Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Winter in the Great White North -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (7289)	12/18/2006 3:49:02 PM
From: marcos	Read Replies (1) \| Respond to of 8273

Freeman King wrote a book, here's a copy for five bucks - antiqbook.com ... name should have rung a bell, don't know why not, maybe heard of him and forgot ... nothing google brought up front indicated whether he had a grasp of rural economics, but we'll give him the benefit of the doubt ... fwiw, a lot of logger types gross me out too, even the odd self-proclaimed farmer mentality, when there's no feel for balance, no respect bmc.v - yes that's about where i come to on it, lag for who knows how long and then ramp good ... my problem here is, i put my ego on the line, explaining to She Who Must Be Obeyed why i was buying her some in the .90s, aargh, lol ... but she hasn't asked about it for months now, and i make a big deal out of ktn.v's chart, where she's in at the low .60s -g- ... piece on nickel - 'Nickel prices have now gone beyond any producer's dreams. That is no journalistic hyperbole: that judgment comes from Sydney-based analysts Stock Resources. They add that the high prices cannot last – but there are no clues to when the big falls will take place. When spot prices kicked off the year at $US13,505/tonne on January 3, no one foresaw anything like the present phenomenon where spot prices soared above $US35,500/tonne last week and even three-month prices were marching on $US35,000. If there are people who believe prices will slide badly in the next year or two, they should tell traders buying nickel 27 months out on London Metal Exchange forward contracts. Last week they were signing up for prices north of $US25,750/tonne, at which level nickel producers would still be making massive profits. They might also tell Xstrata. The new chief of Xstrata Nickel, the arm that holds the assets of the recently acquired Falconbridge, was reported last week in the Canadian business press as saying that he was planning to double output by 2012 and would consider buying any nickel asset up for grabs. Citigroup expects global nickel demand to have been 6 per cent up for this year, even with prices being at a 20-year high. The price is being driven by the soaring demand for stainless steel, which uses about two-thirds of all nickel produced. However, Citigroup does think demand will be weaker next year. (But, it must be added, there were similar predictions last year about 2006.) It sees medium-term supply being dependent on new second-string hopefuls – CVRD's Onca Puma in Brazil coming on in 2009; Anglo America's Barro Alto mine also in that country and also to produce by 2009; and the recently resurrected Ambatovy project in Madagascar now owned by Canada's Dynatec. The fragility of the nickel supply situation – the LME holds about only two days' global supply of the metal – was demonstrated last month when the nickel price shot up overnight after BHP Billiton's announcement that its new Ravensthorpe laterite nickel mine would be delayed. Stock Resource says there is still a question whether the new projects in the pipeline are going to deliver on time. Both the world's biggest laterite nickel projects have seen delays and cost blow-outs. Goro in New Caledonia, now controlled by Brazil's CVRD after its takeover of Inco, was to have produced 60,000 tonnes of nickel a year from 2004. The latest start-up is now 2008, with capital costs blowing out from $US1.45billion to $US3billion. "Given the Goro experience, the market is likely to consider that Ravensthorpe is susceptible to further delays and capital overruns," Stock Resource said in its weekly client letter. Furthermore, the firm thinks Xstrata is being optimistic with its plans to get its 60,000 tonnes a year Koniambo nickel project into production by 2010. This is a throwback to the 1990s. It was the problems with the several big laterite projects in Australia which were at the root of present shortage problems – many explorers mothballed sulphide nickel projects after claims were made that these laterite schemes would be low-cost and meet demand. They proved neither. None of those companies had any premonition about the problems of extracting nickel from laterite ore and how much more complicated it would be than treating the sulphide ore which had been the mainstay of nickel production. Laterites were beguiling as they were available in such large, untapped deposits. All these years later, the Murrin Murrin processing plant in Western Australia is finally ramping up after almost destroying Anaconda Nickel. Centaur Mining & Exploration and Preston Resources did not scrape through after being floored by the Cawse and Bulong projects respectively. Highland Pacific's Ramu, in Papua New Guinea, is only now being developed thanks to the Chinese being prepared to throw about $1 billion at it. As Stock Resource puts it, the big laterite projects were meant to evolve into the 21st century's main nickel suppliers. This kept down the nickel price in the 1990s, another dampener on exploration enthusiasm. We are living with the consequences. At best, a new surge of supply will occur from 2008 through to 2010, according to Stock Resource.' metalsplace.com