Nickel is one of the leading indicator metals when it comes to economic health. The metal, used chiefly as a component of stainless steel, tends to be one of the first metals to fall when times are bad, as well as one of the first to rebound as soon as the economy improves. The metal took a swift and dramatic tumble in concert with the economic collapse, retreating from a US $35,000 a tonne high of a year ago to about US $9660.

Miners anticipate that global demand in the near term will be at best stable; therefore there is hope that the vast amount of mine closures will be enough to equalize the supply-demand balance. Nickel premiums in the United States have declined after holding steady since late last year as orders remain off by about 50 per cent. Stocks in London Metal Exchange warehouses continue to climb. Current global stockpiles are around 100,000 tonnes, equivalent to about 8 per cent of global demand.

According to market sources, the world’s transaction prices of nickel based stainless steel appear to have bottomed out. The current price level stands at US $2,000 per tonne Freight on board in Japanese exports of nickel based stainless CR sheets to China, down by US $100 from February. With prices of nickel based stainless CR sheets tied to nickel prices, it follows that they will respond accordingly to every advance in LME nickel prices. Therefore, the current level of Japanese export prices indicates that they have bottomed out. Taiyuan Iron & Steel Group Co changed its announcement of stainless steel prices for domestic sales from the usual monthly practice to a weekly one from March 9. At the same time, the company reduced the asking price of nickel based CR sheets by US $117.

In contrast, stainless steel manufacturers in Europe are trying to increase the base price of nickel based CR sheets. Their counterparts in the USA are on track to take similar moves. European and US stainless steel producers favour executing price increases on the argument that they can no longer survive at current low prices.

Company News

First Nickel Inc. (TSX: FNI) has filed with the Canadian securities regulatory authorities its audited financial statements for the year closing December 31, 2008. A net loss of $24.2 million was recorded in 2008. The loss includes the write off in the fourth quarter of $16.9 million of deferred exploration costs incurred on the Premiere Ridge, Dundonald and Morgan-Lumsden properties, termination and care and maintenance costs of $2,505,750 on the suspension of operations at Lockerby Mine, and lower sales revenue due to a declining nickel price. At December 31, 2008 the company was debt-free, and net working capital was $8,377,065, compared to $23,980,340 in 2007.

Sales revenue from the sale of nickel, copper and cobalt for the three month period ended December 31, 2008 decreased by $3.2 million (21 per cent), compared with the three month period ended December 31, 2007. Higher nickel and copper metal sales were offset by a reduction in the realized nickel price of 55 per cent, and in the copper price of 23 per cent. On a full year basis, the 2008 revenues decreased by $8.7 million (15 per cent).

Pure Nickel Inc. (TSX: NIC) reported its results for the three months ended February 28, 2009. The company reported that it held $7,273,085 of cash and cash equivalents at February 28, 2009, compared with $7,700,559 at November 30, 2008, and reported a net loss of $352,632 for the first fiscal quarter of 2009, compared to a net loss of $412,005 for the first quarter of 2008. Q1 operating highlights Pure Nickel announced that its board of directors granted an aggregate of 500,000 stock options to its non-management directors. The options have an exercise price of $0.065, a term of three years and are subject to the terms and conditions of the company’s stock option plan.