I guess it boils down to survival for the low cost producers. Survival of the fittest.

http://www.abc.net.au/news/stories/2...

Lower nickel price could force small producers out

Posted Tue Jun 10, 2008 8:13am AEST
Updated Tue Jun 10, 2008 9:01am AEST

Small nickle miners could struggle if price falls (Diane Bain)

Resource analysts are predicting some of Western Australia's smaller nickel operations may struggle to remain afloat if the price of nickel continues to fall.

Last year, nickel was worth more than $25 a pound.

It is now valued at $10 but analysts say it may fall as low as $8 eight a pound in the next six months.

90 per cent nine per cent of Australia's nickel exports come from WA and many smaller operations began production off the back of the strong price.

Resource Analyst Peter Strachan says the increased world supply of nickel and soaring production costs are hurting smaller producers in WA.

"They would like to see the nickel price above eight dollars a pound," he said.

"I mean some of these companies would start to feel very uncomfortable if the price of nickel came back to six dollars a pound.

"Some of them would find that they wouldn't really be profitable."