Noront Resources

There is no real vast inventory of Ni in the LME.... The 40,000 tones is only a few days of consumption, thus these closings will impact price... This shows that producers are reluctant to revert to the old days where they produced every lb of metal they can...

Just like oil the poducers are in control... and the consolidation within the majors will now harvest their crop... The commodities traders think that producers have a mandate to produce as much metal as they can.... but the underlying mandate is to be profitable to their shareholders... This is the new reality in the market... Sometimes one should do less to make more profit.

There are no vast inventories of metals that can stall prices for any length of time... The more daring managment will see that they are better to serve their shareholders than to let commodities traders steal their profits.

These types of actions are what will spawn new cash into the market... Investors want to see managment make decissions that increase shareholder value... not consume resources investors paid to define. We as shareholders of resource companies want value for the resource as the main priority ... not subsidizing jobs and low priced metals.

JMHO

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Nickel Rises in London as Xstrata Suspends Falcondo Operations

By Chanyaporn Chanjaroen

Aug. 19 (Bloomberg) -- Nickel rose for the first time in four sessions in London after Xstrata Plc, the world's fourth- largest producer of the metal, suspended production at its Falcondo operations in the Dominican Republic. Lead also gained.

The Falcondo halt may last four months, Zug, Switzerland- based Xstrata said today in a statement, citing rising production costs and lower metal prices. Falcondo has an annual capacity of 29,000 metric tons of nickel contained in ferronickel, or about 2 percent of world output estimated at 1.45 million tons last year by UBS AG.

``We'll see more ferronickel production closing down in the next few months,'' Charles Cooper, an analyst at Evolution Securities Ltd. in London, said today by phone. ``That will be good for prices.''

Nickel for delivery in three months jumped $749, or 4.2 percent, to $18,799 a ton as of 11:43 a.m. local time. The contract has lost 29 percent this year, following a 21 percent slump in 2007.

Metal producers have delayed new projects and cut output after nickel prices slid to near their production cost, curbing profits. Industrial Metallurgical Holding, Russia's third-largest producer, slashed output by 30 percent to 40 percent after a slump in prices made its operations unprofitable.

Minara Resources Ltd., Australia's second-largest producer of the stainless steel ingredient, also deferred an expansion plan. BHP Billiton Ltd. suspended production at its Kalgoorlie plant in Western Australia for four months from June.

No Surplus

Some 55,000 to 60,000 tons of nickel output was lost this year because of labor disputes and disruptions from Australia to South America, said Vanessa Davidson, who heads London-based CRU's nickel and stainless steel research. Last year's surplus was 96,000 tons, she said.

``I don't see a surplus in 2008 at this point,'' Davidson said today by phone from London, expecting a balanced market for this year. ``Demand has been disappointing but the output loss has provided support.''

Lead added $64, or 3.8 percent, to $1,759 a ton after LME- tracked stockpiles earmarked for withdrawal jumped 11 percent to 14,150 tons, the highest since July 2006. That accounts for 16 percent of total exchange inventories. Most of the increase was in Singapore, traditionally a location for deliveries into China.

Lead has dropped 31 percent this year, the most among all LME metals.

Nyrstar NV, the world's largest zinc producer, reported first-half profit was 21 million euros ($30.8 million), less than the 57.9 million euro median estimate of six analysts in a Bloomberg News survey. The company closed an unprofitable Chinese plant, citing high raw-material costs, and will move a smelter in Port Pirie, Australia to Hobart in Tasmania.

Profitability Concerns

``We are clearly concerned about profitability at some of our operations,'' Chief Executive Officer Paul Fowler said on a conference call with analysts today. ``Port Pirie, for example, is the most expensive zinc smelter in the world.''

Zinc jumped $60, or 3.6 percent, to $1,720 a ton.

Tin stockpiles monitored by the LME fell 250 tons, or 4.1 percent, to 5,910 tons, the exchange said today, taking this year's loss to 51 percent. The benchmark contract increased $695, or 3.6 percent, to $20,000 a ton.

Tin for immediate delivery traded at a premium of $175 per ton over the benchmark price yesterday, the highest since July 16, indicating less availability of metal stockpiles.

Among other metals traded on the LME, aluminum rose $5 to $2,760 a ton and copper increased $48.75 to $7,400 a ton.