Ann: Completion of Entitlement Issue, page-30

G'day Woll,

Here's my take on it …

One only needs to remember the nickel forecasts one read two years ago, projecting 2 or 3 years into the future by all the top industry names to know that picking future prices is an exercise of pin the tail on the donkey! .... However, good supply/demand surplus/deficit figures in combination with trending nickel stockpile figures should at least give you a pretty fair notion of nickel's direction.... You then have to allow for the various spanners in the works which interfere with nice "predictable" outcomes being realized.

The nickel price direction and LME stockpile have been better in sync over the last 3 years. As Jehosephat says above, earlier than that the relationship was pretty out of sync. Clearly, in recent years the declining LME (and Shanghai) corresponds to a nice Ni price rise. Long may both continue. Just recently the stockpile has continued to fall, but so has the nickel price. S0 to address this temporary aberration either stockpiles need to rise again, or the nickel price needs to go back up (or at least some massage in that direction), for the relationship to get realigned again somewhat.

To aim to estimate what $ will nickel be when the LME is down to 200k is not possible to know. But from the charts it would be reasonable to feel at least back to old recent highs, "all things being equal". An annual deficit of say 80k tonnes for the next couple of years surely (also) assists establish a base around these levels … Subject to no nasty left field surprises.

As such and providing exchange rates have stayed under control, all our good nickel miners would have every opportunity to be producing. Cheers, Kip