection network of the quality of the air around the future factory. The system is already operational. It will provide data uninterrupted on the composition of the ambient air." - translated article here

  GFMS Market Analysis: Nickel - here

  Metals enter strange new world - "Wait for it. Soon there will be talk of new commodity paradigms. How else can you explain a share market that wants to believe in hundred-billion-dollar bids for mining companies when metal prices are at record levels after a six-year run?" - article here

  Yunnan Tin Targets Australian Nickel, Copper Mines - "Yunnan Tin Co., the world's largest producer of the metal, is studying the acquisition of tin, nickel and copper mines in Australia to feed demand for the metals in China." - article here

  News Bites - "China '07 Stainless Steel Output Likely Up 21% -Indus" -  "Australia has slipped down the rankings and out of the top 10 of the world's most competitive economies in the past year" - "Mainland surpasses Taiwan in competitiveness" - "China's Jinchuan eyes injecting 1 bln usd into Philippine nickel mine - Numis" - "South Korea seeks 500 tonnes of nickel cathode" - "Australia Kagara Could Start Nickel Output Within 18 Mo" - "Finland's Talvivaara aims to cash in on nickel boom (more)" - (Globe & Mail)"We hear from reliable sources that Roger Agnelli, CEO of Brazil-based CVRD and ultimate boss of Toronto-based subsidiary CVRD Inco, is flying high these days - in a brand new Bombardier. "

  Stag or ‘flation? - "With skinny trousers and Mary Quant dresses, fashionable Americans are taking their cues from the 1960s this spring. For financial markets and central bankers the retro theme comes from a different, less pleasant, decade. With growth slow yet inflation stubborn, America is facing a weak echo of that 1970s scourge—stagflation." - article here

  Question for any of our readers who might be a Rio Tinto expert. Last week, it was announced that Rio and Indonesia had come to an agreement on royalties for their proposed nickel mine on Sulawesi. Bloomberg May 2 - "The government will get 1.5 percent of revenue from nickel- in-concentrate and 0.75 percent from refined metal, Simon Sembiring, director general of coal and mineral resources at the energy ministry, said by text message.". On April 25th, the Jakarta Post reported that the new mining bill being debated in Indonesia stated "Mining firms will be required to process their ore into metal in smelters located in the country.". The US Embassy in Indonesia reports, in reference to the new law, that "Article 62 on transitional provisions does not grandfather existing Contracts of Work by clearly stating that they will continue to be administered under the old law." So, the question. Will Rio be able to ship unprocessed nickel ore from Indonesia after the new law takes effect?

  Today's beginning nickel inventory - minus 12 tons = 4,446 tonnes (24.4%  - 1,085 tonnes cancelled warrants)

Wednesday, May 9   $23.50/lb ($51,800/tonne) - new record high for 3 month nickel today

  Today's official LME nickel closing - set after second ring in morning trading - cash - $24.00/lb - 3 month buyer - $23.11/lb (53.05% higher than 1/1/07). Nickel did the clay pigeon today. In early trading it shot up, reaching a new record high, then for the rest of the day, fell sharply. No real news that we can find that would have caused traders to bail, so we assume it was primarily profit taking. Anytime the Federal Reserve meets, funds tend to get nervous up to the announcement. While no one expects the Fed to change its interest rate, every word Chairman Bernanke speaks will be analyzed and dissected for clues to future economic conditions. There are two schools of thought about what, if any, effect this might have on the coarse of future pricing. We tend to agree with the side that feels the overall US economic picture is becoming less and less of a factor in determining the price of nickel. As long as worldwide demand stays strong, and worldwide supply stays in a catch-up mode, then nickel prices could remain high. Those of us who watch nickel pricing daily, look at what is happening in China first, the rest of the world, second. Three month nickel had a real hard time breaking thru and maintaining a position above the $50,000/tonne mark. It held out for a few days, but today, it slipped back below the level. Now what will happen is on everyone's mind. If you want to play detective, we would suggest you do as a trained law enforcement officer would. You can get a hundred witness', or analysts, in a room and ask what happened, or will happen, and you will get a hundred different versions. This is a good starting point, but the physical evidence is the key to a conviction. And the best evidence in this investigation, is the LME stocked nickel inventories. Today, 3 month nickel ended the day at  $22.36/lb ($49,295/tonne) (Dow Jones - more)

  Atlas to Produce 15,000T of Nickel from Philippine Mine This Year - "Atlas Consolidated Mining and Development Corp expects to produce about 15,000 tonnes of nickel metal from its PHP 1.2 billion ($25 million) nickel mine in the Philippines, executive vp Martin Buckingham told MB." - article posted on forum here

  World Exploration Trends - pdf here

  Mining rivals circling Alcan - (interesting quote from article) - "One person close to CVRD said the mining colossus is still on the prowl for acquisitions and its chief executive officer Roger Agnelli favours Canadian expansion. The Brazilian executive met several months ago with Prime Minister Stephen Harper and it is understood that he spoke enthusiastically about CVRD's plans to continue growing in Canada." - article here

  Indications at 7:55 am CST show nickel selling down by $.11/lb . Yes, that is right, it's down. Earlier in the day, it was another story. It took us till yesterday to identify the highest traded price during last Friday's trading day, just in time to have the finally identified all time record high price squashed this morning. 3 month nickel hit $23.50/lb in morning trading, and has since retreated.  (Bloomberg - more)

  LME nickel hits new high, market awaits Fed meeting - "Nickel hit a new high on the London Metal Exchange on Wednesday and other metals were steady as the marked awaited today's U.S. Federal Reserve meeting, traders and analysts said." - article here

  Nickel exports to China triple on steel demand - "Shipments of nickel laterite ore from the southern Philippines to China more than tripled in April from a year earlier as Chinese companies sought alternative supplies." - article here

  Rand Merchant - Weekly Base Metal Report - pdf here

  Reuters Metal Weekly - pdf here

  News Bites - Australia - "Jubilee Mines suspends operations after miner death" - (now here is an honest title!) - Switzerland - "CEO: Xstrata May Increase Lionore Bid, May Pull Out - Report" - Australia - "Australia Kagara Could Start Nickel Output Within 18 Mo" - "UBS Eyes Nickel Correction; Substitution Risk" -  

  Stainless steel sector to grow 5% this year - "Despite the rising price of nickel and strong rupee value against dollar, the domestic stainless steel industry may continue to grow at 4-5% this year, thanks to good demand for consumer products such as stainless steel utensils." - article here

  Is there any way out for stainless steel on nickel price soaring? - "The price of nickel has increased rapidly over past few months. Doesn't it affect the users to stop using stainless steel products? The question is in what way the nickel trend is going in 2007." - article here

  $20/lb nickel prices unsustainable, sharp price correction coming – S&P - "Standard & Poor’s has found that, while the mining industry is currently benefiting from record nickel prices, mine supply doesn’t have good prospects of keeping up with demand, and that new mine production may come too late to avert destruction of demand." - article here

  In the market for some ferrochrome? The U.S. government sells some every month - see here  (average sell price in April was $.67/lb, which isn't bad considering it's worth a whole lot more on the open market)

  Today's beginning nickel inventory - minus 174 tons = 4,458 tonnes (26.65%  - 1,362 tonnes cancelled warrants)

Tuesday, May 8  

  Today's official LME nickel closing prices - cash - $23.95/lb - 3 month buyer - $23.13/lb (53.18% higher than 1/107). For only the second time in its history, last Friday being the first, 3 month nickel officially closed over the $50,000/tonne mark. And while today's traders were busy trying to decipher the most recent forecasts of a possible bubble burst, they did not panic. The price stayed in the negative all day, but it never slipped below $50,000. The implications of this could be extraordinary. While there are those calling for the bubble to burst, there is a quiet crowd of experts whispering about the $60,000/tonne not being an unrealistic threshold. We would like to think they are crazy, and we hope they are proven wrong, but we thought the same thing when they started talking about $50,000 per tonne being possible. One thing is for certain though. As one of our readers from Duraloy once told us - "Not much we can do about it. Tomorrow the price of nickel might go up, or might go down, or it might even stay the same" Today, 3 month nickel ended the day at $23.08/lb ($50,900/tonne). (Dow Jones - more)

  "What in the world is going on with the media?!" - Sampling of headlines from just the last two days - "Brazilian mining giant CVRD said Tuesday it won't comment on the possibility it could make a rival bid for Canada's Alcan Inc" - "BHP Billiton declines to comment on possible Alcan counterbid" - "Anglo American declines comment on possible Alcan counterbid" - "Rio Tinto could be next takeover target: Citigroup analyst"  - "No mining company is too big to swallow" - "Private equity to grab BHP Billiton?" - "Teck Cominco the big target " - "Analyst: BHP Billiton May Buy Rio Tinto" - "AK Steel Surges on Arcelor Mittal Bid" - "A Mittal Steel takeover of AK Steel is seen as unlikely..." - "Metals Bubble Poised to Burst on Increasing Supplies" - "S&P expects metal prices will remain at historic highs" - "Asia Declines, China Surges" - "Bulletin - Estainlesssteel.com goes way out on limb and forecasts sun will rise on some parts of Earth tomorrow" (well heck, we didn't want to be left out!)

  Metals Insider - Week in Review - "Nickel above $50,000…here we go again?" - here

  ASA Materials Market Digest - pdf here

  Four new charts added last night to our charts page about ferrochrome - here

  Universal Stainless to Present At Cleveland Research Specialty Materials Conference On May 10th - "Universal Stainless & Alloy Products, Inc. announced today that Ken Matz, President, and Rick Ubinger, Vice President of Finance and Chief Financial Officer, will present at the Cleveland Research Specialty Materials Conference in New York City on May 10th. The Company will post the slide presentation for the conference in the investor relations section of its website at http://www.univstainless.com on May 9th." - more here

  The U.S. International Trade Commission (ITC or Commission) today voted to conduct full five-year ("sunset") reviews concerning the countervailing duty order on stainless steel bar from Italy and antidumping duty orders on imports of this product from France, Germany, Italy, Korea, and the United Kingdom . - more here

  S&P expects metal prices will remain at historic highs - "Standard & Poor's recently asserted that strong demand and weak supply has strengthened the credit quality of mining and metal companies globally, and does not foresee "any quick changes in either of these fundamentals." - article here

  Recent metals mergers - "Alcoa Inc.'s $27 billion bid for aluminium rival Alcan Inc. may herald just the beginning of a battle for the Canadian firm, as most big metals and mining companies have been seen as potential buyers." - article here

  Macquarie: OXR- Leverage to Base Metal Upside - "Resource stocks should again be in focus today after last night’s news of Alcoa Inc’s $27 billion bid Canadian aluminium rival Alcan. The last few sessions of trading has seen feverish buying across the resources, with Rio Tinto (RIO) finishing yesterday at a record all-time high." - article here

  CMS And Rio Tinto To Build Smelting Plant In Sarawak? - "The federal government is likely to give the nod to Cahaya Mata Sarawak Bhd (CMS) and its foreign partner, an Australian-based mining group, Rio Tinto, for the construction of aluminium smelter plants in Sarawak." - article here

  News Bites - China - "China Steel Industry Association forecasts exports of steel products will fall in last half of 2007" "China has become the world's largest mineral importer" "China steel exports for first 3 months of 2007 soared by 118.4%" "Shanghai is top destination for imports into China, edging out Beijing, while Shenzhen edges out Shanghai as top export city in China - 1st 3 months of 2007" "Sinosteel Corp, a Chinese mineral trading company, plans to spend $4 billion to build a steel plant in India, joining global steelmakers in tapping the world's fifth-biggest iron ore deposits." "GDP grows 11.1% in first quarter" "Non ferrous metal imports into China surge by 87.6 in first quarter of 2007"

  Courtesy/copyright Dow Jones Newswire - "Western Australia's Port of Esperance will complete required upgrading work at its nickel loading facilities before the next shipment is due, the port authority said Tuesday. "

  Indications at 7:50 am CST show nickel selling down by $.24/lb . The move lower this morning isn't really surprising, with traders returning from a holiday break to mixed news. A group of analysts came out yesterday with forecasts of doom and gloom for nickel investors, with other analysts quick to respond with quite opposite forecasts.  You can pick your poison from whoever you like, but they all have a lousy record of forecasting over the last few years. We recommend you watch one thing - inventory of nickel stored in London Metal Exchange warehouses. Until they start showing consistently positive gains, then all the talk about worldwide nickel demand being immediately curtailed, is just a bunch of baloney. (Bloomberg - more)

  Metals bubble? - " Classic Business Day gets commodities analyst Jason Chesters on the line from Tri-Linear Asset Management in Cape Town to find out if stocks of metals commodities are rising at a pace greater than demand in the world markets" - transcript here

  Copyright/courtesy Dow Jones Newswire - "Nickel prices should remain very strong throughout 2007 said a report published today by Standard & Poor's Ratings Services. The commentary, entitled "Nickel Producers Are Winning The Game Of Supply And Demand--For Now," discusses how stark fundamentals support prospects for continued strong nickel prices. "

  Desjardins Group - Monthly Review of Prices of Commodities - pdf here

  Rand Merchant Bank - May Base Metals Report - pdf here

  Canada Commodity Price Update - pdf here

  Indonesia appeals acquittal on Newmont Mining's charges of polluting bay - "Prosecutors in Indonesia plan to appeal the acquittal on Newmont Mining Corp's charges of polluting a bay off Sulawesi Island." - article here

  Yunnan Tin seeks to take over nickel mine in China - "Yunnan Tin Corp., China's top producer of the metal, will seek approvals to mine nickel and to inject $20 billion worth of nickel assets into its precious metals listed arm." - article here

  Nickel Exports Blocked at Esperance Pending Changes - "Australia's port of Esperance will be blocked from exporting nickel concentrate until ore-loading procedures are improved, the local state government said." - article here

  Jinchuan Group to buy nickel ore from Allegiance - "Chinese largest nickel producer, accounting for 90 percent of nickel production output in domestic market, Jinchuan Group has agreed to purchase 11 percent stock in Australia's Allegiance Mining Ltd. " - article here

  LionOre Shares Rise After Company Says Norilsk's Bid `Superior'  - "Shares of LionOre Mining International Ltd. rose in Australia after the company said a C$5.3 billion ($4.8 billion) offer from Russia's OAO GMK Norilsk Nickel is superior to an earlier bid it accepted from Xstrata Plc." - article here and another and another

  Metal trade doesn't see silver lining - "Increase in supply of base metals like copper, zinc and nickel in the second half of 2007 may ease the supply crunch and soften prices, but traders are unwilling to bet on this." - article here

  China introduces export licenses for 83 steel products - "China will apply export license management to 83 steel products as of May 20 amid efforts to rein in the expanding steel exports and trade surplus, according to the Ministry of Commerce." - article here

  News Bite - "China - CITIC investment researcher Zhang Fang Jian,....January to March this year, China's output of 30,160 tonnes of nickel, an increase of 25.9%. And domestic demand has continued to maintain strong growth, China's imports from January to March precision nickel 29,559 tonnes, up by 46.7%. Zhang Fang estimated 07 Chinese nickel demand for 240,000 tons, up 14%, nickel prices will continue to remain optimistic."

  Today's beginning nickel inventory - minus 84 tons = 4,632 tonnes (28.89%  - 1,338 tonnes cancelled warrants)

Monday, May 7  London Metal Exchange closed today

  Since there are no official LME closing prices for today, here are your average official nickel prices for the month of April 2007 - mean average - cash - $27.79/lb, 3 month - $21.80/lb, 15 month - $17.64/lb, and 27 month - $14.92/lb

  Metals Bubble Poised to Burst on Increasing Supplies - "Copper, nickel and lead, the best performing commodities in the past four months, may be the worst by year-end." - article here  (from a stainless steel users point of view, this just adds further confusion to the frustrating process of making long term purchasing decisions. The last round of the "sky is falling" talk came at the end of 2006. Since then, the price of nickel has soared nearly 50%. As we mentioned last week, if nickel prices 'corrected'(or crashed, or burst, or whatever else you want to call it) by 40%, we would only be back to pricing we were at this January. And since we made that statement... the price of nickel has jumped up by another 10%!! We think these analysts would be more honest if they just openly admitted they have no clue what is going to happen, and quit shooting in the dark. Their recent track record has been dismal... and that is being kind.)   

  Stainless steel surcharges for June updated for 3 major US suppliers - here

  China's GDP grows annual average of 9.67% from 1978 to 2006 - "China's gross domestic product (GDP) grew an annual average of 9.67 percent from 1978 to 2006, said Ma Kai, the minister of the National Development and Reform Commission." - article here

  YTC Applies for Nickel Ore Mining License - "Yunnan Tin Corporation (YTC) recently submitted an application to the Ministry of Land and Resources to acquire a 90% exploration right of Yuanjiang Nickel Ore Mine, according to a source from Yunnan Development & Reform Commission, The regulatory commission now has a controlling stake in YTC." - article here

  Analyst: BHP Billiton May Buy Rio Tinto - "Shares in Rio Tinto PLC and BHP Billiton Ltd. surged Monday as a second investment bank supported the possibility that the mining giants could be the latest subjects in a market bursting with acquisition speculation." - article here

  Iron & Steel Technology May Report - Global Steel Production - (covers January & February stats) - pdf here

  Comment - With the LME markets closed today we take a moment to reflect on the current state of affairs. We must congratulate those of you who are successfully staying ahead in this bull run. Stainless steel users, on the other hand, are finding their situation more and more like that of the hapless poop-scooper, who must step in or clean up what the bull left behind in its wake. Stainless steel prices continue to soar, and producers from around the world are sending loud signals that they are using less nickel. Until the LME warehouse nickel levels start gaining ground, adding some evidence to these claims, nickel investors have no reason to believe this is anything but a bluff. 

We are now seeing reports that chromium is trying to get into the act. India's decision a few months back to add an export tax, and South Africa's clamp down on shipments of chromite ore, has forced China to scramble for supply. This had led to spotty shortages in Europe and North America, which in turn, has led to price increases. Iron ore prices continue to rise, the most recent increase of 9-1/2% taking effect in April. Last week, metals analysts RBC changed an earlier forecast of a 25% drop in price to a 15% increase this year. And molybdenum prices continue to creep up with a very solid outlook forecast, with a few even suggesting it has the potential to increase in price dramatically.

  Nickel, lead at forefront of industrial metal price hike - "Disrupted production, falling stocks and positive US data combined to lift industrial metal prices to new highs on Friday." - more here

  News Bites - (copyright/courtesy Dow Jones Newswire) - Nickel Shipment Leaves Australia's Esperance On Schedule - "Nickel concentrate loading at Western Australia's Port of Esperance concluded as planned during a Department of the Environment and Conservation inspection over the weekend, which found only minor problems with the loading process.......The two main companies that ship nickel concentrate via Esperance are LionOre Mining International Ltd. and Jubilee Mines N.L. Esperance shipped 194,136 tons of nickel concentrate in 2006." (more here) - "Standard Bank says piercing of $50,200 level reinforces view metal has momentum to head toward $54,500, particularly if decline in stocks continues."

  POSCO to raise stainless steel prices - "POSCO Co. Ltd. , the world's third-largest steel maker, will raise prices of stainless steel products by 400,000 won ($431.3) per tonne due to higher costs of nickel, a key raw material, a company official said on Monday." - more here

   Stainless steel prices soaring continuously - "The stainless steel price has been soaring continuously while the nickel price on the LME has been increasingly rising." - article here

  World crude steel production up by 10.2% - "According to International Iron and Steel Institute (IISI), the world crude steel production was totaled 318.3 million tons in the first three months of 2007, increasing by 10.2 percent from the first quarter of 2006." - article here

  Acquisitive Norilsk forecasts nickel supply deficit - "The world’s biggest nickel producer, Norilsk, which last week announced a counterbid for Canada’s LionOre, forecasts a deficit in global supply for the silvery-white metal, as a number of big industry projects have been delayed." - article here

   Rio asks for 30 year permit for mining nickel in Indonesia - "Rio Tinto Group announced that a planned USD 2 billion nickel project in Indonesia may not proceed without the company getting an extended forestry permit." - article here

  Call to clamp nickel exports - "A group of Esperance residents wants tighter controls on nickel exports from the town, claiming bulk exports of the metal should be stopped and the product shipped in containers to protect the community." - article here

  Global prices may nullify nickel duty cut gains - "The FM’s announcement of a duty cut on nickel from 5% to 2% is unlikely to benefit domestic stainless steel players. A day after Mr Chidambaram made the announcement, the price of nickel for 3-month delivery at the London Metal Exchange (LME) zoomed by nearly $300 over Thursday’s close to breach the psychological $50,000 per tonne mark." - article here

  Environmental group in New Caledonia to have more talks over Goro Nickel project - "Brazil’s Companhia Vale do Rio Doce, or CVRD, has given its final approval for the 3 point two billion US dollar Goro Nickel project in New Caledonia, despite delays, cost explosions and quarrels with some locals." - article here


Saturday, Sunday, May 5 & 6

  The London Metal Exchange will be closed Monday, May 7.

  A headline from days gone by - July 1992 - Purchasing Magazine - Headline - What's up with nickel? Certainly not the price! - "It's a 60:40 bet that nickel prices will languish through 1993....At $3.45, the 1992 average six-month spot price is depressed relative to last year ($3.80). Over the previous five years, spot nickel averaged $4.55/lb." (enough to bring a tear to the eye)

  Ok, let us ask a question about the Norilsk offer for LionOre. Is Australia comfortable with the possibility of the Russian government owning part of their mineral assets? Before you raise your eyebrow and shoot us a nasty-gram, let us explain that statement. In our humble opinion, this should be given a little more debate than it seems to be getting. We live in a global economy and any company should be able to own another company, no matter where it is located. Right? Wrong! Here is a challenge for those who think so. Let BHP or Rio make an offer for Norilsk and see how fast the Kremlin shoots it down. In fact, Norilsk is still a closed city. Not the mine, the entire city. That means you can't just jump on a plane and fly in to visit Uncle Alexi whenever you want. You need a government issued pass. Nickel is classified as a strategic asset in Russia, and is protected from foreign ownership. We wrote about this when they affirmed it last year, and felt it was rather ridiculous at the time, considering Norilsk owns Stillwater Mining in the United States. You remember Russian owned Stillwater Mining, don't you? They are the only producer of platinum and palladium in the US. They made headlines last night - "Stillwater Mining posts 1st-quarter loss" - article here (only in America can you loose money in a bull market) According to recent media accounts, as early as two months ago, the Kremlin itself has their eyes on Norilsk ownership. If this were to happen after a merger, then the Russian government would own part of Australia's mineral assets.

Foreign ownership of mining interests is common throughout the world. And while Canada resisted China's attempts to buy some of its largest nickel mines, it did not stop Brazil and Switzerland companies from doing that very same thing last year. And many of Australia's mining interests are already owned by foreign companies. So, why the hesitation on our part? It comes down to who holds control of the company. If CVRD, BHP, Rio, etc, stay in independent, market driven, free from governmental controlled hands, then we witness a global economy at work. But if suddenly a government take over a company, then that government now has a degree of control of another countries assets. Russia is a country that has yet to fully identify itself politically. And it is an economy on the rebound. And while we would like to believe we live in a get along society between economic powers, we are witnessing smaller governments seizing control over mineral assets in South America and Africa even today.

We live in a country where the government can't get over losing Cuban mineral assets to Cuba governmental control nearly a half century ago, so we have little room to voice an opinion. But we thought we would throw this out as food for thought.

  ADB provides 150 mln dollars for Madagascan mining project -"The African Development Bank ( ADB) has agreed to provide 150 million U.S. dollars to finance a mining project in Madagascar." - more here  

  CVRD Inco invests $445 million in Sudbury mining projects - "The company announced today (Friday, May 4) that it will spend $400 million (CDN) to reopen Totten Mine in Worthington. The company expects to create 150 new jobs by the time the mine is in full operation in 2011." - article here

  (comment - we monitor this as Sulawesi island is home to PT Inco) Indonesia: Jemaah Islamiyah’s Current Status - "In late March 2007, arrests by Densus 88, the police counter-terror unit, netted seven detainees in Central and East Java (an eighth was killed); a huge cache of explosives and weaponry; and documents that seemed to suggest a new military structure for Jemaah Islamiyah (JI), the region’s largest jihadist organisation. The arrests followed directly from information obtained from operations in Poso, Central Sulawesi, in late January." - article here

  It's the weekend, where we let the other side have a little space. We try to keep this site balanced, which means we aren't afraid of our readers seeing what the "other side" has to say, no matter how far out in left field we might think they might be. And while censorship is simple paranoia, in a society where everyone has the right to make a speech, we all share the right to make an a-- of ourselves too. Here are two about the Skye Resources project in Guatemala. Wall Street Journal article - pdf here and This Magazine - here   More on our thoughts on the Skye project here  

  A Woman in a Mine’s World - "National roundtable on mining fails those struggling against Canada’s corporations abroad" - article here  (please note - this article is published by a well known anti-mining organization with an agenda.)

  "Mattagami First Nation, Liberty Mines sign MOU" - more here (We would love to tell you this level of cooperation between the indigenous landowners and this mine would make big news with the NGO's, but if we see anything written about this by them, it will probably be about the higher than average suicide rate among the native people of Canada, and somehow try to make that the fault of the mining company) 

  Regretfully, we are unable to publish our weekend report for nickel prices. We would like to claim, that as stainless steel consumers, we just didn't have the heart, but our sources did not publish this week. We apologize to our readers, and will resume posting the info next weekend. 


Friday, May 4  New record high for 3 month nickel today - $23.45/lb ($51,688 a tonne)

  Today's official LME nickel closing prices - cash - $23.82/lb - 3 month buyer - $22.99/lb (52.25% higher than 1/1/07). As a stainless steel consumer, we really find it hard to find anything amusing about the nickel market these days. And we apologize to our Chinese readers, but we can't help but chuckle a bit, wondering what Mandarin cursing sounds like. There will probably be few slang words being slung when China returns to work next week. This is their second long holiday of the year, and the second time they will return to find nickel at new record high's. It was all up today, with nickel breaking a record early, then re-breaking it again in late afternoon trading. For the day and week, 3 month nickel ended at $23.36/lb ($51,500/tonne). (Dow Jones - more) And there is a lot of talk it could go higher next week. We leave you with a video to wrap up the week's nickel movements. The player in the foreground represents the bear of the week, while the player in the background is your nickel bull. We think you will understand our point. Video here. Have a safe and restful weekend!!

  Westpac - Autumn 2007 - Regional industries: base metals, copper and aluminum - pdf here

  China`s stainless steel output may rise 37% this year - "China, world's biggest producer of stainless steel, will probably increase output by 37 per cent this year to 7.35 million metric tonnes, metals research firm Heinz H Pariser said." - article here

  LionOre is Lion's roar - Potanin tries devouring his old partner - "In just five days -- three of them the Russian May Day holiday -- it has been announced that Yevgeny Ivanov, the chief executive of Polyus, Russia's leading goldminer, has suddenly asked to be relieved of his title, in order to take a post with a sister company, still to be formed, with a minuscule fraction of the capital he has controlled at Polyus; its market capitalization is $8.6 billion." - more here

  News Bites - "Fat Prophets analyst Gavin Wendt said Norilsk's counterbid for LionOre could flush out other bidders for the assets, but he ruled out BHP and Rio as potential candidates." "China's Jinchuan aims to lift nickel metal output 7.8% in 2007" "(Indonesia)Inco`s Q1 earnings reach US$227.8 million(more)"

  Update! - Interesting comments from CVRD's 1st Quarter report issued last night - "It is hoped that growth in global stainless steel production will continue to slow in the next few months to a rate more sustainable in the long term. Demand for nickel for other applications coming from the oil and gas industries, aerospace and batteries holds firm, and no sudden changes are expected. Although the expansion in stainless steel output is expected to be lower this year, 7% as opposed to 16% in 2006, and in view of the substantial increase in production of nickel pig iron in China, we estimate that the growth in nickel supply will be sufficient only to meet the increase in consumption, with nothing available for the necessary replacement of inventories. In the face of the severe shortage of refined nickel, increased production of nickel pig iron is supporting at the margin the growth of series 200 stainless steel production in China. However, there are various challenges to be overcome: high productions costs, logistics (imports of millions tons of lateritic nickel ore), low nickel content and high levels of sulphur and phosphorous, intensive consumption and the negative impact on the environment." - pdf report here (comment - either this is an ingenious way of keeping the market nervous, or rather frightening. How often do you see a supplier wish his customer base would slow down?)

  Indications at 7:55 am CST show nickel selling up by $.36/lb . At 7:20 am London time, 3 month nickel passed the old record of April 24th, and reached a new record high of $23.00/lb, before stopping and backing off just a little.  Media is reporting this is because of the problem at the Australian port. We doubt it, as we have been covering this story since the day the birds were reported killed, and today's news isn't anything new. We think it has more to do with Calyon's late forecast yesterday, that they were raising their forecast for nickel to average $22.68/lb for the next 3 months. That is $50,000/tonne, and considering it hadn't got that high for the first 3 days of the quarter, this ambitious forecast raised a few eyebrows. Their prior forecast  for the three months had been $15.88/lb. LME will be closed Monday, so  it is possible we could see the record broken again before days end. (Bloomberg - more) (Financial Times - more) (Forbes - more)

  Nickel and lead hit highs on tight supply - "Nickel and lead hit new highs and copper touched a 10-month record on Friday on strong demand and supply worries following the previous session's rally." - article here

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

  Mining sector expects to hit paydirt, cites $1-B prospects - "The Chamber of Mines of the Philippines expects $348 million in foreign investments to come this year and the inflows to rise steadily to $1 billion a year over the next five years, chamber president Benjamin Philip Romualdez said." - article here

  The Russian bear is back and heading for a boardroom near you - "Norilsk, the world's top nickel producer, is trying to barge its way into Canada. The question is whether Vladimir Putin's government will come along for the ride." - article here

  Goro will produce since 2009 - "The Brazilian company CVRD, majority shareholder of the project, ratified the new budget necessary to the startup of the factory. It rises from now on with more than 288 billion frank. Goro Nickel thus reaches a decisive stage towards its entry in production." - translated article here

  News Bites - "Taiwanese Tang Eng has announced to raise their 304 stainless steel hot rolled and cold rolled price by NT$10,000/mt (US$300/mt) for domestic market." "Japan's crude steel output to hit new highs" "CVRD Inco nickel major contributor to parent company big earnings increase" "FNX Mining Company Inc. Announces Commercial Production from the Levack Mine has Commenced" "OM Group Inc.'s (OMG) Thursday reported a six-fold rise in first-quarter profit, boosted by higher cobalt prices and sale volumes, and the sale of its nickel business to Norilsk Nickel for $408 million in cash."

  China to impose steel export licences - "China's Ministry of Commerce has issued a new policy for an export licence system on some steel products. It will be effective from 20 May." - article here

  Nickel Shipment From Australian Port Faces Scrutiny - "A 20,500 metric ton nickel concentrate shipment from LionOre Mining Ltd. and Jubilee Mines NL scheduled to leave Australia's Esperance Port tomorrow will be monitored amid a metal pollution inquiry in the town." - article here

  Brazil's Vale Says Profit Soars as Metal Prices Rally - "Cia. Vale do Rio Doce, the largest producer of iron-ore and nickel, said first-quarter profit more than doubled to a record as prices rose and the company acquired mines and metals processing plants." - article here

  Xstrata tipped to raise offer for LionOre - "Swiss mining giant Xstrata is likely to come back to the table with a higher offer for nickel miner LionOre Mining International Ltd after it was trumped by Norilsk Nickel." - more here

  Today's beginning nickel inventory - minus 6 tons = 4,716 tonnes (28.88%  - 1,362 tonnes cancelled warrants)

Thursday, May 3

  Today's official LME nickel closing prices - cash - $23.31/lb - 3 month buyer - $22.32/lb (47.81% higher than 1/1/07). If you looked at official closing prices, which are set after the morning trading concludes, you would think not much happened with nickel today. But that doesn't even begin to tell the story of the day. Some of our readers are investors, and for those who have been holding onto their nickel related stock, they are happy campers today. Take a look at what happened with some of the nickel mining and mining exploration company stocks today (here). There were a number that had gained in value by 10 to 20% today alone. And the buying fever, brought about by Norilsk's surprise bid for LionOre, also was felt in LME afternoon trading, with 3 month nickel ending the day at $22.57/lb ($49,750/tonne). That works out out to a gain of $1,000/tonne for nickel, or another dime a pound for 300 series stainless. (Dow Jones - more) (Reuters - more)

  Two observations about Norilsk bid for LionOre - #1just a reminder  and something to think about - Kremlin Inc. To Grab Billionaire's Nickel Giant? - Feb article posted here (if the Kremlin takes over Norilsk, does this mean the Kremlin would own LionOre?) And #2. Have you ever played rock, paper, scissors? 3 offers on the table right now. Under rock, we have a $4.8 billion offer by Norilsk for LionOre Mining. Under paper, we have a $5 billion offer from Rupert Murdoch for Dow Jones. And Kirk Kerkorian wants Daimler to cut Chrysler loose for $4.5 billion. For the 4th quarter of 2006, LionOre made a profit of $205.2 million, on $377.1 million in sales. Dow Jones made an operating income of $48.4 million on revenues of $485.4 million. And Chrysler, according to media, made a profit of $950 million, on 4th quarter 2006 sales of $51.2 billion. So, if you were a player, which would you choose - rock - paper - or scissors?

  No material impact from Voisey's Bay stoppage-CVRD - "A week-long stoppage at CVRD-Inco's Voisey's Bay nickel mine will have no material impact on the mine's full-year production, the company said on Thursday." - article here

  Molybdenum supply is expected to get tighter - "An already tight molybdenum supply situation has gotten much worse recently, sending spot molybdenum prices above $30/lb in mid-April because of threats of export controls by China and the launch of new exchange traded fund (ETF) in Canada." - article here

  Govt cuts export duty on low grade iron ores - "The government on Thursday slashed the export duty on low-grade iron ore to 50 rupees per tonne from 300 rupees after protests by the domestic ore industry, which had seen sales to the key Chinese market tumble." - article here

  Indications at 7:50 am CST show nickel selling up by $.23/lb . The surprise announcement that Norilsk has outbid Xstrata for LionOre, has given some positive momentum to nickel prices this morning, but once again, the prices are see-sawing.  (Reuters - more)  (Bloomberg - more)

  Voisey's Bay nickel mine reopens after strike: CBC - "Production has restarted at the Voisey's Bay nickel mine in Newfoundland after a week-long stoppage when owner, CVRD , replaced striking support staff, Canadian Broadcasting Corp. reported on its Web site on Wednesday." - article here  and here

  Norilsk Nickel Makes Bid for LionOre - "Norilsk Nickel, the world's biggest producer of nickel and palladium, announced Thursday that it had launched a 5.3 billion Canadian dollar ($4.8 billion) bid for nickel and gold producer LionOre." - article here  and another and another and another

  Commodity Price Update - pdf here

  Commodities Round-up - World Mining Stocks May, 2007 - article here

  Rio Tinto, Indonesia Agree Royalty Rate for Planned Nickel Mine - "Rio Tinto Group, the world's third- largest mining company, and the Indonesian government have agreed on royalty payments for a planned $2 billion nickel project, an official said." - article here

  Materials inflation accelerates - "Raw materials inflation is becoming very worrisome for buyers, according to Institute for Supply Management, whose prices-paid index increased to 73.0 in April from 65.5 in March and 59.0 in February. Readings above 50 point to expansion in activity in the indexes calculated by the purchasing organization. “Prices continue to rise at a rapid rate with metals and energy being the areas of greatest concern to buyers,” says Norbert Ore, who directs the ISM survey." - article here

  News Bites - "FNX Mining Earns $30.2 Million in First Quarter" "Eramet First-Quarter Sales Rise 13 Percent on Nickel" "Sherritt first-quarter profit pops on nickel price" "Eramet's 1Q nickel output drops 14.3% on year" "Inco Indonesia's Profit Surges Fivefold on Record Nickel Prices"

  DJ Russia Yuzhuralnickel Ups Jan-April Output By 20% On Year - "Russian Yuzhuralnickel produced 5,500 metric tons of nickel in January-April, 20% more than in the corresponding period last year, the company said Thursday." - article here

  Today's beginning nickel inventory - minus 54 tons = 4,722 tonnes (28.46%  - 1,344 tonnes cancelled warrants)

Wednesday, May 2

  Today's official LME nickel closing - cash - $23.21/lb - 3 month nickel - $22.23/lb (47.22% higher than 1/1/07). Ever seen a heavily intoxicated person, that you could hardly believe could stand, let alone walk? They would take a few steps forward, then stagger back a little, lean forward and repeat themselves. It wasn't a pretty thing to watch, but in the end, they gained some ground. That is how we could best describe nickel trading today. 3 month nickel ended a back and forth trading day at $22.11/lb ($48,750/tonne) (Dow Jones - more)

  Hot Rolled Stainless Steel Coil Forecast - "Transaction values for grade 316 moved up again this month in all regions. Another alloy surcharge rise occurred in North America. In the EU, basis figures reduced but offset only 53 per cent of the surcharge growth. The gap between Eastern and Western prices narrowed as Asian mills imposed another significant hike in recent weeks." - article here

  Metals still enjoying bull market - "The key drivers of the bull market for base metals and precious metals remain in place, Natixis Commodity Markets said in its latest Commodity Markets Q2 Metals Review, released in London on Tuesday." - article here

  AK Steel Announces June 2007 Surcharges For Electrical and Stainless Steels - AK Steel has advised its customers that a $310 per ton surcharge will be added to invoices for electrical steel products shipped in June 2007." - more here (our 304 and 316 surcharge page has been updated here)

  CVRD develops Brazil-China ore shipping service - "Brazilian iron ore mining giant Companhia Vale do Rio Doce said Wednesday it entered into a 25-year freight contract with B.W. Bulk, part of the Norwegian BW Group, to expand its Chinese trade." - article here  (and more on the world's largest ore carrier mentioned in the article here)

  Venezuela's national assembly approves some US$382 million for setting up a stainless steel plant in Monagas state with annual production of 500 million tonnes." - more here and here

  Jakarta Post reports that for the first quarter of 2007, Indonesia's exports of metal ores, such as nickel, copper and gold saw a growth of 75% $1.56 billion.

  Blue Pearl Mining adds corporate video - here (comment - we find some of these corporate video's contain very good info about market conditions - this one covers molybdenum - 95 mb - so it takes forever to load)

  Indications show nickel selling up by $.22/lb at 7:50 am CST.   (Bloomberg - more) (Dow Jones - more) (Forbes - more)

  Nickel Surcharges Rise to Record on Use, Inventory, Calyon Says - "Nickel surcharges paid by stainless- steel makers and other users of the metal rose to a record because of soaring demand from China and dwindling inventory, said Calyon, the investment-banking unit of Credit Agricole SA." - article here

  Brook Hunt Nickel Monthly Report - here

  Behre Dolbear - Global Mining News - pdf here

  Copyright/courtesy Dow Jones Newswire - "LME nickel is expected to average $35,000 a metric ton during '07 and $23,500/ton in '08, says Natexis Commodity Markets. "Further production cuts in stainless (steel) will emerge in the summer months, which will lead to a correction in the nickel price," Natexis adds."

  As long as it takes - "Contractor strike growing at Voisey’s Bay" - more here

  London Metal Exchange (LME) traded options for May 2007 are declared today

  Taiwan's stainless transaction prices hike due to high nickel price - "Although nickel price has reached a new high of US$50,000/mt since last week, orders from steel mills are still placed for releasing constant demands as well as to avoid later risk of higher nickel price." - article here

  Court action promised if PNG government doesn’t initiate review of Ramu nickel agreement - "A lawyer for one set of landowners calling for a review of the Memorandum of Agreement over the Ramu nickel and cobalt mine says the Papua New Guinea government has until the end of May to act or face court proceedings." - article here

  JFE Steel to raise stainless prices - "To offset rising production costs on account of rising nickel price, Japan's JFE Steel is implementing in May another price hike of at least ?20,000/ton to both 300 & 400 series CR coil and plate, with nickel alloy surcharges raised as well according to grade." - article here

  Posco to increase stainless prices again - "In order to meet the price increase for nickel, South Korea Posco plans to increase 304 stainless steel by 400,000 wow/ton from 14 May." - article here

  US Economic Weakness Has Held Back Primary Metals - USGS - "Persistent weakness in the U.S. housing sector and decreased manufacturing activity has held back a recovery in the primary metals industry, according to the U.S. Geological Survey, or USGS, Wednesday." - article here

  Shipping rates rise on shortages of vessels - "Commodity prices may be soaring on record demand for raw materials but so too are the prices for shipping these goods around the world." - article here

  Canadian factor looms large for Australia’s booming mining sector - "Call for Australian investors to take a longer term view of investment in the domestic mining sector and the implementation of a flow-through taxation scheme." - article here

  Mining company acknowledges lead contamination - "A mining company under scrutiny over lead contamination acknowledges lead dust from its Wiluna mine escaped into Esperance, but maintains it did nothing wrong." - article here  (this situation is affecting nickel shipments from this port)

  Today's beginning nickel inventory - minus 204 tons = 4,776 tonnes (29.39%  - 1,404 tonnes cancelled warrants)

Tuesday, May 1

  Today's official LME closing prices - cash - $22.90/lb - 3 month buyer - $22.02/lb (45.83% higher than 1/1/07). US sales of existing homes fell more than expected, but ISM manufacturing index rose higher than expected, in reports released today. Nickel's activity on the LME was a little out of what has become the norm today, starting in the black shifting to neutral for much of the day, then gaining some more in the PM kerb. 3 month nickel ended the trading day at $22.04/lb ($48,600/tonne) (Dow Jones - more)

  Base Metals Review and Outlook May 2007- Fred Demler - here (won't work in Firefox for some reason, must use Internet Explorer)

  Jinchuan ups $1-B offer for Philnico - "China’s Jinchuan Group Ltd. has increased its initial investment offer of $1 billion (P47.6 billion) to run Philnico Industrial Corp., Trade Secretary Peter B. Favila said yesterday." - article here

  Nickel mine uses steel from Australian Stainless Steel Development Association - "When Australian Stainless Steel Development Association Accredited Fabricator Nepean Engineering was awarded the tender for the manufacture of the stirring mechanisms for 10 thickeners for the Goro nickel mine in New Caledonia, they had no idea of the enormity of the venture." - article here

  It's Everywhere, In Everything: The First Truly Global Bubble - by Jeremy Grantham of GMO LLC - article posted on forum here

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

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

  High commodity prices will mean fewer manufacturing jobs: Dodge - "Bank of Canada governor David Dodge says he expects Canada's manufacturing sector will continue to shed jobs as long as commodity prices remain high." - more here

  Recent changes to the superstack - "Greater Sudbury residents who have looked at the superstack recently might have noticed a few unusual changes." - article here

  Indications at 7:50 am CST show 3 month nickel selling up by $.06/lb .  Much of the world is closed for the May Day holiday today, with China closed for the week. For those still working, not much in the way of market movement is expected today. Still a lot of speculation out there about some potential movement upcoming, with the majority forecasting an aggressive swing to the upside.  (Bloomberg - more) (AFX - more)

  Average Nickel Content in Stainless Steel in Decline - "High nickel prices are prompting buyers of austenitic stainless steels to actively seek alternative grades or other materials. The benefits of life cycle costing are diminishing. However, much of the substitution is taking place within the stainless industry but coated carbon steels are under consideration." - article here

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

  News Bite - courtesy/copyright Dow Jones Newswire - "Antam's nickel sales volume during the first quarter increased 112% on year to 3,345 tons, or 17% of the 20,000 ton target for 2007."

  News Bite - courtesy/copyright Dow Jones Newswire - "LME nickel looks set to stay volatile after a choppy start to the week and amid uncertain near-term direction, says a London-based broker. Trade shorts are hovering in the wings, he notes, and would likely provide support if prices slip lower, but talk of substitution away from nickel is adding pressure...."

  Australia to maintain second ranking in global nickel production - "Data produced by the West Perth, Australia-based mineral research organisation Intierra shows that Australia remained ahead of Canada to be the second largest nickel producer in the world in 2006." - article here

  PNG officials note improved conditions at Ramu Nickel - "Papua New Guinea’s Labour and Industrial relations department says it is satisfied that Chinese developers of the Ramu nickel cobalt mine have taken the necessary steps to improve working conditions." - more here

  Rio`s Indonesian nickel project needs forestry permit - "Rio Tinto Group, the world`s third-largest mining company, said a planned US$2 billion nickel project in Indonesia may not proceed without the company getting an extended forestry permit.: - article here

  Jinchuan Group Buys Stake in Australia's Allegiance - more here

  Today's beginning nickel inventory - minus 36 tons = 4,980 tonnes (31.93%  - 1,590 tonnes cancelled warrants)

April entries


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

Date

LME Stock Level +

Cancelled Warrants

Official Cash Close *

Official 3 months close *

Day's Ending *

5-31

7,872

7.62%

$23.09

$21.63

$20.87

5-30

7,698

7.17%

$22.95

$21.18

$21.16

5-29

7,722

9.86%

$23.13

$21.27

$21.59

5-25

7,452

9.82%

$23.13

$21.34

$21.00

5-24

7,200

8.42%

$22.82

$21.23

$20.41

5-23

6,834

8.42%

$22.77

$21.32

$20.91

5-22

5,388

12.03%

$24.38

$22.75

$21.86

5-21

4,986

14.08%

$24.52

$22.86

$22.86

5-18

4,824

18.00%

$23.68

$22.23

$22.82

5-17

4,866

18.74%

$23.81

$22.31

$22.11

5-16

4,872

20.15%

$24.54

$22.86

$22.84

5-15

4,674

21.57%

$24.49

$22.75

$22.95

5-14

4,740

23.52%

$24.09

$22.54

$22.25

5-11

4,698

25.15%

$24.22

$22.75

$22.86

5-10

4,446

24.40%

$23.90

$22.68

$22.63

5-9

4,458

26.65%

$24.00

$23.11

$22.36^

5-8

4,632

28.89%

$23.95

$23.13

$23.08

5-4

4,716

28.88%

$23.82

$22.99

$23.36^

5-3

4,722

28.46%

$23.31

$22.32

$22.57

5-2

4,776

29.39%

$23.21

$22.23

$22.11

5-1

4,980

31.93%

$22.90

$22.02

$22.04

3 month nickel averaged $11.01/lb for all of 2006, $6.69/lb in 2005 - Cancelled Warrants are goods sold and ready to leave the warehouse.


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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 www.estainlesssteel.com

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