nickel up, page-3

The long term chart (below) does not seem to bear out your trepidation at the Nickel price.

Between June 06 and May 08 the price stayed in the $10~15 dollar range with a spike to nearly $25 that lasted about two months ending June 07.

The earlier price was even more stable at around $7.50 from Jan 04 through to March 06, more than two years of stable pricing.

Although the intraday price can drift alarmingly, the longer term average is quite stable and predictable until May 08 when it started to slide, and September~October 08 when all the commodities hit the deck.

Although there has been volatility over the last six months, the spot price has remained in $4~$5.50 envelope since early October with a gradual rise toward the top end of that range through January as the LME stocks flatten out, indicating that supply and demand are evening out, probably due to the Nickel mine closures around the world.

The pre-subprime drop of the Nickel price was only a reversion to the mean after a short (~2 months) spike 50% above the mean of over two years ie between $10 and $15/lb, mostly settling around $12.5/lb ($28,000/t).

Thus I do not share your cautious attitude toward Nickel.

ALB has dropped far more than other Nickel producers, probably because it had only just become a Nickel producer when the Nickel price dropped and had not ramped up to full production (by March this year). Investors probably thought it wouldn't make it. But it has made it through the worst and seen of a dozen or more Nickel producers world wide. Thus I can see its share price growing over the coming months to around $1.50 (which would be a comparable drop from its highs to other Nickel producers such as MCR, PAN, IGO, WSA etc) from its current price of 18c.

Robert