The central question is, how much of the fall in the price of base metals (and oil for that matter) is justified by fundamentals, and how much is due to speculation (short positions).
I believe the fall in resource prices has been overdone, as usual, and that fundamentals cannot have deteriorated so quickly. What deteriorated quickly was sentiment and that works in both directions.
When the markets feels a bottom has been reached, which imo is behind us, the shorts will unravel.
Imo nickel won't fall below $4/lb and will be $6 by March and $7 by June.
I doubt ALB will get production cost down to $4, probably $4.50 is best case, but for the reasons above I think it will prove irrelevant.
Thus I rate ALB as a strong buy.
I know I risk being shot down in flames so it'll be interesting to see how things pan out.
cosmos
ALB Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
