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2004
First Quarter

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Effective April 1st, this daily updated will be re-formatted to read easier and load faster.

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.  

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. .

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. 

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

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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

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.   

3/10  -  LME nickel continued to slide, closing at $5.91/lb Wednesday. Traders nervous as nickel inventories still at record low levels.

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.

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.

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.

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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!

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.

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.

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.

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.

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.

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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