London: Remember the super goodscycle?
Bull market narrative embracing structural steps
Changes in commodity demand, coupled with "longer" pricing?
It's good when it lasts.
But when mining companies write down the huge investments predicted, "stronger for long-term investors," the pressure on shareholders to demand returns rather than the amount forcing investors to change their vigilance on a large scale
The cycle will seem to be like any other grandiose boast.
The document between the network revolution and the Great Moderation.
However, it is always a problematic structure.
Take nickel as an example.
Production of stainless steel with the largest nickel use in China surged 27-
More than 28%-2009 per year-
2010, according to the figures of the International Stainless Steel Forum.
Is the price longer stronger? Nope.
The price of nickel peaked in 2007 and is no longer as high as it is now.
Instead of being some more extensive super
Cycle, nickel is old
The traditional commodity story of prosperity and depression.
This is an area of relevance in a new era of austerity in the economic sphere.
London Metal Exchange (LME)
The nickel price in May 2007 was $50,800 per ton, at which stage it rose $17,000 since the beginning of the year and $30,000 since May 2006.
LME-registered nickel stocks hit a low of 982 tons in February 2007.
Liquidity is so bad that the exchange frequently changed its lending guidance in June of the same year, which contributed to the sell-off --
As spectacular as the previous rally.
Nickel prices have been hovering around $16,500 for six years.
LME stock is 159,552 tons and more metal arrives every day, which makes February 2010
The time is as high as 166,476 tons.
Indeed, the current increase in stock on the exchange may reflect a more aggressive behaviour by warehouse operators keen to motivate excess metal to enter the warehouse.
However, this has more affected the allocation than the remaining funding scale of 86,500 tons assessed by the International Nickel research team last year.
Few analysts expect anything else in the nickel market, in addition to another big surplus this year.
The current feast is directly related to the famine six years ago.
In the face of high prices for key raw material inputs, China's stainless steel plants have been tested in Western countries for many years, but are considered too expensive.
Nickel Iron (NPI), a rough-and-
Off-the-shelf alternative to Ferronickel, designed as an emergency stop
The gap between buyers will not widen until LME prices are normalized.
However, it has become a major production Channel in itself, reducing China's dependence on imported equipment.
It's hard to say how important it is, because the NPI is between the coverage of official Chinese statistics and allows analysts to rely on estimates, in part because of the amount of nickel ore imported from countries such as Indonesia.
The estimated range of NPI production last year is wide
350,000 tons of nickel contains a lot of hot issues, and the real number is within this potential range.
Even in the middle
In this context, this "new" production stream accounted for more than 17% of global nickel production last year.
Every ton made by China itself is a ton that does not need to be imported.
Don't further understand the disconnect between China's stainless steel production and the nickel market surplus and price declineperformance.
In addition, Chinese operators have successfully reduced production costs on an almost continuous basis.
A few years ago, it was agreed that npi's production costs were well below $20,000 a tonne.
As a new generation producer using rotary kiln technology to replace the first batch of npi, this figure may have fallen below $16,000 per ton.
It is a goal of constant movement.
NPI is seen as a delivery phenomenon of the cost structure at the top of the global cost curve, and elsewhere in the world it is not taken seriously by producers who have started a series of their own expansion projects.
Several people themselves used relatively new ones in the experiment. pressure-acid-
Mining nickel in red earth ore instead of vulcanization ore that provides raw materials for traditional production processes.
HPAL has only invested in commercial production a few times before, and the results are mixed.
Quarterly operation report of Murrin website in Australia is three
Remind you every month of the difficulties in achieving consistent nameplate production.
The larger Goro project of the New Caledonia seems to confirm the problem with HPAL.
Huge delay, out of budget, now Goro, operated by Brazilian Vale, has produced about 10,000 tons of nickel in the intermediate form in two years
Start the operation.
Brazil's Vale company is not moving, saying that it currently expects the five Lang to reach about 50% of 60,000-
Later this year, the nameplate capacity is tons per year. We shall see.
It is also clear, however, that Goro is not a typical representation of the HPAL process.
Three other projects seem to be doing well.
First Quantum has just achieved its First full-year production at the Ravensthorpe mine in Western Australia, the asset it acquired on cheap resources ($ 340 million)
In 2009, BHP gave up plans to get it back to work.
Raventhorpe produced 33,000 tons of nickel in the intermediate form last year, as is predicted this year.
The Ramu project in Papua New Guinea, which also uses HPAL to produce intermediate products, has now entered its commissioning phase, according to the latest operating report from minority shareholder Highlands Pacific.
Nickel production last year was 5,800 tons.
The Ambatovy project on the island of Malaysia is more technically ambitious, adopting a directto-
Metal process design.
But again, from the latest updates provided by stakeholders and factory operator Sherritt International, things seem to be going well.
Nickel finished production last year was 5,700 tons.
The company said commercial production is expected this year and production is expected to reach 35,000 tons.
In January, Ma Island first appeared on the list of countries of origin of China's refined nickel imports, indicating that ambatawi has left its mark on the global market.
It can be said that the world may need all of these extra nickel, and if not because of the amazing growth in npi production, other more regular projects from Koniambo, xstrata, are about to be completed.
But the reality is that two different types of production revolutions are now flooding the world with excess metal.
In addition to some unforeseen surges in stainless steel demand this year, the price impact of nickel is, at least, bleak.
But it's just a boom. to-
The metal market has a long cycle of depression.
In this case, no Super player has ever touchedcycle.
It should also remind shareholders and management of mining companies not to overdo --
Ambitious in the massage market dynamics.
Glencore president and future Meg Glencore president Ivan glensberg-
Xstrata talked this week about managing supplies during the boom to "keep the market tight for the time being ".
Nickel is a warning that high prices and tight markets may be completely unexpected, but for a long time
In other words, be careful what you want. --
Andy Home is a columnist.
His own opinion is expressed.
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