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Daily Nickel Prices & Stainless Steel Market Pricing Worldwide Metal Market News

April  2004


4-30

LME nickel is trading softly this morning, falling back to $5.08/lb.

4-29

Metals market was rocky today as prices gained as quickly as they had lost yesterday, and then settled down. LME nickel ended the day at $5.10/lb. We predicted a few week's ago that we felt the market would settle down to the $5/lb range - took longer than we predicted but hopefully we won't see any more major increases in the near future.
*  Thanks to strong sales from its recently acquired Bethlehm Steel, The International Steel Group reported earnings of $70.9 million during the first quarter, compared to a loss during the same period last year of $2.3 million.
*  Tally Metals increases price of stainless 3-5% effective May 3rd. Tally is a division of Carpenter Technology, which announced a net income of $9.5 million in the first quarter of 2004, compared to $1.7 million in the first quarter of 2003.
*   LME nickel gained some ground this morning as investor's jumped in after yesterday's massive sell-off. Feeling the market was over-sold, nickel jumped to $5.41/lb by mid morning.

4-28

*   Metals hit the panic mood today after Rueters published an interview it had done with China Premier Wen Jiablo, who stated China would take forceful actions to cool its economy. LME nickel ended the day at $4.85/lb.
*   Mining company stocks took a beating today as metals prices fall.
*   Is China entering the "Year of the Burn-out". Business Week examines the Chinese economy in an interesting article here. Could make a big difference in future stainless prices.
*   AK Steel adds manganese to its stainless steel surcharges. Allegheny Ludlum already has a surcharge for manganese but it only affects 200 series stainless steel.
*   While metals markets are nervous about tightening Chinese credit, some steelmakers are telling stockholders that they expect the growth in China to continue, keeping production and pricing levels high, and inventories tight. China consumed nearly 1/3 of all the steel produced in the world in 2003.
*   Japan's largest steelmaker, Nippon Steel, reported profits of $380 million dollars in the first quarter of 2004, compared to a 2003 loss of $470 million dollars.
*   LME nickel continues to slide as concerns grow stronger that China is putting the brakes on its economy. LME nickel was at $5.07/lb in early morning trading.

4-27

LME nickel ended today's trading at $5.20/lb.
*   China's business newspaper, The Standard, is reporting China's stockpile of steel products increased by 40% during the 1st quarter of the year. This news will not make traders happy, and could mean the country may be facing over production, which could lead to a glut of product and factory closures.  They also quote J.P. Morgan's analyst, Henry Kwon, who is predicting China steel prices will remain strong and peak during the 2nd or 3rd quarter of 2004.   
*   U.S. Mint increases prices on collector coin's for the first time since 1998, due to increasing costs in silver, nickel, zinc and copper.
*   I add incidents of metal's theft to this log, not only to give you an idea of how bad it really is out there, but some of them are just hard to believe. Russian media is now reporting a 30 meter tall (98 feet tall ), 9 ton radar tower was stolen from one of their (not so) secret miltary bases last week.  Since the base was so secret, employee's on the base are suspected of cutting it down and selling it for scrap. Utah is seeing a rash of boat stainless steel propellor thefts, although officials doubt they are being sold for scrap. Union City. CA officials are angry that scavengers are stealing metals from city recycling bins and wants a law to make stealing their trash a crime??
*   Interesting analysis of the shift's in world steel production over the year's (here)
*  AK Steel increases surcharge on carbon steel from $97 per ton in April to $120 per ton for shipments beginning May 1st. The transactional price, which increased by $150 per ton in April, remained unchanged.
*  US Steel reports first quarter profits of $58 million, compared to a loss of $38 million during the first quarter of 2003.
*  LME nickel continues to slide, selling at $5.17/lb, it's lowest level since last October, and surprising analyst's. China could start buying again at these lower prices. Imports of nickel had fallen by over half in the first three months of 2004, as China turned to lower grades of stainless and used up nickel stockpiles. How much China buys could be a determining factor in where nickel goes from here.

4-26

The analyst's may still be predicting higher nickel prices, but the market isn't buying it - yet, anyway. LME nickel closed down at $5.31/lb.
*  Norando, Canada's largest mining company and 59% holder of Falconbridge, the world's 3rd largest nickel producer, announced its net income had risen to $153 million dollars in the first quarter of 2004 compared to $40 million loss this time last year. It also reported that the cost to produce a pound of nickel was averaging $2.60/$2.95/lb, depending on the facility.
*  For all you steel users wondering why your prices went up so fast, one factor is China's demand for raw material's. China's steel output reached nearly 61-1/2 million tons in the first 3 quarters of 2004, up 26% over the same period last year. Official statistics from Bejing also show sales at China's 66 major steel companies were up nearly 72% ($29.19 billion) and profits rose 126% ($2.4 billion) over the same period.
*  Scrap Magazine is publishing Access Economics Pty of Australia's forecasts of future metal prices. Nickel is predicted to be at $6.53/lb by June and $6.00/lb by December 2004. It is unknown if these predictions were published before the fall experinced last week.
*  Macquarie Bank of Australia isn't convinced we've seen the end of higher nickel prices. It credits some of the lowering in demand due to China using old stocks and shifting to lower grade stainless. As old stocks deplete, Macquarie predicts buyers will re-enter the market and drive prices back up.
*  International Nickel Study Group revises its prediction for 2004, lowering the projected nickel deficit from 30M/tonnes to 20M.
*  LME nickel was quiet in early morning trading, bucking the trend of most metals that were selling higher. Nickel was at $5.40/lb.

Top 5 Steel Mfg Countries of 2003 Top 10 Nickel Producing Companies / 2003
1. China
2.  Japan
3. United States
4. Russia
5. South Korea
1. Norilsk
2. Inco
3. Falconbridge
4. BHP Billiton
5. WMC
6. OMG
7. Eramet
8. Jinchuan
9. Sumitomo
10. Murrin Murrin
(source International Steel Association)

(source Macquarie Research)


4-23

LME nickel ended the week at $5.44/lb ($12M/tonne)
*  China confirms first SARS fatality since last July. Last years SARS outbreak had a major negative economic impact on China and killed 744 people worldwide.
*  Nucor Steel reported first quarter earnings of $113 million, compared to $17.8 million last year. AK Steel announced Tuesday that it also turned a profit in the first quarter, but without the sale of its subsidiary, Douglas Dynamics, it would have lost money. Carpenter Technology saw its net income increase from $1.7 million to $9.5 million, comparing Jan thru March 2003 to 2004. For the most part many US steel manufacturers are reaping the benefits of increased use and higher prices. Still others, do not appear to be benefiting financially from the booming market.
*  LME nickel stocks increased by 288 metric tons yesterday, after falling 216 tonnes since Monday.
*  LME nickel opened quietly, selling at $5.51/lb in early morning trading. Some traders are predicting nickel has fallen too low and recommending buyers take advantage. We'll see.


4-22

For the second day in a row, buyers stayed quiet until nickel fell below $12M/tonne, then they bought. Nickel closed the day at $5.47/lb.
*   Allegheny Technologies announces it lost $50.4 million in the first quarter of 2004 compared to a loss of $27.1 million last year.
*   Universal Stainless & Alloy Products of Bridgeville, PA announces it made a profit of $277M in the first quarter of 2004, compared to a loss of $584M during the same period of last year. Universal Stainless is a specialty metals manufacturer.
*  Overseas buyer says he has seen 316 stainless fasteners jump an additional 20% in price since last week.
*  Higher molybdenum prices will cause 316 stainless prices to continue to rise, but it's good news for U.S. based Phelps Dodge, the world's largest producer. Their mine near Henderson, Colorado, produces more moly than any other mine in the world. Molybdenum is currently selling at $16/lb...approximately 8X what it was 2 years ago.
*  Is this the beginning of the end of high nickel prices? Will China be successful in slowing down its economy, and how much does it really want to? Would higher interest rates really slow the U.S. economy? How much stonger will the U.S. dollar get? With mines producing as much nickel as they can, will the increase offset the predicted deficit this year? Will higher prices turn away stainless buyers and lower nickel demand? Or will any disaster, natural or man made, disrupt the critical flow of nickel worldwide? If you can predict the answers to these questions, among others, then you'll have your answer. We'll keep our fingers crossed, but we don't advise you hold your breath.  
*  Inco reported its net earnings for the first quarter of 2004 were $229 million, compared to $64 million during the same period of last year. Under Canadian accounting principles, called GAAP, the figures would be $229 million this year compared to $33 million last year. 
*  LME nickel was untraded in early morning trading, sitting at $5.60/lb. At one point in yesterday's trading, nickel got as low as $5.33/lb.

4-21

With the US dollar strengthening, continuing news that China is trying to slow down its economy, and Greenspan's remark's potentially slowly the US economy, LME metals took a big hit. Nickel closed at $5.60/lb, with the additional news from Norilsk. That is the lowest so far this year, and lowest since December 1, 2003.
*   Inco advised stockholders that its new Voisey Bay mine should start shipping orders by the latter part of next year. They also advised they would have an update on the development of the Goro Project in New Caledonia by August.
*   Interesting article on issues facing China here
*   Norilsk announces it may sell an additional 15,000 tonnes above what it reported last week.
*   Greenspan, testifying before Congress, hinted even harder today that higher interest rates were close at hand for US business.
*   PBS Nova program "World in the Balance" aired last evening ,revealing some aspects of the amazing growth China has seen in the last 20 years. While program theme was pollution, one of the many interesting facts revealed included that in 1995 there were 2 million cars in China. Today, there are over 20 million, and one car manufacturer executive interviewed, reported his company is expecting an 80% increase in sales this year. The Chinese people, still under Communist rule, are beginning to share similar dreams to Westerner's. Their rate of growth, however, is causing worldwide problems of supply/demand from metals to oil to food.  
*  All metals traded on the LME were down this morning on renewed strength in the US dollar. Nickel was selling at $5.71/lb.

4-20

LME nickel closed the trading day at $5.83/lb.
*  Market analyst's begin analyzing what Greenspan said today, after Greenspan hinted banks were ready for a rate hike (interest rate). Some think it will happen immediately while many others think more economic data is necessary before Greenspan will make any definitive move. With nothing definitive coming from the testimony, it will be interesting to see if this has any affect on the LME metals market tomorrow.
*  Federal Reserve Chairman Greenspan due to testify today to US Senate Banking Committee at 2:30 pm Eastern time - tomorrow before Joint Economic Committee. Metals traders watching closely for interest rate news.
*  Nickel trading at $5.81/lb on early morning LME floor.

4-19

LME nickel ended the day at $5.73/lb.
*  China's Commerce Dept is reporting the price of China steel was 39.9% higher during the first quarter of 2004 compared to the same period last year.
*  Confusion in the press surrounds the deal announced 2 weeks ago about Norilsk Nickel's offer to purchase 20% of a South African gold field. At first, the Russian government had no comment about why they hadn't been asked to approve such a deal, now they are investigating it. Norilsk had announced that Citibank had loaned them $800 million dollars with no collateral required, and then Citibank advised they had taken a 50M/tonne nickel stockpile as collateral. This type of stockpile, unreported before now, is making nickel traders very wary about what the true level of nickel deficit is facing the world. It is believed Norilsk, usually very secretive about their nickel operation, originally denied the Citibank report, in an attempt to keep nickel prices up. As the world's largest producer, Norilsk has the most to loose by faltering nickel prices.  
*  Norilsk announced today it will not increase production  of nickel this year. The statement is sketchy about surplus levels, which Norilsk has been known to keep, and therefore, it is unknown how this statement will affect LME prices. While most analysts still predict a production deficit in 2004, recent moves on China's part to slow their economy down has helped bring nickel pricing down from its earlier high's (although current prices are much higher than this time in 2003).  
*  LME nickel opened lower than its Friday close, selling at $5.85/lb.

4-16

Nickel recouped its earlier losses, closing the week at $5.93/lb, climbing back over the $13/M tonne mark.
*  Falconbridge, the world's third largest nickel producer, announced profits of $184,000,000 for the first quarter of 2004, compared to $38 million during the same period in 2003. It also announced that the strike had dropped nickel output during the same period from 27,450 tonnes last year to 26,858 tonnes this year.
*  Considering the high prices American manufacturers pay for US made stainless steel wire, the following make come as a bit of a shock. After a preliminary investigation, the Canadian government announced that temporary  provisional duties have been attached to imports of stainless steel wire from 4 countries. Investigations into imports from China and Taiwan were determined to be unfounded and further investigation into these countries was dropped. The countries that were determined to be dumping into Canda, and the temporary duties attached,  were Korea (108% duty), Switzerland (108% duty), the United States (100% duty), and  India (6% duty). Canadian law defines dumping as "Dumping occurs when goods are sold to importers in Canada at prices that are less than the selling prices in the exporter's domestic market or at unprofitable prices." Canadian offical's now will conduct a more thorough investigation and announce a final decision on duties on June 30th. Story here.
*  LME nickel selling at $5.70/lb in early morning trading.

4-15

*  Good news finally?? LME nickel closed down again today, ending the day at $5.74/lb. After a sudden increase in LME inventories of an additional 234 tonnes of nickel, some traders tell Reuters they expect the slide to continue - to possibly the $5.50/b range.
*  LME nickel was selling at $5.77/lb in early morning trading.

4-14

*  Bad news for our aluminum customers as LME aluminum hit an 8 year high. LME nickel rebounded a bit, closing at $13,000/tonne or $5.90/lb.
*  Inco reached an agreement with its non production workers today and the union is recommending its members accept the 3 year contract.
*  More good economic news yesterday from US makes metals traders nervous. Why? The report yesterday that retail sales had jumped by 1.8% in March shows the economy in the US is on the fast track to recovery. But with this positive news, comes a fear of inflation and the real pssibility the the US Fed will raise interest rates to "cool the growth". China has already done this, and with the US dollar increasing in value, traders are very nervous. 
*  LME nickel trading at $5.98/lb in mid session.

4-13

*  Nickel closed below $6 today for the first time since March 15th, ending at $5.85/lb. The strengthening US dollar and higher interest rates in China helped bring prices down. The strengthening dollar makes investing in metals more expensive, and the raising of interest rates in China is the Chinese governments attempt to slow down growth. 
*  The theft of metal to sell as scrap continues with another bizarre report from Salem, OR that someone stole the metal bleachers from a softball field. After cutting them up, they attempted to sell the pieces as scrap - but were arrested. There are also reports from Great Britain and China that manhole covers are disappearing, causing serious road hazards.
*  LME trading resumed this morning after a 4 day break. At mid-day, nickel was selling at $6.21/lb.

4-12

*  How long will the current metals boom last? Interesting article
*  Allegheny Ludlum's new surcharges show a slight drop for May on 304 and 316 stainless. Only the surcharge on iron increased. (the drop in 316 is not expected to last - see last entry)
*  Molybdenum took a huge leap last week, thanks once again to China. Mo03, used in the making of 316 stainless steel was selling at $3.51 at the beginning of 2003. By the end of last year, it was selling at $6.96/lb. In January and  February of this year, the price was hovering in the high $7/lb range. In March the price jumped from $7.35/lb to $10.95/lb by month's closing. Last Monday, April 5th, the price leaped to $14.60 and spent the entire week on the rise. By week's end it was selling in the $18-$19/lb range. Expect to see 316 stainless to continue to increase in price.
*  LME markets are closed Monday for the Easter holiday and will resume trading tomorrow.

4-9

* The Freedonia Group's April 2004 report predicts the global demand for industrial fasteners willrise by 5% per year thru 2008 to $48 billion. It also predicts China, which accounted for 10% of world fastener consumption in 2003, will surpass Japan within the next 4 years, to become the second largest user of fasteners in the world, behind the U.S. Contact the Freedonia Group to purchase the complete report.
* LME trading is closed for Good Friday

4-8

LME ended the trading day at $6.26/lb.
* In the world of molybdenum mining, Phelps Dodge finally secured 155 acres  in Colorado from the US Bureau of Land Management, that it had filed a claim on in 1992. Phelps purchased the land from the government under an 1872 Mining Act law and paid the required $5 per acre. Now, after fighting environmentalist's for years to secure the land, Phelps has announced it has no intention of building a mine. Before you feel sorry for them, land in the area is selling for around $1 million dollars an acre. Local and county officials are screaming 'foul'.
* Bloomberg is reporting that nine metals analyst's polled believe nickel will average $14,000/tonne ($6.35/lb) through June. For the complete article and a breakdown of the predicitons, visit Boomberg.com. (If this  proves true, don't anticipate any lowering of stainless steel prices thru the next 5 months). 
* Yieh Trading Corp is reporting China's top 4 stainless steel producers have agreed to cut stainless production by 20% for April and May, in an attempt to drive down raw material cost's.
* Very little activity is expected on the LME trading floor today, as traders prepare for a 4 day holiday, beginning tomorrow. In early trading, LME nickel was at $6.26/lb.

In 2003, China produced 23% of the world's steel, and consumed 27%.


4-7

LME nickel traded quietly, as traders prepared for a 4 day weekend beginning Friday. Ended the day at $6.31/lb.
* LME nickel selling at $6.43/lb in early morning trading.

4-6

Nickel on the LME trading floor re-gained its losses from yesterday and closed at $6.49/lb.
* Inco is in negotiations with non production employee's over a new labor contract, due to expire on April 15th. United Steelworkers of America, which also represented production employee's in their strike last year, is representing the non-production employee's. It is unclear if production workers would honor their counter-parts picket line, should a strike be called. As the world's second largest producer of nickel, any disruption to nickel production at Inco, could be serious to world nickel prices (Update - Union says production workers would be allowed to cross picket line if non-production members were to strike). 
* WMC Resources CEO Andrew Michelmore advised investors at the company's annual meeting today, that the market could not sustain nickel prices above $6/lb for much longer, or the high costs could have a long term negative impact on the industry. He also advised he would like to see prices stay in the $4 to $6 range. WMC is one of the top 5 producers of nickel in the world.
* The Deutsche Bank has revised its forecast for 2004-5 metal's prices. It anticipates nickel will average $6.28/lb in 2004 and $5.35/lb for 2005.
 * Eramet is predicting China will use about 35% of the world's specialty metals, 30% of its carbon steel, and 25% of the world's stainless this year.
* LME nickel opened higher this morning, selling at $6.41/lb.

4-5

* LME nickel tumbled today as the US dollar strengthened against the Euro. Closed at $6.28/lb.
*  Reports from Zimbabwe that 36 tonnes of platinum have been hijacked and disappeared. Last month, hijackers stole 40 tonnes of nickel.
* PT Indonesia (Inco) resident director Bing R Tobing told Antara News that nickel prices would remain high thru 2004. While PT is involved in litigation with the Indonesia government over a few of its mines that were forcibully shut down, Tobing also advised its Indonesia mines would increase production from 155 to 160 million pounds of nickel this year.
* Canada advises China that it may begin investigation into allegations of dumping of stainless and steel fasteners into that country from China and Taiwan.
* LME nickel opens the week and trades at $6.45/lb in early morning trading.

4-2

LME nickel closed the week at $6.53/lb.
* Toronto based Rio Narcea Gold Mines Ltd announces its new Spanish nickel mine is still on target to begin production around Septemeber. In its statement, Rio reports the mine could add an additional 18 million pounds of nickel and 11 million pounds of copper per year to the world market.
* One pessimistic analyst's take on nickel over the next 10 years here
* Dollar rises against foreign currencies as March employement figures show 308M new U.S. jobs created in March, triple that of Wall Street expectations. Increases in dollar value usually makes metals traders nervous.
* Universal Stainless announced yesterday that they were raising stainless steel bar products by 4% for new orders shipped after April 15th.
* LME nickel opened quietly as traders await employement figures to be released from the U.S. LME nickel was at $6.61/lb in mid-day trading.

4-1


Reuters reported one trader as saying "it's unbelievable - the money just keeps piling in". Funds traders invested heavily this first day of the new quarter, and drove all metals up, including nickel which closed at $6.58/lb ($14,500/tonne). Other metals testing multi-year high's with copper close to an 8 year high, aluminum nearing a 6 year high and tin looking to beat a 14 year record high.
* MEPS is now predicting world stainless steel production to increase by 5.6% in 2004.
* US Public Debt on 3/31/04 - $7,131,067,950,647.32. U.S population - 292,924,690.
* LME nickel gained this AM on fresh buying as traders gamble on economic reports due out of the US today. Selling at $6.42/lb in mid-day trading.


3-31

LME nickel ended the day at $6.35/lb.
* According to the Wall Street Journal, Chinese steel producers are preparing to set up mills in the U.S., Brazil, and Australia to help it keep up with its booming steel demand.
* US officials advised the Association of Southeast Asian Nations Regional Forum that the Malacca Straits west of Malaysia was a potential target of terroists. Known as the world's busiest shipping lane, with 1/4 of the world's shipping trade and up to 50% of shipped oil passing thru the Straits, terroism experts fear any successful attack in this region could be devastating to world economic trade.    
* The leading importer of stainless steel fasteners in the US, which sells solely to distributors, is reporting shortages on numerous items.
* Nickel producers are wary of reports China is turning to the production of lower grade stainless steel by substituting manganese for the higher priced nickel. This produces the austentitic 201 series stainless. Manganese is at 7 year high's but still sells from substantially less than nickel - at around $ .77/ lb.
* For the second year in a row, China was the world's largest non-ferrous metal manufacturer in 2003. Output of finished copper products rose 32%, while finished aluminum goods rose by 33%.
* Welcome to our new format. We hope you will find it easier to read. LME nickel opened slightly softer this AM in light trading, selling at $6.28/lb.

3-30

LME nickel ends the day's trading at $6.29/lb.
LME nickel softens in early morning trading - at $6.31/lb.

3-29

LME nickel closed at $6.32/lb.
* Japanese Metal bulletin is advising prices on stainless shipping in May from that country are not increasing and will remain the same as April shipments. Nickel has fallen off its record high but remains in the mid $6 range, double that of early 2003. The bulletin also advises we shouldn't expect to see stainless prices falling anytime soon as chromium is now increasing.
* South African ferrochrome producers have settled on a 12 cent per lb price increase for second quarter 2004 shipments. This follows a 7 cent increase for the first quarter and takes pricing to $ .69/per lb.
* Tally Metals, a subsidiary of Carpenter Technology, announced a 3% increase in stainless steel shipments beginning April 12. 
* Nickel bucked the trend of all other early gaining metals in morning trading, down at $6.29/lb.



Today's LME Nickel Trading   Support at N/A and Resistance at N/A  *

April 2003 comparison figures
Average LME nickel price - $3.59/lb

Allegheny Ludlum Surcharges for April

Nickel Chrome

Moly

Iron

2003
2004

304

.1835
.4678

.0035
.0527

NA

0
.0466

2003
2004

316

.2296
.5848

.0031
.0468

.0198
.1025

0
.0453

courtesy Allegheny Ludlum

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