This page is archived news covering the period from November 1, 2006 to November 30, 2006.
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Stainless Steel Prices & Nickel News

Up to date information on worldwide nickel market pricing, stainless steel prices and metals market trends, analysis, and forecasts

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Daily Nickel Market Prices

November 2006

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

(all ton listings are metric tons = 2204.6 pounds - unless marked official, all nickel prices are indications only)

Notice - the Midwest US is experiencing flooding, freezing rain, sleet and snow today, with numerous power outages (and that is just in our county). This may affect our ability to update this site.

Thursday, Nov 30
Dollar continued to slide today, lowest in 20 months against the Euro, and its lowest in 14 years against the British pound. LME nickel ended the day much higher, closing at $15.40/lb ($33,945/tonne)
*    Article - Excellent global and local prospects for stainless steel here
*    National Australia Bank forecasts nickel  prices for 2007 to average $12.13/lb
*    At 7:30 am CST, indications were nickel was selling up at $.44/lb (nearly 1/3 of LME stored nickel is cancelled warrants, with news in last few days that two mega mines, Goro and Ravensthorpe, expected to start producing nickel next year, won't until at least 2008, is making traders nervous. This will cause forecast deficits next year to widen.)
*    Article - Eramet sells stake in SLN here
*    Article - Why commodities are not as risky as you think here
*    Radio New Zealand and Les Nouvelles Caledoniennes remain quiet on any new CSTNC strike developments, while both are reporting on developments with the French stop work order.
*    Article - Brazil Votorantim seeks nickel imports to up output here
*    Article - China importing low grade nickel to cushion blow from high prices - Numis here
*    Article - Stainless steel output forecast to rise by 60% this year in China here
*    BHP's Ravensthorpe cost estimate increased  from $1.34 billion to $2.2 billion - start up to be early 2008 instead of next year as planned.
*    Yesterday's official closing - cash - $14.97/lb - 3 month buyer - $14.72/lb
*    Today's LME nickel inventory - plus 162 tons = 6,726 tons (28.9% cancelled warrants)

Wednesday, Nov 29
LME nickel ended the day at $14.81/lb ($32,650/tonne)
*    Article - Earthquake rattles Canadian mining town here
*    Article - Chinese data on base metals imports and exports show contrasting trends here (quote - "It also appears that this surge in imports is being used in production of low-nickel grade stainless steel, which we believe doesn’t have a long term future. We understand that this poorer quality stainless is already causing problems in China and that they are heading back forward the higher quality materials,”) (comment - possibly referring to 200 series stainless)
*    BNP Paribas Market Report here
*    Article - The commodities bull is alive and kicking here
*    Video - Maximizing The Miners In 2007 by - here
*    Had a reader who sent us an e-mail today taking issue with our doubt about a possible BHP takeover bid for Freeport. The interesting point he brought up, that we were not aware of, was that Charles Goodyear, CEO of BHP, has a background which includes "Executive Vice President and CFO of Freeport-McMoRan Inc". He also sent us the article "BHP Billiton eyes expansion in gold" here (comment - this is why we don't predict - but we will stick to our statement that we would be surprised. Let's see if we can tip-toe thru this minefield. Let's start with Freeport's Grasberg mine article in New York Times here. Further research on this mine and the Ok Tedi Mine has convinced us that no company should operate a mine by taking advantage of a cash starved Third World country's ignorance in basic environmental laws and allow dumping of mine tailings directly into a natural river system; something that is illegal in nearly every country in the world. The clean-up of these mines that the world will come to demand, the press that will increasingly grow more negative, and the damage they will continue to do to the entire mining industry's reputation, would seem to us to scare off any company that must answer to shareholders. Earlier this year, Norway's $200 billion oil pension fund banned investment in Freeport McMoRan Copper and Gold Inc - read recommendation here. Like we said - BHP dodged a bullet when it got out of OkTedi - why would it want to jump back into a similar mess? Short video -  here Please - this is not an attack on the mining industry - here is a brochure on why we need, must have, and will always have mines here.) And thanks to the reader for the heads up.
*    At 7:45 am CST, indications were nickel was trading $.18/lb lower
*    Article - China may use year end lull to coax down copper; nickel to stay strong - Numis  here
*    BHP chairman Don Argus told shareholders in Brisbane, Australia that the world's largest mining company remains very bullish on metals prices, and growth in Japan and Europe would offset any slowdown in the US. He also reminded the crowd that many natural and man made factors can easily disrupt the supply chain, and increases in capital costs are slowing down construction of new mines that will be needed to meet future increases in demand. speech here
*    Xinhua reports another 11 miners killed in a coal mine explosion this morning in Gansu Province.
*    Dow Jones Newswire - "Very low LME nickel stocks, current production constraints, "active two-way flows" at LME warehouses likely to lead to short-term nickel volatility, says UBS."
*    Yesterday's official closing - cash - $15.60/lb - 3 month buyer - $15.15/lb
*    Today's LME nickel inventory - minus 96 tons = 6,564 tonnes

Tuesday, Nov 28
LME nickel ended the day at $14.99/lb ($33,050/tonne)
*    Video - broadband only - Mining Journal's 20:20 Investor Series - Nickel Day (now online) here 
*    Article - Commodities demand still substantial in medium term here
*    Article - Construction halted at part of Inco project here
*    Article - Chinese puzzle here (quote - "With rapid urbanisation meaning 200 million people will move from farming communities into cities over the next decade - the equivalent of building four cities the size of Sydney every year for the next 10 years, says Oliver - how can you get your slice of the action?")
*    At 7:30 AM CST indications were nickel was quiet and up only a few pennies.
*    Press release - The directors of Toledo Mining Corporation plc advise that the Berong Nickel Project has been issued a Special Mines Permit, and is now able to commence full scale commercial mining of laterite nickel ore from its Berong project on Palawan Island in the Philippines with immediate effect.
*     Les Nouvelles Caledoniennes reports the mines of Thio and Népoui are still experiencing supply disruptions with blockades
*    Yieh reports Taiwan's Yusco and Tang Eng hold stainless price for December
*    Yesterday's official closing - cash - $15.68/lb - 3 month buyer - $15.31/lb
*    Today's LME nickel inventory - minus 282 tons = 6,660 tons

Monday, Nov 27
American traders returned today and while they were trying to figure out what happened to the nickel market while they were on Thanksgiving break, other world traders waited to see how they would react. In other words - it was an old fashioned stand-off to see who would blink first. No one did and LME nickel closed flat at $15.18/lb ($33,475/tonne)
*    Article - Xstrata ups stakes in South African chrome ore export dispute here
*    At 7:30 AM CST, indications show nickel to be trading up at $.03/lb.
*    The anticipated surcharges for January we mentioned last week - expect them to go up now that nickel prices has risen again.
*    Macquarie Research cautions the base metals rally may be overdone, in its weekly report.
*    AP reports 77 miners killed over the weekend in 3 separate coal mine explosions in northern China.
*    Radio New Zealand and Les Nouvelles Caledoniennes quiet on any new developments with SLN and CSTNC
*    Yieh reports Taiwanese stainless steelmakers likely to raise stainless prices for December
*    Friday's official closing - cash - $15.64/lb - 3 month buyer - $15.13/lb
*    Today's LME nickel inventory - plus 588 tons = 6,942 tons

Sunday update, Nov 26
*    Article - The three great challenges facing the global mining industry here
*    Article - Market report: Europe sees red over greenback here
*    Article - Canada woos mine partners from China here
*    Freeport-McMoRan Copper & Gold, who has agreed to a friendly takeover of Phelps Dodge, saw its stock surge late last week on rumors it may itself become the target of a takeover bid by BHP. (personal comment - this would surprise me. While BHP would probably like to get its hands on the Grasberg mine in West Papua, Indonesia, (the world's largest gold mine and third largest copper mine), it dodged a major bullet when it withdrew from Papua New Guinea and the Ok Tedi copper mine in 2002. OK Tedi is classified by some as one of the worst environmental disasters in the world, with Grasberg now drawing similar criticism, some of which is coming from the Indonesia government.) More on Grasberg here
*    Article - "The great Canadian mining disaster" here (comment - this is fascinating reading!)
*    The value of the dollar weakened to its lowest level in a year and a half against the euro Friday.
*    Les Nouvelles Caledoniennes was perplexed by Xstrata's press conference Friday in which it announced its status on the construction of the Koniambo project. The paper was concerned about the vague language and the lack of real commitment given to the project. The paper also reports the new cost estimates could be in the $2.2 to $3 billion range.
*    Reuters is reporting CVRD President Roger Agnelli told a news conference Friday that the price tag for the New Caledonia mine Goro will likely be closer to $3 billion, with initial production to begin in late 2008. In 2002, Inco stopped construction when it became apparent the original $1.45 billion budget would not be met. On October 19, 2004, then Inco CEO Scott Hand, announced production would resume after the company came up with a new estimate - "The final results of the review have included an updated capital cost estimate of $1.878 billion (U.S.), within a minus 5 per cent to plus 15 per cent reliability range" and a projected production beginning in September 2007. In July of this year, Inco announced "We currently expect that the capital cost will exceed the top of the range of our previous forecast of $2.15 billion...."
*    For American manufacturers - if you have employees who cut, drill, weld, or grind stainless, you may want to review the updated OSHA guidelines on "hexavalent chromium exposure in the workplace" here more here The new levels of permissible levels of hexavalent chromium, also known as CR(VI), are much lower than they used to be. In stainless steel, chromium is in the metallic state, which is not hazardous. The chromium in the oxide layer of passivated stainless steel, is dichromium trioxide, which is a trivalent compound. From, "Hexavalent chromium (Cr(VI)) is a natural metal used in a wide variety of industrial activities, including the manufacture of stainless steel, welding, painting and pigment application, electroplating, and other surface coating processes. According to the Occupational Safety and Health Administration (OSHA), there are over 558,000 workers exposed to Cr(VI)." source

Friday, Nov 24
The week ended with nickel hitting a new record high at $33,500/tonne. It ended the week at $15.16/lb  $33,450/tonne
*    At 7:00 am CST, indications were nickel was still increasing, by $.27/lb.
*    Les Nouvelles Caledoniennes reports the Thio mine has been blocked for the last two days by felled trees as CSTNC union members react to SLN plans to lay-off nine of their members. It also reported union leader, Sylvain Néa, was not on the list of nine, although relatives of his were. 
*    Xstrata affirms its commitment to the construction of the Koniambo mine in New Caledonia, and plans to meet with government officials in December to discuss future plans press release here
*    Yesterday's official closing - cash - $14.70/lb - 3 month buyer - $14.36/lb
*    LME nickel inventory - minus 126 tons = 6,354 tonnes

Thursday, Nov 23
The US takes a day off and the nickel market goes nuts and hits a new record high. LME nickel ended the day at $14.70/lb ($32,400/tonne). According to Bloomberg, 3 month nickel hit $32,750/tonne at 3:50 pm, its highest in 19 years, "and $125 more than the previous 19-year high set on Oct. 20". According to the Financial Times "The World Bureau of Metal Statistics said on Wednesday that the global nickel market was almost balanced during the first nine months of the year, recording a 93 tonne deficit." FT also credited the new LME nickel high was "prompted by options-related buying and short-covering".
*    At 6:30 AM CST indications show nickel is selling up by $.27/lb
*    SLN announced the lay off of 9 CSTNC union members for serious infractions committed against the plant during the nine week old strike. The Les Nouvelles Caledoniennes gave the news but went to press before the official announcement was made. It also stated that CSTNC leader, Sylvain Néa, who is now under indictment on numerous charges, including embezzlement,  had met with SLN boss Pierre Alla, but neither would comment to the media about what was said.
*    Yesterday's official closing - cash - $14.56/lb - 3 month buyer - $14.24/lb
*    Today's LME nickel inventory - plus 150 tons = 6,480 tonnes

Wednesday, Nov 22
LME nickel ended the day at $14.13/lb ($31,150/tonne)
*    Article - Bloomberg - Aneka Tambang Says Nickel Output May Rise 43 Percent here (quote - "Aneka Tambang expects nickel prices to average between $10 and $11 a pound next year")
*    Barclays forecasts nickel to sell for $13.77/lb in 2007 - Gerald Baker at Mines & Money conference
*    At 7:30 am CST, nickel indications show up by $.08/lb.
*    Press release - MEPS "The average annual growth in steel production in the first six years of this decade was 6 percent. Our forecast to 2010 indicates a similar figure. Contrast this with a production average annual growth rate of 0.6 percent in the 1980's and virtually no gain through the 1990's." rest here
*    Radio New Zealand reports that officials with Goro say the French court injunction is a preliminary finding and will have no effect on construction of its plant. The Les Nouvelles Caledoniennes states that CSTNC leader Sylvia Nea was released from custody after a hearing for breach of trust against SLN was continued. The paper also reports a panel of experts yesterday recommended the building of an scientific observatory for the "monitoring of the concentrations of chromium, manganese and cobalt at exit of effluent of factory from the Goro plant" and any impact it might have on the environment. Laurent Chatenay (Goro Nickel) commented to the paper “They are recommendations. They must be translated in the regulation to be binding on us."
*    Yesterday's official closing - cash - $14.33/lb - 3 month buyer - $14.00/lb
*    Today's LME nickel inventory - minus 534 tons = 6,330 tonnes

Afternoon Bulletin - Radio New Zealand reports a French court in Paris has ordered the Goro project to stop the construction of its waste storage site within 48 hours or face a fine of $40,000 per day. here
Tuesday, Nov 21
LME nickel ended the day at $14.20/lb ($31,295) up 3.3% for the day on what IFS called short cover buying before the US Thanksgiving holiday.
*    Article - Why Commodities Still Make Sense here
*    UBS 4th quarter 2006 "Commodity Corner" - report issued Oct 31st - pdf here
*    Stainless steel consumers paying $1.2285 in 304 surcharges for November in the US, can expect to see $1.3369 for December, and based off figures so far this month, may see a drop in the surcharge of $.0674 in January, or $1.2648. The latter is subject to change with 1/3 of the month remaining. Surcharges are generally established by taking the average metals prices from two months prior, thus average metal prices this month will be used to establish the surcharge for January 2007. (source - Allegheny Ludlum and Metal Partners Inc)
*    Future nickel (battery) consumption increase or will lower gas prices put the chill on sales increases? - from Arirang News 11/17/06 "Global sales of hybrid vehicles accounted for less than 1 percent of car sales last year, but that figure is expected to leap to 6-12 percent by 2015."
*    The Rheebu Nuu, indigenous Kanak people of New Caledonia, expect to hear this week from a Paris court if there request for an injunction against the Goro project will be granted. The group has expected a decision last week, but the court deferred its ruling till this week, with no reason for the delay given. A court in Noumea, New Caledonia, had suspended Goro's operating license in June, but construction of the mega mine has continued.
*    At 7:30 am CST, indications show nickel selling up by $.45/lb
*    Radio New Zealand reports CSTNC union leader Sylvain Nea has been arrested and being questioned on numerous allegations, including misappropriation of $120,000 from the SLN nickel social committee. The Les Nouvelles Caledoniennes mentions numerous allegations Nea is being questioned on, but does not confirm the allegation mentioned above, nor confirms an arrest was made. It did say questioning continued late into the night and 50 union members gathered around the police station all day where still there at midnight.
*    Yesterday's official closing - cash - $14.04/lb - 3 month buyer - $13.70/lb
*    Today's LME nickel inventory - minus 168 tons = 6,864 tonnes

Monday, Nov 20
Freeport's bid for Phelps, while not nickel related, gave traders an optimistic boost, and LME nickel ended the day at $13.72/lb ($30,250/tonne)
*    China reportedly passed the $1 trillion dollar amount earlier this month in foreign currency reserves, bypassing Japan to become the world's largest held by any country.
*    Dynatec and its partners may have a new headache with their Ambatovy nickel mine in Madagascar. Reports are very sketchy but the military may have overthrown the Madagascar government. An army general there has declared military rule in the country, and the president, who was returning from a European trip at the time, was diverted to a coastal town. Another small nickel miner, Skye, has its own problems in Guatemala here (Authors note - It is worthy to keep in mind that many of the new planned mines are being constructed in countries where geopolitical and security conditions are, at best, questionable.  The above are just the most recent, with New Caledonia indigenous people and unions and Brazilian indigenous people grabbing the recent headlines.)  Update - Media reports Madagascar coup failed.
*    Interview - Are commodities on the way down? here
*    Indication only - at 7:30 am CST, nickel was selling up by $.31/lb
*    Article - Freeport to buy Phelps here
*    Article - Norilsk buys OM`s nickel unit for US$408 million here
*    See Sunday update for weekend updates about New Caledonia. Today Radio New Zealand reports Caledonia minister for mining and economic development is calling the CSTNC strike a terrorist movement. Considering Nea's remarks over the weekend, this statement is counter-productive.
*    Metals Insider - Week in Review - here
*    Friday's official closing - cash - $13.63/lb - 3 month buyer - $13.33/lb
*    LME nickel inventories - minus 108 tons = 7,032 tonnes

Sunday update, Nov 19
*    Saturday's Les Nouvelles Caledoniennes was full of nickel news, with more on the departure of Goro leader Ron Renton, two years before his contract expired, and what appears to be the beginning of the end of the nine week old strike there. The paper reports union leader Sylvain Néa has advised he will report to police headquarters with his toothbrush Monday morning, in response to a summons. He also told the paper that he has promised SLN that the union will not interfere with the loading of two ore tankers at Doniambo, in the hopes of opening negotiations. The blockade of Kouaoua that was resumed on Friday has been removed. Admitting the union members were "exhausted", Nea explained "people continue to support us, our cause is good, but it is necessary for them to work and live". SLN has reportedly started procedures of dismissal against 60 CSTNC members, including Nea, who will now be forced to negotiate to keep his job. Radio New Zealand simply states "Sylvain Nea has conceded that its eight-week strike has not gone well and may be called off".
*    Article - Inco tackles skills shortage for Voisey's Bay processing here
*    Article - Consider the stock positions for base metals here
*    Article - Mineral demand to prop up price here
*    Kagara Zinc Ltd purchases nickel mining rights for $25 million from Canada's LionOre Mining in Western Australia.
*    Article - Industry fortunes worry Teck head here

Friday, Nov 17
LME nickel ends the day and week at $13.56/lb ($29,900/tonne). May you each have a restful and enjoyable weekend!
*    UPS announces an average 4.9% increase in its shipping fees for 2007 press release here
*    Article - South Korea Syndicate Investing $1.1 Billion in Nickel-Mining here
*    Interview - Commodity Bull Market: Another 30 Years? here
*    In reference to my entry yesterday, a reader from "across the pond" sends this description - "Anglo-Saxon" is a disparaging term used by the French to refer to the relatively free-market economics practiced by the US, UK, Canada, Australia and New Zealand ...I'm not sure what phrase they would use to describe the fact that they are still practicing 19th century style colonialism in the Pacific Islands" (editor's note - Along with other Pacific Ocean's territories of French Polynesia and Wallis and Futuna, New Caledonia is part of the French Republic.) Thank you M.
*    Mining Journal reports that the China Metallurgical Construction Corp, which heads the consortium developing the Ramu nickel mine in Papua New Guinea, expects production to start in 2009, and expects to produce 31,000t/y of nickel .
*    At 7:30 AM CST, indications show nickel selling down by $.11/lb
*    Radio New Zealand reports Goro project boss Ron Renton has announced he will resign at the end of the year, but CVRD spokesperson said his reason for leaving was personal and made prior to, and not related to, the CVRD takeover of Inco. Les Nouvelles Caledoniennes reports the mine at Kouaoua is blockaded again by CSTNC and calls it a "fortified camp" with parked 100 ton dumpers prohibiting the passage of other vehicles.
*    Yesterday's official closing - cash - $13.88/lb - 3 month buyer - $13.60/lb
*    Today's LME nickel inventory - minus 54 tonnes = 7,140 tonnes

Thursday, Nov 16
LME nickel ended the day at $13.42/lb ($29,600/tonne) as the bears and bulls continue to play tug of war.
*    Bloomberg reports Japan's largest stainless steel producer, Nippon Steel & Sumikin Stainless Corp, has raised their prices for 304 stainless for the eleventh month in a row.
*    Surcharge - for those here in the US who have seen December surcharges on 300 series stainless steel go up, if the nickel market continues as it has the past week, or maintains its current level, you should expect to see a lower surcharge for January.
*    Graph - World stainless steel production versus industrial production by ThyssenKrupp Stainless here
*    Article - China Metals - Foreign miners in China push into base metals here
*    At 8:00 AM CST, nickel was selling up by a nickel a pound.
*    Radio New Zealand reports SLN is threatening to "take action against" 65 striking employees for acts of sabotage and assault against its staff. SLN head, Pierre Alla, told the station, while the workers have the right to strike, they do not have the right to destroy SLN property. Les Nouvelles Caledoniennes reports CVRD president's visit apparently went well with one writer stating "The man is Brazilian....more cordial and less coldly organized than the Anglo-Saxon chairmen of the time of Inco." Roger Agnelli told members of the Caledonian Senate that CVRD brings environmental expertise to the Goro project and promised to make it “the most beautiful project of the world. Nothing less". (Anglo-Saxon? Is that a slang term against white people? Hey - go back to picking on the Filipino's and leave us up-tight Anglo's alone. )
*    Yesterday's official closing - cash - $13.60/lb - 3 month buyer - $13.20/lb
*    Today's LME nickel inventory - minus 168 tons = 7,194 tonnes

Wednesday, Nov 15
Another roller coaster day for traders as nickel slumped early, then rebounded in the afternoon. LME nickel ended the day at $13.55/lb ($29,875/tonne)
*    When did they say that? Quote - "China accounted for 2/3 of the increase in global demand for nickel last year. Inco, one of the world’s largest nickel producers, told analysts recently that demand in China for stainless steel, which is made with nickel, has expanded so fast recently that the growth alone was equal to more than half of total consumption in the United States or Japan." source - Industrial Commodities and China by Chico May 2, 2003 here (you remember 2002 - nickel had risen 12% from 2001 and averaged a whopping $3.07/lb that year)
*    "Chinese output of primary nickel is expected to increase to 138,50 tonnes in 2006, up from 102,700 tonnes in 2005." source - Antiake 11/14
*    Article - Chinese still have strong hunger for base metals here
*    Article - China closes down 8,000 illegal mines this year here
*    At 7:30 am CST, indications are nickel is trading down by $.22/lb
*    Current forecasts - UBS analyst Robin Bahr tells 22nd International Ferro-Alloys Conference he forecasts average nickel price for 2007 at $10.75/lb. source (On Monday, Dow Jones Newswire carried a story "Nickel prices overextended, tipped to fall almost 20% to $25,000-$26,000/ton within 3 months, says UBS") And from the archives, here are a few more recent forecasts for nickel in 2007. ABARE - $8.57/lb here Morgan Stanley's - $10.75/lb here Wachovia Corporation - $11.68/lb here  MEPS - $10.89/lb here  Westpac - $6.50/lb here Goldman Sachs JBWere - $10.83/lb here This list does not include forecasts from mining companies, which tend to be more optimistic and for the last few years, have been slightly more accurate. To see what forecaster's thought two years ago, check out these predictions made in late 2004 from many of the world's base metal experts here. Most of these companies were still predicting nickel to be in the $5-$7 range for 2006 at the end of 2005. No matter what they tell you, "everyone" got caught off guard this year.
*    Article - "Analysis of China stainless steel market situation" here (published in October)
*    Les Nouvelles Caledoniennes reported yesterday that SLN has suspended its request for "short-time working" at its Thio and Kouaoua operations.
*    Radio New Zealand reports the French court in Paris has deferred for one week its ruling on the injunction against the Goro nickel project. Goro officials told the station a shutdown of the project would mean the lay-off of about 3,000 workers. Other metals news sites picked up this story today and we may see it have an effect on trading. Les Nouvelles Caledoniennes carried as its lead story the visit of CVRD chairman Roger Agnelli to the Goro project and surrounding communities. Today Mr Agnelli is scheduled to meet with the President and members of the Congress. The paper also reports an accident at the Doniambo smelter, when two explosions were heard from one of three furnaces just before 11 pm on Monday evening. SLN told the paper repairs will take up to one week with an anticipated loss of total production at 500 tons, and they felt lower grade ore was to be blamed.
*    Yesterday's official closing - cash - $14.17/lb - 3 month buyer - $13.83/lb
*    Today's LME nickel inventory - minus 150 tons = 7,362 tons

Tuesday, Nov 14
Up in early trading, then down to a low of $12.85/lb when funds liquidated, LME nickel ended the day at $13.25/lb ($29,200/tonne). Market continues to be nervous with the bears overpowering the bulls. Yet even the bears are referring to this as a correction only, so far. Still a long way to go before we could conceivably see the January 1st opening price of $6.12/lb. And we have found no one forecasting any where near that low for 2007. Stay tuned.
*    Article - G20 meeting has sights set on resource security here
*    Article - Canada dropping the ball on China here
*    World Bank issues growth forecast for China's economy in 2007 at 9.6 %
*    At 7:30 am CST, nickel was trading in the positive by $.22/lb (indication)
*    Radio New Zealand reports a French court is expected to decide today on whether to issue an injunction that would halt the Goro Nickel project in New Caledonia in response to a complaint filed by the Kanak activist group. They also report CVRD CEO Roger Agnelli is in the country speaking to officials. Les Nouvelles Caledoniennes reported all nickel mines in that country were operating, many at reduced levels, and CSTNC was quiet.
*    Yesterday's official closing - cash - $13.70/lb - 3 month buyer - $13.38/lb
*    Today's LME nickel inventory - minus 30 tons = 7,512 tonnes

Alert - While we have periodically done stories about the rampant theft of metals, in particular copper, there is a new twist that we thought you should be made aware of. While most thefts of copper, including those of pipes, wires, gutters, etc, is usually discovered quickly, thieves are now stripping the copper coils from the inside of air conditioners and replacing the cover, with the hopes the theft won't be discovered till months later, (i.e. next summer). Just remember Newton's 3rd Law during these trying times. If you have any junk you would like hauled off, forget paying someone to do it. Instead place it in the front yard, with a sign on it that says "free scrap metal"....And if your neighbor protests, you could always put a sign on their car stating "This car contains approximately 55 pounds of copper". Just be careful - so does yours. (ok - we're kidding)

Monday, Nov 13
LME nickel ended the day at $13.53/lb ($29,850/tonne). Traders remain nervous.
*    China state media forecasts 9.5% growth in 2007, down from 10.5% seen in the first 3/4 of 2006.
*    Inco's Indonesian operations announced its 2006 nickel production should fall behind 2005 totals by around 6%, and due to lack of sufficient power supply, will probably not exceed this level again next year.
*     Forbes quoting Macquarie Research - "While we retain an overall bullish stance toward the base metals sector, the risks of a significant short-term price correction are growing"
*    The Australian is reporting UBS forecasts nickel could fall by 17% by February here
*    Why it pays to play ball. According to The Star, former Inco CEO and now CEO of CVRD-Inco Scott Hand, received a $9.5 million "mergers and acquisitions bonus". The article reported he was among 66 individuals who received a merger bonus, the others receiving between $100,000 to $500,000. article here
*    Will nickel plating replace chromium coatings? How nanodiamonds could make nickel stronger here
*    Radio New Zealand reports no progress in ending 8 week old CSTNC strike as Congress refuses to meet with strikers as long as they continue setting up road blocks.
*    Yieh reports Japan has joined South Korea, Europe and Canada in the production of 300M4 stainless, which uses 3.5-5.5% nickel instead of the 8-10.5% found in 304 stainless.
*    Metal's Insider - Week in Review - here
*    Friday's official closing - cash - $14.20/lb - 3 month buyer - $14.03/lb
*    Today's LME nickel inventory - plus 180 tons = 7,542 tonnes

Friday, Nov 10
About the time the media was reporting a big gain in nickel prices this morning, LME nickel began to fall sharply. Base Metals is reporting today that UBS announced that nickel is over-extended and due for a fall, and I suspect this may have had something to do with spooking the market. LME nickel ended the day at $13.29/lb ($29,300/tonne). Earlier in the day it had climbed to $14.15/lb.
*    LME - The London Metal Exchange (LME) has today announced that the Special Committee has lifted the backwardation limit in the nickel market. (backwardation limit of $300.00 per tonne per day started Aug 16th)
*    Thanks to a reader in Canada, we believe the 'likely strike' that Interfax China was referring to in their article yesterday, is most likely the CAW Local 598 and Xstrata Nickel contract due to expire February 1, 2007. The last three contract talks(with the former Falconbridge management) have ended in strikes ranging from one to three month periods. 
*    New Caledonia media quiet on any new developments in CSTNC strike.
*    CVRD predicts nickel markets will remain tight here
*    Yesterday's official closing - cash - $14.04/lb - 3 month buyer - $13.79/lb
*    Today's nickel inventory - minus 252 tons = 7,362 tonnes

Thursday, Nov 9
Dollar retreated today, and investors were looking for good deals after yesterday's 'across the board' retreat. All metals ended up, with zinc reaching a new all time high during the trading day. LME nickel ended the day at $13.75/lb ($30,305/tonne) 
*    Interfax China has a teaser line to a subscription story - "The high price of nickel will continue for at least a couple of years due to a supply shortage and could move up as high as $40,000 a ton in February because of a likely strike, industry insiders said Wednesday."  Note- That is $18/lb? -  any readers have any info on this "likely strike" in February they might be referring too??
*    Article - Bloomberg - "Nickel Drops to One-Month Low in London After Stockpiles Gain" here
*    CVRD reports its net earnings for the third quarter jumped 47% over last year to $1.9 billion.
*    Radio New Zealand is reporting scheduled talks yesterday between government officials and CSTNC union members were cancelled when neither party showed up. Union officials protested that they were not being allowed to protest, and government officials were incensed after two motorists were physically attacked by union members after they refused to take a union flyer.  Les Nouvelles Caledoniennes reports "The director of the SLN announced yesterday its intention to require the setting of the short-time working for its employees at the mining centers of Thio and Kouaoua. If it is accepted, the measurement could take next Monday effect." According to the paper "Short-time working is a measure which can be taken in the event of momentary difficulty, of disaster or destruction of the working tool." It is unclear in the article exactly what this means to the workers, but it appears to be a drop in compensation for those still working. (Opinion - While trying to offset some of its daily losses, this move could be seen as a calculated gamble by SLN, to cause increased contention between unions still working and CSTNC members)(note - Sucden reports this is a lay-off)
*    Article - Russia - "Viewpoint: China steel makers pour it on" here
*    Yesterday's official closing - cash - $14.36/lb - 3 month buyer - $14.15/lb
*    Today's LME nickel inventory - plus 114 tons = 7,614 tonnes

Wednesday, Nov 8
Traders on the LME were pessimistic today with all metals down. LME nickel ended the day at $13.63/lb ($30,050/tonne)
*    Article - "Roasting Bottlenecks Could Support Firm Molybdenum Price Past 2010" here
*    Article - "Nickel – Supply gap to widen within decade" here
*    AK Steel has announced stainless steel surcharges for December - as expected, they rose due to higher nickel prices here
*    Radio New Zealand reports the New Caledonia government has agreed to meet with CSTNC union officials tomorrow to discuss ending the 7 week old strike. Les Nouvelles Caledoniennes reports the meeting is conditioned, as have been the past three meetings that have been cancelled, on the union "once again does not disturb by its actions the life of Calédoniens”. It also reports Eramet's Kouaoua mine has not operated for the past 44 days.
*    Election after thought - I could not help but think, as I was casting my votes yesterday, of a line from the movie "Patton". Upon finding a division of his men facing stiff resistance by the enemy, and not moving forward, General Patton fires the commanding officer and turning to the second in command, and says "‘’Major, you’re in charge. And if you don’t get this unit across the river in 15 minutes, I’m going to fire you, too, and find somebody else who can do it.'
*    Yesterday's LME official closing - cash - $14.69/lb - 3 month buyer - $14.31/lb
*    Today's LME nickel inventory - plus 84 tons = 7,500 tonnes

The Politics of Cuban Nickel
*    For the 15th year in a row, the United Nations will vote today (Nov 8) on a resolution on the "necessity of ending the economic, commercial and financial embargo imposed by the United States against Cuba". Last year the vote of 191 members was - 4 opposed, (US, Israel, Marshall Islands, and Palau), 1 absentia (Micronesia), 4 absent (El Salvador, Iraq, Morocco, Nicaragua) and 182 for, (Afghanistan, Albania, Algeria, Andorra, Angola, Antigua and Barbuda, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belgium, Belize, Benin, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Brunei Darussalam, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Canada, Cape Verde, Central African Republic, Chad, Chile, China, Colombia, Comoros, Congo, Costa Rica, Côte d’Ivoire, Croatia, Cuba, Cyprus, Czech Republic, Democratic People’s Republic of Korea, Democratic Republic of the Congo, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, Equatorial Guinea, Eritrea, Estonia, Ethiopia, Fiji, Finland, France, Gabon, Gambia, Georgia, Germany, Ghana, Greece, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hungary, Iceland, India, Indonesia, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kiribati, Kuwait, Kyrgyzstan, Lao People’s Democratic Republic, Latvia, Lebanon, Lesotho, Liberia, Libya, Liechtenstein, Lithuania, Luxembourg, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Mexico, Monaco, Mongolia, Mozambique, Myanmar, Namibia, Nauru, Nepal, Netherlands, New Zealand, Niger, Nigeria, Norway, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Republic of Korea, Republic of Moldova, Romania, Russian Federation, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Sao Tome and Principe, Saudi Arabia, Senegal, Serbia and Montenegro, Seychelles, Sierra Leone, Singapore, Slovakia, Slovenia, Solomon Islands, Somalia, South Africa, Spain, Sri Lanka, Sudan, Suriname, Swaziland, Sweden, Switzerland, Syria, Tajikistan, Thailand, The former Yugoslav Republic of Macedonia, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Tunisia, Turkey, Turkmenistan, Tuvalu, Uganda, Ukraine, United Arab Emirates, United Kingdom, United Republic of Tanzania, Uruguay, Uzbekistan, Vanuatu, Venezuela, Viet Nam, Yemen, Zambia, Zimbabwe). report here
*    On July 10, 2006, the State Department's Commission for Assistance to a Free Cuba released a report (here) advising that nearly half of Cuba's foreign income came from the sale of nickel, and made a recommendation to establish "an inter-agency Cuban Nickel Targeting Task Force". It is illegal to import Cuban nickel into the United States, in pure form, or as part of any finished product. While virtually impossible to trace where the actual nickel came from, commonly found in plating, stainless steel, batteries, and hundreds of other applications, the possibilty of such an agency, could be seen as an attempt to put overseas manufacturers on notice. In response, Castro has declared the industry strategic. Recent developments (yesterday) found here
*    Banned because of nickel from the United States - Ian Delaney, President of Canadian mining company Sherritt, under Title IV of the Helms-Burton law, which gives the U.S. administration the right to deny US visas to executives, majority shareholders and their families of companies that have invested in property that had belonged to US companies prior to the Communist revolution of Cuba. In a PBS Online Newshour interview dated July 19, 1996, it was reported executives from Sherritt had already been banned entry into the US (and still are to this day).
*    American citizens and companies have filed claims totalling $1.8 billion for the loss of personal property when Castro seized control of Cuba. These include a $88.3 million dollar claim by the Freeport Nickel Company for the loss of the Moa Bay Mining Company. Cuba claims the U.S. economic blockade over the past 50 years has cost its government $86.1 billion.

Tuesday, Nov 7 (Election day in the United States - we predict George Bush will still be President tomorrow. Anyone actually running for office....anyone's guess.)
Zinc and lead hit new record high's today, while nickel ended the day at $14.15/lb ($31,200/tonne)
*    The meeting between delegates from Africa and the Chinese government concluded last week with China opening its wallet. Article here
*    London Metal Exchange has hiked its margins for nickel (the amount required to be set aside as a protection from possible defaults) to $21,000 per lot from $16,800 effective November 13
*    October forecast from Wachovia for nickel - 4th quarter 2006 $12.25/lb  2007 - $11.68/lb  (courtesy Scrap Magazine)
*    SSINA reports stainless consumption in the US increased by 13% in the first 8 months of 2006 compared to last year pdf here
*    Article - China to pay less for minerals here
*    A couple of graphs for the number junkies. 4th quarter LME nickel prices during the last 4 years here. 4th quarter LME nickel inventories for the last 4 years here. (October thru December 2003-2006)
*    China bans export of nickel effective November 22 per article in Shanghai Daily "China will bar the import and export of commodities like liquefied natural gas and coke for processing in its latest effort to tighten trading of resources products, the government said. Goods including LNG, liquefied petroleum gas and coke used for the purpose of processing will be banned from being imported and exported, according to a list announced by the Ministry of Commerce, customs and environment protection authorities said over the weekend. Copper, nickel and other metal raw materials for processing will be forbidden from being exported, while jet fuel, jet kerosene, tin and uranium for processing cannot be imported. The new policies will take effect from November 22." Article here
*    Research - Nickel laterite deposits - geological overview, resources and exploitation (about 3 years old but interesting) here
*    Article - Nickel: The Come-Back Kid  here
*    MEPS forecast for stainless steel - here They forecast nickel to be about $10.88/lb by mid-2007. Quote "...makes it difficult to get an accurate nickel forecast. There are widely differing views from analysts on the price of nickel going forward. The improved availability of nickel next year should lead to a softening of nickel prices, but we won't see them returning to levels seen at the beginning of 2006."
*    Radio New Zealand reports CSTNC has blocked publication of the island's only daily newspaper, Les Nouvelles Caledoniennes. The Les Nouvelles web site headline - "The printing works blocked by the CSTNC: no newspaper today"
*    Yesterday's official closing - cash - $14.16/lb - 3 month buyer - $13.88/lb
*    Today's LME nickel inventory - plus 138 tons = 7,416 tonnes

Monday, Nov 6
Lead was the big winner on the LME trading floor Monday, setting a new record high. LME nickel ended the day at $14.08/lb ($31,050/tonne)
*    Former Falconbridge CEO Derek Pannell appointed a Director of Teck Cominco Limited
*    OM Group financial press release 11/3 - "We continue to examine various options that include the possible sale of our nickel business and/or strategic acquisitions."
*    Platt's - "Papua New Guinea-based Highlands Pacific said Monday the development of the Ramu nickel and cobalt project was formally sanctioned .... The construction of the processing plant and mine infrastructure is expected to commence in April 2007 while production is expected to start in 2009." (authors note - Ramu is a laterite operation projected to produce 32,800 tonnes of nickel and 3,200 tonnes of cobalt annually. Chinese Metallurgical Construction (Group) Corporation (MCC) acquired an 85% interest in the mine in March 2005)
*    MiningWeb article - "Medium term outlook for nickel: supply increases may outstrip demand growth but …" here
*    Radio New Zealand reports CSTNC strike begins 7th week with no new developments. Les Nouvelles Caledoniennes made no mention of the matter in today's paper.
*    Metal's Insider - Week in Review - here
*    Friday's official closing - cash - $14.83/lb - 3 month buyer - $14.42/lb
*    Today's nickel inventory - plus 594  tons = 7,278 tonnes

Friday, Nov 3
While the rest of the market ended on the positive side, LME nickel ended the day and week at $14.25/lb ($31,400/tonne). Have a nice weekend!!
*    Reuters - How investors gain access to commodities here
*    Brief review of Eramet's operations in New Caledonia here
*    There is a lot of speculation among traders we could see a new record high in the few weeks for LME nickel. Much of this has to do with the dynamics of support and resistance levels traders use to gauge the future. We are concerned that the market appears to be showing some trading stability at these current high prices, based on backwardation.  From our Sept 6 entry - ("in a balanced market, 3 month prices would be selling at a little higher than cash prices, to cover storage fees. Right now, the cash premium is higher than 3 month. But if you will notice the difference between yesterday and Monday's official closing, while 3 month cost moved up a little, the cash premium fell, thus the "spread" is growing less. The spread over these two days has fallen from a $1.41/lb difference to $.90/lb. Back on August 22nd, the date of the most recent record high, the spread was $2.30/lb. I wouldn't make any long term plans based on this, but it makes the next few weeks worth watching. ") Yesterday, backwardation was $.23/lb.
*    Radio New Zealand reports the six week old CSTNC strike in New Caledonia continues with no new developments. In a  Les Nouvelles article, SLN reportedly states it losses have so far been $4.5 billion (see end for correction), during the 40 day old strike. Sylvia Nea has apparently asked SLN for a meeting, and SLN has advised him they would meet Monday, but only if the incident's of sabotage and blockage against Thio discontinue immediately. Yesterday, the loading of an ore tanker had to be stopped, when a water pipe was intentionally damaged. (we think the authors meant losses of $45 million - or the translator we use messed up) 
*    Yesterday's official closing - cash - $14.88/lb - 3 month buyer - $14.65/lb
*    Today's beginning LME nickel inventory - minus 216 tons = 6,684 tons

Thursday, Nov 2
LME nickel ended the day at $14.36/lb ($31,650/tonne).
*    Xstrata took over operations of Falconbridge back in August, but announced today that it had secured 100% of outstanding shares.
*    Official Russian figures show nickel production rose in that country by 5.9% during the first 9 months of this year
*    Radio New Zealand silent on any New Caledonia developments - as was Les Nouvelles
*    Press release - MEPS International - "Stainless Steel Prices at Record Levels - More Rises Imminent" here
*    Yesterday's official LME closing - cash - $14.79/lb - 3 month buyer - $14.27/lb
*    Today's beginning nickel inventory - plus 84 tons- 6,900 tons

Wednesday, Nov 1
LME nickel ended the day at $14.03/lb ($30,950/tonne)
*    Bloomberg - Barclays forecast for 2007 nickel prices raised from $9.98/lb to $13.78/lb.
*    The Sydney Morning Herald - Goldman Sachs JBWere analyst reports "nickel market will continue to tighten at least thru 2008 and for that reason we are prepared to forecast rising annual prices for each of the next few years."
*    The typical bearish forecast by Purchasing Magazine "Nickel may moderate soon" here
*    Article - Base Metals – A Good Alternative? here
*    Mining Journal's "Nickel Day 20:20 success" article here
*    Philippine President Gloria Arroyo announces investment of $1 billion by China's Baoshan Iron & Steel Co Ltd (Baosteel), Jinchuan Group and China Development Bank into a nickel mining project on the island of Mindanao. 
*    New Caledonian paper Les Nouvelles reports no talks are scheduled yet between government officials and CSTNC members. From its report today (translation) "While waiting, the situation developed a little with the SLN since the loading of an ore tanker finally started yesterday in Thio under the protection of the police force. Elsewhere, it is the status quo. The mining center of Kouaoua is always blocked while Népoui and Tiébaghi function quasi normally." Radio New Zealand was quiet on the strike today.
*    Yesterday's official LME closing - cash - $14.87/lb - 3 month buyer - $14.35/lb
*    LME nickel inventories - minus 222 tons = 6,816 tons

All prices, unless marked official closing prices, are indications only of LME traded prices and courtesy IFS. LME does not allow their actual prices and closing prices to be published until the next trading day.
The author states that no one has any real idea what's going to happen in the future, and hereby declares that any prediction or forecast made on, or linked to, from this blog, is merely a wildly unsupported speculation (source)



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(average annual price)

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

(average annual price)

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

(average annual price)

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

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