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 Weak Stainless Steel Demand Makes CVRD Dicey

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gastaoss



Number of posts : 440
Registration date : 2007-07-01

PostSubject: Weak Stainless Steel Demand Makes CVRD Dicey   Fri Oct 26, 2007 12:13 pm

Weak Stainless Steel Demand Makes CVRD Dicey

As goes stainless steel demand, so goes nickel demand.Iíve been looking for a dip to buy backmy longtime hold CVRD (RIO) - the massive nickel mining giant from Brazil. After nickel bounced off its lows a couple of months ago,
analysts and purchasing managers were looking for a rebound in demand
in the 1st quarter of 2008 going into construction season.

However,
stainless steel demand is still much lower than where analysts had
expected itÖabout a month or more behind schedule. As such, Iím too weary
to rebuild my position in CVRD. These mining stocks have had a massive
run, and lately itís been only on the dollarís weakness (because as
Iíve said, metal prices have stabilized). So if the dollar somehow
stops dropping or even rebounds, this doesnít look good. Iíll keep
monitoring CVRD for a better entry point. Hereís the excerpt of the
stainless steel article from Purchasing.com:

<blockquote class="quote">Stainless demand has not yet returned, according to
market reviews by several analysts who had expected purchasing and
pricing to rebound this month or next. Lower nickel prices since the
peak in May ďhavenít yet enticed stainless steel buyers back into the
market as quickly as had been anticipated,Ē admits analyst Mike
Gambardella at J.P. Morgan Securities in New York.</blockquote>

full article here: Stainless buyersí strike is longer than expected

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