MARKET TALK: Macq Expects Nickel To Stay Strong In '07

Macquarie forecasts 2007 nickel price at $10.13/lb, down from $11.03/lb in 2006, but above its previous expectations given project delays that see a balanced market in 2007, deficit of 12,000 tons in 2008. Says biggest "unknown" is a sudden surge in Chinese nickel output from small-scale blast furnaces using low-grade nickel ores from Indonesia, which could add 40,000-50,000 tons to global nickel balance. Adds a small correction in global stainless steel markets could push nickel into more balanced position that could lead to prices correcting to $10/lb, but overall expects tight conditions to continue. LME 3-month nickel last trades at $33,100/ton, up $25 on Friday PM kerb.