Much of what we are experiencing is 'Just In Time' modern production. This is why prices fluctuate so dramatically, from boom to bust to boom.
Just a couple of months ago there was not enough oil in the pipeline and prices hit $140.00 Today, there is more in the pipeline then can be used and prices move under $50.00. OPEC will probably reduce output.
And what follows is a report on nickel. They expect a 10% surplus. So Vale, just like OPEC, slows down production. This is the 'Just in Time' approach. When production drops, then demand will rise again, and probably just as violently.
It is also interesting that the demand estimate continues to rise.
It is not that we have more nickel then the world needs nor more oil. It is that we have more available today than can be consumed today.
The fundamentals are sound.
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-- Purchasing, 11/13/2008
The global nickel market will show 110,000 metric tons of surplus in 2009 because of a sharp pick-up in production at a time of slowing demand, the International Nickel Study Group (INSG) suggests in a press release. Demand for the metal, used mainly in alloying stainless steel, will rise to 1.44 million metric tons next year from an estimated 1.38 million metric tons this year and 1.31 million in 2007, the Lisbon-based group says.
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