Nickel - Major Correction, where to next ?

[STRAT]

quote:Originally posted by tricha




I may be right or I may be wrong, I do not know, no one knows. So do your own research and risk analysis and u may be right or u may be wrong.

All I can truely say is I made my judgement call, based on what has changed, moved into oil and cash. My bank statement will be the judge.


Cheers [B)][}]

Thanks Tricha for the link and I would like to add that I too appreciate and enjoy your insightful posts, bold print highlights included, no glasses needed PS Are you staying in the U sector which I suppose falls into both camps?

[duncan macgregor]

TRICHA, I to appreciate your posts big type and all.
The only question I have is why do you rush about like an over swung pendulum?. The market moves a lot slower than you seem to think, it all takes time to move to the next phase. You never jump off a band waggon until the music stops, or you risk being left behind half way up the hill. The market is going to be a bit shaky hang on in or get left behind. Macdunk

[tricha]

Hi Duncan

Have u filled your car up lately [?][?][?] Also have u read this beautiful little book "Who Moved My Cheese" [?][?][?]

I have been slowly swapping out of nickel to oil and it has been very rewarding.
Hold ARQ [], NZO, PSA, NWE and today bought GOG.

I think u will find Jbmurc has quietly done the same

All the best [B)][}]

I posted this on the 28.04.07,

Posted on Peak Oil Bermunda - "Please read Twilight in the Desert by Matthew Simmons and then give your opinion on the future oil price.
Simmons is a well balanced man with a Harvard background and many many years in oil investment banking.I have met him and he is not a man of ego.
His book is about to be published in German and Chinese.
Sentiment can drive the price anywhere for a short period but the reality is that oil demand and the cost of production are both increasing."

Six monthes has gone by and I'm re-visiting oil as the forgotton sector. Crude Oil 66.43 +1.37

I keep going to the bowser and I seem to be putting more and more money into this bottomless pit to fill my car up.

I keep reading stories about all these new car factories in China and India. Chinese now have 300,000 US$ millionares and they all want BMW,s etc,etc.

The situation in Iraq seems ready to explode.

I read more and more stories about global warming, England has recorded highest March average temperatures for over 300 years since records began. It's only natural with higher temperatures to have larger storms, hence the US hurricane approaching soon.

Still no large oil fields found.

Are oil prices on the way up again , if so
Heres the million dollar question

Unlike nickel, oil companies are so hard to define as to which is the best buy.

Are there any glaring buy opportunities out there, there are so many choices.

(I have recently taken up positions in ARQ and BPT)

Cheers [B)][}]

[tricha]

Hi Strat

Another nickel story out today.

http://www.thewest.com.au/default.as...ontentID=31710

I've still got my foot in the U camp via Goldstream who own a large chunk of UNX, who really do have U.
Goldstream are also are exploring quietly in South Australia for U in their own right.

Also free carried in GGY.

Yes we have to have a bit of U, not a wantaben or a gunabe, but a doabe

Cheers [B)][}]

[STRAT]

Thanks for that Tricha

[tricha]

Major Stainless Steel Mills to Cut Production in July

By Interfax-China
21 Jun 2007 at 09:04 AM GMT-04:00


SHANGHAI (Interfax-China) -- China's major stainless steel mills have jointly decided to reduce monthly production by between 20% and 30% in July, in order to combat falling domestic stainless steel prices, a major stainless steel company official told Interfax.

Major domestic stainless steel mills, including Taiyuan Iron and Steel (Group) Co. Ltd (TISCO), Shanghai Baosteel Co. Ltd, Ningbo Baoxin Stainless Steel Co. Ltd, Guangzhou Lianzhou Stainless Steel, and Shanghai Krupp Stainless, a subsidiary of ThyssenKrupp AG, agreed to cut production by 20%-30% next month in a meeting of company general managers held in Shanghai last weekend.




"TISCO plans to cut by 20% on both hot-rolled and cold-rolled stainless steel sheet production next month, to combat falling product prices. We will not stop reduction until when the market recovers. It is not normal that domestic market prices of our products are much lower than our ex-works prices," an official with sales department of TISCO, China's largest stainless steel maker, who wished to remain anonymous said.

"The ex-works price of our 304 series stainless steel sheet (2B 2.0 mm thickness) is now RMB 44,800 a tonne, while price that our sale agents could sell is only RMB 39,000 a tonne," he added.

Baosteel plans to cut 20%-30% of its stainless steel production in July, a Baosteel official said. "At the current product prices, we make no profit at all," he claimed.

The price downturn is mainly caused by high stockpiles of products in domestic market as well as recent drop of nickel prices, the TISCO official explained.

Three month nickel price dropped remarkably by $ 2,800 or 6.93% to a four-month low at $ 37,600 a tonne Wednesday overnight in London Metal Exchange.

"Major stainless steel producers in Europe and the United States cut production in the second quarter under pressure from high nickel prices, which caused market concern that the nickel supply could be eased. Chinese stainless steel makers' joint reduction plan could overweigh market worries," Chen Shufang, analyst with Beijing Antaike Information Co. Ltd said.

LME nickel stockpiles dropped slightly by 12 tonnes to 9,276 tonnes yesterday.

"Stainless steel mills hope the price could be stabilized through less supply of stainless steel in domestic market, but I doubt if they could cut down all of their production lines by 20%-30%, maybe some companies will cut their cold-rolled capacities or some will cut their hot-rolled capacities, depending on their products' stockpiles in market," Chen said.

It is not the first time those major stainless steel mills pledged to cut production. Three stainless steel giants Baosteel, TISCO and Zhangjiagang POSCO announced to cut cold-rolled stainless steel sheet production by 20% in July last year to combat rising nickel prices. Chen said those companies didn't actually cut production last year as much as they pledged.

Chen predicted nickel prices would further to dip as nickel demand growth to slow down in July and August when there will be a slack stainless steel consumption season, and overseas major stainless steel makers are expected to launch equipment maintenance.

High nickel prices have forced domestic stainless steel mills to turn to 200 and 400 series production. Baosteel used 60,000 tonnes of nickel pig iron to produce the 200 series last year and has ordered 200,000 tonnes of the products for this year's production, as Interfax previously reported.

© Interfax-China 2007.

[tricha]

'Super' Stainless Steel Developed

Science Daily — A new type of stainless steel alloy developed at Oak Ridge National Laboratory could allow for significantly increased operating temperatures and corresponding increases in efficiency in future energy production systems.


Creep test specimen of HTUPS-4 (Fe-20Ni-14Cr-2.5Al wt.% base) after creep-rupture test at 750oC/100MPa/2191h/air. Very little oxide scale formation is evident. (Credit: Image courtesy of DOE/Oak Ridge National Laboratory)Ads by Google Advertise on this site


The new alloys offer superior oxidation resistance compared to conventional stainless steels, without significant increased cost or decreased creep resistance (sagging at high temperature).

What sets this proprietary material apart from other stainless steels is its ability to form protective aluminum oxide scales instead of chromium oxide scales. The combination of creep and oxidation resistance offered by these alloys previously was available only with nickel-base alloys, which are about five times more costly than the new stainless steels.

This material also has potential applications in high-temperature (up to 800 degrees Celsius) chemical and process industry applications.

The material was reported on in the April 20 issue of Science. Funding for this research was provided by the Department of Energy's Office of Fossil Energy, Advanced Research Materials Program. Additional funding was received from DOE's Distributed Energy Program, the Division of Materials Sciences and Engineering, Office of Basic Energy Sciences and the SHaRE User Facility.

Note: This story has been adapted from a news release issued by DOE/Oak Ridge National Laboratory.

[tricha]

Well,looks like the institutions have held reasonable firm so far.

Anyone still holding better pray the price does not drop much more.

Because when those Latte drinking fund managers start unloading, there will truely be blood on the floor.
And why do I say that, go back a few years when AMP dumped MCR relentlessly, not once but twice.

July will be when the LME picture starts to unfold, if past LME history is to go by.

Nickel 8886 +468

Cheers [B)][}]

[STRAT]

Nickel needed short sharp shock: Deutsche BankWednesday, 27 June 2007
Kate Hayccok(sic)

ANALYSTS at Deutsche Bank have said the correction to the nickel price is a "healthy development" for a market still facing robust growth and low global supply, with prices to stay strong until 2010.

In a research note analysts characterised the nickel price correction as a short, sharp price shock that was needed to bring nickel prices back down to earth.

The spot price of nickel on the London Metal Exchange has fallen from a high of $US54,050 a tonne since May 15 to a low of $36,735/t on June 20.

Nickel closed at $37,660/t on the LME overnight.

Deutsche Bank was bullish on the commodity and said the price falls would help sustain the market for the metal in the long term.

"We believe the correction to be a healthy development in the global nickel market that will simultaneously help placate disgruntled industry participants, bring stainless [steel] prices to more sustainable levels and reduce the risk of substitution," the bank said.

The bank pointed to changes to LME trading rules, fear of cuts to Chinese stainless steel production rates to prevent oversupply and the issue of nickel substitution as the key drivers of the correction.

It also noted that LME stocks of nickel remain extremely low, despite changes in trading rules leading to an ease in supply, with less than two days of consumption in stockpiles.

As for stainless steel production control policies in China, Deutsche Bank said that while a reduction in production will have a negative effect on nickel prices short-term, "the move was necessary to prevent a vicious cycle of a slowdown in stainless demand as a result of elevated prices".

"While it will take time to determine the effect of the Chinese producers' output reduction, we suspect the end result will eventually bring prices down to a more sustainable level and reinvigorate demand," the bank added.

Analysts at the bank also downplayed the role of nickel substitution, pointing out that greater production of lower-quality products does not mean steel consumers will want those products.

Instead, consumers of high-grade stainless steel would delay purchases until prices became more reasonable.

The bank said the combination of limited refined nickel production growth and strong demand would continue to support prices until 2010, and maintained its nickel price forecasts of $37,479/t for the third quarter of this year and $36,376/t in the fourth quarter. A little less bleak than other articles

[sparrow]

Nickel shines out for some lucky investors

Stuart Washington
July 2, 2007
You can probably spot investors who punted on a nickel play in the past year - they are the ones with broad smiles.

Four nickel miners appear among the top 10 share price increases for 2006-07 on the ASX 200 - Mincor Resources, Sally Malay, Minara Resources and Independence Group - in every case more than doubling their investors' money.

In a year in which the resources boom continued, the spot price for nickel has more than doubled, though has fallen back of late. Not bad for three miners - Mincor, Sally Malay and Independence - built on the cast-offs from the nickel interests in Kambalda sold by Western Mining in the late 90s.

Another infatuation for investors, also appearing on the top 10, are the coal-seam natural gas explorers Arrow Energy and Queensland Gas. While undoubtedly lucrative on paper, they are yet to turn a profit. And of course, when talking about 2006-07, no top 10 would be complete without Andrew Forrest's bold iron ore project, Fortescue Metals Group.

In the bottom 10, some companies showed the resources boom and oil price hikes are no guarantee against doing some dough, with Beach Petroleum, Roc Oil, and services business Boom Logistics all falling into disfavour.

There was also investor dislike of structured finance operator and failed Qantas bidder Allco Finance Group. And in terms of trends, Great Southern and Timbercorp fell heavily because of an adverse tax ruling this year.