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Daily Nickel & Stainless Steel Prices
Market Pricing

Worldwide Metal Market News

October  2004

(Nickel prices are followed here daily as they are responsible for up to 60% of the cost of stainless steel)

10-29

LME nickel ended the day and month at $6.11/lb. For the month, nickel averaged $6.54/lb.
*    China Iron and Steel Association states iron ore imports will rise from 148 million tonnes last year to to more than 180 million tonnes this year
*    LME warehouse stock of nickel slid by 54 tonnes to total 14,142 yesterday.

10-28

LME nickel ended where it ended yesterday - at $6.13/lb.
*    China's Central bank announced it was raising interest rates for the first time in 9 years. Stock markets worldwide are down, but so far metals seems unphased.  
*    Scrap Magazine is quoting HSBC as predicting nickel will average $5.24/lb in 2004 compared to $6.30/lb this year. On the other hand, in the same report, they state "LME price volatility, however, will remain an ongoing feature, with some expecting nickel to establish new highs before the end of this year."
*     Australian WMC Resources, world's 5th largest nickel producer, rejects a $5.5 billion(US) takeover offer from Swiss based Xstrata. Bloomberg identifies Xstrata Plc as the world's largest exporter of coal for power plants. WMC shares jumped 36% after the offer was refused.
*    YUSCO and Tang Eng Stainless Steel Plant announced yesterday that although nickel has fallen in the last few weeks they work off nickel's average cost and both announced increases in stainless effective November 1st. YUSCO also stated international demand for stainless is exceeding current supplies. Steel prices were also announced by Taiwan mills for Novemeber shipments. (This is contrary to what MEPS is reporting in their October report. They say there is a degree of oversupply of stainless in Asia)  
*    LME nickel inventories slipped once again, falling by 132 tonnes to 14,196.

10-27

LME nickel rebounded today, ending at $6.13/lb. Market appears to be attempting to find a direction with weary trader eying support harder than resistance. Is it possible we could be at $5/lb by Christmas? Stay tuned.
*    Article you investors might find interesting here
*    Nickel inventories fell again yesterday by another 198 tonnes to 14,398.

10-26

Nickel prices fell sharply, ending the day at $5.79/lb.
*    Posco of Korea announced stainless steel price increases of 3.9-5.7% effective 10/27.
*    Falconbridge lowers their forecasted nickel prediction for 2004 to only 5M ton deficit and for 2005 to a 9M ton deficit. Expect world nickel production to increase by 55M tons next year. Falconbridge is also analyzing whether to give the go ahea to their New Caledonia Koniambo project. With production at Inco's Voisey Bay to begin in 2006 and Inco's Goro mine to being producing nickel in 2008, the current deficit market could be a glut market later this decade.
*    LME nickel inventories fell below 15M tonnes yesterday with a drop of 504 tonnes to total 14,526. Nickel pricing is in the $5.90/lb range this AM.

10-25

LME nickel ended the day at $6.02/lb.
*    Norilsk Nickel announces its Severny-Gluboky mine will begin operation November 1st. Norilsk is hoping this new mine will increase company nickel production by up to 30% by 2010.
*    International Monetary Fund predicts worldwide GDP to expand 4.3% compared to 5% this year.
*    Falconbridge, the world's third largest nickel producer, announced Friday its profits had soared to $155 million in the third quarter of 2004, compared to $19 million last year. Falconbridge is publically traded but is 59% owned by Norando, which is currently negotiating a $7 billion sale to China MinMetals.
*   Nickel inventories at LME dropped 120 tonnes on Friday, nearing 15M tonnes = 15,030 total.

10-22

LME nickel ended Friday at $6.09/lb
*  LME nickel inventories fell by a mere 6 tonnes Thursday.

10-21

LME nickel ended the day up at $6.22/lb.
*    Nickel inventories in LME warehouses fell again yesterday by 30 tonnes, for a total of 15,156 tonnes.

10-20

LME nickel ended the day at $6.02/lb.
*    3rd quarter financial results.....
US steel maker Allegheny Technologies net income of $8.6 million compared to a loss of 28.8 million this time last year
Metals USA - net income of $31.8 million compared to net loss of $2.8 million last year
Universal Stainless - net income of $2.7 million compared to net loss of $121,000 last year
*    Steel company stocks worldwide fell after US firm Steel Dynamics made comment Monday that they thought steel prices would "soften somewhat" in the fourth quarter of 2004.
*    Posco of South Korea announces prices increases on stainlesss effective Oct 27th.
*    Inco makes its case for sustained high nickel prices thru 2006 - (interesting reading here)
*    Massive Goro project go ahead gets nod from Inco after being suspended in Dec 2002. Initial production from this New Caledonia mine - Sept 2007.
*    Inco forecasts its total nickel production for 2004 will be 505-510 million tonnes - its highest annual production since 1974.
*    LME nickel inventories slipped another 138 tonnes yesterday, to total 15,186 on hand.

10-19

Nickel on the LME took another turn down, ending the day at $6.03/lb.
*      Inco announced it made $148 million dollar net earnings in the 3rd quarter of 2004, compared to a net loss of $23 million this time last year. Sales were double at $1.03 billion. Inco is expected to announce later today that it will proceed with its Goro project in New Caledonia.
*      Purchasing.com is reporting iron producers face higher prices for coking coal next year, as the worldwide supply shortage continues.
*     Reminder from May 2004 report by the Asian Development Bank ""[China] is the world's biggest consumer of copper, tin, zinc, platinum, steel and iron ore; second biggest of aluminum and lead; third largest of nickel... It is now the world's second-largest oil consumer...." Inco is predicting China will be the #1 consumer for nickel by 2005.
*    Yieh is reporting even though nickel has come down, stainless prices will go up in Asia in November.
*    The Financial Express of India reported Monday that Asian shift to low nickel 200 series stainless and no nickel 400 series stainless is increasing at a dramatic pace, at teh expense of high nickel 300 series austenitic stainless. "This is most notable in Asia, where the austenitic ratio may fall to 60% in 2004, from above 70% in 2001".
*    Nickel inventories in LME warehouses slipped another 18 tonnes yesterday to 15,324.


10-18

LME nickel ended the day at $6.10/lb.
*     Molybdenum went up again Friday - now $21.00/lb.
*     Greenspan Friday on oil prices "So far this year, the rise in the value of imported oil--essentially a tax on U.S. residents--has amounted to about three-quarters of one percent of gross domestic product."
*    Yieh.com is reporting nickel consumption has increased 2.9% so far this year in China, while stainless steel production has increased 6.9%. The good news for nickel producers is this may reflect a depletion of nickel stockpiles that have been used. The very bad news for nickel producers is this also reflects the increased production of 200 series stainless, which contains less nickel.
*    Nickel prices are down in early morning trading, as funds further liquidate, possibly led by nervousness over oil hitting $55/barrel this AM.
*    LME nickel inventories fell by a mere 6 tonnes on Firday to sit at 15,342.

10-15

LME nickel ended the day at $6.20/lb.
*    Fairfax Digital published an article today quoting Hu Wei of China's largest copper refinery, Jiangxi Copper, as saying don't count China off and that his country's demand "cannot be satisfied by current tight supply". The metals market tumbled on Wednesday after figures were released that showed China's copper usage fell 21% this July compared to last year. This would agree with WMC Resources Chief Executive Andrew Michelmore's statement that nickel consumption in China could increase by as much as 17% next year.  
*    The Toronto Star published an article today stating Inco's chairman Scott Hand told investors metal prices will remain strong throughout 2005. This came a day after Inco's stock was downgraded by Prudential Financial. Mr Hand also hinted that the Goro Project in New Caledonia may get the official go ahead next week. If this is true, this mine is expected to produce 60,000 tonnes of nickel a year, but not until mid 2007. Inco is also working on the Voisey's Bay project in Labrador, which is expected to start producing nickel in 2006.  
*    New computer virus alert (here)
*    Nickel is up in early trading in London, but market still vulnerable.
*    Inventories of nickel in LME warehouses fell by 42 tonnes to 15,348 yesterday.

10-14

LME nickel ended the day down at $6.15/lb.
*     Nickel prices, along with the other metals traded on the London Metal Exchange, all seem to be looking for a direction this morning after yesterday's huge sell-off. Nickel has see sawed all morning with little movement either way.
*     LME nickel inventories gained 24 tonnes yesterday for a total of 15,390 on hand.

10-13

The Globe and Mail is reporting today's drop in nickel is its worst single day drop since January 1988.
Fund liquidation took on new meaning on the London Metal Exchange as all metals plunged. One of the most watched metals of recent, copper fell 9.8%, with most other metals loosing less. However, nickel led the loss percentage wise at a loss of 13%, ending the day at $6.22/lb.
*     To give you an idea of what has happened on the LME this morning, Man Metals daily report states..."Brent (oil) prices opened steadier in London this morning, but perhaps after noting the 'carnage' in metals, started to sell off." (Oil bucked the metals trend and after dropping to $51+ it ended the day at $53.64/barrel)
*     The International Stainless Steel Forum is predicting a growth rate in stainless steel production worldwide to increase by 6.8% in 2004, 5.9% in 2005 and 5% for 2006. For further details visit www.worldstainless.org.
*    Unconfirmed report that nickel has dived this morning and nearing $6/lb on the London Metal Exchange. If true, this would mean funds are bailing out.
*    Nickel inventories held by the LME fell another 396 tonnes yesterday to total 15,366 tonnes.

10-12

LME nickel ended down for the day at $7.13/lb.
*     Scrap Magazine is quoting INSG as predicting a deficit of 10M tonnes of nickel this year and a balanced market next year of 1.32 million tons produced and consumed.
*    World's largest producer of ferrochrome is asking shareholders to allow it to change its name from SA Chrome to Merafe Resources
*    So far this morning everything but oil is down. Oil is selling over $54 barrel and all LME metals are selling lower at mid-day.
Commentary only
- It seems to be evident that recent hikes in nickel prices are being driven by speculation on the part of fund investment and not justified by market fundamentals. What is unclear, is "if", or when the fund markets take their profits and bail out, where will nickel prices settle in at. It is also becoming likely, that even those nickel producers that have the most to gain by these high prices, are becoming increasingly nervous about the increased use of low nickel stainless, primarily in China. While the stock holders look to the quick profits, the people responsible for long term profitability of a mining company, are probably beginning to get very nervous about the long term implications of these high prices.   

*     LME nickel inventories fell by 66 tonnes yesterday for a total of 15,762 tones stored in LME warehouses.

10-11

My source for nickel closing is closed for Columbus Day, but prices fell into the $7.30-$7.40's range. A secondary source, which publishes the 7:15 pm closing price shows $7.32/lb.
*      Anton Berlin, Norilsk Nickel's head of market analysis and development, told Dow Jones Newswires in an interview today that the supply/demand balance of worldwide nickel is nearing a balance and that the high price of nickel is unjustified and due to speculative activity. (article here from futuresource.com)
*      London Metal Exchange has published a Power Point presentation of their metals seminar on nickel and other traded metals - interesting! (here)
*      Bloomberg is quoting a Societe Generale Commodities Research report that says historically high LME metal prices will continue into 2005, although the growth rate in metals consumption will slip to 5.5% next year. The report predicts prices will fall approximately 5% from their current levels. To see the report, visit (this page), then click base metals under Economic Research/Periodicals
*      The Economist Global Agenda published an article, quoted on Economist.com, that quoted one analyst as stating "lemmings and cliff" comes to mind in reference to some metals pricing. (article here)
*      This could be big news for investors in the future - if it works out (article here)
*     Some traders expressing concern that record high oil prices could start affecting metals prices adversely.
*     Molybdenum pricing jumped to $19.95/lb Friday. 316 stainless steel users will be affected.
*    POSCO, the world's fifth largest steelmaker, announces 12% increase on domestic steel plate.
*    Nickel inventories gained 48 tonnes on Friday - now at 15,828 tonnes

10-8

LME nickel ended the day, up once again, at $7.53/lb.
*    Copper prices hit a 16 year high in early morning trading today, while aluminum hit its highest since August 1995 yesterday.
*    Inventories of nickel in LME warehouses fell 420 tonnes yesterday to 15,780 tonnes.

10-7

LME nickel ended the day at $7.45/lb.
*   One area not hurting for scrap, or scrap scavengers, right now is Florida. Scrap yards in many Floridian towns are opened extended hours. To give you an example of what aluminum scrap is worth, a single pool enclosure can bring around $400. Akron, Ohio is noticing manhole covers disappearing faster than usual. A 90 lb manhole cover is worth about $2 in scrap, but $78 to replace. Malaysia is reporting railway traffic fittings being stolen from rail lines, causing disruption in rail service.    
*   PT International Nickel Indonesia announces plans to build $150 million dollar hydroelectric dam to help increase production of local mine. Bloomberg article states the additional power, due for completion in 2009, will also lower the cost of production by 7% - which is currently running between $1.65 and $1.75 per pound.
*   Yieh is reporting scrap prices in Taiwan are rising and have nearly hit record high's seen in March.
*   LME nickel inventories dropped by 66 tonnes yesterday.


10-6

LME nickel closed over the $16M/tonne mark, ending the day at $7.30/lb.
*    Interesting article about outlook of nickel in China - here
*    Oil hits new record high over $52/barrel on speculation of shortage. Qatar's oil minister told China Daily on 9/27 that there is no shortage of oil and the market prices are being driven by speculators. (Sounds a little like the nickel market) It is also worth noting a statement made by Gina Martin, an economist with Wachovia Corp, to a Bloomberg reporter yesterday. She stated the increase in oil prices will cut 1 to 1.5% from the US GDP over the next 3 to 4 quarters as the higher prices work their way through the system.
*    Copper pricing nearing 9 year highs.
*    Yieh reports many stainless steel mills are applying surcharges effective date of delivery, instead of date of order.
*    LME inventories gained again yesterday, adding another 72 tonnes for a total of 16,266.

10-5

LME nickel closed at $7.16/lb.
*    Another  factor in nickel prices rising - article here
*    Scrap Magazine is quoting 2 predictions for the upcoming nickel market - Macquarie Bank has lowered its deficit prediction for 2004 to 21,000 tonnes and only 10M tonnes for 2005, with an LME cash average prediction of $6.15 this year and $6.25 next year. Goldman Sachs JB Were is predicting a LME cash average of $6.35 for the remainder of 2004. 
*    LME nickel inventory at 16,194 this AM, which would mean an increase in stock of 1,266 tonnes or a gain of 8% yesterday.

10-4

LME nickel ends the day at $7.08/lb.
*   Molybdenum at $18.87/lb. A little over $5/lb this time last year.
*   Traders advise nickel seriously over-bought after Thursday's jump by nearly $1600/tonne and expect downward adjustment in price soon.
*   300 series stainless steel hits new record high in Europe after a 3% hike in the surcharge takes affect for October.
*   LME inventories took a big jump on Friday, gaining 606 tonnes, or 4%.

10-1

LME nickel ended the day at $7.08/lb.
*     Reuters is reporting Cuban nickel mines have not been affected by the energy crisis the country is experiencing. According to the Reuters article, Cuba is the 4th largest nickel producing country in the world and in 2000, nickel became that country's biggest export earner. Cuba has 3 nickel mines, 2 operated and operated by the state with a third, run by the state in partnership with Sherritt International of Canada. 
*     In an article yesterday, the Asia Pulse is quoting industry analysts who believe nickel demand in China will increase from 144,500 tons to 152,000 tons in 2005. This would reflect a 7% increase and a slowdown from the average annual growth of 12-13% seen over the past decade. At present China's demand for stainless is nearly double its output. By 2006, the output should exceed demand and the country is expected to become a world net exporter.
*     In the only good news we can find for stainless steel users, South African ferrochrome producers will keep prices during the final quarter of 2004, the same as Quarter 3, which is a little over $.70 per pound.
*     Bloomberg is reporting that "BHP Billiton, the world's biggest miner, is stating that Chinese buyers will take more than half the nickel from its $1.4 billion expansion in Australia". Article here.
*    Australia's largest steelmaker, Blue Scope Steel, - Chief Executive Kirby Adams told a New York investment conference he is expecting steel prices to remain strong thru 2005 according to a Reuters article.
*    Carpenter Technology announced Wednesday increases prices in stainless steel wire and rod of 5-7%, and 6-8% on sheet and strip.
*    LME nickel gained 210 tonnes Thursday to sit at 14,322 tonnes total. Pricing is erratic this AM, beginning over $7, falling back under and then re-climbing over.

[Most Recent Quotes from www.kitco.com]

This live chart does not follow actual LME prices but gives a good indication of current market activity.


Average September 2004 LME nickel price - $6.04/lb

Average October 2003 LME nickel price - $5.01/lb

Allegheny Ludlum Surcharges for September

Nickel Chrome

Moly

Iron

2003
2004

304

.2154
.404

.0259
.0788

NA

0
.0788

2003
2004

316

.2692
.5049

.023
.0701

.0502
.3405

0
.0641

arrow denotes price comparison to prior month

courtesy Allegheny Ludlum

Daily market prices are courtesy London Metal Exchange.


Closing price - you may notice different sites giving different "closing" costs. We use the price LME uses, which Joanna James at the Global FX Desk graciously explained, is the settlement price after the 2nd ring close offer. Global shows on their site the closing price taken after the last kerb. For their daily chart, visit here.

Every effort is made to provide factual information in a timely manner as a convenience to the reader. Any opinion given on this web site is just that - a mere opinion, and the author is not responsible for any action taken based off that opinion. Multiple sources are used for obtaining this info and there is no guarantee of its accuracy. Any reproduction without written permission from the author is prohibited.

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