Sudbury Saturday Night -- Nickel Mining & Nickel Prices Message Board

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Gold/Mining/Energy : Sudbury Saturday Night -- Nickel Mining & Nickel Prices

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From: LoneClone	3/27/2007 10:11:14 AM
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Further nickel price rise may destroy market demand: Xstrata Source: Hoovers metalsplace.com Further gains in global nickel prices could lead to a decline in demand from key consumption areas, according Monday to Xstrata Nickel chief executive Ian Pearce. "If nickel prices continue to go considerably higher than we're possibly going to get demand destruction in the stainless steel sector going forward, which will hit consumption," he told a conference call. London Metal Exchange nickel prices are at near record highs, having risen 62% since the start of the year to peak on March 16 at $48,500 a metric ton. The bull run started last year and was driven by dwindling inventories and a lack of fresh supply amid strong demand from the stainless sector and China. "Yes, there's upside potential for nickel prices, but our view of the market's fundamentals relate to the long-term value of nickel going forward," he added. Short-term shortages in supply are therefore only a temporary factor boosting prices, Pearce noted, making prices at current record highs "unsustainable in the long term." Pearce was commenting after a move to bulk up Xstrata PLC's (XTA.LN) nickel business with an agreed cash bid for LionOre Mining International Ltd. (LIM.T). The deal values LionOre at C$4.6 billion (US$4 billion), a price that several company shareholders said on an earlier conference call was disappointing and undervalued the firm.

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