Entire Annual Report - Anglo American Platinum

hodium from autocatalyst scrap, which increased by 13 000 ounces. Demand in other applications expanded in the yeardue to increased purchases by glass and chemical manufacturers.NickelNickel remains one of the most volatile metals traded on the London Metal Exchange. After touching a low of US$1,71per pound (US$3 765 per ton) in late December 1998, it ended a dramatic 17-month bull run when it peaked in May 2000at US$4,81 per pound (US$10 600 per ton). The resurgence was due to producer cutbacks, commissioning setbacks to theAustralian laterite projects and strong stainless steel production.The turning point in May, however, was caused by the news that Inco would not go on strike. This development wasexacerbated by signs of a slowdown in stainless steel production and by an increased supply of nickel asproducers sought to benefit from the strong price rally by reversing earlier cutbacksannounced in 1999.By December 2000, sentiment in the market was markedlybearish. Although LME inventories had recorded ten-year lows,the market remained in backwardation. Indeed,prices continued to ignore the prolongedstrike at Falconbridge which was finallyresolved in February 2001 after 8 months.The nickel market is forecast to moveinto surplus in 2001. Just how large thesurplus will be will depend primarily onthe level of stainless steel production and the durationof the destocking process in the early part of the year.45