Stainless Steel Prices & Nickel News, Prices, LME Nickel Price, Stainless Steel News – Molybdenum – World Metal Pricing and Market Conditions

  Courtesy/copyright Dow Jones – “LME nickel is increasingly vulnerable to a phase of stainless steel destocking although the “desperately low” level of available inventory leaves potential for big moves in either direction, says Barclays Capital.

  China’s central bank to raise deposit reserve ratio by 0.5% points – “China’s central bank will raise deposit reserve ratio by 0.5% points as of May 15 to 11%” – article here

  Worth remembering from Thursday – copyright/courtesy Dow Jones – “China’s rapidly growing output of nickel pig iron disastrous for country environmentally, but unlikely to lead to similar tightening measures government considering for aluminum, zinc industries, as Chinese market “acutely short of nickel,” says Citigroup’s Alan Heap. “As far as the Chinese government is concerned, it’s a disaster.” Notes government in past tried to shutdown blast furnaces but these were reopened to produce nickel pig iron; industry highly polluting, energy intensive. But Chinese government has mostly targeted energy-intensive industries which overheated, or producing exports.”

  Sudbury’s mining industry has become world leader in health and safety: USW boss Leo Gerard – (quote from article) “To show how far the issue of health and safety has come in Sudbury’s mining industry, Gerard pointed out CVRD Inco’s Garson Mine last year received a national award as the “safest mine in Canada” with more than two million man hours accumulated without a single lost time accident.” – article here  (opinion – cuddo’s to CVRD Inco Chief Operating Officer Mark Cutifani for attending)

  Haywood Securities – Target and Price Modifications – Metals and Mining – pdf here  (2007 average nickel forecast from $13.50/lb to $19.00/lb)

  News Bite – “The Indonesia government has officially renamed West Irian Jaya province, West Papua province.”

  Indonesia Delays Plan to Merge State-Owned Mining Firms – “The government decides to put off the merger plan for state-owned mining companies over the taxation issue, an official said.” – article here

  Courtesy/copyright Dow Jones Newswire – “Industrial users are paying a fortune for nickel, while demand is likely to remain robust, the Nickel Institute said last week. The institute represents nickel companies, which together produce 85% of the world’s output, and also liaises closely with the stainless-steel industry, which takes up 60% of total nickel demand. Tight supplies and voracious demand from stainless-steel producers drove prices to record peaks in recent weeks, taking the metal’s gains since the start of 2007 to 50%.”

  Do you remember? May 24, 2004 – Indonesia media reports -“A Canadian-owned mine in Sulawesi is the focus of an updated travel warning on Indonesia issued by the Australian government, which adds the area around the mine to the list of high risk regions. Death threats have reportedly been made against the head of the company, Inco, and other Westerners there, and as a result hundreds of additional Indonesian police are being requested to guard the site.” “Four Australians are among more than 50 foreigners who left a Canadian-owned mine in Indonesia after a warning of a possible terrorist attack.” “Indonesian police rushed 230 soldiers and elite Mobile Brigade paramilitary police to the mine site to protect it and staff. The mine, which has the world’s biggest nickel smelter, is 150km south of Poso township, where Muslim extremists linked to the Jemaah Islamiyah terror network have been battling Christians for years.”  and then after nickel prices had jumped over 5% higher because of the threat– “An Indonesian dentist has been arrested in connection with a series of threats made against Westerners on the Indonesian island of Sulawesi. The threats sparked a terror alert from the Australian Government which issued updated travel advice last month.” “Indonesian police have revealed that the threats came from the company’s dentist and not Islamic extremist groups. The dentist is an Indonesian Christian and sent 200 SMS messages threatening Westerners because he feared he was to be replaced by an expatriate.” While in this case they proved fraudulent, threats of terrorism in Indonesia are a legitimate concern, and the reaction by the government’s gives an idea just how serious they are taken

  We have been wanting to put together a page that lists stock values of nickel mining stock for some time for our investor readers – we saw a link given on a forum this week that does exactly that. It has now been added to the right column of links under “Nickel Mining Stock Data”

  Nickel bull looks at $25/lb – “The weekly average price of nickel slipped by barely 3¢/lb to $22.71 on Friday despite earlier speculation that makers of stainless steel, the biggest users of the metal, might reduce orders to cut costs. Nickel has risen steadily by 36% since January with the April month-to-date price average on the London Metal Exchange at $22.73 because of surging demand from China, the world’s largest user.” – article here

  China May Ban Steel Product Export Tolling – “China may ban steel product export tolling, just shortly after the cancellation of steel product export tax rebates, an official with China’s Ministry of Commerce (MOFCOM) told Interfax today.” – article here

  Vale Adds $1 Billion to Metals, Mining Spending Plan – (article here) Brazilian mining giant to build coal-fired power stations – (article here)  

  High-paid mining jobs go wanting – “That loud sucking sound heard in the canyons of the mining sector is the vacuum created by a shortage of skilled labour. There are thousands of jobs on offer now and an estimated 80,000 jobs will be up for grabs within the next decade.” – article here

  Articles on Eramet this week – “Eramet shareholders shun CEO” – article here  Breton protests to Areva about removal of Eramet chairman – report – article here  His final speech to shareholders, before being fired – here  (comment – from Feb 1st release – “Eramet pursued its hedging strategy, which currently applies to 40% of deliveries planned for 2007. for an average price of about 19000 USD/t ($8.60 USD/lb).” – If you had hedged 40% of your 2007 production at $8.60/lb, when it spent the first third of the year selling in the low $20/lb range, how long would you expect to keep your job?) 

  Week in Review – (all prices are indication only and different source used than we use to post daily ending price) Coming off a prior week filled with bullish information, but only a 5% increase in nickel prices, and an inability to maintain a break thru the $50,000/tonne barrier, we started to get optimistic that the worst may behind us. While by no means claiming that the bull market was anywhere near over, we did feel there was a hint of pessimism in the nickel market, especially with the news of China importing more low grade nickel ore. The first four days of this week gave us no reason to feel our optimism that a major correction might be coming was in doubt, while Friday’s movement put a damper on our hopes. (please remember, the author of this site is a consumer/seller of stainless steel product)  Monday morning started the trading day at $22.04/lb, reached a high of $22.57/lb, a low of $21.86/lb, and ended the day at $22.52/lb. The market came close to beating the 3 month record high of $22.75/lb, but not quite. Markets opened Tuesday at $22.52/lb, reach a high of $22.77/lb, a low of $21.60/lb, and end at $21.65/lb. The $22.77/lb became the new record, but the market reacted by retreating fast, with the day’s final trades almost $1/lb lower than they had begun the day. Wednesday, we published our optimism, and the markets didn’t let us down. Opening at $21.68/lb, nickel reached a daily high of $21.85/lb, a low of $21.35/lb, and ended at $21.48/lb. Thursday was much of the same, with markets beginning the day at $21.50/lb, reaching $21.70/lb, falling to $20.97/lb, and ending at $21.36/lb. And then Friday came, making us wonder once again, why we would even hint at predicting this market. Markets opened at $21.43/lb, rose as high as $22.40/lb, a low of $21.24/lb, and ended the day at $22.06/lb. Based off this source, the market ended last Friday at $22.07/lb, so for the week, the market ended flat. Price of 3 month nickel is still 46.16% higher than it was on January 1st of this year, and 274% higher than they were just one year ago, and 610% higher than they were this time in 2003.

(comment) A major correction of 40%, which in anyone’s book is a ‘huge’ correction, would only take us back to January pricing levels, and still leave the price of nickel over 400% higher than they were when the bull market began in 2001-2002. But will it happen? We are hard pressed to find any legitimate reason why it should, but customers of stainless steel remain hopeful. Some of the price increases customers have seen for stainless steel product recently, are staggering, especially on projects that were quoted earlier this year. One reader told us this week, a stainless steel tank, that they had been quoted the first week in January, had just gone up by over 30%. When you are talking a $100,000 tank, that’s a huge bite. Another reader advised us that he was seeing many of his major stainless steel projects put on hold, or cancelled. While the price increases are hurting consumers, the demand seems to be falling only in a few, selective areas. We spoke to someone in the plating industry a few weeks back and asked them if they were seeing current customers of stainless looking at ‘plating over steel’ alternatives. And while he said he was not seeing this among those already committed to providing stainless steel product in their current production and marketing brochures, they were seeing engineers responsible for designing new projects, who would have typically used stainless steel before, considering other options. The information out this week about Posco developing a new non nickel stainless got a lot of media attention, but a reader supplied us technical papers, that we posted on Friday, that show the Japanese have had a comparable product available for 25 years. At this junction in the road, there may be manufacturers that are willing to surrender some of the corrosion resistance that nickel bearing 300 series stainless steel offers, but it typically takes months or even years to test, engineer, order, and be supplied with any possible alternative material. And like the 200 series stainless steel that India is pushing, which comes in both low and high nickel content, new products do not come with the proven track record that 300 series stainless steel can provide. Talk to anyone old enough to remember, and they will tell you how difficult it was to convince customers to switch to the yet-to-be-proven 300 series stainless steel way back when. Today, one can point to the Chrysler Building, built in 1930, or the St Louis Arch, finished over 40 years ago, to prove the claims of corrosion resistance are legitimate. But it wasn’t until the big push on quality hit the United States in the latter half of the last century, that manufacturers outside of the military really came to accept the increased price of 300 series stainless steel for use in civilian applications.

For the vast majority of those buying stainless, they bite the bullet and deal with the cards they are dealt. And while possible substitution changes will be a long range concern, rather than an immediate one, the price of nickel and its immediate effect on the price of stainless steel, is giving manufacturers just cause to start examining those options. Are there any immediate threats to the price of nickel? Very few, except possibly the increased importation of low nickel ore into China. But in the end, this new supply may only be a stop gap source that keeps the supply/demand deficit out of the critical level, and keeps any further talk of rationing muffled. What will happen is anyone’s guess. But for those of us hoping for a major correction, it may be based more on a hope and a prayer, than the reality of the market.   

  Bottler – or miner? (comment – we wouldn’t have given this story much thought until we read one particular statement) – sentence from article -“In 2005, the Framework for Responsible Mining, developed by NGOs, retailers, investors and technical experts, codified the right of communities to consent to operations on their land.” – article here (so, is pumping water, a form of water mining?) – Water – The Ultimate Commodity (article here) and Drinking Water – Investors Perspective – article here  and one final – Pure water in the Desert – article here

  Resource World TV – Fundamental Research Corp – SCC Commodity Presentation – “Fundamental Research Corp Research Associate Martha Buckwalter-Davis, BA (Geology), gives a speech about the benefits of adding commodity exposure to you portfolio through an investment in junior resource companies. She also talks about how Fundamental Research Corp evaluates junior mining companies.” – video here

  Book – China Inc –  released in 2005 (website here) Quote from review by Kirkus Reviews – “Fishman is a little alarmed by China’s growth, but also ready to comfort readers with the prospect of ever-falling prices thanks to its abundant low-wage labor pool. He is more alarmed, however, at a seeming codependency that is emerging, in which Americans buy Chinese goods with money that is in essence on loan from China. “The United States,” he warns, “cannot take on ever-bigger debt and amass huge trade deficits indefinitely.” A thought-provoking and accessible forecast of strange times to come.”

  Not metals related – (comment – hasn’t got much media coverage, for obvious reasons)  PBS Bill Moyers Reports – Buying The War – video here