News item
25 Aug 10
Getting on the band wagon
The following example shows how difficult it is to judge developments on the nickel market at the moment. On the 18th August 2010 the news agency Bloomberg released two reports taken from research of leading commodity banks. One had the title of “In the 4th quarter nickel can increase by 14% since demand is rising” (Société Générale), the other had the headline “Due to weak demand for stainless steel [up to year end] nickel can fall by 23%” (UBS).
Which report can be used? The one which looks better, or the one where the analysts seem to have the most experience? If just expertise is required, then the report of the Société Générale would be more reliable, since its leading base metal analyst is the former head economist of Norilsk Nickel, which is the biggest nickel producer in the world. The man behind the UBS report is a certain Mr. Tom Price, who worked as a geologist in the mining industry in Australia for many years, although it is presumed that his experience has been gained more from iron ore and coal. Before his move to UBS, Price was working as an analyst at Merrill Lynch, Citigroup and AME Mineral Economics.