Nickel Enters a New Era as Indonesia Tightens Supply and Prices Surge [0:00-5:03]

This marks I'll be how are we, sir? Mr. Matthew Gordon doing very well. I'm glad to hear it. Things are fun going along nicely in the world of nickel. Tell me more. Oh yes. So last call talked about breaking out of that 17 to 18,000 range and that we were headed for the 18 and a half to 20,000 range and yet lo and behold we are firmly in the middle of that range. Trading this morning around 19,000. 200. We hit as high as 19, six yesterday. And you know what's what's driving that you know nice move right into the into the firmly into the middle of that range. One air met. They have their wheat of bay mine which supplies the there's i-mip which is in moral Wally and i-wip which is in wheat of bay which is big chin shan operation. They only had a 12 million ton ore quota beginning of the year and they've actually run out of it so they've announced they're going to put their their mine on care and maintenance. You know expect to see some sort of bump up encoded there but still you know a pretty significant drop in supply. I'm seeing alamy inventories continue to climb. We've actually seen you know some increase in China but you know market wise alamy inventories is the thing that most people look at and so having those war inventories you know finally start to make their way down. We're down 4,000 tons this month after being down 6,000 tons last month. So again in this you know the whole you know in terms of actual surpluses that looks like you know the market's getting pretty close to balance and as the year goes on that ore tightness is really going to work its way through the chain you know and that's again what we're seeing already is you know ore prices and NPI prices have stayed pretty firm NPI prices continue to move higher and stainless prices went up another 4 to 5% this week so you know the good thing with nickel you know because nickel is expensive and nickel drives the bulk of the value in stainless steel prices you know nickel stainless has always been prone to these big restocking cycles. So once the market sees stainless prices start to move higher it starts to you know sort of kick off this restocking cycle so I think we'll see you know pretty healthy demand you know through the remainder of the year even if if economic numbers are weakened and the final thing propping things up is we've talked about sulfur last time in terms of how important that is to h pal production and yeah they've up another hundred dollars a ton the over a thousand dollars a ton from 150 dollars 18 months ago it's that extra hundred dollars again it's another thousand to 1200 so so real cost push you know moving higher that's that's there so yeah and the nickel markets in great shape at this point. Right okay let's look at some of the controls that intonation has and we we talked in the past about quotes as obviously you know seem to be experiencing that at the moment and they put the plant in what care maintenance and we debate on care maintenance what does that mean in terms of then ramping up again and then having to maybe then you know put on care maintenance yet that that that kind of sees all aspects it's not good for the balance sheet it's not good for decision making and what can they do about it yeah I mean with with mine I mean they're lobbying right now to get more quota we'll see where they end up you know mining operations are not as as you know it's not as if you had a big processing plant you know turn up and down that's a little more complicated but as of right now you know they're the mining operation they're scaling scaling back but again it's just you know it's not every every big operation doesn't like to get turned up and down so it just again that'll just add to the cost and if you're running subscale in terms of you know we're designed to run it this many tons of day and we're running at that again you know that's just gonna you know continue to drive costs higher in terms of what comes out of it so you know that's that's the part here is with the changes in the minimum price formula with the changes in in more quarters the declining or grades and stuff they you know there's you know there's you know there was a lot of you know underlying cost support in terms of this price move higher so you know people shouldn't think oh it's popped up and it's gonna drop down you know that it really has you know these Indonesian moves have really shifted the cost curve and then you know we should see prices while supported you know from this point forward right it says I mean basically that the the nickel market now um is price managed rather than you know price discovery where we where we've seen it I mean is that the level of control and then the action that has on processing that's nice 100% like in my conversations with people over there you know that's that's you know seems to be where they're headed you know I think you know we may see prices move through 20,000 and then next you know before the end of this quarter but I think if we start to see prices move quickly through that number and get towards 21,000 again I think what you'll see is the other tool is just is just job building the market so they've got the fundamental tools in terms of managing our quarters and then there'll be the moral swation in terms of talking the market into a price range so I think if you do see prices move into that range fairly quickly I think you'll see the Indonesians talk about oh you know we can provide more or if the market needs it we high prices are good for the market blah blah blah so you know I think they