US nickel premiums set to rise

New York (Platts)--2Mar2006

Traders and producers are expecting US nickel premiums to rise over the
next few weeks as consumers stock up on nickel supplies in anticipation of a
possible strike at Sudbury when Inco's three year labor contract expires at
the end of May at its nickel mine and smelter.

     One trader said that he had received several enquiries from consumers for
"hundreds of tons" of nickel as consumers bring forward contingency plans.

     Even Inco is reported to have stopped quoting  "non-traditional Inco
accounts," according to a trader, and stockpiling nickel. The trader said that
in the past, in the run-up to labor contract expirations, Inco had moved
nickel supplies to several warehouses throughout Canada in an attempt to stop
picket lines disrupting deliveries.

     Platts assessment for NY Dealer cathode and NY Dealer Melt premiums were
set last week at 26 cents/lb over LME cash settlement. The new assessment will
be published later today. But producers and traders are quoting premiums at
betwen 25 cents and 27 cents/lb, with vacuum and plate premiums in the mid 30s
cents level.

     A nickel producer said that consumer demand was strong and that prices
had upside potential, without the impact of any strike at Sudbury. But, he
said he had "given up" trying to predict London Metal Exchange pricing, saying
it was entirely driven by investment funds. He said that premiums were steady
in the mid 20s, but added: "Premiums have a chance to firm with a strike hedge
situation looming... Consumers have to make aditional purchases," he said.

     Three years ago, at the last labor contact negotiation, a strike lasted
for four months.

		--Anthony Poole; anthony_poole@platts.com

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