Smaller nickel miners likely will suffer a tough stretch in the short term as prices rise only gradually to cover marginal costs by the end of 2009, analysts said.

London Metal Exchange nickel prices, which hovered around the $9,000-per-tonne mark before rebounding to almost $12,000 per tonne Tuesday, are still well below last month's average price of almost $17,800 per tonne.

"Things have fallen off a cliff to well below marginal costs," said mining analyst Justin Reid of Cormark Securities Inc., Toronto. "Small, single-asset companies will have a very...