nickel speculation

From PAN today and of note:

Sydney - Wednesday - Sep 10: (RWE Australian Business News) -
There had been a softening in demand for nickel due to the perceived
slowdown in the world's economies and there was evidence of substitution
of nickel-containing stainless steels with 200-series stainless steels,
which do not contain nickel, Panoramic Resources Ltd (ASX:PAN) managing
director Mr Peter Harold told CorporateFile in an Open Briefing today.
"This substitution could have occurred as a result of the high
nickel prices in 2007, but persisted during the June half 2008 despite
lower nickel prices during that period," he said.
"In 2007, hedge funds were instrumental in driving the nickel
price up to $US50,000 per tonne, and they are now probably actively
working to push the price down by short-selling. As a result, the price
has been pushed below what we consider to be a fair market level based
on average world nickel production costs.
"In addition, there's been increased supply from pig iron nickel
producers with production in 2007 of over 100,000 tonnes, up from 30,000
tonnes in 2006, at a time when demand was slowing.
"All of this has created a perception that there is an
oversupply of nickel when the reality is the market is actually tighter
than people think. As a result, we think prices will form a base at
these levels and then move higher," Mr Harold said.