looking awfully bullish, page-35

re: looking awfully bullish , chart? Agree Jukes

An interesting exercise is to compare the LME nickel price with that of WMR over the same time frame. WMR runs almost identically with the price of nickel.

Over recent weeks the price of nickel has corrected significantly. And I don't think the WMR price has fully caught up with this movement.

I am short and am looking for a fall to at least $4.60 if the nickel price continues to hover and/or weaken from this point. There will be a few minor rallies on the way down of course, as there have been since the high of $6.00 a few months ago

I believe Andrew Michelmore may be subtly telling the market something as well .....an interesting article below

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WMC chief warns nickel speculators
By John Phaceas
Perth
April 7, 2004


WMC Resources has warned investors not to get carried away by booming commodity markets, declaring the current nickel price unsustainable and conceding that its jinxed Olympic Dam copper-uranium mine may never be trouble-free.

At a subdued annual meeting in Perth, chief executive Andrew Michelmore said the slimmed-down miner was making the most of stronger prices for its key commodities, particularly nickel. WMC therefore expected "continuing improvement" on last year's maiden $246 million profit, in line with consensus forecasts for a profit of about $610 million.

But though surging demand from China and limited new supply would keep nickel prices high for the next two years, Mr Michelmore warned that prices above $US6 a pound ($US13,000 a tonne) could not be sustained and were damaging for the industry.

Nickel yesterday closed $US450 lower at $US13,895 a tonne, but has dropped from 14-year highs above $US17,000 a tonne over the past three months.

"Prices above the $US6 a pound mark are not sustainable for our customers, and not in the long-term interests of the industry," Mr Michelmore said, noting that professional investors and hedge funds had begun speculating on the metal.

"That's where it's not sustainable, because as soon as you get some negative views they dump it, which is what you saw in January when it went to $US17,000 per tonne then came off $US2000 in the space of 24 hours. That's really bad for the industry and for the customers."

Mr Michelmore also warned that sustained high prices would lead to greater substitution by customers, with up to 20 per cent of all nickel applications open to substitution.

Noting that copper prices should stay high for "an extended period", Mr Michelmore said WMC's ability to capitalise hinged on improvement at Olympic Dam in South Australia.

WMC is in the middle of studies to boost Olympic Dam's annual capacity from 235,000 tonnes of copper to 600,000 tonnes. However, the mine lost $120 million last year due to a string of operational mishaps and a blowout in the cost of a newly completed rebuild of its solvent extraction circuit to $375 million.

WMC shares closed 6¢ lower at $5.20. West Australian