MARKET TALK: LME Nickel Selloff Unlikely As Mkt Still Tight

LME nickel unlikely to suffer major selloff in short term despite falling 7% overnight on profit-taking, as stocks still "incredibly tight," says Investec's Darren Heathcote. However, nickel upside capped by slowing demand, as stainless steel markets outside of China weakening, Chinese steel stainless output to be reduced by government policies that will shut some smaller mills. Also says increased initial margin payments to trade LME nickel could curb speculative trading, market to be more balanced in 2H07. LME 3-month nickel last traded at $42,600/ton, +$405 on London Friday PM kerb in very thin volumes.