trashed and down 6pc overnight, page-4

Wedndesday, June 6, 2007
Nickel: The Base Metal Bonanza

Nickel is used to make stainless steel, so it's found in everything from cutlery to microwaves to skyscrapers. Plus, it can be found in a range of other products like batteries, coins, and magnets.


Nickel has jumped more than sixfold in the past five years as supply failed to keep up with demand. Recently, there was less than two days of global consumption in stockpiles!

Again, China is behind much of the nickel story — the country's stainless steel production soared 68% last year! In fact, China overtook Japan as the world's largest producer of stainless steel and the biggest consumer of nickel.

So have we missed the nickel boom? Hardly! Remember, China's consumers are just starting their shopping sprees. They'll probably use up all the nickel the world can produce.

Zhang Mei, a researcher at China's Ministry of Land and Resources information center, recently told a conference in Shanghai that demand for nickel in China may rise 62% by the end of the decade.

And research firm Canaccord Adams recently forecast a nickel supply deficit of 13,000 tonnes this year, a deficit of 28,000 tonnes in 2008, and a shortage of 17,000 tonnes in 2009.

In short, the market should be able to absorb any new supply for at least the next three years. So, yeah, I'm bullish on nickel! And I'm especially bullish on the small-but-growing nickel producers in Canada and Australia that are going to feed China's ravenous demand.

Money and Markets
Sean Brodrick