major issues with nickel

From the outset I must announce that I am a holder of WSA, but for the purpose of this post I would like to inform that nickel moving three months forward is at a dangerous conjucture.

Please take the following information as interest only.

Firstly - Major Nickel Developments in August 09.

From Reuters news wires.

"There are signs Chinese stainless people have been producing too much. There could be a bit of a pull back in Q4," said Vanessa Davidson of industry consultants CRU Group. "It's possible that prices could drift back to $15,000-16,000 in the next month or so," she added.

Davidson said she was not concerned by recent increases in
LME stocks, which have taken them to their highest since April 1995."But I would be worried if that trend was still in place in a month's time," she added.

Nickel Production News for August - from Reuters

PRODUCTION:

Aug 31 - Canada's opposition leader waded into Vale Inco's

dispute with striking workers in Sudbury, Ontario,

saying the miners should return to the bargaining table. Workers

at the Sudbury mines and plants went on strike in mid-July.

[ID:nN31308886]



Aug 31 - South Africa's mine workers' union and Impala

Platinum (Implats) said they would meet for fresh talks

on Sept. 1 to try to bring an end to a strike over wages. The

strike at Implats entered a second week on Aug. 31. Nickel is

produced as a by-product. Strike ended on Monday. [ID:nL8226878]



Aug 27 - Cuban plans to produce around 70,000 tonnes of

unrefined nickel and cobalt this year are behind schedule,

official media in Holguin province reported, apparently due to

hurricane damage sustained in 2008. [ID:nN27316043]



Aug 26 - Vale's Inco division will resume production of

copper and precious metals at its Sudbury, Ontario operations,

despite an ongoing strike by workers, a company spokesman said.

The decision drew a rebuke from the union, which said that using

inexperienced workers in a partial restart would raise the cost

of the operation and endanger lives. Nickel production will

remain halted. Vale has reportedly declared force majeure on

some of its nickel and cobalt production, but it has not

confirmed this. [ID:nN26270524]



Aug 26 - Greece ordered the shutdown of operations at

ferro-nickel producer Larco after an accident killed one person

and injured another, just hours after naming nine contenders as

possible strategic investors for the company. The government

said Glencore International and eight other groups were on a

shortlist to become possible strategic investors in Larco.

[ID:nLQ94305]



Aug 25 - BHP Billiton said it will cut up

to 70 jobs at its Mt Keith nickel mine in Australia to ensure

the operation's viability. It said the cuts would not affect

output at the mine. [ID:nSYU007095]



Aug 19 - Construction of Papua New Guinea's Ramu nickel mine

and processing plant has been allowed to restart after being

halted for a month due to health and safety concerns, PNG's

chief mines inspector said. [ID:nSYD475761]



Aug 17 - Liberty Mines said it plans to restart

production from the Redstone nickel mine near Timmins, Ontario

by August 24. The mine has been on care and maintenance since

October 31, 2008.



Aug 14 - BHP Billiton has hired Bank of America-Merrill

Lynch to advise it on a sale of its Ravensthorpe nickel

operation in an auction which could fetch $1 billion, a source

with direct knowledge of the matter said. [ID:nSYD444236]



Aug 11 - Villagers at a Sulawesi mine operated by PT

International Nickel Indonesia Tbk have ended a

protest over jobs after reaching an agreement with Inco, the

company said. [ID:nJAK403332]



Aug 11 - Vale Inco has shut down its Thompson, Manitoba

nickel mines and processing facilities for scheduled

maintenance, the company confirmed, meaning all its Canadian

operations were shut. The company's other operations in Canada

have been shut by strikes. [ID:nN11527137]



Aug 11 - China produced 118,234 tonnes of refined nickel in

the first seven months of this year, up 10.4 percent from a year

earlier, figures from the National Bureau of Statistics showed.

[ID:nAPI000612]



Aug 5 - China's Jinchuan Group Ltd. will take a stake of

about 51 percent in Zambia's sole nickel mine Munali, which is

due to resume output in September after stopping in March due to

low prices, Zambia's mines minister said. [ID:nL5407150]



Aug 4 - Mirabela Nickel said it had started mining

at its Santa Rita nickel sulphide mine in Brazil. The mine will

start with a capacity of 4.6 million tonnes a year, rising to

6.4 million tonnes in the second quarter of 2010.

[ID:nN04520926]



Aug 3 - Nickel prices remain too volatile to reactivate the

Miitel mine this year, Mincor Resources said. The mine

in west Australia was idled in late December, halting production

of between 4,000 and 5,000 tonnes of nickel per year

indefinitely. [ID:nSYD236224]

Nickel Stocks and Prices.



Nickel on the LME last night.



Nickel seems to be in serious trouble and it is difficult to see where the demand will come from in order to put a halt on the stock piles. Nickel isn't the only commodity that is facing this issue it's right across the board - considering its volatility it certainly is being targeted. It is likely that mines will start shutting down if prices continue to spike down as it did on the LME last night, this will put a cap on stocpiles. However, generic demand from China isn't going to happen in the near future.

Take care Nickel bulls.