Ann: Company Insight - Discussing June Quarterly , page-10

re: Ann: Company Insight - Discussing June Qu... Stockpiles of nickel stored in LME warehouses remain at their lowest level since March 2009, after another day of declines that put the total just under the 103,200 tonne level.

Barclays: Nickel continues to outperform the base metals complex

This performance is in-line with our expectations given that the refined nickel market has been the only base metal in a market deficit, clearly supported by a sustained downward trend in LME stock levels (down by 32Kt, -21% YTD).

In turn, in our view, we certainly lacked a clear justification for nickel prices to be trading into the cost curve, which was the case in mid-June when the profit margins of high-to-medium grade nickel pig iron (NPI) producers in China were being pressured when the LME front-month contract was trading close to $21,000/t. Moreover, the latest flow of data from China suggests that despite concerns over rising NPI output, which have been invigorated by the 62% rise in ore imports year-to-date, refined nickel demand is also in robust health.