canadian nickel - stocks overnight...

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VANCOUVER, British Columbia, Feb 16 (Reuters) - Shares in nickel miners shone on Wednesday after Inco Ltd. (N.TO: Quote, Profile, Research) forecast a third year of shortages for the vital stainless steel ingredient that several analysts had expected would find a balance between demand and supply in 2005.
Inco, the world's second biggest nickel producer, joined its voice to that of No. 3 Falconbridge Ltd. (FL.TO: Quote, Profile, Research) in predicting that another deficit is in the offing as new supply remains scarce and demand from the Chinese stainless steel sector stays healthy.
Inco and Falconbridge, both based in Toronto, together supply a quarter of the world's nickel, which is fashioned into stainless steel to make kitchen sinks and fridges. It also has a myriad of industrial uses because it doesn't rust.
"The market has over the course of the last week become more buoyant on the price of nickel," said Ted Mayers, chief financial officer of LionOre Mining (LIM.TO: Quote, Profile, Research) a smaller Toronto-based nickel miner.
"Both (Inco and Falconbridge) have been right in their optimistic views on the nickel price in recent years. They have a lot of credibility," Mayers told Reuters as LionOre's stock surged almost 8 percent, or 50 Canadian cents, to C$7 on the Toronto Stock Exchange.
On Tuesday, Inco forecast a global nickel shortfall of 16,000 tonnes in 2005 but said it would be even deeper if a shortage of supply did not put a lid on demand.
"The bloom is not off the rose by any means," said Scott Hand, chairman and chief executive of Inco, which, like other nickel miners, has been enjoying the best prices for the metal in 16 years.
A few weeks ago Falconbridge estimated the world shortage at 10,000 tonnes.
By comparison, bodies like the International Nickel Study Group, an intergovernmental organization of mostly European nickel producing, consuming and trading countries, expects supply to match demand of 1.32 million tonnes.
Inco's stock surged C$2.85, or 6.5 percent, to C$46.70 on the Toronto Stock Exchange on Wednesday. Falconbridge jumped C$1.55, or 4.7 percent, to C$34.60.