Sounds pretty positive Ed, thanks.
Here's another one not quite so upbeat but hardly relevant considering when any ore body would actually be producing.
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Nickel futures in London dive to 11-1/2 year lows
Reuters Story - October 05, 1998 15:38
By Anthony Barker
LONDON, Oct 5 (Reuters) - Nickel futures sank to their lowest prices for 11-1/2 years on the London Metal Exchange (LME) on Monday, weighed by gloom over the world economy.
One hope of keeping prices up faded when Russia's Murmansk shipping company quashed suggestions it might not have enough working icebreakers to keep supplies coming by sea from the world's biggest producer, Norilsk Nickel .
A company official said he expected the necessary minimum of three nuclear vessels would be working by the end of the week.
Three months futures in nickel, chiefly used for stainless steel making, fell to $3,925 a level not seen since April 1987, as major investment funds grabbed their chance to push it conclusively under the hitherto impregnable bottom of $4,000.
"The feeling is that people will be tempted to test it a little lower the whole time, as there is no positive news out there," analyst Michael Christian of LME brokers Rudolf Wolff.
On Monday all base metals eased as anxiety over the failure of a weekend Group of Seven meeting to agree on a cure for the slowing global economy depressed expectations for demand.
Nickel has been especially shaky due to overproduction and prospects that Australian operations, such as Anaconda Nickel Ltd's Murrin Murrin, based on a new technology using laterite ores, will soon unleash a flood of low-cost metal.
Nickel producers hurt by low prices have recently announced cutbacks which may have helped prices, as did hurricanes hitting Cuban and Dominican plants. But these have not been enough.
"In fact, neither the deliberate cutbacks nor the unplanned disruptions look like amounting to very much in terms of the market balance, when viewed against a backdrop of weakening demand and rising output at other locations," analysts at Billiton Metals Ltd said in a report issued on Monday.
Billiton said that while cutbacks or reductions by WMC Ltd in Australia, Eramet , Sumitomo Metal Mining Co and earlier by Falconbridge Ltd would restrain Western production this year and next, they would be offset by expansions at others and by the laterite mines.
According to Billiton, the demand outlook poses more immediate concerns, even though stainless steel production, which accounts for more than two-thirds of primary nickel demand, reached record levels in the first half of the year.
It said demand did not rise in the second quarter from the first as U.S., Japanese and Korean stainless mills trimmed output to cut hefty inventories and said European producers looked vulnerable, especially if the United States slapped anti-dumping duties on imports.
"In the absence of some fairly substantial developments the market looks to be heading for further surplus, so it's no surprise prices are coming under pressure," Billiton's Angus MacMillan said.
But traders and analysts do not rule out a dramatic comeback in nickel's famously volatile price within six to 12 months.
News of glitches in the relatively untested laterite processes, or cutbacks by Norilsk or one or more of the big North American nickel producers could work wonders, some said.
They argue that risks of holding already cheap nickel futures, which are unlikely to shed more than a few hundred dollars, could be outweighed by the chance of steep gains.
"The potential is blue sky on the upside," said Wolff's Christian, although he added that prospects were gloomy for now.
"Next year we look for a larger surplus, but were Russian/Cuban shipments to fall substantially, and/or the development of the Australian laterite projects proceed significantly more slowly than the companies appear to believe, the picture could be altered dramatically," Billiton said.
However it forecast a market surplus of 10,000 tonnes for this year and 42,000 tonnes in 1999, after an 11,000-tonne surplus in 1997, with warehoused stocks mounting from the current high level of 13 weeks' consumption to 15 next year. Monday's new surge of gloom over the futures price did not immediately appear to affect physical trading in nickel. "It's trotting along, not good, not bad," said a dealer from a major producer who said that with prices already at or below cost there was little room for further falls right now.
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Supervalue:
I am sorry, but I do not quite understand your post, could you spell it out for me?
Regards |
