Keep your eyes on the supply curve...simple economics really...

Keep your eyes on the supply curve...simple economics really overtakes all of the FA and TA you can throw at this baby.
Nickel reaches record high
Strong demand lifts prices, which have jumped nearly 70 percent in just over a year.
February 26 2007: 7:21 AM EST


LONDON (Reuters) -- Nickel hit a new record high Monday on worries about supplies, while aluminum rose to its best level since last May and copper held firm on expectations of stronger demand from Asia.

Three-month nickel on the London Metal Exchange was quoted at $41,100/41,200 a ton by 5:52 a.m. ET, below a new record high of $41,275, and compared with Friday's close at $40,900.

Strong demand from stainless steel mills, supply disruptions and project delays have all boosted nickel prices, which have climbed nearly 70 percent since January 2006.

"With nickel stocks at such low levels, no one really is prepared to go short," said John Kemp, analyst at Sempra Metals.

Nickel inventories in LME warehouses stand at around 3,500 tons. But only around 1,880 - half a day's global consumption - are available to the market.

Analysts think the surge has been overdone, but expect low stocks to continue to support.

"Nickel pig iron [made from low grade ore] is set to make inroads into Chinese stainless steel production," Calyon said in a research note.

"Markets will be watching to see the extent to which [nickel] pig iron will be used ... and to what extent this will impact on the demand of other nickel products."