Whaler, taking your thoughts a bit further, what happens to companies who are not bought up by the Chinese?

Although we will eventually see an end to this recession and things will start to pick up again, it will be a long time before we see the economic boom and production levels we have seen for the last 15 years or so, in my opinion. If that is correct, although we should see some increase in base metal prices, we should not expect to see $10+ Ni for quite some time.

If the demand is lower than the supply, the price will be lower. Further, the Chinese are likely to use their own ore before they use another companies ore, which will also put downward pressure on prices. At least until worldwide demand outpaces supply.

Could it be that the Chinese will secure enough ore production at bargain basement prices to meet their needs, or at least enough so they can control the market? Then what will happen? Will there be enough incentive for companies to explore? Will there be a considerable market for proven resources that are in the ground? Or will undeveloped resources go undeveloped for a long time until we get into a considerable economic boom again? If so, how long might that be?

Expanding that thinking, what happens to the other companies in the world that are using nickel? How would a Stainless Steel products manufacturer in Pittsburgh, buying raw materials at spot market prices, compete against a Chinese firm that is buying metal at prices arranged at a time when the economy was the worst since the Great Depression?

Just some thinking about what the future wiil bring.... and not bring.

Cheers,

Bluenoser