The economic news out of the U.S. continues to bewilder, but at the same time, motivate traders. It is becoming increasingly apparent that the government is willing to take whatever steps it feels necessary to keep the economy rolling, and rumors of some type of government bail-out were topic one this morning in London and around the world. LME markets were closing just as President Bush was making his announcement, and it will be interesting to see how traders react Monday, after a weekend of analysis.  The U.S. housing market itself, has a marginal effect on the nickel industry as a whole, but the fallout from the subprime problem could have economic effects down the road, if not handled properly. The government is in firefighter mode now, putting out the smaller fires before they turn into a major blaze. Analysts can disagree about the success or failure so far, but if you gauge it by investor sentiment, they are staying ahead of the game.

And there is the rumor that, despite all the producer statements, stainless steel production may be turning a corner, and has seen the worse. We will have to wait and see if this proves true, but hopefully, it doesn't get any worse. It appears a floor was established, so if nickel buyers need to buy, they will probably be doing it soon - unless nickel tanks again next week. This week, tank was not in the vocabulary. Nickel had a big day, and the official closing prices posted above are the highest since August 2nd. Prices eased a little after breaking thru the $30,000/tonne mark, but still ended much higher than yesterday. Three month nickel ended the day,week, and month at $13.51/lb ($29,795/tonne)  (Dow Jones - more) Considering it ended July at $14.25/lb, nickel ended August $.75/lb lower after a fairly volatile month.

US and Canadian markets are closed on Monday, but the LME will be open. We will run a daily update as normal. Have a great weekend!

  Nickel Rises to 1-Month High on Mill Speculation; Copper Gains - "Nickel rose to a one-month high in London on speculation that stainless-steel mills will increase purchases in the final quarter. Copper and all other metals advanced." - more here

  China's steel consumption to go weak this year - "Steel consumption is expected to be weakened this year, especially in the remaining months, said an official with the China Iron and Steel Association." - more here

  (excerpt from Chinese article) Imports of molybdenum into China thru July have slipped 43.5% YOY (5349 tons compared to 9467), and molybdenum ore has dropped 46.8% YOY (3907 tons compared to 7349 tons). (note - yet to find a secondary source to comfirm this)

  Indications at 7:50 am CST show 3 month nickel selling up by around $2000/tonne - or $.90/lb . Market started out in the green from the get -go this morning, but in the last hour of trading, has taken a huge bounce. A sudden movement like this is usually a reaction to some sort of big news, but we are unable to find anything of importance. According to the Bloomberg article "...said Michael Jansen, a metals strategist at JPMorgan Securities Ltd. in London. `It's still a story of investors' sentiment,'' Jansen said today by phone. ``For the most part of this month, metals prices have had little to do with underlying fundamentals.'' (Bloomberg- more)

  Copyright/courtesy Dow Jones Newswire - "Nickel's price correction is nearly over with stainless steel producers returning after a seasonal period of destocking and demand growth for the metal set to firm, says Morgan Stanley. Delays and cost overruns at new projects are also price supportive, the bank notes, while supplies of nickel concentrate remain tight. Sees a recovery in demand for nickel in 4Q with substitution away from the metal "likely complete and possibly overdone."..."LME nickel prices should stabilize at or above current levels as stainless steel producers return to market after seasonal de-stocking period, says Morgan Stanley; 3-month nickel last at $28,475/ton, +$175 on London kerb. Morgan Stanley says prices near current levels likely below marginal cost of production, which has forced some higher-cost nickel pig iron producers in China to reduce output. But lower nickel prices should stimulate demand from stainless steel producers. "We believe the combination of lower nickel prices, dwindling stainless steel inventories and steady final demand is likely to lead to a recovery in nickel demand" by 4Q."

  CVRD puts Brazilian pig iron makers on notice - "Companhia Vale do Rio Doce, reaffirming its commitment to the sustainable development of the regions where it is present and to the compliance with environmental and labor legislation by its clients, announced the followings..." - more here

  Chinese coke exports in July sunk due to strong domestic demand - "It is reported that China’s coke export volume shrank further in July 2007." - more here

  International Stainless Steel Forum introduces new leaflet on "Why use stainless steel reinforcing bar?" - here

  Stainless and Heat Resisting Steel Crude Steel Production (Ingot/Slab Equivalent) -  Statistics here

  Eramet releases 1st half 2007 results - (excerpt) "Furthermore, global nickel production should increase in 2007 compared with 2006 due to growth in Chinese nickel pig iron production. In this context, nickel prices should continue to be extremely volatile." - more here

  China now Australia's no.1 trade partner - "Mainland China is now Australia's number one trading partner, overtaking Japan's top position for the past 36 years." - more here

  Today's beginning nickel inventory - plus 840 tons = 24,126 tonnes (4.50% - 1086 tonnes cancelled warrants/ 23,040 net stock level) Shanghai Jinchuan nickel closed at 250000-251000 RMB/t, plus 2,000.

While US and Canadian markets will be closed Monday, LME will be open for business, so we will have a report that date. We will also pay tribute Monday, to a special day held "down-under", when we will feature what sets atop the largest free-standing stainless steel structure in the southern hemisphere. To our visitors on the other side of the planet, we wish you a safe and restful weekend! If you need to get away, but can't find your passport, you can now take virtual vacations here To the rest of our readers, we hope to see you tomorrow.    

  (submitted by a reader) High phosphorus stainless - "In Russia, China-based stainless steel has been detected with extra high contents of phosphorous, probably due to the use of nickel pig iron in the production phase in Chinese plants. This incident has alerted the Russia Stainless Association and Russia has put Chinese stainless mills on notice warning them not to certify stainless steel made of nickel pig iron and that only standard stainless steel produced with standard refined nickel can be certified accordingly." - source Stainless Steel World here

  TD Bank Weekly Commodity Price Report - pdf here

  Copyright/courtesy Antaike - "According to statistics of non-ferrous metals, in July 2007 the National nickel concentrate output (nickel content) 5,081 tons, a decrease of 795 tons of 1-July cumulative production 38,987 tons, a decrease of 3.8%."

Nickel Producers Share of World Market
from June 2007 report here (thanks Monty)

  Update - Stainless Steel Producers Slash Output as Price Collapse Sets In - "Global stainless steel output is expected to reach 29 million tonnes this year - an increase of 2.2 percent on the figure in 2006. This may seem a reasonable outcome but all is not well in the market. In fact, if we exclude China, steel manufacturing in the rest of the world is forecast to decline by 5.3 percent." - more here

  (info from China about about one of our site sponsors) Adanac taps molybdenum mania with Ruby Creek mine - "Canadian small-cap miner Adanac Molybdenum is on the verge of cashing in a decision to snap up a neglected chunk of northern British Columbia that is now rich with promise, thanks to booming commodity prices." - more here

  Indications  at 7:50 am CST show 3 month nickel selling up by $.18/lb. Busy news day, typical for a Thursday. French Eramet reports sales numbers were up in second quarter, shipments in third are falling due to slower than expected demand, and until worldwide stainless steel de-stocking is completed, nickel prices will remain volatile. More stainless mills announced production cut-back's, Shanghai nickel falls for a third day, and Yusco in Taiwan announced it will raise the price of export stainless steel next month?. How would you like to be a Yusco sale rep and try to explain that?! Trading  price is up this morning, encouraged by LME inventories falling overnight, and still enthusiastic about China announcing plans to shut down smaller furnaces from making pig-nickel.  (Bloomberg - more)

  Industrial metal prices expected to fall further - "Domestic metal traders expect prices of industrial metals like copper, zinc, aluminium and nickel to go down further, but are still wary of trading as prices continue to be volatile." - more here

  Nickel Volatile As Stainless Cos Continue Drawdowns - Eramet - "Global nickel prices are expected to continue to be "extremely volatile" amid an ongoing drawdown in inventories by the stainless steel market, French metals and mining group Eramet SA said Thursday." - more here

  Asian steelmakers to cut steel output next month - "Asia’s third-largest steelmaker Posco of Korea said it will be reducing output of stainless steel by 25,000 tons in September due to declining orders." - more here

  Behre Dolbear Global Mining News - pdf here

  Steel Founders' Society of America Steel Market news - July recap here pdf

  Eramet: Nickel Delivery Expectations Cut As Demand Drops - "Nickel deliveries from French metals and mining group Eramet SA will fall short of the 55,000 metric tons previously estimated due to a sharp drop in metal demand, it said Thursday." - more here

  Eramet 1st-Half Net More Than Doubles on Nickel Gains - "Eramet SA, operator of the world's largest ferronickel plant, said first-half profit more than doubled after nickel prices climbed to a record." - article here

  China's Baosteel says to produce more low-nickel steel - "Baoshan Iron and Steel Co , China's second-largest stainless steel producer, said on Thursday that it would produce more low-nickel stainless steel to meet rising demand in the second half of 2007." - more here

  Price Of High Carbon Fe-Cr Starts To Be Cooled Down - "Immediately after summer vacation was over, heated spot price of high carbon ferro-chrome ( charge chrome ) has started to cool down. Since stainless steel mills in China have been decreasing their production, spot cargoes of high carbon ferro-chrome, having become an excess in China and lost the market for sales, are being offered at a discounted price of 95 US-Cents per lb. CIF." - more here

  Yusco lifts stainless prices for September - "Taiwan's largest stainless producer, Yieh United Steel Corp. (Yusco) is adding its export price for September." - more here

  Baosteel H1 net profit jumps up by 80% YoY - (excerpt) "Baosteel said that its stainless steel operation would face a big challenge in the second half because of large price fluctuations for the material." - more here

  China iron ore import figures for January to July 2007 - "World’s biggest importer of iron ore, China has imported 221.504 million tonnes of iron ore during January to July 2007. Its imports during July amounted to 33.605 million tonnes." - more here

  Nisshin Steel to cut SS output by 40% in August and September - "It is reported that Japan’s Nisshin Steel has reduced the nickel series stainless output by 40% for steel making and by 30% for cold rolling at Shunan works in August and September as compared with July 2007." - more here

  Stainless steel consumption rose 12% in H1 - industry body - "The Southern African stainless steel industry grew by 12% in the first six months of this year to a total apparent consumption of 111 025 t, the Southern Africa Stainless Steel Development Association (Sassda) said." - more here

  Copyright/courtesy Dow Jones - (excerpt) "Anglo American, based in London, UK, is conducting earth works at its ferronickel project in Barro Alto, Goias state, Brazil, due to complete in early 2008. The plant is expected to open in 1Q 2010 and will operate in full capacity in the same year."

  Sally Malay rides high on nickel - "Strong nickel prices and a big increase in production volumes have enabled nickel miner Sally Malay Mining Ltd to record a 453 per cent increase in net profit after tax to $88.1 million for the year to June 2007." - more here

  Interesting Video from U.S. Steel on "How Steel is Made - from Start to Finish" - 6 min video here And anyone interested in where aluminum comes from? Alcoa presents "It All Starts With Dirt" - video here  More "How Things Are Made" video's here

  Today's beginning nickel inventory - minus 150 tons = 23,286 tonnes (3.76% - 876 tonnes cancelled warrants/ 22,410 net stock level) Shanghai Jinchuan nickel closed at 248000-249000 RMB/t, minus 2,500.

Supply will probably never prove to be a problem, but recent news shared by our contact in Indonesia, Rohan, tends to make us believe Indonesia may be looking to clamp down on ore shipments from that country. This wouldn't be completely surprising, and we have seen similar action taken against chromite ore shipments from South Africa to China. Miners with smelters aren't really fond of those who sell raw ore direct at cut rate prices, and have been known to put pressure on governments. In two of the three major sources of pig nickel to China, Indonesia and New Caledonia, there are established nickel smelters, with more on the way. Their voice with the Philippine government, the largest Chinese source, could carry far less weight.

Economic feasibility of the so-called pig nickel production, is more a subject of contention, than fact. While the general consensus from analysts and a few large nickel miners have set the profitability point somewhere around $12/lb, we have seen media reports as low as $9/lb, and as high as $15/lb. Recent demand destruction in the stainless steel market has skewed much of the the recent info about slowing pig nickel production in China, and really does not assist us in determining a good dollar amount. We continue to follow the story closely, as we still feel the mysterious pig nickel will continue to play an important role in the future. Nickel prices will be back in play tomorrow, as London returns to the trading floor. 

  Added a new permanent link to the lower right hand column - Daily Shanghai Metal Index Graph - here

  US could be heading for recession - "Former US Treasury Secretary Larry Summers warned that the United States may be heading into recession as the biggest victim to date of the sub-prime mortgage debacle was humiliatingly sold for a token sum in Germany." - more here

  Slave labor persists in Amazon charcoal works -ICC - "Around 12 percent of Brazil's Amazon charcoal works still uses slave labor despite a major crackdown since 2004, the regional industry watchdog, Citizens' Coal Institute (ICC), said." - more here

  London Metal Exchange is closed today for Summer Bank Holiday.

  Yieh reports China’s Taiyuan Iron & Steel Group (Tisco) is raising the price of its SUS304J1, 304/304L, 321 and 301 CRC and plate by RMB800/ton for September contracts. It is also reporting Japanese Nippon Steel will cut back their output by 40% in September, while announcing price cuts on their stainless steel prices by 95,000 yen/mt from last month on stainless steel plate and sheet. Dow Jones is reporting that Hyundai Steel Co., Japan's second largest steelmaker, says it will "suspend production of stainless steel at its Incheon plant from Aug. 27-31 due to a sharp decline in orders."

  Chinese steel imports short in Europe - "The prices of flat products from China to southern EU are going to be increased from September due to supply decrease from China." - more here

  In a weekly poll of Chinese metals analysts for the Shanghai Nonferrous Metals, 32 responded. Of those, 5 (15%) expect the price of nickel to rise this week, 8 (25%) feel the price will basically stay the same, and 19 (59%) expect the price to fall this week.

2006 Steel Production from European Confederation of Iron and Steel Industries (EUROFER)

  U.S. Steel to Acquire Stelco - "U.S. Steel Corp. has agreed to pay roughly $1.1 billion in cash for Canadian steelmaker Stelco Inc. in a deal to strengthen its position as a supplier of flat-rolled steel products in North America." - more here

  Coking coal prices likely to rebound in 2008 - "Bloomberg reported that Coal used by steel makers might snap a three year slump in 2008 because of a decline in exports from China." - more here

  Machine North: imminent green light - "Joined together last weekend in Toronto, the leaders of the SMSP and Xstrata-Nickel (ex-Falconbridge) examined with the magnifying glass the ultimate grinding of the project of factory of North. Response in September." - poorly translated article here

  Base metals price bounce-back anticipated and gold demand positive - "The strength of Chinese industrial metals demand, coupled with declining exports, bodes well for a bounce back in base metal prices. Lead, tin and zinc have greatest upside potential." - more here

  Shanghai Jinchuan nickel closed at 257000-258000 RMB/t, minus 1,500.

Still have not found the cancelled warrants figures for today, so it will be tomorrow morning when LME officially posts them, that we can catch up.

  TD Bank Weekly Commodity Price Report - pdf here

  (thanks to a reader in Indonesia who keeps us advised of local mining news and assists with translation) Merrill Lynch - Indonesia’s new mining law, due out by end-2007, will stipulate a ban on ore exports, according to Member of Parliament Airlangga Hartanto, who was involved in the ratification. We think ANTM’s existing contracts will be honored but renewal may not be possible. With 80% of ANTM’s ore contracts expiring in 2008, our gross profit forecast for that year is in jeopardy as 20% of it is based on ore exports."

  Sherritt, partners to invest $3.3-billion in Ambatovy - " Japanese trading company Sumitomo Corp. and three partners, including two major Canadian companies, plan to invest about $3.3-billion (U.S.) to develop a nickel project in Madagascar amid increasing worldwide demand for nonferrous metals, the company said Thursday." - more here

  New site for those interested in NAFTA steel trade figures - North American Steel Trade Committee - here

  Indications at 7:50 am CST show 3 month nickel selling up by $.02/lb , much lower than earlier. Cash nickel shows selling up by nearly $2,000/tonne today. None our numerous sources are showing cancelled warrants for nickel this morning, so we will update when we have. (Bloomberg - more)

  China's nickel ore importers suffer huge losses as prices plummet - "China's nickel ore imports skyrocketed in July this year despite shrinking demand, which as led to a significant drop in domestic prices. Domestic nickel ore importers are currently locked into long-term nickel ore purchase contracts signed earlier in the year when nickel ore prices were high, and as such are now forced to sell at a loss in the domestic market, industry analysts told Interfax today." - more here

  Nickel, Lead Push Complex Up; Equities Support - "Gains in lead and nickel are leading the London Metals Exchange base metals higher Thursday, with prices supported by rallies in the stock markets overnight, and market participants said the metals look ripe for a short-term spike." - more here

  Metal prices to decline over 12-18 months as supply increases - Fitch - "Fitch Ratings said it expects metal prices to decline with increased supply over the next 12-18 months but remain higher than long-term averages." - more here

  Funds find a haven in commodities - "Mohammed Syed, the chief executive of Axiom Funds, the world's best-performing investor in commodity hedge funds this year, says the stock market rout bolsters his view that grain, mining and oil beat equity." - more here

  Standard Bank: Weekly Commodity Research - pdf here

  China and India drive global dig - "China and India’s extraordinary appetite for raw materials is prompting the world’s mining companies to put their pith helmets back on. To meet the demand, they are not just expanding extraction, but getting back into exploration." - more here

   Chinese market situation likely to weaken iron ore price negotiation - "It is reported that iron ore concentrate prices in the North China have rocketed up over the recent month, with the past two weeks seeing rises every single day, concerted by purchase price of the steel makers. Iron ore prices in North China went straight up by CNY 135 per tonne (USD 18) on average within one month a 16.5% gain." - more here

  China, India growth to offset US woes - "Strong fundamental demand for raw materials out of China and India would eclipse any drop in US demand caused by the bad debt crisis, BHP Billiton chief executive Chip Goodyear told investors yesterday." - more here

  Sumitomo, Partners Raise Spending on Ambatovy Nickel - "Sumitomo Corp., Japan's third-biggest trading company, and its partners will spend about 32 percent more than planned to develop a nickel mine in Madagascar as prices for equipment, engineering, labor and fuel rise." - more here

  Stainless steel mills in South Korea continue to cut output - "After Posco decreased the output of 300 series stainless steel in August, the company is expected to cut production in September." - more here

  Courtesy/copyright Dow Jones - "LME nickel is in more positive territory but its still sluggish fundamentals will provide reigns for its current gains, says a London-based broker. A firmer tone to the base metals amid relative calm in the broader financial complex is adding temporary support, he notes. Adds that rising inventories and slowing demand from the stainless sector will weigh on prices going forward."

  According to Chinese media reports, ThyssenKrupp asked the European Commission to launch an anti-dumping investigation of stainless steel products against China on the 14th.

  China’s boom gives cautious miners new air of confidence - "The boom-and-bust cycle is so entrenched in the mining sector that executives have been wary of committing to new investment, despite five years of surging commodity prices." - more here

  Xstrata to double molybdenum capacity at Chilean smelter - "Xstrata Copper is studying plans to double the treatment capacity for molybdenum concentrates at its Altonorte smelter in northern Chile, executives said Wednesday." - more here

  Today's beginning nickel inventory - plus 612 tons = 21,078 tonnes (4.41% - 930 tonnes cancelled warrants/ 20,148 net stock level) Shanghai Jinchuan nickel closed at 254000-257000RMB/t, plus 9,500.

We said we would be surprised if nickel ended as high as it indicated this morning... and we are. We expected prices to hit bottom, but not to bounce so high, so fast. Either traders are betting inventories have maxed out and the market is getting interesting again, or we are witnessing a spurt of enthusiasm that will fizzle at the first hint of another large gain in inventories. For the third day in a row, the clues left by the inventory figures, hint at a potential turn around in the market. Another bullish day for nickel, which ended at $12.77/lb ($28,150/tonne), up over $2,000/tonne in as many days. (Dow Jones - more) (Reuters - more)

  (disclaimer - subject to correction - our Chinese translation stinks - the totals should be right, the growth percentiles may be attached to wrong figure) China refined nickel imports for July rose 20.2% in July (1,167 tonnes) and 36.6% for January thru July 2007 (62,527 tonnes) compared to the same period last year. Primary sources shown are Canada, Australia, Russia, and Norway. Imports of nickel ore rose 827.1% (2,277,956 tonnes) over last July, and for the year, have grown by 783.5% (9,299,963 tonnes). Primary sources are shown as the Philippines, Indonesia, and New Caledonia.   

  International Stainless Steel Forum releases 2006 figures - Foreign Trade Flow Stainless Steel Products in 2006 Exports here Foreign Trade Flow Stainless Steel Scrap in 2006 here

  Nickel Institute new articles

• Japanese Club Promotes Stainless Steel Water Pipes - "There are many advantages of using stainless steel water pipes in countries where water resources are scarce and in countries such as Japan where water leakage is a problem." - more here
• Big Plans Take Off on the Arabian Gulf - "When it is completed in 2009, the new international airport in Doha, Qatar will be the first airport designed specifically to accommodate the Airbus A380 super jumbo." - more here
• Processing Perfect Poultry - "Stainless steels enable food processors to maintain hygienic conditions in long-lived equipment" - more here

  Copyright/courtesy China Business Daily News - "Shanxi Taigang Stainless Steel Co., Ltd., a listed subsidiary of Taiyuan Iron & Steel Group, reports a 299.10% year-on-year growth in the net profits in the first half of 2007, reaching CNY 2.74 billion, or CNY 0.7924 per share. The interim report says that its operational revenue in H1 hit CNY 40.1 billion, soaring 173.75% from a year earlier, and the overall gross profit margin was 13.64%."

  Copyright/courtesy Dow Jones - "LME nickel is seen averaging $28,300/ton  ($12.84/lb) in 3Q and and $30,000/ton ($13.61/lb) in 4Q, says Standard Chartered. Notes the recent selloff has been overdone and that nickel demand will pick up as destocking by the stainless steel industry comes to an end. There is already strong evidence that nickel pig iron producers have made significant cutbacks, which will help tighten supplies, Standard Chartered adds. Sees nickel averaging $27,000/ton ($12.25/lb) in '08.

  Copyright/courtesy AFX Financial - "Nickel consumption increased by 11% to 744,000 tonnes in the first six months of 2007, compared with the same period last year, leaving the market 2,600 tonnes in deficit, said the World Bureau of Metals Statistics (WBMS). Mine production for the same period increased by 8% to 760,200 tonnes, while refined production was 11.8% higher, stemming mainly from China, Finland and Canada."

  WMC makes BHP different - "BHP Billiton's profit growth slowed in the June half-year. But it was stopped from 'going down to Rio' by the fabulous profits on nickel." - more here

  BHP Says Credit Squeeze Won't Reduce Commodity Demand (Update4) - "BHP Billiton Ltd., the world's biggest mining company, said a global credit squeeze is unlikely to derail the five-year rally in commodity prices being driven by the emerging economies of China and India." - article here

  Hagedorn declares ‘total war’ on mining - "Shocked by the overwhelming number of mining applications covering almost every square inch of this 254,000-hectare newly-created city, Mayor Edward S. Hagedorn declared today a total ban on large-scale mining in this city." - more here

  Indications at 7:50 am CST show 3 month nickel selling up by $.40/lb . We'll be surprised if this ends this high. Today's news is a mixed bag of bearish and bullish news, and traders are forcing price up too quickly.  (Bloomberg - more) (Reuters - more)

  Global Nickel Mkt In 2,600 Ton Deficit In Jan-Jun 07 - WBMS - "The global nickel market recorded a deficit of 2,600 metric tons in the first six months of 2007, with reported stocks 5,700 tons lower, the World Bureau of Metal Statistics said Wednesday." - more here part 2

  Preliminary - Nickel imports to China rose 20% YOY in July - more later

  Copyright/courtesy Dow Jones Newswire - "Chinese customs data is bearish for LME nickel, says JP Morgan's Michael Jansen. He notes imports of nickel ore are a clear record at over 2 million metric tons, "implying that nickel in the pig iron sector remained broadly healthy in July and that talk of production cuts from this alternative source of nickel for stainless steel producers may remain a story for August/September." "Triland Metals notes nickel's rally surprised many in market, since other metals mostly weakened in Tuesday's session; technically, took out 10-day moving average, needs to break resistance at $27,500 to maintain upside momentum."

  BHP News

• BHP Billiton will up 2008 nickel, copper output - "BHP BILLITON forecasts that its production of nickel, copper, iron ore and oil will show "significant volume growth" in 2008 after a year in which the leading commodity company posted record profits and production." - more here
• BHP Billiton says outlook positive despite US debt crisis - "BHP Billiton is positive about the outlook for the diversified resources company despite the current sub-prime crisis in the United States as the industrialisation and urbanisation in India and China will continue to grow demand for its products." - more here
• BHP profits as commodity demand soars - "BHP, the world's biggest miner, has reported a 19% jump in second-half earnings on surging sales of copper, iron ore and coal, and flagged future growth to strong Asian demand." - more here

  Is the fat lady still singing? - "Mining stocks have taken a severe beating during the recent equity markets sell off, falling, on average, by nearly one third from record highs, most of which were posted in the past few months." - more here

  EU Steel Prices Holding Up At Record Levels Despite Increased Imports -"Last year represented the onset of greater global competition as China became a substantial net exporter of steel." - more here

  PNG Study: Ramu Nickel Mine 'High Risk" - "An environmental impact study on Ramu nickel mine has described the project as a "high-risk operation with severe impacts on the environment and community." - more here

  Today's beginning nickel inventory - plus 12 tons = 20,466 tonnes (3.40% - 696 tonnes cancelled warrants/ 19,770 net stock level) Shanghai Jinchuan nickel closed at 245000-247000 RMB/t, plus 4,500.

Something else worth watching this week. Xstrata and SMSP meet Thursday to discuss the future of Koniambo. This is an interesting situation, from a few different perspectives. First, if Xstrata backs out, Eramet is chomping at the bit to get the mining rights to this area back. They were forced to relinquish it, by the French government, to SMSP years ago, and have been trying to get their hands on it ever since. Second, with news that Xstrata is doubling the size of their Raglan mine, it will be curious to see if they foresee future nickel demand justifying the potentially $3 billion dollar investment. Falconbridge wanted Koniambo bad... Xstrata has not sent the same signals thus far. And thirdly, the decision could send some signals to the nickel market as a whole. If they go, then obviously Xstrata is betting all the new mines coming online over the next few years, will not be enough to meet future demand requirements. If they back off, or continue to send mixed signals, it could imply that worldwide demand either doesn't justify construction of another mega-mine yet, or that Xstrata has better use for the required investment. Either way, it will be interesting to watch if any decision is announced. Speaking of new mines coming, the report below by Commonwealth Research has a nice list of nickel projects under construction.     

  South Korean firms sign Madagascar power plant deal - "A consortium of three South Korean firms said Tuesday it has entered into a US$180 million deal to build a power plant in Madagascar." - more here

  China raises interest rates 4th time in 2007 to curb inflation - "China's central bank raised the benchmark interest rates on Tuesday for the fourth time this year in an effort to prevent the economy from overheating and curb accelerating inflation." - more here

  Russian mining giant comes to Botswana - "Russia's leading mining and metallurgical company Norilsk Nickel has bought Tati Nickel Mine, the company's chief executive Mr Peter Breese has announced." - more here

  2005 Incomes, on Average, Still Below 2000 Peak - "Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows." - more here

  Indications at 7:50 am CST show 3 month nickel selling up by $.05/lb .  (Bloomberg - more) (Reuters - more) (Forbes - more)

  (comment - would you believe $9/lb is now the reported break-even point for pig nickel production?)  The red soil nickel ore price falls, China contains the nickel pig iron to restore the production -  (quote from article) "So long as the nickel price maintains above 150,000 Yuan/tons (19,800 US dollars/tons), contains the nickel pig iron enterprise to be able to make money. " - poorly translated article here

  Rand Merchant Bank - Weekly Base Metal Report - pdf here

  Behre Dolbear - Global Mining News - pdf here

  Haywood Securities - Metals & Mining Weekly - pdf here

  Metal prices still strong, RBC says - "After the meltdown in metals and mining stocks this month, analysts are questioning whether the bleeding has finally stopped." - more here

  Global crude steel production in July up by 5.3% YoY - "International Iron and Steel Institute reported that the total crude steel production in July 2007 for the 67 countries is 109.9 million tonnes up by 5.3% YoY as compared to July 2006." - more here

  Copyright/courtesy Dow Jones Newswire - "Further slippage in nickel demand could "easily" see the negative aura that surrounded the base metals throughout most of last week reemerge, says JP Morgan analyst Michael Jansen. Adds fundamentals imply support on dips but chances of a recovery in prices and a retest of overhead resistance levels depends significantly on investor sentiment improving."

  Output Of Stainless Steel Products In Japan For June 2007 Had Slight Increase - "According to the steel statistics released on the 10th of August by the Ministry of Economy, Trade and Industry, the quantities of stainless steel products ( hot-rolled products ) produced at stainless steel mills of Japan in June of 2007 were as per the table attached hereto." - more here

  BHP Billiton, Rio Tinto bullish on Chinese demand for iron ore - "Officials from Anglo-Australian mining giants BHP Billiton (BHP.AU) and Rio Tinto (RIO.AU) said Monday that they see no imminent slowdown in China's rampant demand for iron ore." - more here

  Alvaro Vargas Llosa: Latin American firms becoming true global players - "Now if only the politicians could get their act together" - more here

  Today's beginning nickel inventory - plus 192 tons = 20,454 tonnes (3.99% - 816 tonnes cancelled warrants/ 19,638 net stock level) Shanghai Jinchuan nickel closed at 241000-242000 RMB/t, no change.

• US credit crunch 'unbelievable' - Swiss central bank chief - "Swiss central bank chief Jean-Pierre Roth sharply criticised the US economic system in an interview published Sunday, after the home loans crisis that caused turmoil on world financial markets." - more here
• China Central Bank Adviser: 'Optimistic' About Econ Situation - "China central bank adviser Fan Gang said Sunday he takes an "optimistic" view of the current situation in the domestic economy and expected the pace of economic growth shouldn't speed up much more going forward." - more here
• Swiss SNB Warns Not To Underestimate Market Turbulence-Report - "Swiss National Bank Vice President Philipp Hildebrand warned not to underestimate the possible consequences of current financial market turbulence on economic growth, Swiss daily Tages-Anzeiger reported Saturday." - more here
• Market turmoil 'set to continue' - "Global stock market turmoil will continue for some time, analysts have said, and may force the Federal Reserve to cut US interest rates imminently." - more here
• Markets' Week of Living Dangerously - "The Federal Reserve made a dramatic move to shore up the US economy as it was rocked by financial turbulence, but Britain's chief banker is refusing, for now, to bail out the reckless." - article here
• The Panic of 2007 - "End of the World or Muddle Through? This week I try to explain in simple terms the very complicated story of how we went from some bad mortgage loan practices in the US to the point of world credit markets freezing up." - more here

  Week In Review - (using different source than for daily updates) If you just looked at the weeks beginning nickel price of $12.09/lb and its end at $11.86/lb, you might think the week was a snoozer. But the price of nickel was a small piece of a much more complex puzzle of base metal extremes. Ask anyone that owned stock in a mining company, and they would probably tell you this is a week they would just as soon forget. Then again, those with the good fortune of selling and buying at that particular right moment, would tell you this was a nail biter, but very profitable week. On Monday, 3 month nickel opened at $12.09/lb, fell to $11.88/lb, rose to $12.47/lb, where it ended the day. On Tuesday, after LME inventories registered a decline, nickel opened at $12.45/lb, rose to $12.93/lb, fell to $12.13/lb, and ended at $12.15/lb. On Wednesday, the market