Nickel Report Update: Falconbridge labor dispute settled

Note: This interim report is an update to the report filed on February 19. To see all previous reports from Allied-Hunter Corporation, click on Nickel & Metal Reports.

A new agreement between Falconbridge Ltd.'s Sudbury, Ontario, nickel operations and unionized employees was ratified yesterday, ending the labor dispute that began on August 1, 2000. The company is expecting to call employees into work over the next couple of days and gradually phase out those non-unionized employees who were operating the mines and smelter during the strike. Falconbridge said earlier on Tuesday, February 20, that it would take a maximum of 30 days to have the entire operations to full capacity, but may take a little as two weeks to bring the Sudbury mine and mill up to design levels.

Sudbury has been operating at 50% capacity through the strike and the additional production will place only modest downward pressure on the market. It seems most of the forecasters already factored in a restart in this quarter. Other market conditions such as weak demand and an available supply of primary and stainless scrap are more important factors dragging nickel down. The three-month nickel price has been holding today at about $6,170/MT. The backwardation has narrowed over the last couple of days leading us to a cash price of $6,310/MT or $2.86/Ib as of this writing.

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Source: Allied-Hunter