There is a significant lag between production cuts and impacts upon LME inventories. It takes quite a while for raw ore to arrive at LME warehouses as refined nickel.

I suspect a lot of manufacturers are being very tight on their forward purchasing of commodities right now, carefully watching the marketplace to see how their order volumes respond. As such, there isn't a lot of outbound shipments.

Once there is a sense that we've hit the bottom of the recession and we are starting to climb back up the other side, there may be a mad scramble to pick up what is available in the warehouses around the world and this may lead to big shortages. Just as production cuts take a while to impact inventory levels, mines restarting production will also take quite a while before they can deliver refined metal to the warehouses.

So the big question then becomes... where's the bottom? I don't think we're near it yet.