The demand and subsequent price of Copper is perhaps the best indicator of worldwide industrial activity. “How is Dr. Copper going”? All things said and done the price of nickel (and other industrial metals) should somewhat mirror the price of copper. But since the large scale commercialisation of NPI production, the relative price of Nickel has dropped dramatically compared to Copper and in the last 10-15 years or so and a new somewhat lower Ni/Cu ratio has developed (NPI effected ratio). No doubt this is the main reasons POS picked up its current assets for a song from companies who saw the writing on the wall. To compete in the new NPI dominated world you need access to a high grade - low COP mine, OR higher Nickel prices.
The Y axis of the Nickel/Copper graph is a smoothed ratio and therefore dimensionless. The X axis is time in trading days. January 1 for recent years is also included on the X axis. One should also consider that a high Ni/Cu ratio does not guarantee a high Nickel price only a high Nickel price compared to Copper. But in the same breath we could say the strength of the overall commodity market is determined by the price of Copper. So high copper prices and high Ni/Cu ratios will ensure good times for Nickel producers.
Recent Nickel/Copper ratio phases.
The “Philippine Flood” – We all got burnt by that one, but so did the Philippines’. They raped and pillaged their beautiful countryside to supply the Chinese NPI smelters with cheap ore and ended up making a loss on extraction after the government got them to fix up the mess they left behind.
The “N4 Rebalance” - The main premise of N4 was a re-establishment of the historical (NPI) Ni/Cu price ratio. As predicted by N4 the Ratio established itself back to expected levels (smoothed ratio of 1).
The “Tsignshan Bluff”- The Chinese have not liked the increasing price action of recent times so I have surmised that Tsignshan created the story that they could build a 50t/y Class 1 Nickel plant that would be cheaper than traditional Nickel Sulphide production and build it in under a year and for just $700m. From day one, I called Bullshit.
The “Nostra’s Rebound”. Now my most daring and chilling prediction ever - as prophesied by Nostradamus, confirmed as feasible by Erich von Daniken and foretold by Giorgio Tsoukalos in his compelling series “Ancient Aliens”, we want to know, “Who is currently hording all the Class 1 Nickel”?
The Nickel Inventory and Nickel Deficit numbers don’t stack up and despite warning punters for months not to sing to loudly about a falling LME inventory, if my information is correct; the truth is soon to be revealed. You will only find this compelling fee information in "Moaning Money" and there are only 2 possibilities.
Firstly possibility - the Ancient Alien Theorists have taken the missing Nickel and the truth will soon be revealed.
Dedans tonneaux hors oingz d'huile & gresse,
Seront vingt un devant le port fermés,
Au second guet par mont feront prouesse:
Gaigner les portes & du verite assommés.
von Daniken said that, “all Nostradamus prophecies eventually come true”.
Giorgio Tsoukalos has got one grouse hair cut and if he says that the pyramids need Nickel, Palladium and Mercury to power up their ancient power sources to contact the gods then you got to believe him.
OR
Second possibility – the likes of EV manufactures and NPI blenders have been buying and hording dark inventory when prices fell under the rouse of the “Tsignshan Bluff. No problems the “Nostra’s Rebound” is still on and we should start finding out more shortly. The Ni/Cu ratio will continue to recover increasing the overall Nickel price.
What does than mean for POS?
FA really. Unless the NP > $AU18,000/t then any share trading in POS is just traders trading. But for Nickel stock in general the "Nostra Rebound" CBTO.
RED
(20min delay)