Effective
April 1st, this daily updated will be re-formatted to read easier and load
faster.
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3/26 -
Nickel gained in morning LME trading selling at $6.35/lb.
3/26 - Reuters is reporting Chinese steel smelters in some areas are running
well below capacity because of power outages. This has helped increase the
cost of steel worldwide as China imports more steel to make up for the loss
in production.
3/26 - LME nickel closed an up and down week basicaly where it
started - $6.44/lb. |
|
3/25 -
LME nickel retreated with all of the LME metals this AM as the dollar
strengthened against the Euro. Nickel fell below $14/M tonne to sell in morning
trading at $6.32/lb.
3/25 - While the mining companies have had very little to complain
about with metals prices soaring recently, they are starting to feel the
pinch of their own success. To help alleviate the deficits in metals production,
new mines are being built and old ones re-opened.
A large part of the expense of building a mine is the
need for steel, which is running 30% higher than last year. This
coupled with high fuel costs, are making the cost of mining much
higher.
3/25- BHP Billiton announced plans yesterday to proceed with a new mine
in western Australia, that when in full production by 2008, will help
BHP pass Falconbridge to become the 3rd largest nickel producer in the
world. This is a risky move, as the nickel deficit is predicted to end
by 2006 and prices could be dangerously low for nickel producers by the time
these mines go online.
3/25 - LME nickel ended after a day of selling, closing at
$6.27/lb.
3/25 - In a follow-up to our 2/25 report, African mining companies fear a
new criminal syndication is targeting minerals after 4 major thefts
in the last 6 months. Last month, two trucks carrying approximately $600,000(US)
worth of nickel were hijacked in Zimbabwe. The devastating blast in an
Arkhangelsk apartment last week, that took the lives of 32 Russian's, is
being blamed on metals scavengers who had apparently stolen bronze fittings
from gas pipes, leading to the explosion. Back to Zimbabwe, residents
are suffering black-out's caused
by metals thieves stealing copper conductors from
electrical transformers. Chinese officials are investigating the theft
of a street scuplture, believed taken for its copper content. And police
all over the U.S. are noting increases in items stolen for their scrap value.
If you have any junk to haul off, and don't want to do it yourself,
we suggest you place it on the curb with a sign "This items
contains 23 lbs of copper!!".
3/25 - Just spoke to a customer that says wooden pallets are going
up...why?....Didn't think China would cut down their own trees did you? And
one article is saying we can all expect bread and cereal to go up as Chinese
demands for wheat have increased substantially. |
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3/24 -
LME nickel crept over the $14M/tonne mark again this AM selling at
$6.37/lb.
3/24- LME emphasis rides on tin as predicted deficits raise tin prices to
highest level since 1990.
3/24 - LME nickel stocks fell to 16,470 tonnes yesterday. In comparison,
1 week ago, nickel inventory was at 17,106 tonnes and 6 months ago, inventory
was at 32,850 tonnes. 5 years ago today, LME nickel inventory stood at 103,725
tonnes. (coutesy LME). Low inventories leave little room for any disruption
in world production which is causing extreme nervousness in market.
3/24- Unrelated to stainless, but possibly helpful to buyers, CBS MarketWatch
put out an article today advising silver is in the inital stage of a potential
bull market. This could have an adverse pricing effect, as
in higher prices, for those who buy electrical connectors.
Well, why not - everything else is!
3/24 - Slow to load but very informative of metals trend, see powerpoint
presentation
here.
3/24- LME nickel rebounded again today, ending the day at
$6.51/lb, proving once again why this author sells
screws for a living, and should not attempt to predict the metals
market.
3/24 - US Commerce Secretary Don Evans is considering asking the Bush
administration to restrict scrap steel exports as prices that have quadrupled
in the last 2 years are putting a heavy strain on US Industry.
(Last 3 dates corrected - thanks Bill!)
Fascinating Facts - In 2003, China was the 5th largest
world consumer of nickel. By the end of this year, experts advise it will
be 3rd, behind the U.S. and Japan. . |
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3/23 -
LME nickel continued to sell at $6.28/lb in mid morning trading.
3/23- Nickel closed on the LME trading floor at
$6.31/lb.
3/23 - Phelps Dodge is predicting a 500M tonne deficit in copper production
versus demand this year. They also report molybdenum, a by-product of copper
production, and a vital ingredient in 316 Stainless Steel, is running at
$10/lb, nearly 20% higher than last month. |
|
3/22-
While the author is unable to determine exactly why the market is on an up-swing
again, LME nickel continues to climb in early morning trading, selling at
$6.55/lb.
3/22 - Far Eastern sources are reporting future stainless steel rod exports
from Japan are scheduled with no new price increases. This is primarily due
to the drop in nickel and welcome news to manufacturers that have seen 4
months of substantial price increases.
3/22 - Macquarie Investment Bank metal analysts are reporting Chinese nickel
demands fell during January and February, due to the higher pricing. Barclay's
Capital analyst reports Chinese imports of nickel fell by 62% during this
period. (Source -
Reuters)
3/22 - LME nickel dropped hard in afternoon trading on investors fears of
the potential economic implications of the assasination of Hamas leader Sheikh
Ahmed Yassin in Gaza City and to a lesser degree, the political turmoil
over the Taiwanese presidential elections. Most metals fell,
with nickel ending the day at
$6.28/lb.
3/22 - Scrap Magazine
is reporting mixed predictions on future nickel prices and they have
changed since our report on March 1st. Macquarie Research continues to be
bullish, claiming that we could see nickel trading at $20M/tonne($9.07/lb)
sometime before the end of the year. Scotia Capital is less optimistic
and predicts the yearly average price to be around $5.00/lb while one of
their analyst's is quoted as predicting the annual average would be in the
$6.12 to $6.58/lb range. |
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3/19
- LME nickel selling at $6.41/lb in early morning trading.
3/19 - Nickel on the LME closed the week at $6.42/lb
after an uneventful day. |
|
3/18 -
LME tin continues to set records, while nickel sells at $6.31/lb in early
trading.
3/18 - Confirming our earlier speculation, Reuters quotes a Tokyo metals
trader "Apparently, there is solid support around $12,000 ($5.44/lb), but
at the same time there is no clear factor to lift nickel back sharply above
$14,000 ($6.35/lb) as nickel is still in a downside corrective phase"
(courtesy Reuters).
3/18 - LME nickel inventories have increased from 14,034 tonnes on March
4th to 17,106 tonnes yesterday.
3/18 - .Nice colored pie charts of where the "devil's metal", nickel,
comes from -
2001
3/18 - Nice 5 year graph of LME nickel pricing history
here,
courtesy Inco.
3/18 - LME nickel closed over $14M/tonne to end the day at
$6.42/lb.
3/18 - Not related but might be wise to gas up tonight. Rocky
Mountain News says the price at the pump could jump by a nickel by Saturday,
as the price of crude oil closed today at its highest
price since the 1990 Gulf War.
Chromium Facts 2003
US consumed about 12% of world chromite ore production
Consumption of chromium ferroalloys and metal was predominantly stainless
and heat-resisting steel and superalloys, respectively.
Value of US chromium consumption approx $188,000,000
26% of US consumption came from purchased stainless steel
scrap (57% of US nickel consumption was from
scrap)
80% of world chromium exports - South Africa (48%), Kazakhstan (23%), Zimbabwe
(8%)
Chromium has no substitute in stainles steel
Source US Geological Survey January 2004
Mineral
Commodity Summaries - |
|
3/17 -
While nickel producers will be happy, those of us in the stainless
steel industry will not see pricing drop as soon as we hoped, as nickel climbs
yet a second day, selling at $6.44/lb in mid mornig trading. This will give
stainless producers reason not to drop stainless prices as it appeared they
might just 2 days ago.
3/17 - After 2 solid days of buying, LME nickel saw some selling late
and closed at $6.21/lb.
3/17 - Specialty Steel Industry of North America released figures
today on stainless usage in the US for 2003. US consumption
of stainless decreased in 2003 to 2,586,937 tons, or roughly 1% less than
2002. During that same period, imports declined by 7% and supply approximately
23% of the US market. The SSINA is a Washington, DC based trade organization
representing all of the major US stainless producers. For further details
of this report, including a breakdown on stainless products, contact the
association directly.
Fastener Update - It's Catch-22 time when trying to decide
whether to invest in blanket orders for stainless steel fasteners. Importers
and fastener distributors are facing the same questions end-users are. With
nickel on a steady decline for the last 2 weeks, it appeared the worst was
over, and stainless prices might drop. Now with nickel rebounding strongly
in the last few days, and rumors floating that nickel producers might even
be buying back nickel, the market could be thrown back into "panic". If in
fact nickel producers are buying back nickel it could be for 2 reasons.
They forsee troubled times ahead, or, they might not appreciate the fall
in pricing and are trying to bring prices back up. Either way, nickel prices
have moved up sharlpy since Monday and stainless producers that might have
considered dropping their surcharges, will be afraid to do
so now. This directly affects the screw manufacturers, including the
overseas manufacturers. Large importers must now try to make decisions in
the best interest of their customers, without having a clear answer of what
that is. With plenty of factors saying the market should drop in the near
future, it is wise to hold off major purchases. Now with new factors saying
that might not happen as quickly as originally thought, if necessary purchasing
is held to a minimum too long, then we could be facing a shortage of parts
in late summer. On the other hand, if major purchases are made now, and the
market does fall, then the customer will be paying higher prices than they
should be. The end-user is also facing the same situation. Placing a blanket
order at this time, when the market is very possibly at its peak in pricing,
destines the user to pay these high prices longer than they would had they
held off. If, on the other hand, prices continue to stay high - or God forbid
- increase, then users may be scrambling for parts later on. Our
recommendation is based off the inability to give you an accurate prediction
of the future. What we were sure of Monday morning, could now be wrong, based
off the activity in the nickel market the last two days. We recommend
you take measures to protect yourself, ensuring you can cover inventory
requirements, but think twice before investing in blanket orders beyond 3
months. While fasteners may be one of the lesser dollar commodities
you purchase, reviewing and renewing blanket orders on a quarterly basis
could very well save you some money during 2004
. |
|
3/16 -
LME nickel selling at $5.78/lb in early morning trading. Although slightly
up this AM, we feel a downward trend has been established.
3/16 - Taiwan temporarily suspends construction on government buildings,
due mostly to higher steel prices.
3/16 - Contrary to our statement this AM, nickel rose steadily thru the day,
selling at $6.10/lb mid-day.
3/16 - LME metals scored big today, with tin hitting a 14 year high.
Nickel also rose, closing at $6.28/lb, negating
its last two weeks of steady drop and proving once again why we sell stainless
steel fasteners and not invest in nickel. Reuters reports much of the nickel
buying today was spurred by CTA (Commodity Trade Advisor) purchasing. |
|
3/15 -
Stainless Steel Review published by
MEPS International Ltd
is reporting stainless steel in the US may reach a milestone next month
and for the first time, some may see surcharges exceeding the base price
on 304 stainless steel hot rolled strip. The article also states that surcharges
have risen from $64/tonne to $1214. During that same period, base prices
have increased by approximately $90/tonne.
3/15 - South African ferrochrome producers are still trying to get 12-15
cents more per pound for 2nd quarter shipments. They attempted to
get a 10 cent price increase for January, but only were
able to get seven cents, which took pricing to the 56 - 57 cents per lb range.
Prices have doubled since 2001, when ferrochrome was selling for below 30
cents. One supplier told Reuters that the increase in coke has added nearly
6 cents and increasing freight rates have added another 3 cents to their
cost during the first quarter of 2004. Another factor is the 68% increase
in the value of the South African Rand against the US dollar during the last
two years, which has hurt South African exporters.
3/15 - More on the situation in India.
See article.
3/15 - Raymond Goldie, of Salman Partners, a Vancouver, Canada based resources
analyst, told a convention of Mining Prospectors last week, that he felt
nickel could be in such a short supply during the next two years, that we
may experience rationing. (Opinion - while worldwide consumption is up, we
do not see conditions getting to the point of rationing - unless
there is major dusruption in the currently maxed out worldwide production
and/or transportaion of nickel.)
3/15 - LME nickel closed at $5.76/lb.
In 2003, China became the first country in history to
import more than $1 billion of US scrap metal - source American Metal market
industry paper |
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3/12 -
LME nickel slid further yesterday, and was selling at $5.88/lb this morning.
LME nickel inventories rose by 414 tonnes today, leading some to believe
further falling prices may be in order, while others believe the predicted
deficit will stabilize pricing. So far the tragedy in Spain has shown little
affect on the market, although the dollar has rebounded against European
currencies, which sometimes brings new investment money into the metals
market.
3/12 - Falconbridge blames the strike for lowering its anticipated
production of nickel for 2004, saying the strike cost them 4000 tonne per
day. This "bad news" for the nickle market was offset by the news that LME
inventories were up.
3/12 - A report in The Times of India is reporting the stainless steel industry
in India is facing a sudden crisis due to a India government blunder
that effectively stripped export incentives for stainless producers. While
facts are unclear at this time, we will keep you advised if this will have
any affect on stainless exports.
3/12 - China is threatening Taiwan and India of the potential of anti-dumping
suits of their imports of stainless steel, according to the Taipei Times.
While China already has anti-dumping suits against Korea and Japan, the timing
of these threats are made at a time that could mean, and we empasize this
is wishful speculation only, that China forsees a strong probability
of stainless dropping in the near future, and they do not want foreign countries
taking advantage of this in their market. As China is the driving force in
world stainless steel consumption, this could be an attempt on their part
to keep prices up.If true, this could have a short term negative affect on
US imports, keeping prices high, but a longer term benefit. If China does
in fact clamp down on imports from Taiwan, Taiwan will be forced to look
at other avenues to move their stainless at lower prices and the US and European
screw markets are an option.
3/12 - YUSCO (Yieh United Steel Co) of Taiwan reports prices of
stainless steel have dropped 3-5% this week!!
3/12 - J & L Specialty Steel LLC announce 6% price increase in
stainless steel prodcuts effective on shipments made after March 28th.
3/12 - Fastener Update - Guessing what the market
will do is like playing the stock market. It can go either way at any time.
Based on world market conditions, we recommend that this is NOT a good time
to place large orders for stainless steel fasteners overseas, nor place long
term blanket orders with fastener distributors. Prices look to have peaked
overseas, and while it may still be some time before we see prices drop,
as imports placed today take 4 months to hit US shores, we have probably
seen the worst of the price increases. It's a gamble, but short
term contracts to protect your inventory needs could be your best move at
this time.
3/12 - Please note correction to earlier AM price. LME nickel continued
to slide, closing the week at $5.85/lb.
|
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| 3/10
- LME nickel continued to slide, closing at
$5.91/lb Wednesday. Traders nervous as nickel
inventories still at record low levels. |
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3/9 -
LME nickel prices slide in morning trading, selling at $5.91/lb.
3/9 - LME nickel ended today's trading at
$5.93/lb.
3/9 - Ferrochrome producers are asking for a 12 cents/lb increase
for Q2. Here are some current costs compared to last year. Nickel $3.88/lb
a year ago today. Copper closed at $2922/tonne yesterday compared to $1658.50
last year on this date. Aluminum Alloy - $1575/tonne compared to $1385. Lead
$906.50 compared to $455.20. Ferro molybdenum - $19.65/kg compared to $10.15.
And finally 99% chromium metal closed last week at $5000/ton compared to
$3550 this time last year. And CNN reported this AM that gas pump prices
are only 1 penny shy of last year's all time high. Courtesy
The
Financials.com
3/9 - The International Stainless Steel Forum released figures last
week that show stainless steel production rose 10.4% in 2003. The heaviest
growth rate was in Asia, which increased 17.6%, while the America's came
in the lowest, with only a 3.7% increase. This follows an overall growth
rate of 7.8% in 2002 and was higher than many had predicted. |
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3/8 -
LME markets quiet as traders wait and see what market will do. LME
nickel at $6.01/lb.
3/8 - Taiwanese and Chinese screw manufacturers say their cost on stainless
steel wire rod is the highest since 1993. Q2 prices are 30-46% higher than
Q1 costs.
3/8 - Commonwealth Bank of Australia thinks the US and Chinese economic booms
have peaked and now anticipates the average price of nickel for 2004 to be
$6.18/lb.
3/8 - LME nickel closed at $6.01/lb after a quiet day. |
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3/5 -
For those who might have started chilling the champagne to celebrate
the drop in nickel, you can put them back on the shelf. Nickel edged back
up this morning to $6.05/lb.
3/5 - Allegheny Ludlum announced price increases on stainless steel
sheet and strip, of 3% effective March 8th, and another 3% effective March
29th. New surcharges of March 1st remain in place. Company blamed increases
in raw material, transportation, energy, heath care and other expenses for
the price increase.
3/5 - So how are things across the pond for ouor European friends? Here is
a quote from the MEPS European
Review, dated February 2004. "The European steel market seems to have
gone crazy. In 25 years of analysing steel prices, MEPS has not seen anything
like the present mania. It is not just a bull market, it's a rampant, raging
bull market. Record levels of global steel production have drained all the
available supplies of ferrous raw materials. Panic reigns, as the shortages
and other cost increases are pushing steel prices up dramatically for hot
rolled coil. Values in March are expected to be at an 8 1/2 year high. Some
mills are putting customers on allocation."
3/5 - LME nickel ended the week at $6.05/lb, falling
about 8% from last Friday's close. Jobs growth numbers released from the
US today was about 10% of the expected number, which drove the dollar lower
and sparked metals investment. Why this sparks interest in metals is puzzling.
Any negative economic news from the US usually has the reverse effect on
metals. Apparently investors still feel the economic future looks strong,
even if job growth remains low.
. |
|
3/4 -
While it is too soon to predict the bubble has burst, nickel continues
to slide. In morning trading LME nickel was at $6.12/lb.
3/4 - LME nickel inventory has increased from 13,548 tonnes to 14,034
tonnes since last Thursday.
3/4 - For the first time this year, nickel slumped below $6 to close
at $5.93/lb.
3/4 -
Norilsk Nickel announces its employees have agreed to extend their
labor contract thru 2007. |
|
3/3 -
LME metals continued downward, lead by profit taking in the extremely
volatile copper market. LME nickel was selling at $6.35/lb in morning
trading.
3/3 - It was another day of profit taking on the LME trading floor
with some metals taking big hits. LME nickel closed down at
$6.28/lb. While nobody is claiming this is anywhere
near the end for high nickel prices, bad news for nickel producers is good
news for future stainless prices. Stay tuned! |
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3/2 -
LME nickel prices at $6.68/lb in early trading.
3/2 - One Taiwan business newsletter classified the steel industry's
pricing in Taiwan as "chaos". Prices jumped up 5% on cold rolled stainless
steel between 8 am and 4 pm yesterday.
3/2 - Nickel and it's
primary
users....or who is getting hurt by the high prices?
3/2 - LME markets closed down, after a round of profit taking swept
most metals. LME nickel ended the day, down to
$6.48/lb.
3/2 - Carpenter
Technology announces another 5-7% increase on stainless rod, and 3-5%
increase on stainless steel bar and coil.
3/2 - Non stainless steel related news - In a move sure to raise a few
eyebrows, Russia's top maker of titanium products, has announced it will
purchase a smelter in the US, so it can capture up to 15% of the US military
products market. Does this qualify as a "Believe it or Not" news
items? |
|
Largest producers
of nickel in 2003 - Norilsk of Russia, Inco of Canada, Falconbridge
of Canada, and WMC of Australia. Largest producing nations - Russia,
Australia, Canada, New Caledonia, and Indonesia. Largest reserve base of
nickel - Australia, Cuba, Canada, Indonesia, and New Caledonia. All mines
presently running at, or near capacity. Next large mine to come onstream
will be Inco's Voisey Bay Project in 2006. |
|
3/1 -
LME nickel began the new week with a big jump in early trading, selling
at $6.77/lb.
3/1 - Stainless steel is beginning to show signs of shortage's in some
area's, particularly, according to some of our customers, in stainless steel
sheet. Quotes are being honored for minimal period's of time, and in some
cases, as long as a phone call only. Stainless steel fasteners are not quite
this bad yet, although there are signs of spot shortages. Prices are still
increasing and as imports just now begin to hit from November, when price
increases first began, there is a very good chance you may see prices go
up very soon. Domestic stainless steel fastener manufacturers are hurting
though as shortages of stainless steel rod and wire abound. The Allegheny
Ludlum website shows the surcharge on 304 stainless increased from .4951
to .5521 over the weekend. And Far Eastern stainless manufacturers raised
prices for March last week. The material shortages are being caused by gambles
that didn't pay off. Many steel distributors let inventories fall as prices
increased, with many, including the author, expecting nickel prices to fall
upon the completion of the Falconbridge strike. This has happened but nickel
prices have risen since and now everyone that supplies stainless, from
the mill down is struggling to figure out what to do. To often in
the past, stainless steel prices have suddenly plummeted and those that
have been burnt in the past, don't want to repeat the mistake. The market
could best be described as "confused".
3/1 - The metals market continues as a bull market, lead again today
by copper. Following in its shadow, LME nickel closed at
$6.67/lb. This time last year nickel prices
were at $3.98/lb on fears of a strike at Norilsk, which did not materialize
and prices would later settle down and average $3.80/lb for the month of
March 2003. LME nickel inventory is still falling, down nearly half of its
level in Dec 2003.
3/1 - Interesting difference of opinion's. Macquarie Research is still predicting
nickel prices for 2004 to average around $7.50/lb. On the other hand, Scotia
Capitol is predicting prices will fall later this year to the $4.50/lb -
$5.00/lb range. Friday, Australia's Commonwealth Bank predicted a second
quarter price of $6.80/lb and $6.18 for the entire year. And Scrap Magazine,
in their upcoming March/April issue, annnounce the trend for the nickel
fundamentals look more bullish than other metals traded on the LME. We
hope Scotia is correct, but even they say it will be in the second
half of 2004 before prices begin to drop. |
|
2/27 -
LME markets were quiet Friday morning with nickel selling lightly at
$6.58/lb.
2/27 - LME nickel ended the week at
$6.57/lb. |
|
2/26 -
Totally contrary to what we had predicted would happen, nickel prices
continue to rise even though the Falconbridge strike ends. Mid-morning nickel
pricing at $6.62/lb.
2/26 - Nickel closed on light trading at
$6.60/lb.
2/26 - One of our customers advised today that their stainless steel sheet
suppliers quotes are being honored for no more than 2 hours.
|
|
2/25 -
LME nickel prices gain to $6.57/lb in early morning trading on weakening
dollar. Copper threatening to hit 6-1/2 year high. Besides the weakening
dollar, any news of suplly disruption is causing concern among traders, who
are already working under the predicitons of a nickel shortage this year.
2/25 - So why are prices on everything, including nickel and stainless
so much higher than last year? Primarily it's because of what economist's
are beginning to refer to as the C-word - China. To give an idea of how big
a consumer China has become in the last few years, take a look at this
list. China consumes over 1/2 of the cement in the world. It has become the
second largest importer of oil, behind the US. It uses 1/3 of the world's
mined coal and nearly 40% of world steel. Importing and exporting to and
from China has become so lucrative that ship lines now charge 3X what they
did a few years ago. The list of "world's largest" honors once held by the
U.S. are dropping like flies to China's phenomenal domestic boom. And what
about stainless steel? In 2002, China passed Japan and the US to become the
world's largest consumer of stainless steel. That year it also became the
largest consumer of copper and steel. Its rate of consumption has increased
an average of 17% over the past decade. Since 2001, it has set its sight
on becoming the world's largest producer, and within a few years, many
believe they will achieve this goal. Just 2 plants in China buy more nickel
than do all of the manufacturers using nickel in the US. (Another source
I have disagrees with this placing China as the 3rd largest consumer behind
the US and Japan, China having jumped from 5th to 3rd in 2004) China has
become so concerned about potential shortage's of nickel, it has imported
and stockpiled eight times as much nickel in February 2004, than it did last
year. So when will prices fall? Ask China. As long as they are buying everything
the world produces, the market won't adjust like it should.
2/25 - Taiwanese metals market watchers advise stainless prices will go up
again in March in their country. Let's hope they are wrong.
2/25 - MEPS has a very interesting article about the
steel industry
in Europe. It's beginning line is "The European steel market seems to
have gone crazy." Speaking of crazy, in a follow-up to our report
last week on the problem of stealing metals for scrap, we found this article
where thieves stole an
entire
bridge!
2/25 -
LME nickel ends the day at $6.53/lb.
|
|
2/24
- LME nickel selling at $6.32/lb in mid-morning trading.
2/24 - Totally contrary to what many of us had thought and hoped for, nickel
regained a little momentum today ending at
$6.52/lb. |
|
| For
information on why nickel is important to stainless steel pricing, please
visit Nickel and Dimed Stainless Steel |
|
2/23 -
The strike is over!! LME nickel responds as expected and drops to $6.34 in
mid day trading Monday. The strengthening US dollar also contributed to this
drop. CAW Local 598 announced late Saturday that they had reached a tentative
agreement with Falconbridge and on Sunday the membership voted to accept
the offer.
2/23 - The drop in LME nickel stalled after news from Falconbridge that it
would take up to four weeks to return mining nickel to 100%. Ended the day
at $6.36/lb.
2/23 - CAW announces that the agreement was ratified by 93.5% of workers
that voted. In what is seen as a major concession, Falconbridge agreed to
staff any new Sudbury mines with CAW members, which was a major sticking
point to prior negotiations.
|
|
2/20 -
In early trading, LME nickel drifted lower as traders grow nervous about
the talks at Falconbridge. Nickel at $6.82/lb.
2/20 - Macquarie Research's latest figures advise the 64M tonne stockpile,
released during the Inco strike in 2003, offset an actual 63M tonne deficit
in world supply. These figures show that 2003 ended with a positive 1 ton
balance in world supply/demand. For 2004, they are predicting nickel production
of 1,284M tonnes (+7.2%) against a forecasted 1,346M tonne consumption (+7.8%),
showing a forecasted deficit of 58M tonnes. Source for this info is courtesy
Macquarie
Research, one of the most respected metals and mining analysis organizations
in the world, and Scrap Magazine. Average LME cash price for 2003 ended at
$4.21/lb against $3.07/lb in 2002 and $2.20/lb in 20001. Macquarie is still
forecasting an average price for 2004 to be $7.50/lb. Scrap Magazine reports
scrap prices continue to rise.
2/20 - No news from Falconbridge. Both the union and Falconbridge negotiator's
have agreed to a news black-out as long as negotiations, now in their third
day and being moderated by the government, continue. Now entering its 4th
week, CAW Local 598 members went on strike 1/31 over various issues, primarily
on Falconbridge's increasing use of non-union subcontractors, which CAW sees
as a move to eventually break the union through retirement attrition.
Falconbridge reported on February 5th, its net earnings for 2003 were $194
million, nearly half of this coming in the final quarter when the potentiality
of a Falconbridge strike helped drive the nickel market to 14 year record
high's. After an inital drop upon news of the strike (from $25 to $23/share),
Falconbridge stocks are now selling in the $26.50/share range. In February
of last year, the stock was selling around $12/share (source
Stockwatch.com).
2/20 - As prices for scrap metal climb, theft is becoming an increasing problem.
The media scratched the surface of this ever growing nuisance, when it covered
the destruction of Iraq after the inital US invasion. Some of this stolen
material was carried out of the country and sold on worldwide scrap markets,
which for a short time drove prices down in 2003. Canada.com, quoting
an article by
The Gazette, advises scrap iron, which sold for $50
a tonne last year, now brings $160. Scrap cars are bringing $150/tonne
compared to $65/tonne this time last year. Thieves have also reportedly stolen
large quantities of aluminum and nickel in Canada. Now with copper bringing
record high prices, even your water pipes may not be safe. Think we are kidding?
The Free Lance Star of Fredericksburg, VA is
reporting thieves used a vehicle to ram a fence and then carried off
$10,000 worth of copper piping. The Duluth, MN
News Tribune reports one scrap yard is setting new records
for receiving scrap. Ron Kloeden Jr, president of Alliance Iron & Metal,
is quoted as saying, "if it isn't nailed down, it's getting stolen". See
also
Akron (Ohio) Beacon Journal article.
2/20 - LME nickel ended Friday's trading lower, closing the week at
$6.85/lb. |
|
2/19 -
While other metals crept back up, nickel continued its slumber trading mid-day
at $6.97/lb.
2/19 - LME nickel ended the day slightly up at
$7.02/lb. Falconbridge continues to meet with its
union, under a media black-out. |
|
2/18 -
Nickel finally started attracting some attention among traders, after it
remained the only mineral not setting new yearly high's this week. Aluminum,
lead, zinc, tin and copper again hit new high's today, and nickel began to
creep up, selling at $7.13/lb at mid-day. Talks have resumed at Falconbridge,
but both parties have agreed to a media blackout.
2/18 - Profit takers took over the trading the last half of the day and prices
fell from record high's - on all metals except nickel. Luckily it ended the
day about where it started, closing at
$6.98/lb. |
|
2/17 -
Reflecting what many believe is already a high price, nickel prices sleep
while others hit new highs. Aluminum, zinc, tin, and hottest of all, copper,
all hit multi-year highs today while nickel hibernated at $7.03/lb in early
morning trading.
2/17 - Canadian government mediator to return to Sudbury today to resume
talks between Falconbridge and their union.
2/17 - LME nickel continued to buck the other metals upward trend by
closing flat at $7.01/lb.
|
|
2/16 -
LME nickel was stabile in early morning trading, while other metals soared.
Selling at $6.96/lb. Falconbridge is scheduled to meet again with its striking
union this week. Reuters reports non union labor has helped the company keep
its production at 50% of pre-strike level so far.
2/16 - A roof collapse over an indoor pool in Russia that has killed 25 people
so far has engineers anxiously waiting results from the scene. A buildup
of snow or corrosion are being reported as possible causes. Ever since a
roof collapse over an indoor pool in Switzerland, stress corrosion cracking
has been identified as a serious threat in this type of environment. The
Russian building, however, was only a few years old, and if corrosion is
determined to be a cause, it's rate of acceleration will bring new worries
to the table.
2/16 - LME nickel ended Monday where it ended Friday -
$6.99/lb.
2/16 - Exporters are screaming foul about the increasing freight costs of
sea feight lines. One exporter recently reported that on slab steel, frieght
cost alone added 20% to their cost. In South Africa, the world's largest
producing nation of ferrochrome is paying higher dock rates, even before
their product gets on the ships. One group that is not suffering is the scrap
metals market. As Robert Garino puts it in this months Scrap Magazine, "the
market predictions for 2004 are so optimistically bright that you may need
some shades to read our annual forecast feature".
2/16 - We noticed last week one of our competitors was reporting on their
web site stainless steel fastener prices were going up and blanket orders
were adviseable. We advised our readers of this 3 months ago, "before" the
curve upwards began. Stay tuned to this page for up to date developments
and predictions based on years in the industry. As it stands today, overseas
prices on fasteners are still climbing and inbound product at higher prices
will start hitting US docks in mid March. Inbound product for April is higher,
and May even higher. Hopefully, with nickel falling back in January to its
present level, we are hoping for some stability in pricing from May into
June shipments. But that is yet to be seen. While nickel is only 8% of 300
series austentic stainless steel, it makes up to 60% of the raw materials
final cost.
|
|
2/13 -
LME nickel continues to drift, selling at $6.99 in early morning trading.
In fastener news, stainless steel prices continue to rise overseas, now in
its 3rd month of increases. Manufacturers, who can usually but their raw
material three months in advance, are now only being allowed to purchase
a month at a time. This makes them more succeptible to increases in stainless,
which is immediatley reflected in their selling price for fasteners. Some
fasteners are coming in 30% higher than they were in November of last
year>
2/13 - Profit takers hit coper today but nickel moved very little, closing
the week at $6.99/lb. |
|
2/12 -
LME nickel closed at $6.80/lb. Reflecting the confusion
surrounding nickel futures, nickel was one of the few metals traded on the
London Metal Exchange that did not go up today, as positive economic news
from the US drove many metals up, including cooper, which hit a 7-1/2 year
high. Copper is having its own supply and demand issues and has drawn most
of the traders attention since nickel calmed down in mid January. Nickel
should stay in the high $6/lb range at least until March unless #1 Falconbridge
settles their strike on which prices should fall #2 Something happens to
disrupt the supply of nickel further (ie natural disaster, transportation
accident, mine affected, fire, etc) which would cause prices to rise. #3
or economic news either way which reflects a much larger/smaller
potential deficit in nickel production. Nickel was at $3.82 this time last
year.
2/12 - Copper continues drawing most of metals traders attention, hitting
new 7-1/2 year highs. LME nickel was selling at $6.94/lb in early trading.
2/12 - LME nickel prices closed at $7.01/lb
Thursday. |
|
2/11
Metals markets were quiet in early trading with Japan being closed
for a holiday. LME nickel slipped to $6.81/lb as more predictions come in
that the deficit in nickel could be less than the 30M tonne predicted for
the year. With Flaconbridge still on strike though, this deficit could rise
again as time goes by. |
|
2/10 -
LME nickel gained slightly, selling at $7.03/lb in early morning trading.
2/10 - LME nickel prices ended the day at $6.89/lb.
One of the major suppliers of steel fasteners to distributors advised price
increases are coming from manufacturers faster than they had earlier predicted
and they now predict further increases of 15-20% by spring.
|
|
2/9 -
The mediator working the strike at Falconbridge, ended negotiations
late night Sunday after reaching an impasse over contracting out and union
security issues. He will be setting up meetings for later in the week, after
a cooling off period and for both sides to re-evaluate their positions. LME
nickel at $6.94/lb in afternoon trading.
2/9 - LME nickel took the back seat as copper maintains most of the metals
markets attention. Nickle prices ended at $6.87/lb
for the day. .There are some predicting Falconbridge will have to be out
on strike for 5-6 weeks, before we may see any real possibility of price
increases. While China markets continue to expand at a phenomenal rate, European
and US markets haven't quite met earlier predictions yet, and the deficit
forseen, is not as extreme as feared. |
|
2/6 -
LME nickel prices continued its nervous trading, inching up to $6.78/lb
in early morning trading.
2/6 - LME nickel ended the week about where it started, at
$6.80/lb
|
|
2/5 -
Nickle continues to remain quiet selling at $6.78/lb in mid morning trading
2/5 - Since mid November, overseas fastener manufacturers have been honoring
quotes for 7 days, and in some cases, have been not honored quotes for that
time period. The largest importer and supplier to US fastener distributors
is now advising on larger quotes, they can only honor quotes for 2 days.
Inventories of imports are tightening, and will get tighter in the next few
months.
2/5 - LME nickel ended the day unchanged form yesterday with a market too
uncertain to do much of anything. Closed at
$6.75/lb. |
|
2/4 -
Nickel soft in morning trading - at $6.68/lb.
2/4 - Continuing what could best be described as "in a state of
nervousness", nickle closed today's trading at
$6.74/lb. |
|
2/3 -
On analyst's prediction's the strike will not last long at Falconbridge,
LME nickel edged even lower in morning trading to $6.72/lb.
2/3 - LME nickel stale-mated in afternon trading and closed at
$6.78/lb for the day. Falconbridge announces it's
production will be lowered by 2000 tonnes a month while the strike lasts
but that they had enough stock to supply customers through next month. This
was a little more pessimistic of a statement than made yesterday, which kept
markets in flux.
2/3 - Reuters is reporting Inco is now forecasting a nickel deficit
of at least 19M/tonnes this year, although it admits demand may force this
number higher.
Norilsk
is reporting lower profits than expected last year in its nickel production.
This was due in part to its releasing of 30M tonnes of nickel it was holding
as bank collateral earlier in the year when prices began to edge up when
Inco miners were on strike. Stainless users do owe a debt of gratitude
to Norisk, although their motive was not to gain world affection. Had Norilsk
thought the market stood any chance of going as high as it did last November,
they would have held those reserves and sold for a huge profit. It was a
gamble that didn't pay off for Norilsk but helped the stainless market by
keeping nickel price increase minimal during the Inco strike.
|
2/2 -
In early morning trading, nickel jumped to above $16M/tonne before calming
down a little to trade at $7.03/lb.
2/2 - Falconbridge relieved some tenseness among traders when it announced
it has no intention of declaring force majeure during February. Force majeure
is declared when a company does not fill it can meet its contract obligations.
On this profit takers jumped in and LME nickel actually closed down from
Friday at $6.76/lb. The market continues to remain
nervous. Any agreement between Falconbridge and its union could easily drive
prices down to the $6/range, so movement is difiicult to predict. As long
as all other supply lines of nickel remain intact, it is doubtful we will
see much change for awhile. Any negative economic news from anywhere in the
world, specifically the Far East, could help drive prices lower.
|
|
2/1
- (Weekend Update) Flaconbridge union strikes
at midnight. Falconbridge produces 5% of the world's nickel and with an expected
deficit of 30M/tonnes predicted this year, this strike will likely drive
already high nickel prices even higher. While it is too early to tell what
effect this will have on stainless steel prices, an early bet is they will
continue to rise.
2/1 - (Weekend Update) According to
their website, CAW Local 598 advises they were locked out last night at midnight
after Falconbridge rejected their final counter proposal. No matter who made
the first move, the union is now picketing Falconbridge operations. The site
also reports Falconbridge was bussing in retired personnel and non-union
workers to the smelter in anticipation of a strike. When CAW went on strike
3 years ago, Falconbridge was only able to maintain production at approximately
20% of normal capacity, using non-union personnel. Monday could be an
"interesting" trading day at the London Metal Exchange. Not only will this
strike send some minor shock waves through the market (prices already up
in anticipation of a strike potential) but Far East Market re-open after
a two week holiday. With China being the largest consumer of nickel in the
world, the two happening the same date could make the question not "will
nickel go up?" but "how high will nickel go up?". |
|
According
to figures from the US Geological Survey published in January 2003, 57% of
nickel consumed in the US is recycled nickel. Since the US no longer has
any nickel mines of its own, stainless producers in the US must import their
nickel, or use recycled nickel. Canada, Norway, Russia, and Australia are
the biggest nickel suppliers to the US.
|
1/31 -
(Weekend Update). Falconbridge makes last minute
contract offer .... Reuters quotes a Canadian Auto Worker official at 6:35
pm stating "There will be a strike" after the union rejects the offer. |
|
1/30 -
LME nickel trading slowly at $6.74/lb in early trading.
1/30 - LME nickel ended the week at $6.99/lb as
traders grew more wary of the strike potential at Falconbridge Saturday
night.
1/30 - Reuters is reporting union leaders are predicting Falconbridge will
lock the union out this weekend. Some workers are being told to clean out
their lockers, and some entrances have already been blocked by the company.
The union is stating they already have plans in place to picket, but are
now expecting the company to take pre-emptive action. In late LME trading,
nickel jumped over $15M/tonne. |
|
1/29 -
Copper continues to get most of investors interest as LME nickel was quiet
in early morning trading, trading at $6.73/lb. Falconbridge met with their
union for 17 minutes yesterday, with the union reporting no progress or proposals
being made by either side. It's -24 degrees this morning in Sudbury.
1/29 - LME nickel succumbed to short term profit taking today and edged back
downward, closing at $6.62/lb. There appears to
be concensus among traders that prices will head up if Falconbridge is hit
by a strike Sunday, but with Chinese markets closed for the remainder of
the week for holiday, there is a lack of interest in heavy investment. And
there does not seem to be a concensus among traders that there will even
be a strike. Although the rhetoric coming from the union has intensified
this last week, the market remains too nervous after the last 3 month roller
coaster ride.
1/29 - Reuters is reporting sources from inside the union describing
Falconbridge's offer today as "so far off the mark" |
|
1/28 -
In slow trading, LME nickel was back up to $6.67/lb in early trading
Wednesday.
1/28 - While economic news from the US wasn't as good as expected, LME nickel
received some interest from banks today on supply concerns and gained to
close at $6.76/lb. While the market is concerned
about supply issues, another news item, not yet getting much attention, is
the spread of the bird flu in SE Asia. It has the potential to become more
deadly than SARS, which seriously hurt the Chinese market last year. If this
turns into an epidemic, we could see less pressure on nickel supplies. With
Chinese consumption the primary factor in driving nickel prices up, any lessening
of that pressure will have worldwide implications on nickel.
1/28 - Mine Mill Local 598 has called for strike meetings to be held Friday
with members, to make preparations for a potential strike, starting Sunday
morning. From the website, it appears a salary proposal has been made - and
rejected. Outsource contracting still remains to be a major sticking point
with the union. |
|
1/27 -
LME markets continued to trade thin selling at $6.62 in mid day trading.
The Falconbridge union updated their website overnight, publishing a couple
of letters from members encouraging strike. According to the
Sudbury Star,
the union president reports a government mediator was unsuccessful Monday
in brokering a deal and left. While monetary issues havent even been discussed
as yet, with Saturday being the strike deadline, a sticking point is
Falconbridge's increased use of contracted labor. The union feels this is
an attempt by the company to use non union labor. This "contracting out"
was the main issue in the strike 3 years ago. Local 598 claims approximately
1000 members. And it's 15 below zero this morning in Sudbury.
1/27 - AK Steel announced increases in stainless steel pricing another 3%
yesterday effective March 1st, while Universal Stainless & Alloy announced
increases of 4% in stainless steel effective on shipments after Feb 3rd.
1/27 - LME nickel ended trading today at $6.56/lb,
with very little movement forseen until next week. By then the market will
know what will happen at Falconbridge and Chinese markets will return to
work.
|
|
1/26 -
LME trading continued slow in nickel, as the Far East begins its second week
of Chinese New Year holiday. LME nickel was trading at $6.67/lb mid day.
1/26 - What is seen as a tactic, and also potential preparation, Flaconbridge's
union began setting up stirke trailer's at the entrances to Falconbridge
facilities Friday. The rhetoric on the union's website,
www.minemil598.com
continues to imply a strike is inevitable.
1/26 - International Iton and Steel Institue releases figures for 2003, showing
US has slipped to third in world for steel production. China led the way,
becoming the first nation to ever produce 220.1 million tonnes in one year,
followed by Japan at 110.5 million tonnes, with the US third at 91.4 million
tons. Total world crude steel production was 962.5 million tonnes for 2003.
1/26 - LME nickel was quiet thru much of the day, with sentiment on the trade
floor still leaning towards an agreement being reached at Falconbridge. This
writer does not share their enthusiasm, but anything that brings down nickel
will eventually carry to stainless steel prices. LME nickel closed at
$6.60/lb. |
|
1/23 -
LME nickel traded lightly this AM, selling at $6.66/lb. The Falconbridge
union updated their website overnight and the talk is turning tough. They
are warning their union members to get all prescriptions and doctor's
appointments taken care of before the 31st deadline. Normal strategy, but
the web site now includes paragraph's readying the union for a potential
strike. According to the union, the two sides have only met face to face
for 23 hours during the last 8 weeks. They are claiming the company is being
inflexible, and according to the union site, may give some reason for this.
Even the union admits the company was successful in getting most of what
it wanted during the last strike. With only 50 new members, the majority
of the union rank and file are veteran's of the last strike, and may not
be so apt to strike if they feel their fight will inevitably be in vain.
1/23 - LME concentrated on the already tightening copper market on reports
the major mining area of Chile was struck by an earthquake. Nickel was quiet
closing at $6.72/lb for the week. |
|
1/22 -
LME nickel was trading very light and selling at $6.73/lb in mid day trading.
Today begins the Lunar Year of the Monkey in China, with Asian traders out
till January 28th.
1/22 - LME nickel traded very light today as investors have shifted their
attention to copper in the last few days. One trader told Reuter's he wasn't
convinced that Falconbridge's union would be in any hurry to strike in the
middle of winter, a sentiment that may be shared among other traders. The
union is reporting company negotiators are keeping daily meetings with the
union very brief, or cancelling them altogether. Negotiations on the critical
issue of wages has yet to begin, with only 9 days left to the end of the
contract. LME nickel closed at $6.68/lb. |
|
1/21 -
LME nickel was quiet this AM trading at $6.71/lb. With China out for
the next 2 weeks, there doesn't seem to be any real enthusiasm to take risks
in this market right now. The International Nickel Study Group released its
figures thru November 2003, showing consumption outpaced production of nickel
worldwide, with consumption at 1.112 million tonnes compared to 1.108 million
tonnes of production. With most experts predicting a 30M/tonne deficit this
year, traders would have liked to see a larger deficit growing in the fourth
quarter of last year. Meanwhile, at Falconbridge, the union updated their
website on Monday evening claiming Falconbridge is not negotiating in good
faith. This, with falling inventories at LME, may have helped bolster volume
yesterday, which saw a sharp increase. Investing in nickel today could best
be described as erratic, nervous, with no real enthusiasm to be the first
to make any major steps. Meanwhile stainless prices continue to rise worldwide
as producers adjust surcharge
1/21 - Carpenter Technology announces its surcharge formula for metals. Quoting
their press release "Raw material surcharges and price quotations made will
be based on nickel at $4/lb., cobalt at $10/lb., chrome at $4.15/lb. and
molybdenum at $6/lb. Carpenter will adjust all prices quoted at the time
of order to reflect current raw material prices. In addition, the surcharge
calculation and price adjustment for high-temperature alloys will now include
an $.18/lb. premium over the LME price for nickel to recover additional costs
incurred." All of these metals are currently selling above these levels,
so no decrease in surcharges is expected in the forseeable future. Ferrochrome
saw a 7 cent price increase on January 1st, and molybdenum climbing above
$8.00/lb again.
1/21 - LME nickel closes at $6.77/lb as dollar weakens
again. |
|
1/20 -
LME nickel continues its erratic ride gaining ground to sell at $6.70/lb
in mid afternoon trading. LME stocks down and buyers starting to get extremely
nervous about low inventories.
1/20 - LME nickel was bought heavily today, bolstered by dwindling nickel
inventories. Gaining $1,050/tonne, it closed at
$6.82/lb.
|
|
1/19 -
LME nickel traded lightly in mid afternoon at $6.69/lb. Activity is
expected to be light due to Chinese New Year this week and the US out for
Martin Luther King birthday today. Volatility is still the primary
expectation.
1/19 - Courtesy
Allegheny Ludlum
Products - Market Monthly Averages -
Nickel -
Chrome -
Molybdenum
(Check main page for link to monthly stainless steel
surcharges)
1/19 -
Taiwanese and Chinese steel mills are so busy there are reports some factories
are offering employees double to triple times normal wage to work through
the week long Chinese Lunar New Year holiday. Taiwan reports most steel products
have risen 20-40% since Nov 2003, with further increases possible, dependent
on what nickel does.
1/19 - While many investors are standing on the sideline, due to the
erratic prices that nickel has taken in the last 2 weeks, profit takers still
seem to be in control. LME nickel ended Monday trading at
$6.35/lb. |
|
1/16 -
In early morning trading LME nickel jumped to $6.60/lb. This may be
in part due to Falconbridge's union updating their site last evening with
ome rhetoric that impolies negotiations aren't going well. Quoting "It is
becoming apparent that in spite of lip service to the contrary, Falconbridge
has little interest in presenting an acceptable offer to the membership of
this Local. The ball is very definitely in the Company’s court at this
time. Their choices are becoming very limited, make a suitable offer to the
Union, or face the prospect of strike action, and all of its attendant costs
and lost opportunity. As stated before any negative rhetoric could drive
pricing up. The addition of a count down calendar on the site, while a ploy,
could also be sending a shiver through nickel traders. LME nickel stocks
are exceptionally low.
1/16 - China is still sucking up as much nickel and stainless steel as it
can get. As the world's largest importer of stainless, and the world's largest
user of stainless, what happens here has a dramatic affect on the rest of
the world. They seem to be placing a big emphasis on becoming more self
sufficient, signing huge contracts for nickel from Australia. Taiwan is shipping
stainless steel in at a quick pace, putting a further price strain for other
stainless steel products, including fasteners.Posco of Korea, one of the
world's largest producers of stainless steel announced new price increases
effective imediately. Allegheny Ludluum announced increases of approximately
6% on many of its stainless steel products, effective Jan 26th. Iron ore
prices sore in the Far East, rising 19% this week, after rising 9% during
the entire 2003 calendar year.
1/16 - LME nickel reversed the plunge of the last few days, rising
$1,000/tonne in heavy trading. Closed the week at
$6.69/lb. |
|
1/14 -
LME nickel opened weakly this AM, slipping to $6.44/lb on light
trading.
1/14 - LME nickel had another rocky day, and one trader told
Reuter's things were happening so erratically "it's nearly impossible to
trade". During today's afternoon trading, nickel rose to as high as $6.56/lb,
sunk as low as $6.12/lb and finally ended the day back to
$6.26/lb. It is curious that we are hearing very
little rhetoric coming out of either side in the Falconbridge negotiations.
Any negative comments would stabilize the nickel market on raised concerns
of a potential strike. The lack of such rhetoric has had an unnerving effect
on those that were betting a strike was forthcoming, and many of these have
since taken their profits and bailed.
1/15 - Sorry for the laste update due to illness - LME nickel bounced
heavily today as bargain hunters and profit takers jockeyed for position
- ending at same level as yesterday
$6.26/lb. |
|
1/13 -
Early trading on LME nickel showed a slight gain, selling at $6.94/lb. New
report shows China's demand for nickel should increase from 116 tonnes of
nickel used in 2003 to 145M tonnes in 2004.
1/13 - Early morning trading made my prediction yesterday of further drops
appear to be wrong, but the market took a big dive in the afternoon. At one
point, LME nickel hit $14,000/tonne, its lowest point since 16 Dec 2003,
but recovered a little at day's end. LME nickel closed at
$6.49/lb, definetly good news for stainless steel
users. This is a bubble that has been overdue to burst since Christmas (see
notes 12/23/03). With the week long Chinese
New Year celebrations set to start next Monday, there remains room in the
market for more adjustment - although tough talk from either side of the
Falconbridge negotiations could turn the market around immediately. Expect
erratic trading during the next few days, and possibly weeks. |
|
1/12 -
LME nickel opens softer in early Monday morning trading, selling at $7.15/lb
on profit taking. Dollar is on the rise and may encourage more profit taking
in the next few days.
1/12 - LME nickel was hit hard again by profit takers for the second time
this year, with many traders sitting on the sidelines in anticipation of
the Falconbridge negotiations. Since the strike mandate vote last Thursday,
the rhetoric from both sides has subsuded, which causes many traders concern
there may be an agreement. LME nickel closed at
$6.73/lb, its lowest price this year, but still
well ahead of the average $3.42/lb it was selling at this time last year.
Without some news from Canada leading traders to be more nervous about a
strike potential, watch for further drops. |
|
1/9 -
LME nickel gained ground in early morning trading after Falconbridge's union
announced its members had voted overwhelmingly to give it authority to call
a strike should they be unable to negotiate a deal with Falconbridge. Nickle
was at $7.41/lb in mid day trading
1/9 - Union reports 2/3 of membership voted, with 98% approving the strike
option.
1/9 - After dissapointing employement news from the US, metals markets at
LME became erratic. While non-farm jobs increased by 43M and the unemployement
rate fell, the numbers were dramatically lower than the 130,000 increase
in jobs analysts had predicted. Any news that casts doubt on a strong economic
recovery, causes concern among metals traders. LME nickel held firm in trading,
closing the week at $7.30/lb. Trading may continue
to hover in this range, or actually step back a little, as traders watch
reports of the Falconbridge negotiations. There are reports that some
of the increase in the past few days was made by traders who thought the
strike mandate approved yesterday, was an actual strike vote. This was never
true(see 1/5). As stated before, if the union agrees to a new contract, we
should see prices fall to the mid $5 range, but if a strike takes place,
it is unknown how high it may go. Either way, stainless steel prices will
continue to be higher than those seen during 2003. Negotiation/strike deadline
is now set for Jan 31st.
1/9 - Historical record of the last Falconbridge strike 8/1/2000 thru
2/20/2001
Some of the market conditions were different during the last round of
negotiations, that did not conclude until after a 6 month strike. In August
of 2000, when CAW (Canadian Auto Workers) went on strike, the nickel market
was in a downward trend, after reaching record high's earlier in the year.
Prices continued to fall throughout the period, with the strike having minimal,
if any, significant impact on worldwide prices. Falconbridge reported their
total loss during the strike period was $82.5 million dollars. Also, in
Falconbridge's 2000 annual report, they note that during the 10 year period
from 1990 thru 2000, that they had successfully negotiated 34 agreements
with their unions, and only 4 that had concluded in stikes. Of these 4, 3
of them were with the CAW. It's anybody's guess what will happen during the
negotiation, but one thing is probable. Market traders figure at least $2
of the current selling price has been figured in in anticipation of a strike.
If this is true, Falconbridge has no motivation to settle this any earlier
than a 23rd hour agreement. This will keep the market in flux for the next
3 weeks, keep prices up, and make Falconbridge's shipments during this period
extremely profitable. It's also in both parties favor to build up the rhetoric.
The fear of a strike is the barometer to the current market trepidation,
so the more nervous the traders, the higher the prices will go. Obviously,
based on history, there has been some strained relationships between Falconbrodge
and the CAW. So are there any benefits to Falconbridge by allowing a strike
to happen? Their mine ran at 20% and smelting operation at 50% during the
last strike, according to Falconbridge's 2000 annual report. Would this much
production selling at $7-$8/lb offset full production at $5/lb, and keep
the company's head above water? Only Falconbridge knows. The strike mandate
with a 98% approval vote definetly implies some hostility by the union rank
and file on certain issues. Was fellow Canadian producer Inco's strike earlier
this year, a successful move by their union - or did it end in a draw? Stay
tuned. |
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1/8 -
LME nickel was stabile in early morning sales, while other metals continue
to drop. Bloomberg has published a table comparing major analysts prediction
for average nickel prices. Of 11 analysts who gave predictions for 2004,
price estimates averaged $5.81/lb. Prices are higher at the present time
due to the talks at Falconbridge. Union votes today whether to give its
negotiation team a strike mandate. Markets are expected to climb again if
this mandate passes, which many believe it will.
1/8 - LME nickel gained ground in afternoon trading, closing at
$7.30/lb. |
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1/7 -
Trading was light this AM in LME nickel as traders took a breather after
yesterday's profit taking drove prices down nearly 10%. Morning trades ended
with nickel up slightly at $6.92/lb.
1/7 - LME nickel closes at $6.92/lb. |
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1/6 -
In mid day trading, LME nickel was selling at $7.89/lb, ever closer to the
all time record selling price. Taiwanese mill's are advising their customers
that they forsee the potential of nickel prices hitting $20M/tonne ($9/lb)
this year.
Monthly stainless steel surcharge by Allegheny Ludlum
Products
Market Monthly Averages -
Nickel -
Chrome -
Molybdenum
1/6 -
Finally, there is good news, as well as bad news. LME nickel, as well as
all metals traded on the London Metal Exchange, were hit with a rash of profit
taking this afternoon. The good news for stainless users? LME nickel dropped
from a new 14 year high of $17,720 to close at $15,200/tonne
($6.89/lb). The bad news is this is where
the market was at on 12/22, and even the most pessimistic of traders don't
feel this profit taking will last very long. All eyes are fixed on the
Falconbridge talks. |
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1/5 -
LME markets continue to climb on news that China's economy is still growing,
and at mid-day was trading at $7.71/lb.
1/5 - Link to Local
598 of CAW. This union is the one that is currently negotiating with
Falconbridge,
the third largest supplier of nickel to the world, and the union that has
the entire nickel industry so nervous.
1/5 - LME nickle closed at $7.76/lb. This is a new
14 year record closing and $.41lb off the all time record high set in 1989.
1/5 - It is apparent that some traders are betting on a strike at Falconbridge.
This may be in part due to the fact the last negotiations between Falconbridge
and their union ended in a seven month strike in 2000, and the increasingly
tough talk coming from the union's web site. Thursday, union members will
vote whether to give their negotiators the option to strike. This is expected
to pass, but only gives the negotiators more bargaining power with
Falconbridge. |
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1/2 -
LME markets started out 2004,much the same as 2003 ended. Trading for
the first day of the New Year ended at $7.63/lb,
flirting with the $17M/tonne level for much of the day. Traders continue
to eye negotiations at Falconbridge, with a vote on the 8th by the union
on whether to give its negotiators a strike mandate.
1/2 - One year ago, nickel averaged
$3.42/lb during Jan 2003. The all time record selling
price is $8.17/lb, which was hit in April of 1988.
For a history of nickel prices and its effect on stainless steel,
visit here.
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