Nickels golden sheen starts to dim

Nickels golden sheen starts to dim

Recent decreases in the price of nickel do not signal a break in the extraordinary times enjoyed by the industry, including Greater Sudbury miners, observers say.

“The fundamental market, the premiums in the nickel business are still holding up very strong. They haven’t changed at all,” Montreal-based nickel analyst Terry Ortslan said Friday.

After falling below US $20-per-pound this week, from a high mark above $24 this spring, nickel prices are stabilizing, partly due to the resolution of two major issues affecting market speculation, Ortslan said.

“The Voisey’s Bay strike has been settled after about eight weeks,” he said of a strike which began in mid-April by maintenance and support workers at the giant nickel deposit in Labrador.

Second, Russian mining giant Norilsk Nickel has reopened a crucial shipping port, Ortslan added.

“Norilsk shipments are back on because the Dudinka port has opened with the ice break-up. They’re loading up the ships now and nickel is coming to the London Metals Exchange.”

Despite the recent drop in the spot, or cash price for nickel, healthy prices are still being paid by customers supplied by companies such as CVRD Inco and Xstrata Nickel, Ortslan said.

“If you look closely at the premium markets, at what the consumers are paying, they’re paying in excess of the metals market price to obtain nickel,” he said. “That has not come down at all. So there is an adjustment in the short term, but it’s not a fundamental change in the marketplace.”

It may have been unrealistic to expect $24-per-pound nickel to last much longer, said Rick Grylls, president of Mine, Mill and Smelter Workers Union Local 598/CAW, which represents Xstrata Nickel miners. Still, “the good times” can be expected to continue indefinitely, Grylls said.

“The market is going to correct sometime, someplace. But I don’t think it’s going to be tomorrow. When you’re in a run like this, all you can do is see where it goes.”

The good times will include another quarter of healthy nickel bonuses and profit sharing to be paid to local Xstrata and CVRD Inco employees next month.

The local employees earned bonuses estimated in the $17-$18-per-hour range – or roughly $8,000 to $9,000 per person – for the first three months of this year. Similar payments, although possibly somewhat lower, are expected for the second quarter which ends June 30.

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