* Weekly Round-up - Nickel rose this week for a number of reasons. First, the dollar fell against the Euro and was at an eight week low yesterday. A weak dollar is good for metals. Second, Norilsk had to shut down shipments for the annual floods on the Yenisei River. While an annual event, the tight market is nervous about the extent of this closure and the impact it will have on inventories. Speaking of inventories, our number 3 reason is LME inventories have fallen for about 2 weeks straight now, falling below the 12M tonne mark yesterday. Fourth, investors that panicked that China was shutting down shop a few weeks ago, are now realizing the efforts to slow the economy seem to be slow and gradual, meaning China will still remain a large consumer of nickel. And finally, economic news from various regions of the world remain strong, meaning nickel consumption will continue to grow strongly. While estimates of the world deficit have fallen since the beginning of the year, the anticipated market still remains in the deficit.
* US metals markets close at noon today, and LME will be closed Monday for the holiday weekend.
* On Wednesday,. Inco announced that its new Goro Nickel Mine startup date had been pushed into 2007. Originally planed for a 2006 opening, this new delay is making traders nervous about an already tight nickel market, with the Goro opening the first large new mine to potentially alleviate a deficit situation. While we expect the initial impact off this announcement to be minor, it does have the potential to keep the world in a deficit situation longer than orgianlly thought, which could keep nickel prices up through 2005, and now potentially, 2006. Good news for nickel stock holders but not good news for stainless steel users.
* LME nickel inventories fell to 11,844 tonnes yesterday. This is not going to help bring nickel prices down, with the world's largest producer not shipping due to a closed port and annual spring floods.
* While every nickel mine has its own production costs, we saw one estimate this week that the average cost to produce a pound of nickel is approximately $2.41/lb.
* Steel fastener buyers shouldn't expect to see prices come down anytime soon. China Steel Corp just announced new price increases in steel wire for June.
* South Africa, the world's largest supplier of ferrochrome, announces it will double production this year to an estimated 120M/tonnes.
* LME nickel opened the morning at $5.44/lb.
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