nickel price bouncing back, page-7

Thanks Dolphin- Ive reproduced your posting on the AGM Forum, so to be fair Ive reposted my response here:-

According to Dolphins article it is well known in the trade that a broker and a nickel producer colluded to control the nickel price. This forced LME to take the action it did.

We know that together these two held at least 80% of nickel stocks held by the LME.

There are two ways of holding stock in LME warehouses- put it there or buy it.

We know there had been some substantial additons to the LME warehouses just prior to LME taking action. Was this because the combined holdings of “the broker” and “the nickel producer” was falling or about to fall below the level of a “dominant position”?

A certain nickel producer was expecting to add far less than normal to the LME warehouses for a period due to shipping problems. We would expect that this companies holdings in LME warehouse would gradually diminish % wise until fresh shipments arrived- unless there were significant additions to the LME warehouse which would hold up this %.

If this is the case then the whole drop in nickel price came about under contrived circumstances. Given time we can expect a return to the normal supply- demand situation.

Of course the other excuses “pig nickel” and “substitution” which have been bandied about as factors in the recent price drop, are not factors at all (as I suspected all along). These factors have been there all year and haven’t suddenly come into effect. But for those not privy to the full story above its something convenient to write about, and as we know the nickel analysts we read are reluctant to dig very deeply to get the full story.

The unfortunate thing is that sentiment for nickel as an investment has been hurt quite badly, even though the fundamentals of supply and demand have not changed at all.

How long will it take for sentiment to return to positive is anyones guess……