I've been thinking about this and my guts say that when Nickel was below $10,000 there was a high premium built into the speccie Nickel stocks by the market. ie they were priced on the assumption of Nickel going up to historic highs.
It was mid to late 2003 when miners were pumping out announcement after announcement to cash in on the frenzy. I only started trading in Sep 2003 and I thought it was normal for stocks to jump 25% in one day because it happened so often at that time. My very first trade was ANL and I made 38% in 2 days (haven't repeated that too many times alas).
Early 2004 saw a dramatic decline in the price of Nickel at the same time as we saw a big increase in the AUS$, DOUBLE WHAMMY! It was no wonder that these stocks dropped dramatically. Who can forget the Chinese government's announcement that they were going to restrict monetary supply to slow growth, that set the cat amongst the pigeons.
The second half of 2004 saw a recovery in Nickel prices but I think the market was looking elsewhere by then, especially Uranium. Also there's always the suspicion that it is short lived, that it will dive again.
Now I think that the price recovery is looking like the real deal and LME stocks are low, very low.
It will take some time but if the price rise is sustained I think the market will very tentatively and gingerly start accumulating Nickel miners again.
