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Gold/Mining/Energy : T.ITE: iTech Capital (TSE) -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Hamlin who wrote (1435)	11/4/1999 5:37:00 PM
From: keith massey	Respond to of 5053

Price of Nickel Proves Precious As Stainless-Steel Output Rises By NEIL BEHRMANN Special to THE WALL STREET JOURNAL LONDON -- Nickel is proving to be the most precious metal this year. In the past 12 months, its price surged 98%, far in excess of other base metals. Zinc rose 21%, aluminum 16%, copper 11%, tin 5% and lead 1%. Silver gained 6.5%, and gold, after a recent recovery, rose 3%. "Nickel is the jewel in the metals crown," says Jim Lennon, London metals analyst and longtime nickel specialist at Macquarie Bank of Australia. He has been optimistic about the metal for more than a year and is "even more bullish about prospects in 2000." Annual average prices of nickel will be $8,000 a metric ton next year, Mr. Lennon believes. Considering the volatility of the metal, that prediction implies that nickel quotes could swing between $7,000 and more than $10,000 a metric ton in the coming year, traders say. Tuesday, three-month nickel futures rose $39.50 a metric ton to $7,875 from Monday on the London Metal Exchange. Hedge and commodity funds are aggressively trading the volatile metal, traders say, and some hold sizable positions. "The main reason for nickel's boom is a surge in production of stainless steel, the industry which consumes most of the metal," says Peter Richardson, metals analyst at Deutsche Bank. Also, there were widespread production cuts of nickel this year, he says. Producers, including Western Mining Corp. in Australia, Inco Ltd. in Canada and Japanese and Yugoslavian producers, slashed production by 44,500 metric tons this year, Mr. Richardson says. The result is that London Metal Exchange nickel inventories tumbled 17,500 metric tons to 48,108 metric tons this year, he says. "The imbalance between supply and demand should continue well into the new year, and prices could reach $9000 in 2000," says Martin Squires, head of metals research at Rudolf Wolff & Co. But much will depend on economic circumstances, and if production and nickel scrap supplies rise when there is an unexpected slowdown in the business cycle, nickel could drop sharply, he warns. The recovery in the stainless-steel industry continues unabated in the U.S., Asia and Europe, Macquarie's Mr. Lennon says. Moreover, exports from Norilsk, the Siberian producer that is the biggest nickel miner in the world, "may well be markedly lower than previously expected," he contends