interesting view on pon

An excerpt from eStainlesssteel.com ... interesting view on today high price.

Our comments from Friday hit a few of the investor forum's and we have been following the responses. One of the best observations to our analysis came from user "kamchatkatravel" on an Investor Village message board. We feel our other readers deserve to see it also. "I thought this bit of reasoning, however, was somewhat curious, and reminded me of what the bears often say about the oil market: "What the system does allow, is a metal that is worth $7.36/lb on April 6, 2005, with 9,936 tonnes of nickel sitting in LME warehouses, and worth $7.70/lb a year later, with 31,668 tonnes of nickel stored, be worth $22.68/lb yesterday, with 4,812 tonnes of inventory stocked. Is this evidence of a market price being determined solely by supply and demand? Or is it the billions of dollars finding their way into fund markets, and these funds looking for a place to get the highest return on investment?" What the analysis leaves out, of course, is that the fact that it is now taking $20+ nickel to balance the market indicates that demand relative to supply is very strong. A situation where there is 9,936 tons of Ni in storage at $7.36 is very, very different from one where there is essentially equivalent storage at $22, and can't simply be chalked up to speculation. If Ni were now to magically return to $7.36, what would happen to inventory? It would no longer exist." (comment - they have us there)