Today's official LME nickel closing prices - cash - $12.83/lb -...

Today's official LME nickel closing prices - cash - $12.83/lb - 3 months buyer - $12.95/lb (16.6% lower than 1/1/07). Baltic Dry Index fell another 49 points today, to read 6,917. LME warehouses received a whooping 1153 additional tonnes of nickel overnight. Of the four warehouses receiving inventory, Busan, South Korea received 348 tonnes, Helsingborg, Sweden received 84 tonnes, Rotterdam, Netherlands received 492 tonnes, and Singapore received 300 tonnes. Outbound, Rotterdam shipped 48 tonnes, St Louis, US, shipped 6 tonnes and Busan shipped 18 tonnes. The news staggered an already reeling market, and nickel headed south from the bell. Today's official cash closing price is the lowest it has been since September 21st of last year. Standard Bank tried to remain optimistic in a note today "Although prices could drift over the remainder of the third quarter, we see good reason to remain cautiously bullish for the fourth quarter when stainless production and nickel demand are poised to rebound". Having lost 45% of its value since May 9th, the collapse in price is having an adverse effect on the entire downstream stainless steel market. End users demand immediate price relief from vendors who still have material manufactured from stainless purchased before the price of nickel began to fall. Warehouses worldwide are flushing their stock, not wanting to be caught with over priced inventory. Distributors refuse to invest in new inventory, knowing stainless steel prices will fall further. Stainless manufacturers are watching their demand dry up, and refuse to buy nickel for stock that may be over-priced tomorrow. So how will nickel find stability, when its largest demand base is hemoragging? Hard to tell. All eyes are on the London Metal Exchange, as many accuse it as being the villain that started this mess, and now look to it too become the white knight, who alone can bring some stability back to the market. Until the price stabilizes, do not look for stainless steel users to jump back in with both feet. And until they jump back in, we should see nickel inventory numbers continue to blossom, which in turn, adds more downward pressure on the trading price. It's a brutal cycle, with few winners, and many are hoping it comes to an end very soon. 3 month nickel ended today's trading at $12.76/lb ($28,100/tonne)


RAB