LME Credibility

The February spot price for nickel on the LME was US$11/lb, now it's US$9.75/lb, about a 12% decrease. The February inventory level for nickel was 87,000t and now it's 57,000t, a 35% decrease.

Given that we know the demand for nickel is only going up, one of these figures has to be wrong. For me, it's the nickel price brought on the LME letting Mr Big Shot run over them and then bowing to their Chinese masters in Beijing. Add in a general mistrust now of the LME.

What implication would a prolonged price manipulation have for Mincor, given Mincor's payabilty is linked to the LME? Surely another pricing mechanism has to be found. You don't sell your prize bull at a vegan saleyards so why sell into a crooked market.

I understand the role of hedging but it can go sour as well. What about an auction system similar to PLS for their lithium or is direct selling to companies the answer? I think BHP is concerned less as they can set their nickel sulphate price but they must share a common interest in seeing their suppliers do well.

Nickel at US$13-14/lb will encourage exploration through to development but not less IMO.

On another note it's disappointing to see David Southam go. I wish the new MD well and hope she has equal success but for now it seems the air has gone out of the tyres a bit.