Monday, August 31

• Baltic Dry Index - closed for holiday today (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Yen Gains as Hatoyama's DPJ Sweeps to Power in Japan, Driving Down Stocks // Japan's Record Unemployment Threatens Short `Honeymoon' for Hatoyama's DPJ // India Bond Futures Start With `Healthy' Trade on Hedge Against Inflation // India's Economy Expands 6.1%; Growth Accelerates for First Time Since 2007 // Hong Kong Stocks Slide on Report New Loans in Mainland Dropped Last Month // Consumer Prices in Europe Declined Less Than Economists Forecast in August // U.K. Home Prices Post First Gain Since 2007 on Low Supply, Hometrack Says // European Stocks Decline on Valuation Concerns; Steelmakers, L'Oreal Slide // Fed Will Miss Inflation Target Over Next Decade, Economists Say in Survey // Disney to Acquire Marvel for $4 Billion, Gaining Spider-Man, X-Men Series // Dudley Says Fed Can Avoid More Rapid Inflation, Sees No Need to Cut Buying  // Stocks in U.S. Decline, Trimming S&P 500's Sixth Straight Monthly Advance
• The US Dollar has flip flopped from this morning, and is now trading lower against the Euro, by nearly 1/3 of 1%. The shift is not helping oil, as NYMEX cruse is down nearly 5% and under $69.50/barrel. Gold is down 1/2 of 1% while silver is up over 1/10 of 1%. Base metals went untraded with London markets closed for holiday. BDI numbers also went unpublished due to the holiday. Although the Chinese stock market had its worst month in the last 10, losing 21.8%, US markets have generally looked the other way. But after losing nearly 7% last night, the world was paying attention today. Tomorrow we get the all important China and US Purchasing Managers Indexes in manufacturing, and with expected to show growth, markets may be a little more cheery tomorrow. How metals will react as they resume trading tomorrow is anyone's guess at the moment. After a big day of loss that they are missing out on, Londoners may wake to news that Chinese markets are rebounding, and with the Dollar lower today, anything goes. 82% of the metals analysts that SMM interviewed today believe nickel in China will fall this week. We will see.  

  Reports

• Weekly Commodity Price Report - pdf here
• The Commodity Tracker - pdf here
• Weekly Forecast by SMM Specialist - more

  Commodity/Economic Articles and Comments

• China’s nickel imports hit a new high in July, when refined metal landings measured more than 47,000 tons, ferronickel totals measured over 33,000 tons and oxide numbers went over 12,000 tons. The total net imports for nickel in finished form totalled over 260,000 tonnes for January thru July.
• (EN) Steel producer ArcelorMittal South Africa announced on Monday that its flat steel prices would rise by between 2% and 4% in October, while its long steel product prices would remain unchanged.
• Nigel Gault, IHS Global Insight - "The cash-for-clunkers incentives boosted consumer spending in July and will give an even bigger kick in August. But, aside from that, consumer spending is still subdued. Incomes remain weak, showing no change in July, although there was one encouraging signal in that wage and salary income edged higher, its first monthly increase so far this year. But the labor market is still shedding jobs. When given sufficient incentive (as in cash-for-clunkers) consumers will spend. But reduced wealth, high debt, tight credit, and a weakening labor market are all weighing on consumers. Consumers remain a missing link in hopes for strong recovery."
• Joel Naroff, Naroff Economic Advisors - "To me the real story in the report were the income numbers. While disposable personal income, which is what we have left after the government gets its share, was essentially flat, wages and salaries actually increased. With all the layoffs, businesses had been cutting back on their payments to workers. Therefore, the increase is a very positive sign."
• U.S. stock market set for shift as investor sentiment falls - more
• Blue Chip, White Cotton: What Underwear Says About the Economy - more

  Interview - Stainless sector needs a makeover-ArcelorMittal exec - ArcelorMittal is reviewing all options for its stainless steel operations, and the sector as a whole would benefit from consolidation in Europe, a senior executive at the world's biggest steelmaker said. - more

  Collapsing Nickel Prices, Higher Costs Bury Antam’s Earnings in First Half - PT Aneka Tambang, the country’s second-largest nickel producer, said its first-half earnings dove 84.7 percent from the year-earlier period because of falling prices for the metal in the first sixth months of this year.  - more

  China Needs to Limit Iron Ore Supplies Sold on Spot  - China, the world’s largest iron ore consumer, needs to limit supplies of the material sold on the cash market as talks to settle contract prices stalled, Baoshan Iron & Steel Co. said. - more

• Baosteel confirms paying provisional ore prices - Baoshan Iron and Steel Co , the flagship listed unit of China's biggest steel mill, confirmed on Monday that it was paying provisional benchmark prices for iron ore to major overseas miners. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around untraded as the London Metal Exchange is closed for Summer Bank Holiday. Trading will resume tomorrow. The US Dollar is trading higher against the Euro, by 1/4 of 1%. NYMEX crude futures are down over 2-1/4%, and at $71/barrel. Gold is down over 1% and silver is lower by over 1-1/2%. Asian markets fell overnight, with China down over 7%. European markets that are open are down, and US futures show Wall Street could open in a foul mood. NI LME inventory numbers today, and the BDI numbers will not be released until tomorrow. Bloomberg is carrying an article "Shipping Rates Seen Falling 50% on China, Fleet Size" this morning here. For the metals industry the second third of the year ended with mostly positive news, as numerous steel companies announced they were firing back up and hiring back workers on Friday.    
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Weekly Scoreboard - pdf here
• Robry Sunday Night Economic Assessment - more
• Metals & Mining Weekly - pdf here
• 2008 Canadian Minerals Yearbook - pdf here
• ISRI Friday Report - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  no report today as LME markets are closed (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Base metals on the Shanghai Futures Exchange fell Monday on spillover negative sentiment from Chinese equity markets.
• (AMM) Market sources are split on whether demand for stainless steel is improving, but they agree that prices will be substantially higher in coming months even if demand fails to strengthen.
• (Dow Jones) South Korea's Posco to raise stainless steel prices by up to 13% from September, company says reflects recent gains in global commodity prices, follows on from significant price cuts this year and last year of first 10%, then 14% in February. Stainless prices dogged by overcapacity, but that appears to be turning around as Posco's move shows.
• (Yieh) Taiwan’s China Steel Corp. is expected to increase production by 10 percent in the fourth quarter, and market participants said the company’s price list for October-November is likely to rise by 5 percent.
• (Interfax) China's crude steel output in August may topple July record - China's crude steel output in August may surpass the record high volume of 50.68 million tons seen in July, due to the time lag between price drops and output, a Chinese industry analyst told Interfax on Aug. 31.
• (JMB) Market price of cold-rolled Ni stainless steel sheet/ Kanto area - rises 1st time in 2 yrs
• Demand for commodity has to catch up for sustainability - more
• Commodity prices diverge amid recovery hopes - more
• China demand may drive commodities higher - more
• Commodity traders signal lift for prices - more
• Citigroup Seeks ‘New Blood’ for Asian Commodity Team - more
• Austria's biggest steel maker phases out short working hours - more
• Voestalpine to End Short Work Hours on Steel Rebound - more
• U.S Steel restarts Ontario furnace ahead of hearing - more
• Steelmakers Resume Output as Global Demand Recovers - more
• (China Daily) Chinese shares plunge 6.74%, driven by weak energy shares
• US must act to support dollar: Economist - more

  China to subsidise loans for raw material imports - China will cut costs of raw material imports by subsidising the interest on loans taken out to pay for shipments, China's top planning body, the National Development and Reform Commission (NDRC), said. - more

  A look into the future: Nickel – Part One In the last of a four-part series highlighting what experts believe the future may hold for Australia’s key commodities, Paula Wallace takes a look at what could be in store for nickel. - part 1 part 2

  A big week for moly - Molybdenum, a metal that’s used in steel production, was all the rage two years ago, when the economy was on rails and commodity plays were soaring. - more

  African Eagle seeks partners for nickel, copper - African Eagle Limited will seek an equity partner to finance an up to $450 million nickel project in Tanzania and could sell some copper and gold projects to raise funds, the company said on Monday. - more

  Demands for new regencies, province revive in South Sulawesi - Regional autonomy is deemed ineffective, but requests for autonomy remain strong in South Sulawesi, where two new regencies and a new province are demanding immediate autonomous status, namely South Bone and Central Luwu regencies and Luwu Raya province. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Vale Inco 'always prepared to meet' with union, company says - The USW has posted a letter to Harvey Beresford that asks for a return to negotiations in Sudbury, Port Colborne and Voisey’s Bay. Has Vale Inco responded? - more
• Voisey's Bay workers complain about bad food - A United Steelworkers union representative planned to meet with workers Monday at the Voisey's Bay nickel mine in northern Labrador about complaints of unsafe working conditions and unfit food. - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Ore miner ends talks over price - One of the "big three" iron ore producers has cut China's national ore negotiating body out of the equation, electing to deal directly with steel makers that want to buy its products. - more
• Iron-Ore Demand May Only Be Restocking - Estado - Namisa S.A., mining subsidiary of Brazilian steelmaker Companhia Siderurgica Nacional (SID), believes current iron-ore demand may just be restocking, the Estado news agency reported Friday. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, August 28

• Baltic Dry Index -  minus 4 to 2,421. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan's Jobless Rate Climbs to Record 5.7% in Blow to Aso on Election Eve  // Toyota Shuts First Plant in 72-Year History as GM California Venture Fails // Asian Stocks Gain as Harvey Norman, Dell Earnings Beat Analyst Estimates // China's Stocks Decline for Fourth Week; Banks, Sinopec, Cosco Lead Retreat  // European Confidence in Economy Jumps More Than Forecast to 10-Month High // U.K. Economy Shrinks Less-Than-Forecast 0.7% as Investment, Spending Drop // U.K. House Prices Increased Most in Five Years in July, Land Registry Says // European Stocks Climb After Dell, L'Oreal Earnings; Infineon, BHP Advance // Consumer Spending in U.S. Climbed in July on `Cash for Clunkers' Program // Leverage Rising on Wall Street at Fastest Pace Since Credit Froze in 2007 // U.S. Stake in AIG Deemed `Highly Speculative' in Draft Treasury Document // U.S. Stocks Retreat from 10-Month High, Led by Exxon, as Oil Prices Fall
• The US Dollar is now trading higher against teh Euro, but by a miniscule amount, after a morning of choppy ups and down's. NYMEX crude is down nearly 1/3 of 1% but over $72/barrel. Gold is up 8/10 of 1% while silver is higher by over 3-1/2%. Base metals all ended the session higher. Indicator charts show nickel started off much higher, but started showing signs of being in trouble late in the afternoon. Most of the fall came after in after hours trading. Dow Jones reports three month nickel ended the day at $8.63/lb , down 1.15% for the week, but still 6.02% higher for the month. Inventories of nickel stored in LME approved warehouses rose significantly yet again overnight, now showing well over the 113,000 tonne level. We see another day of gains like either of the last two, and we will see nickel inventory numbers at new high's for the year. Sucden's day old chart shows rangebound nickel (chart here).  The Baltic Dry Index drifted for a second day, down 4 points to 2,421. The Commerce's Department earlier report that consumer spending rose in July was credited mostly to the "Cash for Clunkers" program, that helped 700,000 new vehicles sell during July and August. This will mean August numbers will be tainted by this government stimulus also. The more important number, in our opinion, was the slight drop in the US savings rate in July. While it is obviously too early to say this is conclusive evidence that Americans will most likely 'not' change their buying habits after this economic mess is over, it does start to give us hints that they probably won't. Good news for Wall Street as this means they should return to living beyond their means just as soon as their confidence rises. The saddest part of this whole episode will probably be the only lesson that people will remember. And what was that? In our opinion, the lesson will be that if you get into trouble about the same time as a bunch of others do, the government has a bail-out plan ready for you. New lesson for the kids. If your neighbor's trash starts a fire that burns down your house, call your insurance company. If your neighbor's trash starts a forest fire that burns down the entire neighborhood, call FEMA. If you loose your job and fall behind on your mortgage, you better pack your bags and reserve a room at your mom's - unless of course - some of your neighbor are in the same boat, then the government will step in too make that house affordable for you again. Meanwhile, the idiot down the road, who worked all his life, lived within his means, and paid off his house, gets to watch his tax dollars help you pay off your house, while his property value tanks to everyone except the county property tax assessor! Ok - apparently it's been a long week and we need the break. Have a safe and pleasant weekend!

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• JPMorgan analyst Michael Jansen - ""Underpinning base metal demand ...will be the onset of restocking across the industry pipeline, with fabricators having run down their working inventory levels aggressively over the past 12 months."
• Michael Widmer, metals strategist at Banc of America Securities-Merrill Lynch - "We need better certainty of how the economy is shaping up before we see re-stocking."
• (Dow Jones) Creat Resources Holdings Ltd , a mining, exploration and development company, said Friday that it has entered into an agreement to purchase Exploration Licence 21/2004 and its related exploration/mining information known as the Dundas Nickel Project from Stellar Resources Limited and its subsidiary for a consideration of A$250,000, and an obligation to provide the previous owner with a 2% net smelter royalty as required for the transfer.
• World faces hi-tech crunch as China eyes ban on rare metal exports  - more
• China steel prices plunge after July rises  - more
• The Spend-And-Borrow Economy - more
• A brief history of climate change and conflict - more
• U.S. Bank Enemies At The Gates Could Trigger Sudden Gold Breakout  - more

  Nickel May Decline Should Vale Resume Canada Output, RBC Says - Nickel may drop after a 67 percent rally this year if Vale SA resumes output at two Canadian sites hit by a strike, according to RBC Capital Markets analysts. - more

  Mining and metals: Flash in the pan, or white-hot? - Is the rally here to stay? Ask Scotia Cassels portfolio manager David Whetham in our online discussion - more

  Posco hikes prices to match high costs - Posco, Asia’s biggest stainless steel maker, will raise prices for stainless steel products by as much as 13 percent in September to reflect higher raw materials costs. - more

  Elements of Asia-led super-cycle reappearing for base metals--Scotiabank - Scotiabank economist Patricia Mohr says base metal prices have strengthened "to quite profitable mid-cycle levels." - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.35/lb higher, with all base metals trading much higher  as speculative money pours in. The Euro is trading  over 1/10 of 1% higher against the US Dollar, and is rangebound at the moment. NYMEX crude futures are 1/2 of 1% higher and nearing $73/barrel. Gold is up over 1.1% and silver is nearly 3-1/2% higher. In overnight trading, Asian markets ended slightly higher, with China falling over 3%. European markets are higher this morning, with US futures implying a slightly higher opening. Inventories of LME stored nickel rose again at well above average levels, and the BDI slipped again. The Commerce Department reported U.S. personal incomes remained the same in July, while consumer spending rose for the third month in a row, by 0.2%. Consumer prices remained flat, keeping inflation in check, and the personal savings rate fell to 4.2% in July, from 4.5% in June. The savings rate figure is already starting to answer the question on whether American's will change their savings/spending habits because of this severe recession.    
• Bloomberg morning base metal news - more
• Reuters morning report - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Fortis Asian Metals Monthly - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals eased on Thursday, but prices recovered off their worst levels of the day, as a rather sharp selloff in the dollar to 1.4360 against the Euro, a rebound in energy, and a firmer tone in US equities, (up for their eighth straight session), all helped prices off their lows. .... The metals complex is sharply higher as of this writing, perhaps a belated reaction to yesterday's bullish backdrop. The stronger Shanghai session has helped set the stage for today’s stronger move on the LME despite significant gains seen in weekly Shanghai inventory holdings..... Nickel is at $19,500, up $745 in a solid advance. There is very little news to report, with the complex pushing higher along with the rest of the group. (read Ed Meir's complete morning base metals report here)
• (Alibaba) -Due to the sales pressure and sluggish demand as well as the surging prices of raw materials and steel products, the prices of all the domestic stainless steel including 304 went down.
• (Yieh) China’s Shanxi Taigang Stainless Steel Co., Ltd exported stainless steel of nearly 10,000 tons in July, which was the first time for Taigang to reach almost 10,000 tons in export volume since 2009. According to the statistics from the customs, Taigang exported stainless steel of 9,627 tons in July, up by 40 percent on June.
• (Purchasing) Stainless steel prices are rising by 10% in Europe, dropping a sharp 19% in Asia and sliding steeply in North America .  ... Industry analysts say U.S. production capacity still exceeds demand and the excess capacity will limit the ability of producers to raise prices significantly, even when demand picks up.
• (Asia) Rio Tinto is awaiting a license from the government to establish an Indonesian corporate body needed to start nickel mining venture in the country. The establishment of the local corporate body is one of the conditions needed by Rio Tinto to secure license for venture in Lasamphala in Central Sulawesi and Southeast Sulawesi.
• (WS) India’s stainless steel consumption is likely to rise 10 per cent this year on increased demand from automotive, railway and transport sectors. Demand from utensil sector, which consumes about 60 per cent of the country’s total production, is also expected to rise because of fragmented family concept and innovative use in kitchens.
• (SSY) US steel imports in July rose by 14% month-on-month to 0.9 Mt after falling for five consecutive months, according to the American Iron and Steel Institute (AISI). Year-to-date imports dropped by 49% from a year earlier to 8.7 Mt. This represents the lowest level over the past nineteen years.
• (JMB) Ni Series Cold Stainless Sheet Price Shows Upward Sign, Tokyo
• (AAR) - The Association of American Railroads today reported that rail traffic continues to show slight improvement with rail carloadings at their highest level since early March. For the week ended Aug. 22, 2009, U.S. railroads reported originating 279,478 cars, down 16.1 percent compared with the same week in 2008. Regionally, carloadings were down 14.2 percent in the West and 18.9 percent in the East.
• 41 dead, hundreds affected by mystery illness in Papua New Guinea’s Morobe Province - more
• Bribery pervades list of wealthiest - more
• Questions over strength of recovery - more
• New Hurdles Loom for Commodities ETFs - more
• Strong quake hits northwest China - more

  POSCO raises stainless steel prices by 13 pct - South Korea's POSCO said on Friday that it would raise stainless steel prices by up to 13 percent in its third consecutive monthly increase to reflect improving global prices and rising raw material prices. - more

  Taigang Stainless Steel Swings to First-Half Loss  - Shanxi Taigang Stainless Steel Co., China’s biggest producer of the rust-proof metal, posted a second half-yearly loss as overcapacity and slowing demand depressed prices. - more

  World Production Of FeCr In First Half 2009 Decreased By 45% = Survey By ICDA, Decline In FeCr Production Was Larger Than Reduction In Stainless Steel Production - According to a preliminary survey of the world production of ferro-chrome in the first half (January - June) of 2009 compiled and released in last week by ICDA (International Chrome Development Association), being influenced by a substantial reduction in production of stainless steel and a considerable measure for adjustment of ferro-chrome stocks implemented by steel mills, the world production of ferro-chrome in the first half of 2009 decreased by 45.5% as a whole in comparison with that in the same period of 2008. Also, the world production of ferro-chrome in the first quarter (January - March) of 2009 had a large decrease of 57.3% compared to that in the same quarter of 2008. - more

  Commodities expected to rebound after July dip - Commodity prices slipped in July after two months of gains but are expected to rebound as some G7 countries join China in the economic recovery, Scotiabank said in its monthly commodities report. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Ore miner ends talks over price - One of the "big three" iron ore producers has cut China's national ore negotiating body out of the equation, electing to deal directly with steel makers that want to buy its products. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, August 27

• Baltic Dry Index - minus 2 to 2,425. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Philippine Economic Growth Accelerates, Bolstering Regional Recovery Signs // Japan Unemployment, Inflation Reports May Deal Blow to Aso on Election Eve // Asian Stocks Decline as China Considers Production Curbs; Rio Tinto Falls //  Europe Retail Sales Drop for 15th Month as Unemployment Rises, PMI Shows // Diageo Indicates Worsening Profit Outlook on `Murky' Prospects For Economy // Stocks in Europe Fall for Second Day; Diageo Drops, Credit Agricole Gains // U.S. Initial Jobless Claims Drop to 570,000 in Sign Recession Is Abating // Economy in U.S. Shrank 1% in Second Quarter, Less Than Economists Forecast // Federal Reserve Seeks Delay in Disclosing Recipients of Emergency Lending // FDIC List of Problem U.S. Banks Rises to 416, Putting Reserve Fund at Risk // Toll Posts Eighth Straight Loss as Recession Saps Demand for Luxury Home
• The US Dollar is trading slightly lower against the Euro at the moment, but was trading higher just a few minutes ago. This change came to late to help commodities which fell as the Dollar strengthened off morning lows. NYMEX crude is down over 1% and under $71/barrel. Gold is only slightly higher, while silver is down over 3/4 of 1%. Gold has entered a wedge and is expected to break hard one way or the other shortly. Base metals ended the day mixed, but have recovered some in after hours trading. Indicator charts show nickel fell off earlier highs in the afternoon as the Dollar strengthened, then made up some of its losses in after hours. Dow Jones reports three month nickel ended the day at $8.51/lb , its lowest close for the month. Inventories of nickel stored in LME approved warehouses rose by an astounding amount overnight, and now sit over the 112,000 level. For those who follow such things, nickel trading moved into backwardation last Friday, and has traded there since. This means 3 month nickel is trading for less than cash nickel, and is the opposite of contango, which nickel has traded in for years. Backwardation is not very common in commodity trading. Analysts seem to be ignoring the inventory build-up, but it has to be concerning. We are sitting less than 2500 tonnes shy of the 114,476 record high for this year, and for that matter, this century. The Baltic Dry Index fell 2 points to 2,425, as the one day gain hesitates. Been a fairly quiet week with metals markets and equity markets, and as Ed Meir stated this morning, both appear to be "treading water". Boring, but considering the last year of serious up's and down's, the market can use the breather.

  Reports

• Commodities Daily - pdf here
• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• (JMB) Japan Stainless Sheet Export Price Reaches US$ 3,000 to Asia
• Siemens bought two Chinese metal companies - more
• Brazil's Vale to build 5 mln tonne/year steel mill - more
• U.S. mortgage delinquencies up in July: Equifax - more
• Citizens Not Sharing the Government's Optimism  - more
• Bernanke Victimized by Identity Fraud Ring - more

  Cuban nickel production behind schedule - Cuban plans to produce around 70,000 tonnes of unrefined nickel and cobalt this year are behind schedule, official media in Holguin province reported this week, apparently due to hurricane damage sustained in 2008. - more

  Russia wants to introduce stainless tubes import duty. Centravis position on the market is stable - Soon a special protecting 28,1% duty for the import of stainless tubes to the territory of Russian Federation is possible to be introduced. It will make situation more difficult for all suppliers of stainless tubes, including Ukrainian ones. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.10/lb higher, with all base metals trading ni the green this morning. The SU Dollar is assisting commodities this morning, by trading slightly lower against the Euro, by a little over 1/10 of 1% at the moment. NYMEx crude futures are down 1/3 of 1% but remain above $71/barrel. Gold is up 1/3 of 1%, while silver is off 1/4 of 1%. In overnight trading, Asian markets ended slightly lower as China considers production curbs in steel and cement production. European markets are a tad higher this morning, while US futures are ever so slightly higher. The Labor Department has reported this morning that U.S. weekly jobless claims fell 10,000 to 570,000 last week, while continuing claims fell 119,000 to 6.13 million. The Commerce Department announced that the US GDP fell 1% in the second quarter of 2009, which is what was earlier forecast.  Nickel inventories rose by a ridiculous amount overnight, while the BDI ended its one day positive run.
• Bloomberg morning base metal news - more
• Reuters morning report - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices fell yesterday, but the declines were modest, except for aluminum, which lost substantial ground after it broke below key $1890 support. Just like on Monday, yesterday’s weak session was somewhat surprising, in that for the second day in a row, participants shrugged off constructive macro data out of the US. In this regard, July new home sales increased to their highest level in 10 months, while August durable goods order readings came in higher than expected, but neither did much for any of the markets. This could be partly due to the fact that the increase in the durable goods data, (up by 4.9% vs. the 3.0% increase expected) was perhaps skewed by the government’s “cash for clunkers” program. Excluding transportation, durable goods orders were up by 0.8%, slightly less than the 0.9% expected. Metals were also pressured by a stronger dollar, which finally moved off its 1.43 perch against the Euro to trade more in the mid-1.42 range (where it is right now). In addition, weaker energy prices caused by an uninspiring set of EIA numbers constituted another downward drag. We are slightly lower in metals right now, having come off from earlier highs. It seems that markets, in general, seem to be treading water, as investors are perhaps taking money off the table after weeks of steady gains. There is also some unease about goings-on in China, where the government is now talking about curbs on overcapacity in a number of sectors, like steel and cement, although whether this would amount to anything meaningful remains to be seen. However, despite apparent misgivings about pushing higher, we believe the global “recovery trade” remains intact, and should eventually reinvigorate the markets, particularly if macro data continues to come up with numbers that now seem to be surprising more consistently to the upside. Having said that, not all the metals will be moving up equally, with aluminum remaining our least favorite horse in the race, while copper and lead should lead the group more definitively on the next bounce. ... Nickel is at $18,930, down $145, and very quiet, with only a $450 trading range in place."  (read Ed Meir's complete morning base metals report here)
• (Yieh) Chinese stainless steel suppliers, such as Baosteel Group, Taiyuan Iron & Steel (TISCO) and Lianzhong Stainless Steel Corp. (LISCO) tend to operate at full production at least in short term. Although demand from end users remain weak, more and more orders are derived mostly traders.
• Sucden - China's crude steel output could hit a record in August, this according to data from the China Iron and Steel Association. Production was running at an all-time peak of 1.67 million tons in the first 10 days of the month, nearly 10% percent higher than in early July, and 2% higher than all of July. The early August figure equates to an annualized production rate of nearly 610 million tons, more than 20% above production of 500 million tons in 2008.
• (ATA) The American Trucking Associations' advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 2.1 percent in July. In June, SA tonnage fell 2.4 percent. July's gain, which raised the SA index to 101.9 (2000=100), wasn't large enough to completely offset the reduction in the previous month. The not seasonally adjusted (NSA) index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 106.3 in July, down 0.9 percent from June.
• China Curbs on Overcapacity Show Strength of Recovery - more
• Real US unemployment rate at 16 pct: Fed official - more
• Clunkers and Home Sales – It’s All the Same Thing - more

  Talvivaara CEO sees nickel price pickup in H2 2010 - Nickel prices are likely to fall this year, but could pick up in the second half of 2010 as government stimulus efforts rekindle demand, the chief executive of Finnish miner Talvivaara said on Thursday. The company reported a wider second-quarter operating loss, as technical problems reduced its crushing capacity, but said repair work was on schedule and the unit should be running in September. - more

  Vale Sells 2.1% of PT International Nickel Indonesia  - Vale SA, the world’s largest iron- ore producer, raised 925.6 billion rupiah ($91.6 million), selling 2.1 percent of unit PT International Nickel Indonesia, the Southeast Asian nation’s biggest nickel producer. - more

  Jinchuan To Take Over Zambia's Munali Nickel Mine In Sep-Govt - China's largest nickel producer, Jinchuan Group Ltd., will take over the Munali Nickel Mine in Zambia in September, a government official told Dow Jones Newswires Thursday. - more

  Sampling of European September Stainless Surcharges

• ThyssenKrupp Nirosta - pdf here
• Outokumpu - pdf here
• ArcelorMittal Stainless - pdf here
• Ugitech - pdf here

  China August steel output seen at record high - China's crude steel output could hit a record in August as data from the China Iron and Steel Association (CISA) showed daily production was running at an all-time peak of 1.67 million tonnes in the first 10 days of the month, an industry source said on Thursday. - more

  Steel Prices Move Higher In Most Developing Markets - Turkish long product quotations have once again been heavily influenced by the movement in semi-finished steel and scrap values. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Vale Inco expects strike-hit Sudbury ops could be running within weeks - Brazilian-owned Vale Inco has officially decided to restart operations in Sudbury, Ontario, and could see mining resuming “within weeks”, spokesperson Cory McPhee confirmed on Wednesday. - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, August 26

• Baltic Dry Index - plus 39 to 2,427. (chart) (article - Daily Baltic Dry Index Volatility - here)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Worst Taiwan Storm in 50 Years Prompts Debt Sales, $1.2 Billion Bank IPO // Asian Stocks Advance on China Earnings, U.S. Consumer Confidence Report  // German Business Confidence Climbs More Than Forecast as Economy Rebounds // European Stocks Decline, Led by Swiss Life; WPP, Antofagasta Shares Drop // Bernanke May Redefine Fed's Mission With New Power Over Financial Markets // Waiting for Economy Roubini Can Believe In Means Missing Rally of Century // Homebuilders Buy Land After Three Years of Selling as U.S. Demand Returns // New-Home Sales in U.S. Jump 9.6% in Sign Economy Recovering From Recession // `Clunkers' Car Trade-In Program Yielded Almost 700,000 Sales, U.S. Says // Stocks in U.S. Fluctuate After Some Durable Goods Orders Miss Estimates
• The US Dollar continues to trade stronger against the Euro, up over 4/10 of 1% at present. NYMEX crude is over 1% lower and nearing the $71/barrel level. Gold is down less than 1/10 of1% while silver is over 1/10 of 1% higher. Base metals ended the session lower, unable to overcome the stronger Dollar. Indicator charts show nickel fell after our morning briefing, and stabilized lower late in the trading session. Dow Jones reports three month nickel ended the day at $8.64/lb . Inventories of nickel stored in LME approved warehouses rose again overnight, back over the 100,000 tonne level. Sucden's day old chart shows trading thru yesterday, with nickel trading in a narrow range (chart here). Today's trading stayed within this range. The Baltic Dry Index squeaked out a gainer, up 39 points to 2,427. In U.S. economic news, the Commerce Department reported thanks to a huge increase in aircraft bookings in July, U.S.-made durable good orders jumped 4.9%, the largest increase in two years. The Commerce Department also reported sales of new homes rose for the fourth month in a row in July, jumping 9.6% to a seasonally adjusted annual rate of 433,000. The strike in Sudbury forced another victim today, when Xstrata announced its Kidd copper smelter and refinery will shut down for 7 to 10 weeks, due in part to lack of concentrate from Vale's Sudbury operation. Other than that, it's been a fairly quiet news day on the metals front, so we will leave it at that.

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• (Metal Bulletin) The European stainless steel market is heading for a crash thanks to soaring nickel prices, stockholders and traders told MB.
• (WSJ) Demand for temporary and contract employees increased “markedly” this month, according to the American Staffing Association, a potential augur of improvement in the overall jobs picture. The group’s Staffing Index rose to 75 in the two weeks ending Aug. 16, from 71 in early July, outpacing gains in the same period last year.
• Don't Succumb to Deficit Hysteria - more
• Applying Roubini Wisdom to Stocks Means Missing Out - more
• Bloomberg's Smear of Roubini Merely Hurts the Insulter - more
• WSJ Warns That China May Stop Manipulating Its Currency - more

  Union Angry, but Not Surprised, by Vale Inco’s Decision to Resume Production - United Steelworkers Local 6500 president John Fera says he was disappointed and angry – but not surprised – about Vale Inco Ltd.’s announcement it intends to resume partial operations at its striking Sudbury plants. - more

• Vale to restart some mining at strike-bound Sudbury - Vale said it would to restart some of its mining operations in Sudbury, Ontario, using management and non-union workers at the site as a strike at the facilities approached six weeks in duration. - more

  Commodity Outlook 2010: Prices to rise, but not to 2008 levels - Economists at the International Monetary Fund say the global slump is bottoming out, with contraction in 2009 of about 1.4%. - more

  China handling Hu case properly: Smith - China is handling "expeditiously" the case of an arrested Australian mining executive who faces bribery charges, Australian Foreign Minister Stephen Smith says. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.07/lb higher, with other base metals trading quietly mixed. The US Dollar is trading over 1/10 of 1% higher against the Euro, adding pressure to commodity trading. NYMEX crude futures are down 3/4 of 1% and at $71.50/barrel. Gold is trading 1/4 of 1% higher, while silver is over 6/10 of 1%. In overnight trading, Asian markets ended slightly higher, with European markets slightly lower this morning. Futures show Wall Street has yet to decide how it will open. The BDI edged up overnight, as did inventories of nickel in LME warehouses.  
• Bloomberg morning base metal news - more
• Reuters morning report - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• U.S. Imports for Consumption of Steel Products - more
• China's Metal Demand - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices sold off sharply on Tuesday, with the selloff all the more surprising given the constructive macro data out of the US. In this regard, August consumer confidence readings rose to 54.1 from a revised 47.4 in July, while more importantly, after three years of declines, the Case-Shiller housing index showed home prices increasing by 2.9% in the three months ending June 30th. US equity markets advanced on both these news items and held on to their gains until the end of the session, but the stronger tone did little to prop up either energy or base metals. The dollar was not much of a factor either in yesterday’s action, as it hovered around 1.43 against the Euro for most of the day, making the selloff in commodities even more puzzling. Some of yesterday’s gains are being recouped today, with metals modestly higher across the board. There is not much news that we see apart from German business confidence readings, which rose for a fifth month in August to their highest level since September of last year. In this regard, the Ifo institute said its business climate index increased to 90.5 from 87.4 in July. ... Nickel is at $19,550, up $195, and very quiet."  (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Antam Expects 2010 Ferronickel Output +42% To 17,000 Tons
• (M Biz) The total export amount of TISCO Stainless Steel approached 10,000 tons, which is the first time that TISCO Stainless Steel's exports sprinted 10,000 tons since the financial crisis in 2008.
• (JOC) Total steel imports to the United States rose 14 percent in July, compared with June, to 893,202 metric tons, according to preliminary data issued Tuesday by the U.S. Department of Commerce. Nevertheless, steel imports remain down 49 percent in July, on a year-to-date basis, compared with last year.
• (JMB) Japan Cold Stainless Sheet Inventory Continues to Shrink in July
• Germany faces commodity supply gap - more
• Commodities countries first in line to hike rates: economists - more
• Ocean shipping: Port Tracker report says 2009 retail container volumes will be lowest in seven years - more

  Vale to Resume Output at Canadian Sudbury Nickel Unit - Vale SA, the world’s second-largest nickel producer, plans to resume output at its Canadian Sudbury operations as soon as possible amid a strike by union employees, Chief Executive Officer Roger Agnelli said. - more

  Canadian Royalties rejects Jien Mining's takeover offer - Canadian Royalties Inc on Tuesday rejected the unsolicited takeover offer from a joint venture led by China's second-largest nickel miner Jilin Jien Nickel Industry Co , saying the offer did not recognize the strategic value of its Nunavik nickel project. - more

  New Caledonian nickel producer to phase out 20% of jobs - New Caledonia's largest nickel producer has announced plans to radically cut costs over the next three years. Management at SLN say they were taken by surprise by the intensity of the global financial crisis... and are now working to ensure they won't be caught out again in future. But unions representing SLN workers are already objecting to plans to phase out one in every five jobs at the plant. - more

  New Mazabuka Nickel mine owners to scale up operations - The Chinese investor taking over operations of the closed Albidon Nickel mine in Mazabuka has pledged to resume full scale operations following the successful completion of negotiations with the Zambian government. - more

  Chinese spot steel product prices to further drop in September -analysts - Domestic spot steel product prices are expected to further decrease by between RMB 200 ($29.28) per ton and RMB 300 ($43.92) per ton on average in September, which Chinese industry analysts told Interfax on Aug. 25 is a correction to a previous surge. - more

   MEPS Forecasts Gradual Upturn in World Steel Prices Over Next Twelve Months - The MEPS - World Composite All Products carbon steel price peaked in July 2008 at $US1160 per tonne. In the subsequent ten months the value fell by more than 50 percent to $US562. However, the production curbs are beginning to bite as customers start to rebuild inventories in most regions of the world. - more

  Price Of FeCr For Shipments In Q4 / 09 Requires To Rise By More Than 10% = Sitttard CEO / ENRC Referred To The Price - more - At the conference to announce ENRC's settlement of accounts for the second quarter (April - June) of 2009, Mr. Johannes Sittard, who is CEO of ENRC (Eurasian Natural Resources Corporation) as a leading producer of ferro-chrome in Kazakhstan, referred to price of high carbon ferro-chrome for shipments in October - December quarter of 2009 and said that the Company will require to rise the price by 10% at least. - more

  British miner seeks full control of mining project - British miner Metals Exploration PLC has posted a P175-million bond with the government for the approval of its Financial Technical Assistance Agreement (FTAA), which will allow 100% foreign ownership in its gold-molybdenum project in northern Luzon. - more

  Courtesy AISI - In the week ending August 22, 2009, domestic raw steel production was 1,304,000 net tons while the capability utilization rate was 54.7 percent. Production was 2,158,000 tons in the week ending August 22, 2008, while the capability utilization then was 90.4 percent. The current week production represents a 39.6 percent decrease from the same period in the previous year. Production for the week ending August 22, 2009 is up 1.5 percent from the previous week ending August 15, 2009 when production was 1,285,000 tons and the rate of capability utilization was 53.9 percent.

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, August 25

• Baltic Dry Index - minus 49 to 2,388. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Stocks Slump as Premier Warns Against `Blind' Optimism; Chalco Falls // China Risks Asset Bubbles as Cash Fuel Speculation, Construction Bank Says  // Asian Stocks Decline on Lower Chinese Earnings, U.S. Credit-Loss Concern // U.K. Mortgage Approvals Increased in July to Most in 17 Months, BBA Says // Daimler's 2 Billion-Euro Bond Sale Will Be Continent's Biggest Since June // German Government Spending Lifted Economy Out of Worst Recession Since War  // Bernanke Named to Second Term at Fed After Keeping U.S. Out of Depression // Court Orders Federal Reserve to Disclose $2 Trillion Loan Program Details // U.S. Consumer Confidence, Home Prices Exceed Forecasts in Sign of Recovery // Stocks in U.S. Climb as Economic Reports Boost Optimism Recession Ending
• The US Dollar continues to trade lower against the Euro by 2/10 of 1%. NYMEX crude is nearly 1% lower, and has slipped under $74/barrel. Gold is up 1/3 of 1% while silver is up by nearly 1-1/4%. Except for lead, base metals ended lower today on demand concerns. Indicator charts show nickel fell in overnight trading, but bounced back this morning, only to surrender most of its gains late. Dow Jones reports three month nickel ended the day at $8.78/lb . Inventories of nickel stored in LME approved warehouses slipped slightly overnight, just under the 110,000 level. Sucden's day old chart shows nickel's trading pattern is showing no obvious signs of a trend one way or the other (chart here). Cancelled warrants are sneaking up, but remain shy of the 2% level. The fall in the Baltic Dry Index numbers appeared to be slowing yesterday, but today's 49 point drop is higher than yesterday's slip. TransWorldNews tried to put a smiley face on the bad news yesterday - "The pickup in demand for dry bulk ships is evidenced by the rise of the Baltic Dry Bulk Index from its December low of 663 to well over 3000. This figure is still well below the high in the index reached in 2008 of 11,793." Obviously a mis-quote, as it should read "to well 'under' 3,000", where it has been since August 6th. In US economic news, the New York-based Conference Board reported its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July. The S&P/Case-Shiller composite indexes rose 1.4% in June from May, nearly three times the increase of the month before. MarketWatch reports that "White House and congressional budget analysts are projecting a deficit of $1.6 trillion for fiscal year 2009, lower than the White House projected earlier but still the highest since World War II." Wall Street likes what it is hearing today, and is trading higher, much like yesterday, when it only managed to squeeze out a 3 point gain. Interesting to watch the apparent disconnect between China and US equity markets again. Really makes it harder on metals traders. And finally, it came as quite a shock to us this morning, as we are sure it will to you, to learn that we were wrong about Vale. Vale Inco announced this morning that it 'would' resume partial operations at its Sudbury facility, regardless of any doubt we may have expressed earlier on this site. Risky move by the company, in our opinion, but Vale CEO Agnelli is a bold player, and isn't known for shooting from the hip. Could be some interesting days ahead, as the union decides on how to respond. Lord knows, based off rising LME inventory numbers, we sure need more nickel. We liked this comment made by analyst Michael Jansen today - "Observers are correct when they point to a massive disconnect between commodity prices and economic fundamentals." And just like politics and religion, analysts don't sound so bad when we agree with them. .But then, he continued "Any demand recovery will quickly test the market’s ability to supply the materials and the two obvious ones here are copper and nickel." What? Nickel made this list? Are we reading the same reports? We have major nickel mines on strike, others closed, others a hair breath away from starting production, and pig nickel producers firing up ... and we are worried about supply if demand picks up? Demand is slowly picking up and we are still watching nickel inventories 'grow' daily. Sheesh!

  Reports

• The Commodity Tracker - pdf here
• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• (Reuters) Benchmark iron ore prices in China fell to $95 a tonne on Monday, easing 17 percent from its nearly one-year peak of $115 in early August, as traders said many Chinese steel mills stopped buying ore for future delivery.
• JP Morgan global metals analyst Michael Jansen - “Observers are correct when they point to a massive disconnect between commodity prices and economic fundamentals.... Any demand recovery will quickly test the market’s ability to supply the materials and the two obvious ones here are copper and nickel.... The outlook for the next two to three months justifies the outperformance of commodity prices and we have a very bullish scenario for metals through the second half of the year into the first quarter of 2010.”
• JP Morgan update sends miners sliding, FTSE 100 rebounds on US consumer confidence update - more
• Commodities wait on economic outlook - more
• Commodity cowboys romp in sweet spot - more
• Case Shiller Improves Monthly, Falls Yearly - more

  Vale Inco resumes partial operations during strike - The following message was sent to Vale Inco employees today by the company. Look to The Sudbury Star for more details as they emerge. - more

  China still hungry for metals - Chinese imports of industrial commodities should slow in the second half of 2009, but there is likely to be increased demand through restocking in Western economies. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.05/lb lower, off session lows, but showing signs of possibly stalling. Other base metals are mixed but mostly lower. The US Dollar is trading a little over 2/10 of 1% lower against the Euro,  but for a second day, neither is showing overall strength to set a trend. NYMEX crude futures are quiet and just under $74.50/barrel. Gold is nearly 9/10 of 1% higher, while silver is up nearly 1%. In overnight trading, Asian markets ended lower, with China falling hard on comments by Premier Wen Jiabao that their economy faces "uncertainties" and the China Construction Bank Corp. warned of asset bubbles. European markets are quiet so far this morning, trading slightly higher, while US futures show Wall Street may continue its positive run on news President Obama will nominate Fed Chairman Ben Bernanke for another term. In US reports today we get Consumer Confidence numbers. LME inventory numbers fell a tad overnight but remain above pre-Sudbury strike numbers.    
• Bloomberg morning base metal news - more
• Reuters morning report - more

  Reports

• Commodities Daily - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Global Mining News - pdf here
• Commodity Monthly - pdf here
• AIST Industry Stats - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals were generally higher yesterday, helped by advances in both copper and lead, with the latter maintaining its strength on the back of the partial Henan province shut-downs referenced yesterday. More impressive, was the fact that markets held their ground in light of Chinese import data that showed month-over-month declines in a number of metals. Although widely expected, the declines, particularly in copper, (off 23% month-over-month) were on the higher side of forecasts. However, we suspect that because copper scrap imports soared in July over June levels, (+61%), that this may have offset the negative implications of the refined declines. ... The quiet tone that set in over most markets by late in the session yesterday has lead to across-the-board selling today.  .... Nickel is at $19,400, down $200, and quiet, with a tight trading range band in place."  (read Ed Meir's complete morning base metals report here)
• (Reuters) Jilin Jien Nickel Industry Co, China's second-largest nickel miner, said it expected prices of its products to fluctuate due to a murky recovery picture. It did not disclose production figures for the first half of the year.
• China’s Jinchuan Group raised nickel prices again on Monday by $440/tonne.
• (Yieh) According to the report, China’s stainless steel exports increased by 3.7 percent to around 39,000 tons in July compared with June. However, China imported 101,000 tons of stainless steel in July, which is 6 percent down from June.
• (Interfax) China's imports of refined lead, zinc, tin and nickel rose on an annual basis in the first seven months of this year, while the country's exports of the metals, excluding nickel, tumbled, according to figures released by the General Administration of Customs (GAC) on Aug. 24.
• Re-stocking by developed nations set to boost metals demand - more
• (SSY) China’s steel prices have corrected downwards after stronger production levels and stock building.
• Crucible Seeks to Auction Off Almost All Its Assets - more
• U.S. Bank Failures for 2009 Hit 81 - more
• Economic recovery will take some time, premier warns - more
• Obama to Nominate Bernanke to 2nd Term at Fed - more

  70 jobs slashed at BHP Mt Keith nickel mine - Up to 70 jobs have been slashed to help ensure the economic viability of a West Australian nickel mine, BHP Billiton says. - more

  New Caledonia’s SLN firm on cost cutting plans - New Caledonia’s SLN nickel company has restated its need to cut costs in a bid to ensure the company’s long-term viability. - more

  Quantities Of Molybdenum Produced By Major Mines / Western Countries In First Half / 09 = Produced 112 Million Lbs. Of Mo As Decreased By 18% Compared To That In Same Period / 08 - The quantities of molybdenum in molybdenum concentrate produced by seven major molybdenum mining companies in the western countries for the first half (January - June) of 2009 (on the basis of settlement of accounts released by these seven companies) were as per the table attached hereto. - more

  Mwana Africa to scale up operations - Diversified mining group Mwana Africa is planning to scale up operations in Zimbabwe following an improved market environment in the country. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Spot Iron Ore Prices May Fall to $70 a Ton, NMDC Says - Cash iron ore prices may fall to about $70 a metric ton in the “near term” as China, the world’s biggest buyer, cuts purchases, said Rana Som, chairman of NMDC Ltd., India’s top producer of the steelmaking material.  - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, August 24

• Baltic Dry Index - minus 31 to 2,437. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Coal Rally Ending as China Slows Imports to Open Idle Mines, Boost Surplus // Yen Weakens for Third Day as Recovering Global Economy Boosts Yield Demand // China Construction Bank Chairman Guo Shuqing Sees Capital Market Bubbles // Japan's Nikkei Index Jumps 3.4%; Most Since May on U.S. Homes, Commodities  // Asian Stocks Rise on U.S. Home Sales, Commodities; BHP, Mitsubishi Advance  // ECB Warns of `Bumpy Road Ahead' as Officials Signal No Stimulus Exit Soon // European Stocks Climb, Extending Stoxx 600's 10-Month High; BHP, Rio Rise // Bernanke, Trichet Say Recovery Shouldn't Delay Banking-Regulation Overhaul // Roubini Says Risk of Double-Dip Global Recession Rising on Exit Strategies // Highest Commodity P/Es Hide Bargains as Earnings Forecasts Get No Respect // Stocks, Commodities Gain as Bernanke, Trichet Bolster Economic Confidence
• The US Dollar and Euro haven't done much today, trading off the top spot, with the US Dollar currently in the lead, but only slightly. NYMEX crude futures are up over 1% and over $74.50/barrel. Gold is over 1-2/3% lower, while silver is off over 1/4 of 1%. Base metals ended the day mixed, with the Dollar uncertainty weighing heavily on traders. Indicator charts show nickel climbed steadily and then fell back steadily during the trading session, although the market fell from Asian highs before London trading began. Dow Jones reports three month nickel ended the day at $8.89/lb . Inventories of nickel stored in LME approved warehouses rose yet again overnight, and with the level climbing over 110,000 tonnes, we now have more nickel available than we did when Vale Inco workers went on strike in July. Very unusual turn of events and tells us that either demand is not yet where many are hoping it is, or that there is more supply out there than many want to believe. We tend to think both are true. The Baltic Dry Index slumped again, down 31 points, but is showing signs of potentially going positive in the next few days. The strike in Sudbury appears to be moving back into the spotlight as Vale hints it may re-start the mine with non union workers, and the union threatens to go to war if it does. We would be surprised if this actually happened, as Brazilian owned Vale would run the risk that the Canadian government would end its silence over the strike and vocally side with the union. And unless Vale has some secret desire to unload the Inco assets, like BHP is wanting to do with Ravensthorpe, this scenario does not seem likely to us. Markets are upbeat today with world markets closing higher, and those in this hemisphere still trading, also higher. Its a heavyweight fight between the warnings from Roubini of a possible second dip, and the reassuring words from Fed Chairman Ben Bernanke. At least today, it appears Roubini is being taken as yesterday's news. The best news out there is the rash of steel mill re-opening's announced today. But before we get too bullish, read Robry's Economic Assessment we posted to under reports this morning. This guy has a lot of followers, us amongst them. Still a lot of trees between us and the edge of the forest, but there appears to be some clearing ahead.

  Reports

• BNP Paribas Fortis metals monthly - pdf here
• Weekly Forecast by SMM Specialist - more
• Weekly Commodity Price Report - pdf here
• China Commodities Weekly - more

  Commodity/Economic Articles and Comments

• (Bloomberg) Nickel, which surged 17 percent the past month, may advance further as “price momentum” and inflation expectations lure fund managers even as stockpiles of the metal approach a 14-year high, according to Commerzbank AG.
• (Reuters) Cory McPhee, spokesman for Vale's Inco unit - "We have to keep all our options open, and no decision has been made in that respect, but certainly we have to do what's best for the business."  - United Steelworkers Union Ontario director Wayne Fraser - "If they think they're going to keep us out on the picket line while they try to produce our product, they better think again. We'll use every tactic we possibly know to stop them from doing any production."
• China Direct Industries (CDII) and China Armco Metals Enter Into Strategic Partnership Agreement for Metals Procurement - more
• Outokumpu to end remaining temporary layoffs in Tornio - more
• Steel Upturn Sees Corus Fire Up Closed Plant - more
• Arcelor Mittal, MT, To start again two blast furnaces in U.S - more
• Power Cuts Threaten South Africa’s Economic Recovery - more
• Chinese Metals Boosted by Stimulus - more
• GPS solar flare outage alert - more
• What's Ahead for Commodities  - more
• Roubini: Two options, one result - more

  Mining investments on track to target - Investments in mining as of this month are nearly halfway to the government’s $650-million scaled-down full-year target, the chief of the Mines bureau said yesterday.  - more

  Greece's Larco sale sparks investor interest - Nine firms expressed interest in becoming a strategic investor in Greece's state-run ferronickel producer Larco, the country's finance ministry said on Monday, without disclosing names. - more

  Rio Tinto - China strikes back - Still smarting from its failed attempt to buy into the Australian mining giant, Beijing makes a new bid to secure its supply of iron ore. - more

  India Confident of Achieving 120 Million Ton Steel Production by 2012-13 - Speaking at the international conference on "Clean, Green and Sustainable Technologies in Iron and Steel Making," PK Rastogi, Indian Secretary of Steel, said that the Indian steel sector is positioned to achieve its production target of 120 million tons by 2012-13. - more

• Land losers ask return of land as company fails to put up unit - Members of about 50 families who lost their land for setting up of a ferrochrome unit in Kalinga Nagar in Jajpur district in 1992, have gone on hunger-strike demanding return of their land as the project could not take off. - more

  Trade secrets: the iron ore wars - With steel the proxy battleground for the path of Chinese development, the iron-ore wars are far from over. - more

  Ports of Long beach, Los Angeles, and New York/New Jersey TEU's - exports slid for a second month, down 2% from June and 8.8% under May. Down 14.9% from July 2008. Imports rose after slipping in June. Up 9.7% from last month, and highest since November 2008. Except for dip in June, imports have been rising since bottoming in January 09. They remain 23.3% below July 08 figures.

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.11/lb , after trading much higher in China overnight. Other base metals are mixed, but getting energy from the Dollar's recent dip. The US Dollar is trading lower against the Euro, but only slightly after being higher most of the morning. NYMEX crude futures are 1/5 of 1% higher and at $74/barrel. Gold is down slightly and silver is over 1.8% higher. In overnight trading, Asian markets ended soundly higher, with European markets up this morning. US futures show Wall Street could open slightly higher. LME nickel inventories now sit higher than they did when Sudbury Vale miners went on strike after a large gain was reported overnight. 
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• World STeel Review Iron & Steel Statistics Bureau - pdf here
• Metals & Mining Weekly - pdf here
• Weekly Scoreboard - pdf here
• Robry Sunday Night Economic Assessment - here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "We certainly were wrong in our short-term assessment put out Friday, when we suggested that markets were due for a pause given that they may have already discounted a good portion of the US's fledgling recovery. Instead, metals finished sharply higher, while crude oil futures hit fresh 2009 highs on a huge macro surprise. In this regard, existing home sales for July rose for the fourth straight month, hitting an annual rate of 5.24 million units for its largest monthly gain ever and the highest reading seen since August 2007. The markets ignored the fact that the headline number masked some underlying problems, such as the fact that inventories continued to mount-- up 7% to well over 4 million units. In addition, housing demand may be exaggerated somewhat by a first-time $8,000 homebuyers' credit due to expire on December 1st. Nevertheless, the fact that sales moved up-- and sharply at that-- was welcomed, and an understandable cause for a rally. Markets were also buoyed by remarks made by Fed Chairman Bernanke, who said prospects for return to growth in the near-term appeared good in the US and abroad, although his ECB counterpart was far less sanguine. Metals are pushing higher right now, following through on Friday's robust gains, and building on the advances seen in European and Asian equity markets .... Metal markets are also mulling over China's latest trade data .... Out of Europe, industrial orders increased more than economists forecast in June, the latest indication that the recession is easing. Orders to industrial units in the Euro region rose 3.1 % from May levels, the biggest gain in 19 months and well ahead of the 1.8% rise expected. Out of China, Premier Wen Jiabao said the government will maintain its fiscal and monetary policies as the economic recovery isn’t stable yet and faces many “uncertainties.” He said authorities can’t be “blindly” optimistic, as a decline in external demand will likely continue, while excess production capacity may restrain growth, this according to remarks quoted from the government’s web site. .... Nickel is at $19,650, up $350, with today’s advance resulting in a slight breakout out of the recent congestion range. It looks like we could push slightly higher from here." (read Ed Meir's complete morning base metals report here)
• China refined nickel imports rose 16.4% month-on-month in July while exports of stainless steel strip rose 3.7% in July MOM to 39,367 tonnes.
• Outokumpu - Outokumpu's Tornio plant will end the currently on-going part-time temporary layoffs for about 900 maintenance and support functions employees from the end of September
• (Abix) BHP Billiton's decision to abandon the Ravensthorpe nickel laterite operation in Western Australia has tainted the investment community's view of the sector in general. However Bronwyn Barnes, MD of exploration firm Graynic Metals, is confident she will be able to spark interest in the company's new ventures in Australia as well as offshore.
• (AP) China's Jinchuan Group, Asia's leading nickel producer, cut its electrolytic nickel price on Thursday, ending the price rise for five months running since April this year.
• (CD) China's gross domestic product will grow about 8.5 percent in the third quarter from a year earlier, picking up from the second quarter's 7.9 percent pace, a government think-tank said on Friday.
• (AAR) The Association of American Railroads (AAR) today reported that while there may be signs of incremental, month-to-month gains in carload traffic, year-over-year traffic remains down for July by 17.5 percent. According to AAR’s “Rail Time Indicators” report and video summary, intermodal rail traffic also remains down for July by 18 percent compared with the same month last year.
• (AP) British steel-maker Corus said Monday it would restart production at its Llanwern works in Wales, encouraged by a rise in the price of steel as the global economic downturn eases.
• American Manufacturing Can No Longer Compete - more
• Roubini warns of double-dip recession: report - more
• Larry Reaugh: The Three M’s Of Specialty Metals - more
• 3 Signs the Housing Crisis Is Over - more

  China's metal smelters H1 production - China's metal smelters have started to announce production details for the first half of 2009, with more expected this month. - more

  Nickel prices rise on demand expectation - As signs of revival in world economy begin to show, nickel prices are likely to average around $15,000 a tonne in the second half of the year, riding on the expected increase in consumption. - more

  Molybdenum Trade By China In First Half / 09 Still Had Excess Of Imports Over Exports = Peak Of Imports Was Over On Monthly Base, China Has Become Largest Country To Consume Moly - When a balance on trade (imports and exports) of molybdenum by China in the first half (January - June) of 2009 is focused, China still had an excess of imports over exports. This pattern of trade on molybdenum is anticipated to remain unchanged for the time being. - more

  Tati Nickel commits to cooperation with Namibia council - The general manager of the Tati Nickel Mining Company mining giant, Sebetlela Sebetlela, enchanting the Enhana Town District Council delegation from Namibia committed his organisation to working hand in hand with the North East District Council to help develop the district. - more

  EU Steel Prices Predicted to Recover Over Next Twelve Months - After peaking in August 2008 at €860 per tonne, the MEPS EU average flat products' price collapsed to €420 per tonne in May this year. This was the lowest figure for more than five years. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, August 21

• Baltic Dry Index - minus 66 to 2,468. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Said to Plan Tightening of Bank Capital Requirements as Stocks Rally  // Rio Seeks Better China Relations After Spy Row, Explores Chinalco Ventures // China's Yu Seeks Free-Floating Yuan as Government Encouraged to Slow Sales // Stiglitz Says Dollar's Role as Store of Value Is `Questionable,' Has Risk // Asian Stocks Post Weekly Drop Amid Earnings Concerns; Bank of China Falls  // German Services, French Manufacturing Unexpectedly Expanded During August // Pictet Buys U.S. TIPS as `Massive' Stimulus Stokes Concern Over Inflation // European Stocks Climb to 1O-Month High; Maersk, UBS, Intertek Shares Gain  // U.S. Economy Stops Shrinking, Heads for Expansion, Coincident Index Shows // `Cash for Clunkers' to End Aug. 24 After Fueling U.S. Sales, Dealer Anger // U.S. Existing Home Sales Surge 7.2% to Highest Level in Almost Two Years // Bernanke Says Global Economy Starting to Emerge From Recession on Stimulus // Meredith Whitney Says Bank Failures in U.S. Will Increase to More Than 300 // S&P 500 Index, Oil Rise to 10-Month High, Treasuries Drop on Housing Data
• The US Dollar continues to trade lower against the Euro, down nearly 1/2 of 1% at the moment. NYMEX crude is up nearly 2% and over $74/barrel. Gold is up 1-1/3% and silver is higher by 1-2/3 of 1%. All base metals traded on the London Metal Exchange ended higher today, as the weak Dollar and higher equities helped force the mood positive. Indicator charts show nickel spent most of the day climbing before stalling out around morning briefing time and holding onto this range for the remainder of the session. Dow Jones reports three month nickel ended the day and week at $8.73/lb . Inventories of nickel stored in LME warehouses blossomed overnight, and now rest just shy of the pre-Sudbury strike 109,716 tonne level. Sucden updated their graph showing nickel trading thru yesterday (chart here). The Baltic Dry Index slumped again, down another 66 points to 2,368. It's been an uneventful week with news about nickel although one story will stand out in our memory. We learned that nickel was being stockpiled by Chinese pig farmers. At first glance, with all the talk of Chinese pig nickel production, one might dismiss this as nothing new. But no, we have not taken it upon ourselves to start calling pig nickel producers simple pig farmers. These are honest to goodness pig farmers. Yes the four legged, mud wallowing, ham and bacon growing swine farmer. And ETF's are not good enough for these guys. No, they are buying physical nickel and stockpiling it on their farms, in the hopes the price will rise and bring them a hefty return later. So far, it is a gamble that has been paying off for them. Adds a whole new dimension to the 'swine flu' phrase. And it has to be humiliating to those who spent years in college and more years in training to become professional nickel investors. Next time one cold calls you trying to get you to invest thru their firm, tell him you are already dealing with Yu Stin Ki Pu Swine Farm and Metals, who not only makes you money in nickel trading, but also makes one great meat lovers breakfast!.  That is, if the dining area is upwind of the farm. In US economic news, Ben Bernanke is now taking credit for saving the world from the end times, economically speaking, in an apparent bid to save his job. Wonder if our great grandchildren will agree, as they will be paying the tab for this "rescue". The National Association of Realtors reports home sales rose 7.2% to a seasonally adjusted annual rate of 5.24 million last month, its first four month rally in 5 years, and its largest one month sales gain since 1999. The 'cash for clunkers" program ends Monday, so if you are one of those hard working, tax paying citizens who can't seem to squeeze a dime out of the government, this may be your last chance, courtesy of well - you. Otherwise, have a safe and enjoyable weekend!!  

  Commodity/Economic Articles and Comments

• Andy Xie: New Bubble Threatens a V-Shaped Rebound - more
• Reflections on a Year of Crisis - more

  Glum outlook for steel production overdone - Global Steel production in the first seven months of this year was 664 million tonnes down almost 20% on the equivalent period in 2008, according to the World Steel Association. - more

  Maoists threaten to blow up mining office - A letter purportedly written by Maoists threatening to blow up a mining office was received by the Orissa Mining Corporation, Chromites Division located at Jajpur Road in Jajpur district, police said today. - more

• Maoists threaten Orissa minister - Maoist rebels have threatened to blow up the residence of Orissa Finance Minister Prafulla Ghadei and kill his son, police said Friday. - more

  China iron ore stocks up slightly, prices weaken - Imported iron ore inventories at major Chinese ports climbed slightly in the week ended Friday, data from industry consultancy Mysteel showed, despite spot prices weakening in China due to few trades this week. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.23/lb higher, with all base metals solidly higher. The trend for nickel trading has been upwards all morning and its starting to show signs of climb exhaustion. The Euro is trading higher against the US Dollar, boosting base metals, up over 1/2 of 1%, but showing signs of stalling its morning upward trend. NYMEX crude futures are nearly 1-1/2% higher, and near $74/barrel. Gold is 7/10 of 1% higher, while silver is up over 1%. In overnight trading, Asian markets ended lower while China ended higher, even after it was reported that China may tighten capital requirements for banks, threatening to curb the record lending that has helped spark economic recovery in that nation. European markets are moderately higher this morning after German services and French manufacturing expanded in August, and futures show Wall Street wants to continue its three day winning streak.  The BDI slipped again overnight, while LME nickel inventories swelled to a level just shy of where they were the day Vale Sudbury miners went on strike.      
• Reuters morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "LME prices finished mixed on Thursday, giving up earlier gains after U.S. jobless claims data weighed on sentiment. In this regard, claims data increased to 576,000 for the week, substantially more than the 550,000 claims expected. Continuing claims also pushed higher, rising to 6.24 million, underlying the fragile state of the US labor markets. Other data released, namely, an in-line July reading for the index of leading economic indicators and a better report from the Philadelphia Fed on regional manufacturing conditions in the mid-Atlantic, both failed to spark anything meaningful on the upside. The back-and-forth we have been seeing in base metal prices of late should perhaps come as no surprise, as the impressive run we have had over the last few months has, by now, more than discounted the fledgling recovery stage we seem to be entering. Markets now need to see more in terms of consistency in the data as well as more in terms of upside surprises in the numbers themselves to justify further gains. Having said that, metals are up today, .... Nickel is at $19,367, up $467, and recovering nicely off an intraday low of $18,450 hit earlier today. (read Ed Meir's complete morning base metals report here)
• (Yieh) The prices of Chinese steel products have slipped all the way since the beginning of August and market seems to fall into a panic. Recently the steel price had experienced a soar and plummet in price.
• (AP) Sumitomo Metal Mining Co., Ltd. has acquired a 16.5% stake in Nickel Asia Corporation, a Philippine-based nickel mining company, for $39 million. Sumitomo Metal Mining is a Japan-based engaged in the exploration, development, production, and sale of resource properties.
• (SG) It is reported that Hengyang Valin Steel Tube Co Ltd has achieved new breakthroughs in production. Its No. 219 mill rolled out 13Cr stainless steel pipes with the spec of 101.6×15.5mm filling the blanks of high grade stainless steel pipe production in the steel mill.
• (PR) The Association of American Railroads today reported that rail carloadings are registering incremental gains, but traffic remains down year over year for the week ended Aug. 15, 2009. U.S railroads reported originating 276,488 cars, down 17.1 percent compared with the same week in 2008. Regionally, carloadings were down 16.6 percent in the West and 17.8 percent in the East.

  Nickel May Gain as Stockpiles Fail to Deter Funds: Chart of Day - Nickel, which surged 17 percent the past month, may advance further as “price momentum” and inflation expectations lure fund managers even as stockpiles of the metal approach a 14-year high, according to Commerzbank AG. - more

  Rising nickel price is linked to traders, not users - World nickel prices have increased this summer to an August month-to-date average of $8.94/lb mostly because of growing investment by traders and hedge funds, according to analysts, who see no demand surge by stainless steel mills and other users. - more

  Market Tendency On Imports Of Ferro-Alloys At 17th August 2009 = Interest Is When Does Excessively Heated Steel Production In China Become Short Of Breath - The market tendency by item on imports of ferro-alloys into Japan at the 17th August of 2009 is as follows ; - more

  State Plans To Restore Export Tax On Nickel - The government expects to restore nickel export tariffs at a base rate of 5 percent in a move that could bring $140 million into state coffers in each of the next three years, sources said Thursday. - more

  No demand for metals until '10-BHP CEO - BHP Billiton Ltd, the world's largest miner, said on Thursday it did not expect to see "clean demand" for the global metals sector until early 2010 as a global slowdown bites. - more

  Blood on the Hands at a Bleeding Steel Mill - A takeover plan for Tonghua's steel mill died after employee fears, harsh rumors and management resistance led to an untimely death. - more

  Posco project not to be relocated : Naveen - Posco Steel Project is on and it will come up at the already planned location near Paradeep, according to Orissa chief minister Naveen Patnaik.  - more

  RP Sydney consulate to reach out to Pinoys in New Caledonia - Philippine officials in Sydney will reach out to Filipinos in the French overseas territory of New Caledonia from Aug. 21 to 23. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Vale Says Can’t Rule Out Sudbury Restart Amid Strike  - Vale SA’s nickel unit said it can’t rule out restarting its Sudbury mine in Canada with non- unionized labor amid a strike that has lasted 37 days. - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Spot Iron Ore Price to China Slumps on Steel Decline  - The cash price for Australian iron ore delivered to China, the world’s biggest buyer, slumped 9.3 percent after Chinese steel prices declined. - more
• Rio Tinto chief pledges closer ties with China - Rio Tinto chief Tom Albanese pledged a closer relationship with China, saying it is of great importance to the company. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, August 20

• Baltic Dry Index -  minus 80 to 2,534. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Mobile Posts First Profit Decline in Nine Years as User Growth Slows  // Taiwan's Economy Contracts at Slower Pace After Exports to China Improve // Asian Stocks Rise as Chinese Shares Rebound; Brambles, QBE Climb on Profit // U.K. Posts Record July Deficit as Tax Revenue Drops, Benefit Payments Rise // Volkswagen Falls for Sixth Day as Short-Sellers Increase Bets for Declines // European Stocks Rise; Shell, BHP Billiton, Holcim, Ahold, UBS Shares Climb // U.S. Initial Jobless Claims Unexpectedly Rose 15,000 to 576,000 Last Week // Leading Economic Index May Indicate the U.S. Recession Is Close to Ending // Philadelphia-Area Manufacturing Unexpectedly Expands First Time in a Year // Sears Falls After Posting Unexpected Loss as Demand for Appliances Drops // Stocks in U.S. Advance After AIG Says It Will Pay Back U.S. Bailout Funds
• The Euro continues to trade higher against the US Dollar, but by only 1/10 of 1% as it was earlier this morning. It's been an up and down day as the Euro and Dollar struggle for the top spot, and this uncertainty took its toll on commodities. NYMEX crude continues to trade quietly, down a mere 3/10 of 1%. Gold is trading flat to slightly lower and silver is up nearly 3/4 of 1%. Base metals ended mixed and mostly lower. Indicator charts show nickel's morning trading was erratic but the downward trend we reported this morning stuck thru the remainder of the day. Dow Jones reports three month nickel ended the day at $8.57/lb , the afternoon's losses not enough to offset an early morning jump. Inventories of LME stored nickel fell overnight, thanks to a large outbound Asian shipment. The total still remains above the 109,000 tonne level. The Baltic Dry Index continues its slide, down another 80 points to 2,534, and hit a new reaction low. US reports in the news today include an unexpected rise in first time claims for unemployment - (report). The Federal Reserve Bank of Pennsylvania reported manufacturers reported improvement in business during July - (report). And the Conference Board Leading Economic Index rose 0.6% in July - (report) Wall Street is higher on the news. Metals news has been on the weak side to say the least, and maybe the quiet is a good thing. From all reports, it appears steel production is quietly ramping up, although it remains to be seen, at least here in the States, if the increase is being caused by a true increase in demand, or trying to fill in depleted inventory's. We would be curious how much, if any, of the increase may be due to stimulus money finding its way into road and bridge projects. Up in Canada, the strike in Sudbury grinds on, with no end in sight. The leader of the union representing the Sudbury miners, has reportedly threatened 'war' with Vale if they attempt to resume production using non union workers. And we are not sure how many workers are left at Voisey's Bay, with that union also on strike, but this mine is currently located near the predicted path of Hurricane Bill. With production at Goro still delayed, Vale is having some tough times mining nickel lately. Not that we exactly need it at the moment. For you on the other side of the globe, have a good weekend!

  Commodity/Economic Articles and Comments

• (SN) Mining company Albanian Chrome has restarted its ferrochrome plant in Elbasan following an almost ten-month pause in operations prompted by the global economic downturn, it said on Wednesday.
• (China) No interest rate change likely before April: Analyst - more
• Record Treasury Demand - more
• Pressure rises to protect our pensions - more
• Too Big Has Failed - pdf here

  Global crude steel output down in July -Worldsteel - Global crude steel production fell by 11.1 percent year-on-year to 103.9 million tonnes in July, figures from the World Steel Association showed on Thursday. - more

• Global crude steel output highest for 2009 in July - Production was 103.9 million tonnes, up from 99.7 million tonnes in June this year, figures from the World Steel Association showed on Thursday. - more

  Rio Tinto Cautions On Sustainability Of Commodity Price Gains - Diversified miner Rio Tinto PLC Thursday cautioned the large rallies in commodity prices may not be sustained in 2010, despite strong growth in China. - more

  China is reporting nickel output for July was 7.42% higher than the same month last year. Year to date figures show nickel output is running 10.39% ahead of last year at this time.

  Tati Nickel undertakes to promote localisation - A senior manager at Tati Nickel Mining Company says the company will never exceed its set 10 percent ratio of local employees to expatriates. - more

  PSE OKs mining firm's listing - A local mining firm has obtained the Philippine Stock Exchange's (PSE) approval to list its shares on the local bourse without raising capital amid volatile market conditions. - more

  U.S. steel industry still struggles with limp demand - World steel production in July rose to its highest this year, but U.S. steelmakers are still operating at barely half capacity as demand limps back from the global recession, data and analysts said on Thursday.  - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.05/lb higher, but no real trend appears to be established yet, as nickel has spiked over $400/tonne more than it is at present twice already today. If anything the trend appears to be moving lower, but erratic at best. Other base metals are mixed but mostly higher. The US Dollar is  trading less than 1/10 of 1% lower against the Euro, helping commodity trading. NYMEX crude futures are quiet, and just under $72.50/barrel. Gold is quiet as well, while silver is over 1/2 of 1% higher. In overnight trading, Asian markets ended higher, with China's market rebounding over 4% after yesterday's big drop. European markets are higher this morning, and US futures show Wall Street could open in positive territory.  Both LME nickel inventories and the BDI fell overnight. US weekly jobless claims were just released and rose by 15,000 last week, while continuing claims fell by 2,000 to6.24 million. The Conference Board's index of leading indicators and the Philadelphia Fed Survey will be released later this morning.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• India Steel Monthly - pdf here
• July 2009 Crude Steel Production - pdf here
• Business Employment Dynamics Summary - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Copper prices fell to their lowest level in just over two weeks yesterday after a slide in Chinese equities triggered massive falls across most commodity markets, but metals began a slow climb back over the course of the US session, as steadier equity markets and a renewed selloff in the dollar stabilized prices. In addition, a stunning upside reversal in crude oil markets was instrumental in pulling metals higher. Nevertheless, not all session’s losses were erased by the official close, with aluminum being particularly weak, but the recovery was still notable, setting the stage for a more sustained advance we are seeing as of this writing. Ironically, energy markets are sitting out today’s rally today, leaving it metals to push higher on their own. The dollar is unchanged at 1.4220 against the Euro, but still weaker than the 1.41 reading we saw at this time yesterday. We suspect that today’s stronger tone in metals will prevail over the course of today’s session, as importantly, the surge in Chinese equity markets overnight, (the largest since March), is putting the US and European stock markets on a firmer footing. In addition, despite the recent downtick in metals, several key support levels, particularly in copper, ali, and nickel have held, and this should encourage chartists back in on the long side ... Nickel is at $19,140, up $290. We approached key support at $18,200 yesterday, but never really tested it, and so the market is presumably pushing higher off that hold."  (read Ed Meir's complete morning base metals report here)
• (Interfax) Jinchuan Group Ltd., China's largest nickel producer, reduced its ex-works refined nickel price on Aug. 20 by RMB 7,000 ($1,024.62) per ton to RMB 146,000 ($21,370.65) per ton on falling market prices of refined nickel, according to Jinchuan Group's Web site.
• (Dow Jones) Global crude steel production reached a seven-month high
• in July as burgeoning demand from China propelled the country to produce a record amount of steel during the month, figures from the World Steel Association showed Thursday. Global crude steel production rose 4.2% on month to 103.9 million tons in July but fell 11.1% compared with the same month a year ago.
• (Yieh) Chinese crude steel output reached 50.68 million tons in July, up by 12.9 percent compared to the same period last year. From January to July this year, Chinese crude steel output totaled 317 million tons, enjoying a pick-up of 2.93 percent on last year.
• Mining Giant Rio Tinto Reports Profits Dip 65% - more
• China deepens probe into U.S. steel subsidies - more
• Most in mining industry believe climate change is already hurting operations - more
• (JMB) Japanese raw steel output increased by 11.3% to 7.66 million tonnes in July from June, which increased for 3 months in a row, announced by Japan Iron and Steel Federation on Wednesday.
• (Bloomberg) Eramet SA: The operator of the world’s biggest ferronickel plant may be active after the International Nickel Study Group said nickel production in June totaled 113,100 metric tons, exceeding demand of 107,700 tons.
• 'Dr. Doom' Economist On Prospects For Recovery - more

  Tendency To Produce More Cr-Based Stainless Steel In Japan Came To Standstill In Q1 / 09 = Ratio To Produce Cr-Based Stainless Steel At Blast Furnace Mills Fell To Lower Level Than 60% - Blast furnace mills in Japan have deepened the tendency to increase their production of chrome-based stainless steel (hot-rolled products) but, owing to a considerable reduction in production of stainless steel implemented by these mills in the first quarter (January - March) of 2009, the ratio of chrome-based stainless steel products produced by seven blast furnace mills (including three companies of the Sumitomo Group) had fallen to 58.5%, having broken the level of 60%. -  more

  Russia nickel duty to range from 5 pct upward - Russia expects to restore nickel export tariffs at a base rate of 5 percent in a move that could bring $140 million into state coffers in each of the next three years, government sources said on Thursday. - more

  Mincor Second-Half Profit Drops 82% After Nickel Price Slumps - Mincor Resources NL, an Australian nickel producer that supplies BHP Billiton Ltd., reported an 82 percent decline in second-half profit after prices tumbled. - more

  Statement regarding Berong Nickel Operations Update - Toledo Mining Corporation plc advises that a third shipment of ore was shipped to BHP Billiton's Yabulu refinery from the Berong mine on Palawan island, Philippines, on 11 August 2009. The shipment contained 48,108 tonnes of ore at 1.5% nickel (approximately 481 tonnes contained nickel on a dry basis) and 30% iron. - more

  Investor slump looming - Papua New Guinea is being predicted to hit an economic slump if the proposed amendment to the Mining Act 1992 is passed in Parliament. The mining industry, contributing about 64 per cent of export earnings, will be thrown into chaos and many people mostly Papua New Guineans will be unemployed. - more

  Good business practice saved Tati - Sebetlela - Good business practice and "other measures" have contributed to the survival of Tati Nickel Mining Company, says the company's Managing Director, Sebetlela Sebetlela. - more

  FNX offering raises M&A risk: UBS - UBS Securities analyst Onno Rutten likes FNX Mining Company Inc. as a pure-play developer of footwall deposits in Ontario's Sudbury Basin. So he views any M&A activity, which the company hinted at last week, as a potential risk. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Baosteel to resume control of China iron ore price negotiations - The China Iron and Steel Association (CISA) will end its first and only tumultuous year at the head of China's iron ore price negotiations, with Baosteel set to resume its traditional role leading talks with foreign miners. - more
• China drops CISA being in charge of iron ore talks - China will abandon its disastrous experiment of putting the China Iron & Steel Association in charge of iron ore price negotiations this year. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, August 19

• Baltic Dry Index - minus 90 to 2,614 . (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Asian Stocks Decline as China Enters Bear Market; Maanshan Steel Slumps  // China Stocks Dip Into Bear Market as Economy Concern Hurts Shanghai Index  // Yen Rises Against Euro as Plunge in Chinese Stocks Spurs Demand for Safety // German July Producer Prices Drop Most in 60 Years as Energy Costs Decline // Dollar Falls Against Euro as U.S. Equity Advance Eases Demand for Safety // European Stocks Drop; Volkswagen Leads Decline in Automakers, ENRC Rises // Buffett Says `Gusher' of U.S. Federal Debt Poses Risks to Economy, Dollar // Pimco Says Dollar to Fall Against Emerging Currencies on Reserve Concerns // Investors Piling Into Stocks as Risk Appetite Jumps, Merrill Survey Shows // U.S. Recession May Have Ended in June, Goldman's McKelvey Tells Clients
• The US Dollar has sunk hard against the Euro recently, and is trading over 8/10 of 1% lower at the moment. NYMEX crude is up over 3-1/2% after inventories fell hard. Gold is now trading 1/2 of 1% higher, while silver has cut its earlier losses and is down only 1/2 of 1%. Base metals ended mixed, and the apparent blood bath building this morning was averted when the US Dollar took a dive. Indicator charts show nickel was wandering thru much of the morning, with ups and downs, until the Dollar's recent fall helped it hit the gas. Dow Jones reports three month nickel ended the day at $8.53/lb , same as yesterday's close, but sentiment into after market trading was strongly positive. Inventories of nickel stored in LME warehouses rolled over the 109,000 level overnight, after another substantial gain. The last trading days have seen inventory numbers grow, and we are in jeopardy of seeing the amount roll over the pre Sudbury strike level of 109,716. Another 420 tonnes will put us back to that mark, and considering 4 of the last 8 trading days have seen growths larger than that, its very possible we will breach that level. The Baltic Dry Index fell for a second day, and in two days has nearly erased the gain from the prior three days. During that period the BDI gained 162 points, in the last two it has fallen 160. Prior to that, the BDI had been in a semi - freefall. Forbes daily metals round-up (here) US markets are bucking the overall downward trend started by China's big overnight drop. Hurricane Bill is now a category 4 hurricane, and expected to miss the US and most of the Canadian eastern coast, but at the moment, appears to be destined for Newfoundland. (here) It has been a quiet week for metals news.

  Commodity/Economic Articles and Comments

• (Dow Jones) LCH.Clearnet, which clears trades for the London Metal Exchange, will raise initial margins on contracts for aluminum and nickel, the group said Wednesday. .... Nickel initial margins will be raised to $2,200/ton from $1,900/ton and the primary nickel swap to $2,200/ton also from $1,900/ton.  
• (JMB) Nickel Stainless Cold Rolled Price to Rebound After 2 Years Drop - Nickel series stainless cold rolled flat steel market price shows sign to rebound in Tokyo and Osaka when the dealers try to increase the reselling price under makers hike, higher nickel price and higher Asian stainless market. The supply balance gets tighter when the dealers' inventory at end of June decreased by 36.7% from a year earlier level.
• The Case for Optimism - more
• Deflation or Inflation? - more

  3Q Ferrochrome Capacity Utilization Reaches 95% - Eurasian Natural Resources Corp. PLC (ENRC.LN) increased its ferrochrome production to near full capacity and iron ore production to full capacity in July as it becomes increasingly confident of a sustainable recovery in demand for the commodities, Chief Executive Johannes Sittard said Wednesday. - more

  Russian govt sees progressive nickel duty - A Russian government commission has recommended the introduction of progressive export duties for nickel and the maintenance of current high import duties for cars, the government said on Wednesday. - more

  DJ Western Areas Considering Nickel Mine Development Restarts - Australia-based nickel miner Western Areas Ltd. said Wednesday it is considering resuming development of two of its mines due to higher nickel prices. - more

  Japan July crude steel output down 25 pct yr/yr - Japan's crude steel output dropped by a quarter in July from a year earlier to mark the 10th straight month of decline, but ticked up from the previous month in a sign the industry is gradually recovering from its worst downturn since World War Two. - more

  Steel mills want $10/ton hike in wire rod prices - Buyers unimpressed with price-hike proposal - more

  Rio Tinto probe 'could last two months' - China could wrap up its investigation of four Rio Tinto employees suspected of industrial espionage and bribery, including an Australian national, in two months, one of their lawyers said on Wednesday. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around  $.09/lb lower, and on a downward trend after making an earlier push north. At the moment all base metals are trading lower. The US Dollar is trading higher against the Euro, by a little over 1/4 of 1% and is on the rise after making an earlier drop. Nickel appears to be watching the Dollar closely this morning. NYMEX crude futures are off a little over 1/3 of 1% this morning as traders await inventory numbers out of the US. Gold is down over 1/2 of 1% and silver is off nearly 3-1/2%. In overnight trading, Asian markets were lower with China dropping nearly 4-1/2%. European markets are lower this morning, and US futures show Wall Street is noting China's slide with concern. A Bloomberg headline put it this way this morning "Asian Stocks Decline as China Enters Bear Market." Nickel inventories rose substantially again overnight and the BDI is down today. We are definitely not out of the woods yet. Someone needs to get out the insecticidal soap, because there are bugs starting to nibble at the green shoots.    
• Bloomberg morning base metal news - more
• Reuters morning report - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals finished higher yesterday, but in an unusual session, gave up most of their gains as the day wore on. This was in stark contrast to the action in the US equity and energy markets, with both finishing close to their highs. Equities firmed up on a set of favorable earnings reports from the likes of Home Depot and Target, offsetting the dreary numbers put out on Monday by home retailer Lowes. Energy prices were strong all day, and then pushed even higher in after-hours trading after favorable inventory data came out. Other than that, there was not much to cheer about on the US macro front-- July housing starts and building permits data both came in worse than expected, causing an early sell-off in most markets before participants regrouped to push prices higher. As of this writing, all markets are heading in the same direction - south. ... Nickel is at $18,700, down $100, and approaching trend line support at $18,200. Two days of closes below this mark would break the upchannel that is in place, and potentially result in a sharper move lower. " (read Ed Meir's complete morning base metals report here)
• (Dow Jones) The world refined nickel market was in a 55,900-metric-ton surplus in January-June, the World Bureau of Metal Statistics said Wednesday. .... World output during the period declined 2.3% to 669,100 tons, mostly owing to production cuts in Japan. World demand fell much faster, dropping by 11.5% to 613,200 tons. World mine output during January to June declined 2.7% to 719,800 tons. In June, refined nickel output was 113,400 tons and demand was 127,500 tons.
• (MBiz) Reporter learned from Domao Qi, Baotou that in the recent days, Mengli (Baotou) Ferroalloy Company's ferroalloy project involving 250mln yuan signed the agreement with Domao Qi. Once the project puts into production, it can solve the employment problem of 1,500 labors.
• Regency Mines in MoU with Australia’s Direct Nickel over Mambare project development - more
• (Bloomberg) Sumitomo Metal Mining Co. acquired 16.5 percent of Nickel Asia Corp., the biggest nickel mining company in the Philippines, for $39 million. Tokyo-based Sumitomo Metal made the announcement in a press release distributed through the Tokyo Stock Exchange.
• Kennecott Eagle Minerals Announces Favorable Proposed Decision in Michigan Environmental Permit Case - more
• (SSY) According to the China Iron & Steel Association, China’s steel inventories have risen for the first time in the past five months. Stocks for construction steels (rebar and wire rod) increased by 6% to 4.26 Mt by end-July. Hot rolled coil stocks were up by 7% month-on-month at 2.9 Mt. That’s 81% and 95% higher than the beginning of this year
• (China Daily) China's stocks plunge 4.3% on Wednesday
• Commodities Super-Cycle Strengthened by the Fantastic Crisis! - more
• 3 Tips for Investing in Commodities - more

  ENRC Says Ferrochrome to Rise as Stainless Steel Demand Returns - Eurasian Natural Resources Corp., a producer of steelmaking raw materials in Kazakhstan, said the price of ferrochrome will rise next quarter after losing more than half its value in the past year as customers boost orders. - more

  Interviews and views - India needs imports of stainless steel for infrastructure creation - Q - How big is the stainless steel market in India and what are the emerging opportunities you see in India? - more

  Steel industry shows signs of recovery - The global steel industry is showing early signs of recovery from the economic crisis. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Vale Inco training regimen alarms union - STRIKE: Steelworkers fear for safety if production restarts during labour dispute - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Detained Rio Chinese staff healthy, calm, lawyers say - Three detained Chinese employees of Anglo-Australian miner Rio Tinto appeared healthy and calm, their lawyers said on Wednesday after visiting them earlier this week -- the first such meetings since their detentions. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, August 18

• Baltic Dry Index - minus 70 to 2,704. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Everbright Securities Rises 30% in Weakest Start for Chinese IPO This Year // Most Asian Stocks Decline on Growth Concerns; Mitsubishi, Fortescue Fall  // German Investor Confidence Rises to Highest Level in More Than Three Years  // U.K. Inflation Unexpectedly Stays at 1.8% as Cost of Games, Alcohol Climb // European Stocks Advance After Investor Confidence Report; HSBC, Rio Gain // Housing Starts in U.S. Unexpectedly Decline; Single-Family Starts Increase // Producer Prices in U.S. Decline More Than Forecast as Energy Costs Recede // Home Depot's Second-Quarter Profit Falls Less Than Estimated; Sales Drop // Pimco Strategist Clarida Sees U.S. Growth of 2% in `New Normal' Recovery
• The Euro continues to trade higher against the US Dollar, by around 1/3 of 1% at present. NYMEX crude is trading nearly 2-1/2% higher and nearing $68.50/barrel. Gold is 1/2 of 1% higher, while silver is slightly lower. Base metals ended the day mixed. Indicator charts show nickel started higher at teh beginning, but stalled out around our morning briefing, then began to stair step its way downward. Dow Jones reports three month nickel had its worse close of the month, ending at $8.53/lb , one US penny lower than its July 3rd close. Inventories of LME stored nickel rose again overnight and now risk climbing over 109,000 tonnes. We are less than 1000 away from where we were when the Sudbury strike began, and if we see a couple more days of gains like yesterday's, we could rise over that level. Cancelled warrants continue to decline. Sucden's day old chart show nickel trading over the last few days - thru yesterday (here). From a technical view, according to this graph, the RSI started today in a comfortable position, but the SStoch showed nickel in overbought territory. The Baltic Dry Index ended its drive into positive territory and resumed its downward trend, slipping 70 points to 2,704. And yes, we read the analyst yesterday dismissing those of us who are concerned about the BDI dropping, as nothing more than a seasonal trend, but we think that excuse is stretching it. Seasonally we are in one of stainless steel worst period's but production seems to be picking up. And while we agree that much of this appears to be little more than filling in a depleted supply system, with real demand yet to rise, production is nevertheless increasing and this means raw materials need to be transported. The BDI isn't sending the signals that that is happening on a satisfactory scale. Commerce Department reported a 13% fall in multifamily unit starts last month, while single family starts rose by 1.7%. putting the overall seasonably adjusted number at -1%. Analysts had expected an increase, and for a short period, Wall Street staggered on the news. Olivier Blanchard, the top economist for the International Monetary Fund, stated in an article today that while the global recession is over, it was not a typical one, and that we should not expect to see a typical recovery. He warned "The crisis has left deep scars, which will affect both supply and demand for many years to come." The world's oceans are busy with numerous tropical storms brewing (chart).

  Reports

• Commodities Daily - pdf here
• China Update - more

  Commodity/Economic Articles and Comments

• (Scotia - China Update) "And even better, base metals are easier and cheaper to store than, say, steel and iron ore. All of these benefits did not escape the eyes of savvy investors in China. Both state-owned enterprises and private entrepreneurs are participating in the “investment” game. Local metal traders have reported many stories of this sort, such as “a rich man walked into our office and asked us what had been the lowest and highest prices of nickel. After telling him those prices, he said the current price was low and he placed an order.”...... In Guangzhou, CCTV reporters found that pig farmers are buying nickel or copper for stockpile. In addition to private entrepreneurs, it seems that institutional money, such as that from stock brokers and private funds, is also deeply involved in this “investment.” ..... We regard these speculative behaviours as natural, and they will inevitably occur in a bull market, so we do not want to exaggerate the impact they have. Also, the scale of the speculative investment is hard to quantify, although some local observers put the number at some 200,000 tonnes for copper, and at 50,000 tonnes for nickel. That said, we do want to caution that these stockpiles are in “weak hands,” as speculators have no real use for base metals. When the market sentiment turns, they are very likely to turn into quick sellers, especially when the bank’s money is involved."
• (Scotia - China update)   In addition to the pickup of refined nickel output as we discussed last week, the production of nickel pig iron (NPI) is now back in top gear in China. Raw material is flooding into China, with ore imports jumping to 1.6 million tonnes in June. This was their highest level in 13 months, and July’s landings have been even larger, taking port stocks to a peak for the year at 8.6 million tonnes, according to Brook Hunt. With the industry’s production costs now in the US$11,000-US$17,000/tonne of Ni range, almost all operations, even those using Philippine ore, are economic, and output is racing ahead. A recent survey by Brook Hunt’s Beijing office has identified 47 active, dormant, and greenfield ventures. ... With no capacity constraints, there are few obstacles to NPI growth. In contrast to two years ago, the production processes are now well established, the product fully proven, and the end market clearly defined. How much NPI could be produced in 2009? By Brook Hunt’s estimate, there is little reason why output in the second half of the year shouldn’t be well up on the first half total of 37,000 tonnes, pointing to a total of at least 100,000 tonnes for 2009. Our own research would concur with the basic findings of Brook Hunt, and in our opinion, as in the last nickel cycle, NPI production should cap the nickel price on the upside.
• (Scotia - China Update) For the time being, local Chinese prices are slightly lower than international prices, for both ferro-moly and molybdic oxide. As a result, quotations for Chinese exports are heard in the European markets again. ... Even if Chinese exports will likely remain modest in volume, we expect China’s molybdenum imports to fall visibly in the late summer months. In recent weeks, we began to hear news about resumption of output by small producers in China. Although local prices have risen in sympathy with the overseas market, it seems that there is no real lack of material in China. The recent perceived shortages could be attributable to the fact that many producers and traders are hoarding material in anticipation of higher prices.
• Federal Reserve Releases “Real” FOMC Statement - more
• Crashing House Prices Cause Foreclosures - more
• Return of the Militias - more

  Speculators aren’t wicked; they keep the market liquid  - The Commodities Futures Trading Commission (CFTC) wrapped up its hearings on whether to install position limits on futures trading this week, and like other hot topics being tossed around Capitol Hill, misinformation seems to be running rampant. - more

  Froth and bubble: dipping into the commodities rally - So what is it: a bear market rally in commodities and resource stocks or just a temporary pullback in the new bull market run? - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around  $.18/lb higher, with all base metals trading in the green this morning. The US Dollar is trading lower against the Euro, down a little over 1/10 of 1%, helping to boost commodities. NYMEX crude futures are up over 1%, and over $67.50/barrel. Gold is up over 1/10 of 1% while silver is over 1/2 of 1% lower. In overnight trading, Asian markets ended mixed. European markets are higher this morning on news German investor confidence rose to its highest level in over 3 years. And US futures show Wall Street wants to correct the last two days of trading and head into positive territory. Nickel inventories were way up overnight, and the BDI slipped into the negative, as we feared. Yesterday's correction appears to have spooked the markets and while metals are up at the moment, nickel is showing evidence of potentially stalling out.    
• Bloomberg morning base metal news - more
• Reuters morning report - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Global Mining News - pdf here
• E & Y Mining Eye - pdf here
• Strategic business risk 2009/2010 - mining and metal - pdf here
• World Steel Review - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices fell sharply yesterday, building on the weakness that first set in on Friday, as overbought conditions, coupled with growing doubts about the strength of the budding global recovery weighed on the various markets. The macro numbers coming out lately have been quite erratic, and not necessarily reflective of the V-shaped recovery that the markets seem to be discounting given the fantastic price rises seen since March. More importantly, even when relatively decent macro numbers do come out, at times they seem unable to add to the upside momentum, since prices have presumably discounted the better news. This was best illustrated in Monday’s session, where despite a positive Japanese GDP report out earlier in the day and relatively decent US macro numbers that followed, both equity and commodity markets fell flat, with the former in particular losing significant ground for a second day running.  ... Metal prices fell sharply yesterday, building on the weakness that first set in on Friday, as overbought conditions, coupled with growing doubts about the strength of the budding global recovery weighed on the various markets. The macro numbers coming out lately have been quite erratic, and not necessarily reflective of the V-shaped recovery that the markets seem to be discounting given the fantastic price rises seen since March. More importantly, even when relatively decent macro numbers do come out, at times they seem unable to add to the upside momentum, since prices have presumably discounted the better news. This was best illustrated in Monday’s session, where despite a positive Japanese GDP report out earlier in the day and relatively decent US macro numbers that followed, both equity and commodity markets fell flat, with the former in particular losing significant ground for a second day running.  ... Nickel is at $19,725, up $625, but prices came close to test trend line support at $18,200 yesterday. For the time being, nickel’s upchannel remains intact, and the fact that we held an earlier test of support yesterday bodes well for a further advance." (read Ed Meir's complete morning base metals report here)
• (FT) Analysts warned that some investors, sitting on top of large gains from commodities bets made earlier this year, could still sell in the near term to lock in some profits. The spot S&P GSCI, the commodities index, has surged 27.6 per cent since January.
• (Yieh) - Taiwan’s Yieh United Steel Corp. (Yusco) is expected to resume operation tomorrow; operation had been affected by limited water supply. The company was forced to halt production due to turbid water in the water tank as a result of typhoon damage. Fortunately, the water supply will be restored today.
• (JMB) Nippon Steel Keeps Top Stainless Sheet Share in F2008
• (SBB) US stainless pipe maker raises prices 7.5%
• (JMB) Orders for stainless steel plates/sheets in July/ Ni type, 1st increase in 10 months - increased exports and advanced adjustment of inventory
• (China Daily) China reduced its holdings of US Treasury debt in June by the biggest margin in nearly nine years, according to a US Treasury Department report issued on Monday. China cut its net holdings by 3.1 percent to $776.4 billion in June from $801.5 billion in May, the report says. This is also the first large-scale reduction of US Treasury debt by China so far this year
• (Reuters) Japan's power generation fell 10.6 percent in July, the sharpest drop in five months, sapped by weak industry demand and cooler weather, while higher nuclear plant utilisation helped cut consumption of thermal fuel and push up LNG inventories by the most in seven months.
• National Association of Home Builders builders' index climbed to 18 in August from 17 in July, its highest since June 2008.
• Empire State Manufacturing Survey - more
• Household Debt to Net Worth Ratio Spiking - more
• China goes house hunting to rev up economy - more

  Nickel Stocks In China Have Increased To 100,000 Tons At Present = Survey By Antaike, Owing To Fever To Invest Excessively In Nickel - Antaike, which is national organization in China to investigate metals, expressed recently that the total quantity of nickel stocked in China as of present time is estimated to have reached a scale of 100,000 tons. The activities to invest in nickel are supposed to have still had a fever in China. - more

  Destocking Continues at U.S., Canadian Metal Centers - Inventories of steel and aluminum products at North American metals service centers continued to decline in July, the Metals Activity Report from the Metals Service Center Institute shows. - more

  Nickel Fire at Esperance Port in West Australia Under Control - A fire at Esperance Port on the southern coast of the state of Western Australia is now contained and under control, the state’s Fire & Emergency Services Authority said. - more

  Ramu NiCo project resumes operation - Chief Inspector of Mines Mohan Singh has given the Ramu NiCo project approval to resume full operations. The approval was given based on the company’s latest submission made to the inspectorate, seeking approval to resume full operations with the submission also containing details of rectification work the company had made so far. - more

  Copper Stockpiled by China’s Pig Farmers May Be Sold - Copper, nickel and other base metals stockpiled by speculative Chinese investors including pig farmers may be sold when “market sentiment turns,” said Scotia Capital Inc. - more  

  Kiwara extends nickel strike at Kawako - Kiwara, the Zambian based exploration company, has announced that the first results of its follow-up drill programme at Kawako have intersected further high grade nickel mineralisation and significantly extended the strike. - more

  Courtesy AISI - In the week ending August 15, 2009, domestic raw steel production was 1,285,000 net tons while the capability utilization rate was 53.9 percent. Production was 2,158,000 tons in the week ending August 15, 2008, while the capability utilization then was 90.4 percent. The current week production represents a 40.5 percent decrease from the same period in the previous year. Production for the week ending August 15, 2009 is up 0.7 percent from the previous week ending August 8, 2009 when production was 1,277,000 tons and the rate of capability utilization was 53.5 percent.

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, August 17

• Baltic Dry Index - plus 22 to 2,774. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Baosteel, China's Mills Win 35% Iron Ore Price Cut From Fortescue Metals // Japan Emerges From Recession; Stocks Decline as Growth Misses Estimates // China Stocks Plunge Most in Nine Months, Led by Yunnan Copper, PetroChina // Asian Stocks Decline Most in Five Months on Japan, China Growth Concerns // King Crushing Pound as U.K. `Can't Afford Stronger Currency' as GDP Slips // Yen Gains to Two-Week High Versus Euro as Asian Stocks Extend Global Drop // U.K. Home Sellers Reduce Asking Prices by Most This Year on Loan Squeeze  // Lehman Collapse `Alarmed and Surprised' Gieve After Rescue of Bear Stearns // European Stocks Fall on Japanese Economy; Swedbank, BHP Billiton Declines // VIX, Europe's VStoxx Surge on Concern About Worldwide Economic Recovery // Lowe's Falls After Missing Estimates as Consumers Curb Remodeling Projects // U.S. Stocks Decline on Economic Concerns; Shares of Intel, Citigroup Fall
• The US Dollar continues to trade higher against the Euro, but hasn't changed much from this morning, still near 1% higher. NYMEX crude continues to trade over 2-1/2% lower and under $66/barrel. Gold is down 1-1/2% and silver is off by nearly 5-1/2%. Base metals all ended lower as economic concerns dragged equity markets much lower, and with the additional strain of the rising Dollar, metals stood no chance today. Considering the pain many traders were feeling today, nickel actually held on fairly well. Nickel plummeted early, but was already in a recovery mood when we posted our morning update, and that continued throughout the remainder of the day.  While nickel closed down today, afternoon sentiment was positive, and it does not appear much of this was short covering. Dow Jones reports three month nickel ended the day at $8.66/lb , the second lowest close for the month. LME stored inventories of nickel grew yet again overnight, although not by quite as much as it has recently. Cancelled warrants fell under the 1-1/2% level again. The Baltic Dry Index continues to cause concern, and while it rose 22 points overnight, its third consecutive day of gains is showing evidence of already losing momentum. So why the hiccup today? You would have to look at the equity market for that answer, and even there, we are unable to put our finger on any one particular thing. If we were to hazard a guess, it appears a minor correction in China's stock market appears to be swelling, and the rest of the world is playing a little catch-up. Respectable Chinese analysts have been warning that the Asian stock market has risen too far, too fast based on the economic news, and Chinese markets have been reacting since mid last week. China’s Shanghai Composite Index lost 5.8% overnight, its biggest drop since November of last year. Other Asian markets also traded lower on news Japan's recovery does not appear to be happening as quickly as previously hoped. European markets followed suit, and at the moment, US markets are also lower, the S & P down over 2%. Many of the economic monitors we follow are starting to show the earlier signs of recovery, are themselves starting to slow. Are we in for a u-shaped recovery? Or are we about to double dip? Bloomberg probably said it best with the headline "Falling stocks signal global 'reality check'"

  Commodity/Economic Articles and Comments

• (CS) While we expect China's imports of refined nickel in July/August to fall short of the pace set in the 1H09, we are still keeping an eye on the developments across the border in the US, that at Vale's Sudbury and Voisey's Bay operations. Risks are on the upside as time passes with no labor agreement but lack of fresh buying on the higher values (basis 3M) can lead to the $1000+ sell-offs like the market witnessed today. Rising stocks on the LME and ensuing NPI production in the Far East should not support positive price action, but bounces will continue as reports of stainless restocking hit the market. We remain cautious/neutral - and favor buying on dips and taking disciplined profits off the table on an advancement back toward recent highs.
• UBS: Baltic Dry Scares Base - Declining bulk freight rates are worrying some clients and commentators, as the recent disconnection between base metals prices and the Baltic Dry Freight Index is quite unusual, as the accompanying chart shows. - more
• (AP) US Regulators on Friday shut down Colonial Banc Group, a lender in property development, in the biggest US bank failure this year. They also closed four banks in Arizona, Nevada and Pennsylvania. The closures increased to 77 the number of federally insured banks that have failed since the start of the year.
• Look Out Below - more

  BHP Billiton calls for more transparency in iron pricing  - A senior executive at mining company BHP Billiton says the way iron ore is priced should be more transparent, and that such a reform could help prevent situations like one that led to four Rio Tinto employees being arrested in China on commercial spying charges. - more

  Hundreds of workers protest at Chinese steel plant: report - Hundreds of workers protested Saturday at a steel plant in central China, eliciting a promise from the government to temporarily call off an unpopular privatisation plan, state media reported. - more

  China "win-win" iron ore deal more like "lose-lose"? - China touted its iron ore pricing deal with Australia's No.3 miner, Fortescue Metals Group (FMG.AX), as a "win-win" deal on Monday, but analysts were inclined to take a pessimistic view of the settlement. - more

• Twiggy's agreement with China raises questions of control - Andrew Forrest has always considered himself a trailblazer. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around  $.28/lb lower, with all base metals trading lower, as Asian markets start a negative tone for the week. The US Dollar is trading nearly 1% higher against the Euro, adding additional pressure on commodity trading this morning. NYMEX crude futures are down nearly 2-1/2% and under $66/barrel. Gold is off over 1-1/2% and silver is lower by over 4-1/4%. In overnight trading all Asian markets ended broadly lower as traders begin to wonder if the world economy will rebound as quickly as they had hoped. European markets are following suit, and US futures show Wall Street could open way down as well. It appears the day is shaping up to be a profit taking, or day of correction, as a wave of trepidation rolls over world markets.  
• Bloomberg morning base metal news - more
• Reuters morning base metals news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Weekly Scoreboard - pdf here
• Robry Sunday Night Economic Assessment - more
• Mining & Metal Weekly - pdf here
• Weekly Forecast by SMM Specialist - more
• BMO The Goods - pdf here
• Strategic business risk 2009 - Mining and Metal - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Ed traveling, no report today.
• (MNP Nickel stocks dropped like, well, stone today as the nickel price came under pressure on the London Metal Exchange, dropping almost 5%. At $US19,514 the price is still looking remarkably healthy compared to late last year, but investors still sold off nickel equities.
• (FT) Chinese commodity imports are expected to slow in the second half of the year from record levels as the impact of the country’s stimulus package, arbitraging opportunities and stock-piling fade, according to a Royal Bank of Scotland report being published Monday.
• (Yieh) Taiwan’s stainless steel makers including Yieh United Steel Corp. (YUSCO) and Tang Eng, announced to hike stainless steel prices again, as global nickel price increased to above US$20,000/ton recently, which is US$3000/ton higher than price in July. YUSCO said that its domestic price of 300 series flat products increased by NT$10,000/ton, which is about 10 percent higher than price in early August.
• (MBiz) S.Korea POSCO announced to adjusted up the CR stainless steel flat products to U.S.$150-200 per ton due to the nickel price rising and the strong demand. Meanwhile, the company's export of the stainless steel products in Q2 reached 308,000tons, up 27.8% over Q1.
• (FA) It is reported that net import volume of China’s stainless steel in H1 2009 was 1.15 times of the 2008 figure. In H1, China has imported 534,000 tons of stainless steel, and exported 198,000 tons. Net imports volume was 336,000 tons, 1.15times the 2008 figure.
• (China Daily) Chinese shares dive 5.79% on pessimistic mood // Hong Kong stocks plunge 3.62%

  Nickel imports seen up 15-20% - India’s nickel imports are expected to rise 15-20 per cent in August-December as against last year, because of robust demand for steel, particularly from the infrastructure sector, said traders and importers. - more

  Liberty to Re-Start the Redstone Nickel Mine and Corporate Update  - Liberty Mines Inc. is pleased to announce that it plans to re-commence production from the Redstone nickel mine near Timmins Ontario by August 24, 2009. - more

  ThyssenKrupp Sees Need For Consolidation In Stainless Steel - German steelmaker ThyssenKrupp AG still sees the need for a consolidation of the stainless steel market despite some improvements in trading conditions in recent weeks, Chief Financial Officer Alan Hippe said Friday. - more

• ThyssenKrupp CFO Sees Near-term Stainless Steel Price Upside - Steelmaker ThyssenKrupp AG expects stainless steel prices will rise in the near-term, Chief Financial Officer Alan Hippe said in a conference call to analysts Friday. - more

  Construction resumes at PNG’s Ramu nickel project - Construction has resumed at the Ramu nickel cobalt project in Papua New Guinea following rectification of a number of health and safety issues. - more

  Tata Steel in talks with 2 mining firms for JV - Aiming raw material security primarily for its global operations, the world's sixth largest steelmaker, Tata Steel, is scouting for iron ore and coking coal mines worldwide and is in talks with two mining firms in Vietnam and South Africa for joint ventures. - more

  China may boost energy, mining acquisitions by half - China, unfazed by failures to invest in Rio Tinto Group and Unocal Corp, will boost spending on oil and mining acquisitions by at least half this year to take advantage of lower valuations after commodity prices slumped. - more

• Metals Outlook: Bulls Still Supported by Fundamentals, But Skeptics Remain - While the bulls continue to see a seamless story of metal re-stocking moving from China to the West, several analysts remain skeptical. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• China’s Mills to Ask Rio, BHP for 35% Ore Price Cut - China will ask Vale SA, Rio Tinto Group and BHP Billiton Ltd. for a 35 percent cut in iron ore prices, scaling back demands for a larger reduction after seven months of stalled talks with the world’s biggest producers. - more
• China saves face with cheaper Fortescue iron ore deal - Upstart Australian miner Fortescue Metals Group broke ranks to forge a slightly cheaper iron ore price with Chinese steel mills in exchange for up to $6 billion in funding, giving Beijing's beleaguered industry group a much-needed face-saving win. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, August 14

• Baltic Dry Index - plus 67 to 2,752. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Yen Rises on Speculation Japan's Investors Bringing Back Overseas Earnings // Hong Kong Recession Ends as Exports Help Boost GDP 3.3% in Second Quarter // Asian Stocks Advance on Speculation Earnings Will Rise; Yanzhou Coal Gains // Spanish Economy Contracts by 1.0%, More Than Forecast, in Second Quarter // ThyssenKrupp Advances on Signs Steel Demand, Prices May Be Set to Rebound // European Consumer Prices Fall Faster Than Estimated as Energy Costs Drop // European Stocks Fall After U.S. Confidence Report; Volkswagen Shares Drop // Homeowners Reduce Asking Prices by $27 Billion With Deepest Cuts in Nevada // U.S. Consumer Confidence Declines on Job Concerns, Michigan Survey Shows // Banks May Reach Point of No Return as Toxic Loans Exceed 5% of Holdings // U.S. Stocks `Dramatically Overpriced' Amid Crisis Fallout, Federated Says // Stocks in U.S. Fall as Confidence Drop Adds to Speculation Rally Overdone
• After consumer sentiment numbers were released this morning, the US Dollar rose against the Euro, and is now trading nearly 1/2 of 1% higher. NYMEX crude is down over 4% and around $67.50/barrel. Gold is down nearly a full percent, and silver is off 1-3/4%. Base metals ended the day lower, as the rising Dollar, falling equity markets, and negative market news, drove traders into a profit taking mood. Indicator charts show nickel was falling from earlier highs when we posted this morning, but hit the skip slope shortly thereafter, and ended the day on the slide. Dow Jones reports three month nickel ended the day at $8.88/lb , $.02/lb lower than last Friday's close. History will show the week was a loser, but that won't tell the whole story of some volatile movements, and new annual record highs. Inventories of nickel stored in LME warehouses rolled over the 108,000 level overnight, with another large gain. The Baltic Dry Index gained 67 points, which was a second day of gains, but lower than yesterday's 73 point jump. In our opinion, we really need a 100+ point jump for this to stick in the positive for awhile. Media reports the University of Michigan's consumer sentiment index for August came in at 63.2, much worse than the 69 reading that economists expected and down from 66 posted in July. The market may like what it sees in the economy, but John Q Public isn't seeing it yet, and is worse about what is really happening. Consumers that aren't confident don't spend money, and consumer spending makes up nearly 2/3 of the US economy according to some reports. It appears the week will end like so many recently. Less bad news in daily doses, sprinkled with good and bad news. Markets gets euphoric based on some information, only to get a reality check by others. The bulls want it to be better than it really is, and the bears want it to be worse. Somewhere in the mix is reality. And that reality tells us that a whole lot of good people around the world are still hurting.
• Have a safe and restful weekend!    

  Reports

• Commodities Daily - pdf here
• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• (Citi) Nickel Takes up The Running - Nickel has doubled and led the base metal complex higher since early April. The nickel market is small, at approximately a quarter of the size of copper, ally and zinc markets. Rapid changes in open interest have dramatic price impacts on nickel. Open interest has moved sharply higher suggesting new long positions have been established.
• China and Commodities: Chicken or the Egg? - more
• (Millan L. B. Mulraine, TD Securities) "The market expectations (and our own forecast) were based upon the belief that the cash for clunkers program will bolster the headline number, particularly given the anecdotal evidence that this program has proven to be hugely successful. Unfortunately, this was not the case – at least in the July data. However, we continue to believe that this will eventually show up in the data at some point, making August retail sales the obvious candidate for the surge. Even so, with almost all sales categories weakening in July, the underlying tone of U.S. consumer spending has left much to be desired."
• Paul Dales, Capital Economics - "July’s retail sales figures provide very little evidence that household spending is “stabilizing”, as the Fed suggested in yesterday’s policy statement. In fact, they show that falling employment, slowing wage growth and a limited access to credit are still taking their toll on spending."
• Dan Greenhaus, Miller Tabak - "While the positive readings for some countries in the Euro zone are a surprise, the broader idea that the global recession is easing remains unchanged. Today’s data serves as confirmation of an idea already widely accepted. The issue remains how the various countries that have benefited from stimulus measures fare subsequent to the removal of the stimulatory measures. Has demand been stimulated enough to stand on its own two legs?"
• Toxic Loans Topping 5% May Push 150 Banks to Point of No Return - more
• (WSJ) The odds that the U.S. economy will contract in the third quarter of this year are down to one-in-four, the Philadelphia Federal Reserve Bank’s latest quarterly Survey of Professional Forecasters shows.

  Nickel imports seen up 15-20% - India’s nickel imports are expected to rise 15-20 per cent in August-December as against last year, because of robust demand for steel, particularly from the infrastructure sector, said traders and importers. - more

  BHP Billiton extends nickel offtake deal with Australia's Mincor - BHP Billiton has extended its nickel offtake agreement with Australia's Mincor Resources for a further nine years, Mincor said in a statement Friday. - more

• BHP Billiton to lose $1bn on sale of Ravensthorpe nickel mining operation - BHP Billiton, the world's largest miner, has reportedly hired Bank of America-Merrill Lynch to auction its Ravensthorpe nickel operation for up to $1bn (£605m). The company mothballed the site in January following a $2.1bn investment. - more
• Stern warning for Australia's future relationship with China - The sorry tale of Stern Hu and his three Rio Tinto colleagues, all detained in China, has forever altered the relationship that could have been between Australia and China. Despite the ideological differences, Australia was one of the first developed nations to embrace the sleeping giant to our north. - more

  China imposes moratorium on "chaotic" steel industry - Mainland markets dropped today as continued uncertainty about economic fundamentals and monetary policy weighed on recent gains. - more

• Is China's Stand-Off with Rio Tinto Just Getting Started? - When the Chinese government announced earlier this week the formal arrest of four Shanghai-based executives of global mining giant Rio Tinto - one Australian citizen and three Chinese nationals - it seemed a deliberate ratcheting down of a case that had stunned foreign investors in the country.  - more
• China's tough stance fails as steel mills go it alone in pricing talks - The tough-talking China Iron & Steel Association is failing to talk at all with its iron-ore negotiating partners, as steel mill members ignore its directives and entrench the Japanese benchmark price as their own. - more

  EU Threatens Tax on Indian, Malaysian Stainless Steel Fasteners - The European Union threatened to impose tariffs on screws and bolts from India and Malaysia, saying EU producers may be victims of subsidies and price undercutting. - more

• EU launches investigation of Chinese steel rope, cable - The European Commission on Wednesday launched an investigation into the possible circumvention of antidumping measures imposed on imports of steel rope and cable manufactured in China. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.09/lb , but fading with most other base metals lower. The US Dollar is trading slightly higher than the Euro at the moment, but the momentum appears to be in the favor of the Euro at the moment. NYMEX crude futures are trading nearly 2/3 of 1% higher, nearing $71/barrel. Gold is up nearly 1/3 of 1% and silver is up by 1/10 of 1%. In overnight trading, Asian markets ended higher, with China lower. European markets are trading slightly higher this morning, while US futures are choppy and have yet to decide a direction for Wall Street's opening. LME inventories rose again overnight, as is today's BDI reading.
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Commodity Markets Review - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - " More impressively, none of the metals gave up much of their gains despite a late-day fade in both energy and equity markets. Prices lost ground in these complexes after doubts arose about the strength of the impending US recovery when it was revealed that July retail sales fell by a surprising .1%, substantially less than the +.8% rise expected. An unexpected increase in the number of workers filing jobless benefit claims did not help matters much either, and neither did a report showing that July foreclosure filings in the U.S. climbed to a record rate for the third time in five months, as the recession leaves more homeowners unable to keep up on payments. As of this writing, metal prices are mixed in Asian trading with copper, up $46 a ton at $6427, while ali is at $2064, up $4. There are decent $300/MT gains each in nickel and tin, but lead and zinc are weak, off by about $20 and $10 a ton respectively.  ... The dollar is relatively unchanged, and hovering just under 1.4290 against the Euro. Should it weaken further, we could see further gains set in over metals, but on the flip side, the rally is getting long in the tooth, and technically, some of the complexes, such as copper and nickel, are now in overbought territory. We suspect the upward momentum of the last few days should perhaps carry over into Friday’s trading, but some profit-taking should emerge as we start the new week in practically all the markets.  ...  (read Ed Meir's complete morning base metals report here)
• (Yieh) Korean Posco announced to raise its export price for stainless steel cold rolled flat by about US$150-200/ton in response to high nickel costs and strong demands. Meanwhile, the company reported that its stainless steel exports during the second quarter increased to 308,000 ton by 27.8 percent compared with the first quarter.
• Bank of America May Expand Commodities Group 25% in Three Years - more
• (Kyodo) Japan's crude steel output in the current fiscal year is likely to fall to the lowest level in nearly 40 years due to weak demand amid the global economic slowdown, according to industry projections made available by Thursday.
• (Purchasing Mag) Molybdenum prices have averaged slightly more than $9/lb so far this year but an analysis by J.P. Morgan Securities warns "expect moly prices to close in on $15/lb over the next several months and to average $18/lb in 2010." The forecast from New York-based analyst Michael Gambardella suggests that "most Western molybdenum producers have little to no inventory, leaving traders scrambling—given the recent increase in demand outside China."
• FNX Mining Q2 profit up 11 pct - more
• ThyssenKrupp sees wider 2009 loss, better 2010 - more
• (China Daily) China's power consumption in July rose 6 percent to 342 billion kWh over the same month of last year, said China's National Energy Administration (NEA) Friday.

  BHP hires BofA-Merrill for Ravensthorpe sale: source - BHP Billiton has hired Bank of America-Merrill Lynch to advise it on a sale of its Ravensthorpe nickel operation in an auction which could fetch $1 billion, a source with direct knowledge of the matter said on Friday. - more

  Tension at the Jindal Steel Kalinganagar plant - Tension prevailed outside the proposed 1.6 million tonne integrated stainless steel project of JSL Ltd at Kalinganagar near Duburi in Jajpur district due to a clash between the stone pelting workers and security personnel. - more

  First Nickel looking to raise $35 million to develop Lockbery Mine - First Nickel Inc. is confident it can raise the millions it needs to pay for development work at its shuttered Lockerby Mine. - more

  Danieli Sees Strong Recovery in Asia, CEO Benedetti Tells Sole - Danieli SpA, an Italian steel-mill engineering company, is seeing a strong recovery in China and India, Chief Executive Officer Gianpietro Benedetti told daily Il Sole 24 Ore in an interview. - more

  Low demand: Tata Steel cuts long product prices - Kolkata: Tata Steel has reduced prices of long products, used primarily in the construction sector, by Rs 1,000-1,500 a tonne with immediate effect. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Life on the picket lines is never dull - There wasn't a dull moment Thursday on the United Steelworkers Local 6500 picket line at Vale Inco's Copper Cliff Smelter Refinery. - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, August 13

• Baltic Dry Index - plus 73 to 2,685. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Yanzhou Coal to Buy Australia's Felix for $2.9 Billion to Secure Supplies // Li Ka-Shing Says Global Economy Won't Recover This Year, `Worst Is Over' // Asian Stocks Rise as Fed Says Recession Easing; Commonwealth Bank Advances // Euro Gains for Third Day After Surprise Growth in German, French Economies // Europe's Recession May Be Ending as Germany, France Show Unexpected Growth // Stocks in Europe Gain on German, French Economies; Prudential, Rio Advance // Walmart's Earnings Top Analysts' Estimates on Cost Reductions; Sales Drop // Foreclosure Filings in U.S. Climb to Record for Third Time in Five Months  // AIG Consumer Loan Unit Cuts 900 More Jobs, Shuts Branches as Losses Mount // U.S. Initial Jobless Claims Climb; Total Rolls Drop to Lowest Since April // Foreclosure Filings in U.S. Climb to Record for Third Time in Five Months // Stocks in U.S. Fluctuate as Consumer Companies Decline, Bank Shares Climb
• The Euro continues to trade higher against the US Dollar, by 2/3 of 1%. NYMEX crude is up 1.8% and hovering just under the $71.50/barrel level. Gold continues to trade higher, up a little over 1%, while silver is nearly 3-1/2% higher. Base metals ended broadly higher today, getting an early morning push from the falling Dollar, positive economic news from Europe, and  a fresh inflow of fund investment. Indictor charts show nickel opened much higher, rose even more but peaked out around our morning briefing, before gradually slipping back some. Dow Jones reports three month nickel ended the day at $9.34/lb , a new fresh closing high for 2009. Nickel inventories stored in LME warehouses rose again overnight, and now rest just shy of the 108,000 tonne level. The Baltic Dry Index also rose, up 73 points to 2,685, after falling for 10 consecutive days. It hit 3,499 before it started the most recent losing streak. Some of the analysts we read each day, were nearly giddy this morning on news that Germany's and France's GDP actually rose last quarter. But then US reports began being published, and a somber reality check was in store for all. The Labor Department reported fist time claims for unemployment benefits rose by 4,000 to 558,000 last week, although continuing claims backed off to 6.2 million, its lowest level since April. Then the Commerce Department reported US retail sales slipped 0.1% even though teh 'cash-for-clunkers' program was widely expected to take the total higher. Excluding auto sales, retail sales fell 0.6% in July. MarketWatch reports "Retail sales - which account for about one-third of final demand in the economy -- are down 8.3% in the past 12 months." RealtyTrac reported 360,149 foreclosure filings nationally in July, up 7% from June and 32% from the same month last year. Futures were plus 90 this morning during our monring report, but by the times the markets opened this morning, traders were sullen and Wall Street opened lower. Markets have rebounded some since and are trading in the green at the moment, but the early morning euphoria and left over excitement from yesterday's Fed encouragement, has apparently evaporated.

  Reports

• Commodities Daily - pdf here
• Association of American Railroads Weekly Report - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) South Africa's state-owned power company Thursday said an agreement that will see wages rise 10.5% has been reached with unions and is set to be signed Monday.
• Fed Signals No Rush to Exit From Stimulus as Recession Ends - more
• Chinese learn credit card perils the hard way - more
• As homeowners head 'underwater,' another housing crisis looms - more
• U.S. home foreclosures set another record in July - more
• Next Bubble to Burst Is Banks’ Big Loan Values: Jonathan Weil - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:35 am CST show 3 month nickel trading around $.54/lb higher, and that is no mis-print. Base metals are much higher this morning, while nickel is showing signs of either taking a breather, or topping out. The US Dollar is trading 8/10 of 1% lower against the Euro, giving a partial boost to commodities, as Germany and France show unexpected increases in their respective GDP's. NYMEX crude futures are up nearly 2% and at $71/50/barrel. Gold is trading 1-1/3% higher and silver is nearly 2-1/2% higher. In overnight trading, Asian markets ended higher, with only South Korea and Pakistan dropping. This morning, European markets are much stronger, and US futures imply a strong opening for Wall Street. If you have ever watched the movie, "Wizard of Oz", you remember the song by the munchkins that starts "Ding Dong! The Witch is dead. Which old Witch? The Wicked Witch! Ding Dong! The Wicked Witch is dead." Reading some of the analysts this morning, we can not help think of this song. As for commodities, here is your Dow Jones story headline from this morning that tells the story - "Metals Surge On Fresh Wave Of Fund Buying" (more) And not that is really matters, but for you old timers that still follow fundamentals as it was once defined, nickel inventories rose by another large amount overnight. And the BDi - it rose finally.
• Bloomberg morning base metal news - more

  Reports

• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals posted strong gains on Wednesday, with the surge fueled by a combination of factors-- a weaker dollar, stronger US equity markets, and a well-received (and widely anticipated) Fed statement. Although were no particular surprises in the Fed announcement, the fact that the central bank expressed its determination to stay the course on the interest rate front despite improving economic conditions was reassuring enough. The Fed also said that it would slow the pace of its $300 billion Treasury buying program, and now expects that these transactions will be completed by the end of October of this year vs. the original September deadline. Yesterday’s surge in the LME metals was enough to trigger a limit-up session in Shanghai copper overnight, which, in turn, is leading to another robust session as of this writing. The dollar is weaker again, now just under 1.43 against the Euro, and with the Fed announcement out of the way, we could see the greenback resume its decline .... Nickel is at $21,200, up $1550, and making fresh 2009 highs in the process. The next upside target looks to be $22,700.  (read Ed Meir's complete morning base metals report here)
• (SSY) According to the National Bureau of Statistics, China’s crude steel output rose to the first 50+Mt monthly total in its history, up by 2.6% from the previous record set in June to 50.6 Mt, posting a 13% increase year-on-year.
• (Interfax) China's steel product output up 7.6 pct year-on-year in first seven months
• (TEX) Japanese Export Offers At $2,900 C&F For Ni-Based Stainless CR Sheets
• (JMB) Global supply-demand for nickel this year/ Excess supply increases to 50 thousand tons
• Western Areas is almost doubling the output of its Cosmic Boy concentrator and will develop a second nickel mine at Forrestania in Western Australia. The $A61.5 million projects will be funded from cash. Final environmental approval is still required but the new mine, Spotted Quoll, should be producing by March 2010.
• (eTrucker) The Freight Transportation Services Index was unchanged in June from its May level, remaining at its lowest level in 12 years, the U.S. Department of Transportation’s Bureau of Transportation Statistics reported today, Aug. 12. BTS, a part of the Research and Innovative Technology Administration, reported that the Freight TSI has declined in all but two of the last 11 months, and that the index has declined 14.8 percent in that 11-month period. The June Freight TSI of 94.0 is the same as in May, remaining at its lowest level since June 1997 when it was 92.4. The Freight TSI is down 16.7 percent from its historic peak of 112.9 reached in May 2006.

  Nickel price outlook mixed although fundamentals improve - While nickel has been performing reasonably well of late, and fundamentals are seen to be improving, it remains particularly vulnerable to any stuttering in the global economic upturn. - more

  Commodity Outlook 2010: Prices to rise, but not to 2008 levels - Economists at the International Monetary Fund say the global slump is bottoming out, with contraction in 2009 of about 1.4%. - more

• Fever In China To Increase Steel Production May Cause To Push Up Prices Of Ferro-Alloys = Output Of Crude Steel In China Is Anticipated to Exceed 500 Million Tons In 2009, Stimulating Domestic Prices - Being stimulated by a fever to expand steel production in China, prices of bulk ferro-alloys (silico-manganese and ferro-silicon) in domestic market of China are rising steeply. - more

  Traders seek repeal of ban on scrap imports - Faced with a huge shortage of base metal scraps due to a sudden ban on scrap imports, the Mumbai-based Bombay Metal Exchange and the Bombay Non-Ferrous Metals & Scrap Merchants Association have urged the government to repeal the move. - more

  Salzgitter sees no signs of strong steel recovery - Salzgitter, Germany's second-biggest steelmaker, posted a wider-than-expected pretax loss in its second quarter and gave a downbeat outlook on Thursday. - more

  China stops expansion projects in steel industry for three years - China's Ministry of Industry and Information Technology (MIIT) Thursday announced a three-year moratorium on approvals of new expansion-related proposals in the iron and steel industry, as the government pledges to eliminate outdated capacity. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• China steel body under fire, govt support seen waning - China's embattled steel industry association came under direct fire in a state-owned newspaper on Wednesday, suggesting diminished government support for its recalcitrant stance in marathon iron ore negotiations. - more
• Rio Tinto Employees Face Formal Charges  - Foreign businesses in China have started to take steps to protect themselves as the formal arrest Tuesday of four employees of miner Rio Tinto renewed questions about the boundaries of acceptable commercial behavior here, and the penalties for overstepping the line. - more
• World Iron Ore Price May Not Continue Rising, Li Yizhong Says - The global prices of iron ore may not continue their rising trend because of China’s ongoing efforts to reorganize its steel industry and reduce their excess production capacity, the Chinese industry minister said.  - more
• CISA stance hurts small steel mills - China's top negotiators in the bitter and protracted row over the price of iron ore seem destined never to agree - risking a loss of face that will raise questions about whether they are up to the job and who it is they are actually representing - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, August 12

• Baltic Dry Index -minus 11 to 2,612. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Rio's Hu, Three Colleagues Charged With Stealing Trade Secrets, Bribery // BHP Billiton's Second-Half Profit Drops 65% as Metal Prices, Demand Slump // China Construction to Buy AIG Unit in Hong Kong, First Purchase Since 2006 // Asian Stocks Fall on Valuation Concern; Chinese Equities Enter Correction // Confidence in Global Economy Jumps on Signs Recession Is Approaching End // Bank of England Says Inflation May Miss Target Amid Slow Economic Recovery // Nestle Sales Miss Estimates as Consumers Spurn Bottled Water, Milk Powder // U.K. Unemployment Rises to Highest Level in 14 Years as Companies Cut Jobs // European Stocks Gain; E.ON, Balfour Beatty, Nobel Biocare Rise on Earnings // Trade Deficit in U.S. Widens Less Than Economists Forecast as Exports Gain // Stock Bulls Increase Worldwide as Survey Shows Most Optimism in Two Years // Fed May Acknowledge Faster Growth, Pledge to Keep Rate `Exceptionally' Low // Home-Price Drops in U.S. Accelerated Last Quarter as Foreclosures Climbed // Stocks Advance as Toll Brothers, Macy's Earnings Beat Analysts' Estimates
• The Euro is now trading 1/2 of 1% higher against the Dollar, giving commodities a healthy boost. NYMEX crude is trading higher by nearly 1-3/4%. Gold is up nearly 1/2 of 1%, and silver is up by 1-1/3%. Base metals, all trading in the red during our morning briefing, all ended the day higher as the Dollar fell. Looking at the indicator charts, nickel traded strictly on the Dollar's movement today. In trouble early, as soon as traders could tell the Dollar's sudden dip was a trend shift and not just a momentary ripple, nickel took off and climbed the rest of the day. Dow Jones reports three month nickel ended the day at $8.91/lb . Nickel inventories jumped again overnight and are now well over the 107,000 tonne level. The Baltic Dry index is finally showing signs of a turnaround, by only falling 11 points overnight. The Commerce Department reported earlier this morning that imports into the US rose for the first time in nearly a year in June, but remained at a 5-1/2 year low, excluding oil. Exports rose two percent during the same month.  Hopefully, you are all breathing a collective sigh of relief. We have, for our regular readers, passed the 10' o'clock witching hour in which we forecast the U.S. recession would be unofficially over. In fact, if you believe this baloney, we are now well into our third hour of the recovery. Feel any better yet? We hope so, because we are busy rolling dice, and its still up in the air whether the recovery will stick for more than a day or two, or we will double dip. And if you think rolling dice is a crappy way of forecasting, well it is. But if you read some of the other analysts deeply thought out, number crunching, analytical reports, like we do, we figure we stand as good as a chance as they do of being 100% wrong every time we dare take a stab. Even a stopped clock is right twice a day! At least we admit we are totally guessing. And that $10/lb guess for nickel before the end of the year. Enough already with the fundamentals argument. We have a major mine in Sudbury shut down due to a strike, another in Voisey's Bay on strike, another shut down for maintentance, and a whole crop of them still shut down from the recession. And even these guys are scratching their heads, wondering how inventories have only declined 2,238 tonnes in the last 30 days. And while that might not be so bad, they were down by another 1,680 tonnes 4 days ago, but have been gaining ever since. Fundamentals has been redefined from supply and demand to "funds-r-mentals". It's a new day folks. Get in early, convince the funds to join in late, then bail before they figure out they were snookered. Just don't bail too early, or you might miss out on one heck of a party. That's our retirement funds they are playing with you see. Or what's left of them.   

  Reports

• Commodities Daily - pdf here
• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• Na Liu of Scotia - China Commodities Weekly - ".... Overall, this set of macro data fits very well with our recently adopted investment stance of “less bullish, more neutral, but definitely not bearish.” It appears the recovery in China is still ongoing, but the pace of the recovery is not as quick as the market had expected, as inventory re-stocking is slowing. In other words, the market has run ahead of itself in terms of investors’ expectation for the economic recovery in China. ... As Premier Wen said, downside risks for the Chinese economy still exist and the foundation of the recovery is not solid and needs to be strengthened. The below-consensus July macro data just released certainly supported this explanation. To elaborate on this explanation, we need only to quote once again Premier Wen’s comments from last week: “The impact of some of our near term stimulus policy will eventually wear off, and some of our long-term policy to drive structural change will take time to show an impact. The impetus for self-sustaining growth in the economy is still not strong. Therefore, the direction of macroeconomic policy cannot change.” Premier Wen’s caution seemed to be echoed by China’s steel traders lately. After 16 weeks of strong rallying, the steel prices in China suffered a pullback in the second half of last week and so far this week. ... . We expect China’s copper and other base metals imports to continue to drop into the late summer months, as the Shanghai-LME price ratio has remained depressed over the past two months."
• (Egoli) China Steel Australia Limited (CNH) said it commenced production at its China-based merchant pig iron (“MPI”) plant on August 6. Production at the plant had been delayed a few weeks due to the process of price negotiations for the raw materials. The company converted its nickel pig iron plant near the city of Linyi in China’s Shandong Province to produce MPI. China Steel said production volumes had yet to reach full capacity but production was expected to ramp up over the next few weeks. The company said it expects to record a loss for the full year after being affected by the time needed to convert the plant, the current global economic conditions and the delay in the supply of ores. However, China Steel also said it expects to continue profitable trading with the new MPI product in future periods.
• (Dow Jones) U.S. nickel exports rose 9.6% in  June from the previous month, but was down 36.8% from the previous year, the Commerce Department reported Wednesday.
• (Dow Jones) U.S. nickel imports fell 53.0% in June from last month, and was down 77.8% from the previous year, the  Commerce Department reported Wednesday.
• Is China's steel surge sustainable, asks Stopford - A note from Clarkson Research written by Dr Martin Stopford has highlighted the astonishing recent surge in imports into China (see also separate story), without which the fast-growing drybulk fleet would probably be in the same dire financial straits as the tanker market. - more
• Coffin brothers talk commodities - more

  Rio’s Hu Faces Bribery, Trade Secret Charges in China - Rio Tinto Group executive Stern Hu faces charges in China of bribery and stealing commercial secrets from the nation’s steel industry, a downgrade from earlier government claims of espionage. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:35 am CST show 3 month nickel trading around $.08/lb lower, with most base metals lower this morning. The Euro has only recently gone higher against the Dollar, up by 1/10 of 1%, and nickel has risen off earlier lows. NYMEX crude futures are flat so far. Gold is lower by 2/10 of 1% and silver is trading even. In overnight trading, Asian markets ended lower with only Australia and New Zealand squeaking out gains. In Europe, trading is slightly higher while in the US, futures show a slightly higher opening is possible as the market awaits word from the Fed on interest rates. Nickel inventories are not cooperating with what many perceive as what should be happening, considering the large strikes in Canada, and the resumption of stainless steel production in various parts of the world. They registered another large increase overnight. China has finally formally arrested the four Rio employees that have been detained for nearly 6 weeks. And Taiwan officials report hundreds are still missing after mud slides decimated small villages in the southern part of that country after Typhoon Morakot rolled thru earlier in the week.   
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• NFIB Small Business Economic Trends - pdf here
• BHP Billiton Results for the Year Ended 30 June 2009 -  pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices closed lower again on Tuesday, as a steady dollar, weakness in US equity markets, and a sag in energy prices, all combined to chip away at the complex. Prices were also hurt by a rather lackluster response to Chinese metals trade data and macro numbers, neither of which sparked anything meaningful on the upside yesterday. More broadly, there seems to be a feeling setting in that after weeks of steady gains, all markets are in need of a breather, particularly as we approach the treacherous September/October time frame. Historically, September is the month that has proven the most difficult for the equity markets, although October is the one that usually comes when it comes to the more memorable sell-offs. Certainly, last year's performance confirmed these seasonal tendencies in spades. As of this writing, metals are not doing much, with slight losses apparent. Investors are waiting for the Fed policy statement out later today to see if they can detect language that possibly hints at a modest detour in the Fed’s loose monetary stance. We figure that although the economy is now well on its way to recovery, it remains relatively weak, and this should allow the Fed to stay on hold for a while longer..... Nickel is at $19,295, down $205. We have had quite a volatile day so far, with a $600 trading range in place. Prices sank to a low of $19,080 earlier, before recovering. (read Ed Meir's complete morning base metals report here)
• Societe Generale analyst David Wilson  - "I think most people would agree the rally's overblown, but I don't think we'll see much downside because of the wall of investment that's flowing into commodities."
• Impact of export slump on GDP growth downplayed - more
• Keith Hennesey - “There is a difference between “good news” and “pointed in the right direction.” Friday’s jobs report was good news, but the economy is still not yet pointed in the right direction. We have a ways to go… Imagine you’re in a car that has been rolling backwards downhill at high speed. Now the car slows down, but it’s still rolling backwards downhill, just more slowly. You are not headed in the right direction until you’re moving forward… Friday’s jobs report was good news because the bad news beat expectations, and because it signaled that things might turn around more quickly in the future. But the President is wrong – the U.S. economy is not yet pointed in the right direction.”
• (WSJ) Industrial production in the 16 countries that use the euro reversed the gain posted a month earlier in June, highlighting fears that the recovery from recession will be a slow and painful one. According to figures released Wednesday by the European Union's statistics agency Eurostat, industrial production fell 0.6% from May and fell 17% from a year earlier. That was the smallest year-to-year drop since February.
• India’s Production Rises at Fastest Pace in 16 Months  - more
• Japan Economy Probably Expanded for First Time in Five Quarters  - more
• Home Values Flatten in Short Term; Yearly Declines Shrink, but High Rates of Foreclosure, Negative Equity Expected to Delay True Recovery - more
• Trucks win in Cash for Clunkers game - more
• Darwin Awards - more

  Western Areas Shares Surge on Plans to Double Nickel Output - Western Areas NL, an Australian nickel producer that supplies BHP Billiton Ltd., surged the most in four weeks in Sydney trading after announcing plans to almost double production at its Forrestania project - more

• BHP Billiton committed to nickel: Kloppers - BHP Billiton Ltd’s woes in the nickel sector have not dented the miner’s commitment to the metal, with the mining giant’s chief executive Marius Kloppers saying that its recent setbacks have led to a change in strategy - more
• BHP Cautions on Outlook as Metals Bash Profit - BHP Billiton Ltd/Plc , the world's largest miner, gave a guarded outlook for global commodity demand, sending a worrying signal for weaker rivals, after a slump in metals prices triggered its first profit decline in seven years. - more

  China Says Domestic Demand Can’t Offset Export Slump  - China’s efforts to boost domestic consumption can’t completely offset slumping export demand, the commerce ministry said. - more

• Fever In China To Increase Steel Production May Cause To Push Up Prices Of Ferro-Alloys = Output Of Crude Steel In China Is Anticipated to Exceed 500 Million Tons In 2009, Stimulating Domestic Prices - Being stimulated by a fever to expand steel production in China, prices of bulk ferro-alloys (silico-manganese and ferro-silicon) in domestic market of China are rising steeply. - more

  All Products Carbon Steel Price Forecast - As predicted, the MEPS- Global Carbon Steel price moved up by over 1 percent in July. - more

  Mechel Announces the Memorandum of Cooperation Signing With Mitsui & Co. - Mechel OAO, one of the leading Russian mining and metals companies, announces the Memorandum of Cooperation signing with Mitsui & Co. Corporation. - more

  Your mission (or at least your excuse) should you choice to accept it, is to locate the nickel bearing object in each of these photo's. With that in mind, here are your 2009 Miss Universe contestants from major nickel producing and/or nickel refinery countries.... (hint - the average human body contains about 10 mg of nickel)

• Miss Russia - here / Miss Canada - here / Miss Australia - here / Miss Indonesia - here / Miss New Caledonia - no entry / Miss Philippines - here / Miss Columbia - here / Miss Dominican Republic - here / Miss Brazil - here / Miss Cuba - no entry / Miss South Africa - here / Miss Greece - here / Miss Zambia - here / Miss Turkey - here / Miss Spain - here / Miss Japan - here / Miss Norway - here / Miss Finland - here / Miss France - here / Miss UK - here / and Miss USA - here (ok, no nickel but holds majority of site readers)

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Four Rio Tinto employees arrested - Nearly six weeks after being detained by the Shanghai State Security Bureau for suspected espionage activities, Shanghai procuratorate authorities have now formally arrested four Rio Tinto employees. - more
• Rio says employees acted properly in China business - Anglo-Australian miner Rio Tinto believes its employees being held in China acted properly and ethically in their business dealings in the country, the global miner said on Wednesday. Rio Tinto made the comments in a statement after four of its staff, including Australian Stern Hu, were formally arrested on suspicion of obtaining commercial secrets. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, August 11

• Baltic Dry Index - minus 66 to 2,623. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Exports, Lending Fall, Adding Pressure on Government to Aid Economy // Yen Gains a Second Day as China Industrial Output Grows Less Than Forecast // Rio Executive Stern Hu, Detained in Shanghai, Gets Second Consular Visit // Asian Stocks Gain on Speculation Profits Will Increase; Golden Agri Surges //
• Worker Productivity Surges at Fastest Pace in Six Years Amid Job Losses // TARP Oversight Panel Says Smaller U.S. Banks May Need to Replenish Capital // Underwater Mortgage Holders Approach 25% as Home Prices Fall, Zillow Says //  European Stocks Fall Most in a Month; Lloyds, Danske Bank, Natixis Decline // Worker Productivity Surges at Fastest Pace in Six Years Amid Job Losses // Stocks in U.S. Fall on JPMorgan MBIA Downgrade, Outlook for Bank Earnings
• Merely stating the Euro continues to trade higher against the Dollar by over 1/10 of 1% would not tell a complete story about the last 4 hours. Shortly after our morning update, the Dollar began to strengthen, and went positive till only the last hour or so. As the Dollar rose, it dragged base metals lower, and its recent fall came after London markets were closed. Thus metals traders did not have the opportunity to respond. NYMEX crude is presently down over 2%  and under trading $70/barrel. Gold and silver are both flat at the moment. All base metals ended lower on the rising Dollar, including nickel. Indicator charts show nickel was trading in positive territory until the Euro took a dive, and then the price of nickel slumped the rest of the session. Picture a ski slope and the price of nickel ending the day at the very bottom of the hill. Dow Jones reports three month nickel ended the day at $8.84/lb .  Inventories of nickel stored in LME warehouses rose sharply again overnight, and are now threatening to cross over the 107,000 tonne level. The Baltic Dry Index continues to slide, down another 66 points. The Fed began its meeting today and will announce any changes to the interest rate on Wednesday. Widely expected to be left in its current range near zero, LME traders are watching closely how the Dollar reacts this week. Raising the interest rate would boost the dollar, as it would make returns on investments more lucrative and attract funds from investors. However, an increase in the Dollar, would add downward pressure on base metals, making them more expensive to own. We typically see this all the time, but traders will pay special attention this week, as a surprise increase in interest rates could potentially cause a sharp downward movement in metals prices. The US Dept of Labor released its 'Labor Productivity and Costs' report today, which showed the reason for corporate profits. During the second quarter, output fell 1.7% annualized, while hours worked declined at a 7.6% annual rate, with hourly earnings barely increasing. Productivity in the non farm sector increased at its best rate in 6 years, and could potentially signify a recession bottoming, as output begins to increase but companies continue cost savings programs. Wall Street appears to be more concerned that companies who apparently made money last quarter by cutting overall costs, may not have much fat left to trim. Without a positive shift in the economy, profits next quarter could lag those of the past quarter. At present, Wall Street is 1% lower. If you are a half full glass type of person, there is economic news around to be optimistic about. If you are a half empty glass type of person, there is plenty of economic news around to be pessimistic about. Pick your poison.   

  Reports

• Global Mining News - pdf here
• PMPA Metals Impact - pdf here
• Fundamental Views on Metal Markets - 4 parts - pdf here
• Statistical Summary August 2009 - China - pdf here
• Statistical Summary August 2009 - Global - pdf here

  Commodity/Economic Articles and Comments

• (Credit Suisse) ...while we expect China 's imports of refined nickel in July/August to fall short of the pace set in the 1H09, we are still keeping an eye on the developments across the border in the US , that at Vale's Sudbury and Voisey's Bay operations. Risks are on the upside as time passes with no labor agreement.
• (Goldman Sachs) "We expect some short-term factors that have lent particular support to aluminum and nickel prices to wane in coming months ... we anticipate robust emerging market growth to remain supportive of metals demand, leaving risks to our base metals price and returns forecasts skewed to the upside."
• (MarketWatch) China - Industrial output for July expanded 10.8% from the year-earlier month, slightly ahead of the 10.7% growth recorded in June, but short of an 11.7% increase forecast in a Reuters poll of economists.
• China's steel exports fell 74.9% YOY to 1.81 million tons in July, while iron ore imports rose 31.8 % YOY to 58.1 million tons. In the first seven months, steel exports fell 67.3 % YOY to 11.16 million tons, while iron ore imports increased 24.1% to 355.25 million tons.
• PT Inco says its cutting of 87 jobs to reduce costs will not affect annual production goals. PT Inco company has approximately 3,400 employees, mostly in Sorowako and quarry work in  South Sulawesi.
• (LG) It is reported that China’s scrap import totaled 7.57 million tonnes during the first six months, up 426.7% YOY.
• 4 ETFs to Consider for the Base Metals Boom - more  
• Eskom workers appear to back deal - S.Africa union - more
• Global gold hedge at multi-year low - more
• Andy Xie: China Stocks a Giant Ponzi Scheme - more  (who is Andy Xie and is he worth listening too? Here is a Reuters article dated April 30, 2007 called "Andy Xie warns of China crash" (more) Here is a quote from the 2007 article - "Xie, who attracted a wide following while he was at Morgan Stanley (MS.N) because of his often contrarian views on China's economy and stock markets, also warned that the global boom in equities would be over by 2008 and that this would coincide with a worldwide recession. The recession would start from the United States and spiral down into Asia where exporters would be hit, Xie, 46, told Reuters in a telephone interview. "I think it's going to be bust very soon," Xie said, adding that a combination of excess liquidity, rising inflation and rich valuations would result in a global crash soon.")
• Industrial Dynamic at Core of China's Fight with Economic Slowdown - more
• Canada - Five signs a housing recovery is on the way - more
• New bull, new bubble, new meltdown by 2012 - more

  Reuters reports nickel output in China rose 7.4% MOM in July, and thru the end of July, TYD output is up 10.4%

  Hernic Says Ferrochrome Demand Rises, Prices Stay at Low Levels - Hernic Ferrochrome Ltd., the company that shut furnaces from January, is waiting for metal prices to rise before deciding to increase output even as demand improves. - more

  Vale Inco's Manitoba ops shut for maintenance - Vale Inco has shut down its Thompson, Manitoba, nickel mines and processing facilities for scheduled maintenance, the company confirmed on Tuesday, meaning all its Canadian operations are currently silent. - more

  Rio, China and the question of state secrets: John Kemp - Online comments in a magazine sponsored by China's National Administration for the Protection of State Secrets (NAPSS) accusing Rio Tinto employees of using bribes to obtain confidential information as part of iron ore negotiations over six years, costing China's steelmakers 700 billion RMB (around $100 billion) in higher prices, have brought new heat but little light to the bitter dispute between China and the major iron ore suppliers. - more

  POSCO Upbeat on Rising Steel Demands in China - POSCO, which suffered the worst first half on a global economic slump and high raw material prices, is forecast to see a strong rebound thanks to bullish factors in China. - more

  German Stainless Steel Plant Gets New and Exchange AOD Converters in Just 3 Weeks - Siemens VAI Metals Technologies replaced two existing stationary AOD vessels and started up two new exchange-type AOD converters at the German stainless steel producer ThyssenKrupp Nirosta in Krefeld, including auxiliary equipment. - more

  South Africa: Lessons From the Anglo-Xstrata Scrap - Now that the war between Anglo American and Xstrata is over, some post-match pontificating is in order. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:35 am CST show 3 month nickel trading around  $.05/lb higher, with other base metals mostly higher, but quiet. The Euro is trading 1/4 of 1% higher against the US Dollar, giving commodities a slight boost this morning. NYMEX crude futures are 1/3 of 1% higher and nearing $71/barrel. Gold is up 1/3 of 1% and silver is higher by 1/2 of 1%. In overnight trading,. Asian markets ended slightly higher, while European markets are lower this morning . At the moment, US futures show a slightly lower opening on Wall Street. LME nickel storage gained for a third day overnight, by another significant amount, while the BDI slumped yet again.
• Spouse complaining that you don't spend enough time with the family? Well we here at estainlesssteel dug deep in our bag of tricks and found some cheap entertainment for tonight, that even you might enjoy. National Geographic reports that "From any vantage point in the world, you might see more than 80 meteors an hour streak across the sky during the best viewing time, when the moon's glare will be weakest—late Tuesday night and into the wee hours of Wednesday, weather permitting." (more) In the mean time, a thought about investing. There is an old saying that "if you don't want to run the risk of drowning, don't get in the water". If that is your trading strategy, good for you, but we recommend you find some safe shade in the mean time. For those of us who have been standing on the edge of the pool since March, waiting for some mystical right time to jump in, all we have gotten out of the market this year thus far, is seriously sun-'BURNT'!
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Weekly Forecast by SMM Specialist - more
• SMM Weekly Review and Forecast (August 3-7) - more
• Commodity Trends - pdf here
• SFSA August 2009 Casteel Reporter - pdf here
• Signs of economic recovery raise metal demand - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  Whereas metals held off the bearish impact of the stronger dollar very impressively on Friday, the complex could not do so again yesterday. With the greenback strengthening again from around 142 to 1.4130 against the Euro, metal prices fell sharply, with particularly steep declines noted in ali and zinc. Lead and tin were also lower, but nickel bucked the trend to close slightly higher. Other than that, there was not much that was noteworthy in the other markets-- oil prices finished mixed in listless trading on account of the same dollar pressures, while US stocks edged lower after four weeks of consecutive gains. ... We do not expect to see a very eventful session today, as most markets are treading water. The dollar is not doing much as of this writing, as it inches back towards the 1.42 mark against the Euro, lending an element of support to both metals and oil. On the US macro scene, we get Q2 productivity readings (expected at 5.4%) later today, and the Fed’s rate decision and statement tomorrow. ... Nickel is at $20,230, up $30, and making an eleven-month high yesterday, but trading is very quiet so far today, with a $330 trading range in place. Prices remain steady in light of the ongoing strike action in Canada, which we referenced in yesterday’s note.  (read Ed Meir's complete morning base metals report here)
• (Dow Jones) India's stainless steel demand is likely to rise 10% in the fiscal year ending March 31 from 1.4 million metric tons a year earlier, a senior industry executive said Tuesday.
• (Yieh) According to the Japan Iron and Steel Federation (JISF), Japan imported 9,075 tons of stainless steel products, up by 18.6 percent compared with 7,649 tons in May.
• (AM) Fortescue Metals has posted an annual profit of US$508 million after a loss of US$771 million at the same time last year.
• (Interfax) China's crude steel output hits high in July - China's crude steel output peaked in July, reaching 50.68 million tons, up 2.61 percent month-on-month and 12.6 percent on an annual basis, according to a report released by the National Bureau of Statistics on Aug. 11. - more
• (SSY) Latest information from China’s iron ore ports indicate that a total of 47 Capesize vessels are waiting to berth compared with a peak of 88 in mid-June.
• (JMB) Nickel Stainless Cold Rolled Price to Rebound After 2 Years Drop - Nickel series stainless cold rolled flat steel market price shows sign to rebound in Tokyo and Osaka when the dealers try to increase the reselling price under makers hike, higher nickel price and higher Asian stainless market. The supply balance gets tighter when the dealers' inventory at end of June decreased by 36.7% from a year earlier level.
• (CM) · China imports 58.08 mln tons iron ore in July, up 47 pct year on year
• (ED) China's power consumption rose 3.79 percent year on year to 305.22 billion kilowatt hours in June, the China Securities News reported, citing sources from the China Electricity Council (CEC).
• (CD) China's retail sales rose 15.2 percent in July to 993.7 billion yuan ($142 billion) from a year earlier, and urban fixed-asset investment rose 32.9 percent year-on-year in the first seven months to 9.59 trillion yuan ($1.4 trillion), the National Bureau of Statistics announced Tuesday.
• China July CPI falls 1.8%, PPI down 8.2% - more
• Mark Williams, Asia economist for Capital Economics - "It's a very serious threat. The Chinese government is walking a tightrope. There is the question of what happens if they rein in lending, because there is really no strong evidence that private sector demand is picking up."

  China cracks down on illegal moly mining in Guangdong - China is moving against illegal molybdenum mining in Guangdong Province's Yangchun City as miners scramble for the rich local moly ore resources, a source at Beijing Antaike, the state-run metals information provider said Monday. - more

  Extraordinarily High Nickel Price Causes To Rise Price Of Stainless Scrap To Yen 170,000 / Ton = Operation Rate To Produce Stainless Steel In Japan Is Expected to Raise To Level Of 90% From September - Because of the rushed nickel purchases, LME nickel prices in the afternoon market at the 4th August of 2009 had risen to the level of US$19,000 per ton in both for cash and for three-month futures. - more

  Inco says protest ends at Indonesian nickel mine - Villagers at a Sulawesi mine operated by PT International Nickel Indonesia Tbk have ended a protest over jobs after reaching an agreement with Inco, the company said on Tuesday. - more

  Stop anti-dumping duty on imported stainless steel: AISSIA - All India Stainless Steel Industries Association (AISSIA) today urged the government to immediately stop the imposition of anti-dumping duty on imports of stainless steel coils, as it is adversely affecting the domestic stainless steel utensils and cutlery manufacturing units in the country. - more

  Norilsk Chief Offers to Find Buyers for 25% Stake Held by Rusal - Vladimir Strzhalkovsky, chief executive officer of OAO GMK Norilsk Nickel, offered to find buyers for the 25 percent stake in his company held by United Co. Rusal if it opts to dispose of the shares. - more

  China makes unexpected grab for Canadian miner - State-controlled Jilin Jien launches a surprise bid for Canadian Royalties, a stark change in tactics for the Asian superpower - more

  Courtesy AISI - In the week ending August 8, 2009, domestic raw steel production was 1,277,000 net tons while the capability utilization rate was 53.5 percent. Production was 2,158,000 tons in the week ending August 8, 2008, while the capability utilization then was 90.4 percent. The current week production represents a 40.9 percent decrease from the same period in the previous year. Production for the week ending August 8, 2009 is up 0.7 percent from the previous week ending August 1, 2009 when production was 1,269,000 tons and the rate of capability utilization was 53.2 percent.

  Baoshan Lifts Steel Prices for September Delivery, Mysteel Says - Baoshan Iron & Steel Co., China’s biggest steelmaker, raised hot-rolled product prices by 600 yuan ($88) a metric ton for September delivery, Mysteel Research Institute said. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• China Backs Off Accusations Against Mining Giant - China appeared on Monday to step away from accusations made over the weekend that the British-Australian mining giant Rio Tinto had engaged in commercial espionage against China for six years that cost the country about $100 billion. - more
• Chinese Iron Spot Prices Hit Nosebleed Levels of US$110/ton - It was only 3 weeks ago I wrote about how iron ore spot prices had reached the breathless level of US$90/ton. - more
• China secrets official recycled Rio 'facts' - An official who accused Rio Tinto of corporate espionage costing China 700 billion yuan ($A122.36 billion) says he was not close to the case and his "facts" came from state media. - more
• Iron Ore Prices Jump 10% to $111 a Ton for India-China Cargoes - Cash prices for iron ore delivered to China from India surged 10 percent, the biggest gain in two months, because of increasing demand from the world’s biggest steelmaker and buyer of the raw material.  - more
• Rio says seen no evidence for China detentions - Anglo-Australian miner Rio Tinto said on Tuesday it had yet to be presented with any evidence to support the detention of four of its China-based staff on suspicions of stealing state secrets. - more
• Minmetals' JV project may have 155m tons of iron ore - Chinese iron ore trader Minmetals Group's ore project in Anhui province has deposit potential of up to 155 million tons worth nearly 50 billion yuan, Caijing Online reported yesterday, quoting an unnamed source from the Anhui Geology Exploration Bureau (AGEB). - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, August 10

• Baltic Dry Index - minus 83 to 2,689. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Indonesian Economy Grows 4%, Fastest Second-Quarter Pace in Southeast Asia // China Property Sales Surge 60% From Year Earlier Amid Asset Bubble Concern // Japan Machine Orders Rise for First Time in Four Months as Recession Eases // Asian Stocks Gain on U.S. Jobs, Japan Machinery Orders; Bridgestone Climb // Euro Failing to Heed Goldman Sachs Yet Doesn't Mean Dollar Losing Support  // U.K. House Prices Will Start Rising Again in 2010 as Slump Ends, CEBR Says // Latvia's Economy Contracted 19.6% in Second Quarter on Manufacturing Slump // Stocks in Europe Drop After Four-Week Rally; Daimler, VW, Lloyds Decline // U.S. May Be on Brink of a Recovery on Obama Stimulus, Tyson, Krugman Say // Consumer Bankruptcies in U.S. May Reach 1.4 Million for 2009, Group Says // McDonald's July Sales Rise 4.3% on Demand for Angus Burgers, McCafe Drinks // Stocks in U.S. Fall on Valuation Concern; Boeing, Best Buy, Newmont Slide
• The US Dollar has strengthened against the Euro and is now trading 1/3 of 1% higher. NYMEX crude is up 1/4 of 1%, while gold is down a full percent, and silver is off 1-1/3%. Base metals ended the day mostly lower, dragged down by a rising Dollar and slumping equity markets, except for nickel. Nickel started strong, and at one point, according to Reuters, hit an 11-month high of $20,475 a tonne, before it stepped back a little when the Dollar started gaining. It held its own for most of the afternoon, until it began to slump late. Dow Jones reports three month nickel ended the day at $9.16/lb , for its second close above $9/lb this year. Inventories of nickel stored in LME authorized warehouses rose for a second day, for a two day gain of over 750 tonnes, and near the 106,500 tonne level. Sucden's day old chart shows nickel nearly $2/lb bull run over the last few days (chart here). Think it will affect stainless prices? To give you an idea, the Chinese stainless steel index we follow jumped from 108.13 on July 31st to 116.33 on Friday. It was in the 95 range back in May. The Baltic Dry Index was down 83 points, its rate of decrease slowing. China is after another nickel project - a duo of companies including Jilin Jien Nickel Industry Co announced an offer for Canadian Royalties and its Nunavik nickel project on Friday.  It appears China has shifted gears from stockpiling nickel to buying foreign producers, but going after those that won't cause much political resistance. A weekend report from a Chinese newspaper about the Rio case got a lot of attention this morning, but it appears the story was written by an over zealous reporter, and not speaking on behalf of the government. World equity markets appear to be taking a breather today, but with the bull fully in control, it is going to take some seriously bad news to shift this market's direction downward.  

  Reports

• Commodities Daily - pdf here
• The Commodity Tracker - pdf here
• Weekly Commodity Price Report - pdf here
• The long run, the short run and the in-between - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) Chinese officials distance the government from allegations on a state-backed Web site that employees of mining giant Rio Tinto had used years of "deceit" to obtain state secrets that cost China's steel industry more than $100 billion. (Here is the actual Chinese article here)
• (Interfax) Russia may tie the export duty on nickel to market prices for the metal. The export duty of 10% was reduced to zero in February following the steep decline in prices. A few months later the decision was made to reimpose the duty. Revenue from nickel exports has already been written into the budget: 4.5 billion rubles a year in 2010-2012
• (Bloomberg) Iron ore contract prices may rise 10 percent next year on demand from China, said Bank of America Merrill Lynch, reversing its estimate of a 5 percent drop.
• (RA) “Every rally, like every bottle of beer, has a finite life span,” observes Chris Mayer in this week’s feature column. “There will be lots of bumps along the way, but the prices of many commodities — such as oil, iron ore and molybdenum — will tack higher, in my view.”
• (JMB) Distributors of cold-rolled stainless steel sheets in Kanto/ To raise price in full swing after Bon holidays
• (Dow Jones) South Africa's National Union of Mineworkers will Tuesday vote on the latest wage offer from state-owned power company Eskom, and may still strike if the offer is voted down, a union spokesman said Monday.
• (Friday) The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index rose to 121.8 in the week ended July 31 from a downwardly revised 119.5 the week prior, which was originally reported at 119.6.
• Chief Executive Chuck Sorrentino, Houston Wire and Cable - "The outlook for the balance of the year remains uncertain. While new large capital project commitments in the second quarter were even higher than that achieved in the first quarter of 2009, there appears to be less current activity with smaller, less capital intensive projects."
• 'Bubble-Mania' in Shanghai Spreads to Global Markets - more
• To the North, Grumbling Over Trade - more
• World’s Busiest Ports - more
• US Deficit Rose $181 Billion in July - more
• A bad week for China’s facts and figures - more
• Unemployment Rate Drop = Decline in Labor Force - more
• Attractions: Top eight most beautiful waterfalls in China  - more
• Typhoon Kills 29 in Taiwan, China; 13 Die in Japan - more

  China Casts Resource-Hungry Eye on Nickel Mines - Following in the footsteps of other Chinese resource companies, and leveraging off government efforts to restructure the non-ferrous metal industry and create a number of global giants, the country's two largest nickel producers both announced significant overseas acquisitions. - more

  Revisions to base metal price forecasts - Base metals prices have surged this year as positive expectations of a global economic recovery, combined with fund and Chinese buying, helped boost prices. - more

  Imports of nickel ore and ferro-nickel into China in June 2009 (material base)

• Nickel Ore - #1 Philippines (56.3%) #2 - Indonesia (39.7%) #3 Australia (1.8%) #4 Spain (1.5%)
• Ferro-nickel - #1 Japan (47.4%) #2 Colombia (33%) #3 South Korea (6.1%) #4 New Caledonia (4.5%) #5 Indonesia (4.2%)

  Exports of nickel ore from New Caledonia this year

• June 2009 - 1,269,000 tons (1.9% more than June 2008)
• YTD (thru June) - 3,950,000 tons (11% more YOY)

  Idled metal capacity restarts, 2009 projects - Encouraged by higher prices, a few metal producers have started to reverse earlier cutbacks and project delays, prompted around mid-2008 by plunging demand. - part 1 here part 2 here

  Tati Mine Spends Millions On Science Education -  Tati Nickel Mining Company has spent nearly P7 million in library improvement programmes for 13 secondary schools within a 50km radius of its operations. - more

  China Publishes Rio Tinto Spy Allegations - Employees of the British-Australian mining conglomerate Rio Tinto engaged in commercial espionage for at least six years, Chinese officials said Sunday. - more

• Rudd plays down Rio Tinto claims - The Rudd government has played down new accusations by Beijing against mining giant Rio Tinto that may affect the case of detained Australian Stern Hu. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:35 am CST show 3 month nickel trading around $.28/lb higher, with other base metals mixed. The Euro is trading 1/10 of 1% higher against the US Dollar, while NYMEX crude futures are down 1/3 of 1% and under $71/barrel. Gold is down nearly 1% while silver is off over 1-1/2%. In overnight trading, Asian markets ended higher, with China lower. European markets are lower this morning, and US futures show Wall Street might open slightly lower. Weather is in the news today, with Morakot a  Tropical Depression after striking both Taiwan and the east coast of China. Tropical Storm Felicia is expected to hit the Hawaiian Islands tomorrow, while Etau is expected to skim eastern Japan. And in the Atlantic, Tropical Storm 09E has yet to be named but is gathering strength and heading for the Caribbean region. Despite another large gain in inventories overnight, nickel is back on the bull this morning. The BDI slumped again.  
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Weekly Scoreboard - pdf here
• Robry Sunday Night Economic Assessment - more
• Metals & Mining Weekly - pdf here
• KME Metal Report - pdf here
• Commodities Monthly - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices surged on Friday after stronger-than-expected nonfarm payroll data unleashed renewed optimism about the US economic outlook. Employers cut 247,000 jobs in July, much less than expected, and the widely watched unemployment rate also fell slightly to 9.4%-- still high, but at least heading in the right direction. It was also quite impressive that metals held their ground Friday despite the spike in the dollar, which rose sharply on the payroll news, and managed to single-handedly reverse the sharp gains seen in energy prices. The dollar's rise was quite unusual in that up until now, it has steadily weakened despite better-than-expected US macro numbers. Investors sold the greenback as they headed into riskier, but better-performing markets, and thus we became accustomed to seeing the dollar ease after commodity and equity markets rallied after stronger macro numbers. Friday’s performance was the first time in several months that the historical relationship surfaced, i.e., a stronger dollar resulting from stronger macro statistics. Whether this relationship holds up over the next several weeks remains to be seen. We have our doubts that it will, given the massive deficits and the fact that the Federal Reserve is still content to stay on hold at least until it sees more concrete signs of recovery. If we are correct in our analysis, dollar rallies-- like the one seen on Friday-- should be sold into, as they likely will not be sustained for long, and neither should they be counted on to act as a “headwind” holding commodities in check. Metals are higher as of this writing after opening lower in Asian trading. The dollar is holding on to levels from late Friday, hovering around 1.42 against the Euro. We do not see much to hold metals back over the next few days --prices did undergo a slight correction last week, but most of the short-term chart patterns are intact, and it seems that longs are regrouping for another push higher..... Nickel is at $20,200, up $575, and holding steady in light of the strike action going at Vale Inco's Sudbury operations and Voisey's Bay in Canada, both of which have sidelined about 160,000 tons of production. Technically, our charts show that nickel is safely within its short-term upchannel, which will only be taken out if we get below $18,000. Having said that, a retracement of that magnitude will not take that long in nickel. (read Ed Meir's complete morning base metals report here)
• (Yieh) Because the increasing nickel price and the dearth of stainless steel scrap supply, the stainless steel scrap enjoyed a pick-up of ¥5,000/ton in Japan. Japanese mills held a utilization capacity of 70-80 percent in July and will probably lift the utilization capacity to 90-100 percent during the next a few months.
• (Dow Jones) Russia Jan-June Nickel Exports 9.5% Down On Yr To 106,200 Tons
• (JMB) Nickel price continues to rise to 9 dollar level/ Supercharged speculative buying, up 30% in a month
• (IOL) Planned industrial strike action by disgruntled Eskom workers was avoided after the power utility revised its wage offer on Saturday, trade union Solidarity said.
• ArcelorMittal Confirms Strike at Mexico Steel Plant - more
• (MW) Goldbrook Ventures Inc. announced today that Jien Canada Mining Ltd. has formally commenced an all-cash take-over bid for Canadian Royalties Inc. to acquire all of the issued and outstanding common shares and all of the 7% Convertible Senior Unsecured Debentures due March 31, 2015 of Canadian Royalties . The Offeror is jointly owned by Jien International Investment Ltd., a wholly owned subsidiary of Jilin Jien Nickel Industry Co., Ltd and Goldbrook Ventures Inc..
• Baltic Dry Index Down 17% for the Week, Worst Fall Since October - more
• (CCR) China's power production in July rose 4.21 percent from last year to 348.5 billion kWh, growing faster than in June and hit a record since the begging of 2009, according to State Grid Distribution Center. It was the second month in a row that power output grew after a 3.59 percent annual rise in June.
• (Albanian Minerals) Large mineral reserves exist in Albania and Kosovo worth hundreds of billions of dollars. The most significant in Kosovo is coal deposits, gold, silver, arsenic, thallium, bismuth and iron types of Pb and Zn and other metals.
• The History of US Government Corporate Bailouts - more
• Five Reasons the Market Could Crash This Fall - more

  Indonesia's Inco: road blockade not hitting output - Production at a Sulawesi mine operated by PT International Nickel Indonesia has not been affected by a new road blockade to protest against the firm's plans to cut jobs there, INCO said on Monday. - more

  Goldbrook, Jilin Jien bid for Canadian Royalties - Canada's Goldbrook Ventures Inc and China's Jilin Jien Nickel Industry Co agreed to jointly bid for mineral explorer Canadian Royalties Inc for 60 Canadian cents in cash. - more

  Scarcity Of Actual Cargoes On Supply Of Stainless Scrap Causes To Restrain Purchases At High Prices = Stainless Steel Mills Intend To Purchase Stainless Scrap Mainly At Yen 165,000 / Ton - LME nickel prices at the 3rd of August were <> US$18,580 per ton (US$8.43 per lb.) for cash and <> US$18,700 per ton (US$8.48 per lb.) for three-month futures, having recorded the highest ones since the beginning of 2009, but the domestic price of nickel-based stainless steel scrap (new clippings) in Japan has taken an unexpectedly calm reaction to this rise of LME nickel prices. - more

  Russia's nickel export duty may be pegged to market price of metal - Russia’s nickel export duty could be pegged to the market price of the metal. The 10% duty was zero-rated in February this year due to a steep decline in prices on the international market. Within several months, a decision was adopted to reinstate the duty. - more

  Base metals on way north again - Base metals are expected to continue their resurgence over the remainder of the year, with China's increasing demand supported by a recovery in the US car and housing sectors. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Rio spied for six years: China claim - A state secrets watchdog has accused mining giant Rio Tinto of committing economic espionage for six years, saying in a report the spying caused "tremendous harm'' to China's economic security. - more
• Rio Tinto Accuser Says Article Was His Own Opinion - The author of an editorial linking Rio Tinto Group’s actions in China to 700 billion yuan ($102 billion) in excess charges for the steel industry said the article was his own opinion and used previously published data. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, August 7

• Baltic Dry Index - minus 135 to 2,772. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China to Scrutinize Stock Gains, Won't Cap Loans as Money Floods Economy // China's Sovereign Wealth Fund Lost 2.1% in 2008 as Recession Shrank Assets // Japan Airlines Posts Biggest Loss in Six Years as Overseas Travel Plummets // Asian Stocks Drop as Declining Profits Fuel Valuation Concerns; DBS Falls // Volkswagen Sees 2009 Sales Dropping 5%, Less Than Earlier Forecast of 10% // RBS Forecasts Two More Lean Years After Posting Unexpected First-Half Loss // U.S., Swiss Still Negotiating UBS Accord on Secret Accounts, Lawyer Says // European Stocks Gain as U.S. Jobless Rate Falls; Logica, Volkswagen Climb // U.S. Job Cuts Slow, Unemployment Rate Unexpectedly Falls as Downturn Eases // Housing Rebound May Stall on Climate Law Mandates, GE, U.S. Builders Say // Stocks in U.S. Gain, Treasuries Drop After Better-Than-Estimated Jobs Data
• The Euro bounced against the US Dollar when the employment report was issued this morning, then took a dive. The US Dollar is trading 1-1/5% higher against the Euro at the moment. Typically, when we see that big of an increase in the Dollar in one day, we see a mini-blood bath in commodities. That is not happening today, as the economic news is growing less and less bad. NYMEX crude is trading flat, around $72/barrel. Gold is down 2/3 of 1%, and silver is higher by 7/10 of 1%. Base metals ended mixed, but mostly higher. Indicator charts show nickel started the session lower, but started climbing, before dipping when it became apparent the Dollar was gaining. But then nickel bucked the downward pressure of the Dollar and climbed to within spitting distance of the $20,000/tonne level, before losing the $700/tonne gain it had made earlier. At the end of the session, nickel was rebounding once again. Dow Jones reports three month nickel ended the day and week at $8.90/lb , up $25/tonne from yesterday's close.  LME stored inventories rose overnight, over 350 tonnes, not expected with so many mines on strike and closed. Cancelled warrants slipped back under the 1-1/2% level. Amongst the positive economic news these days, or at least the less bad, including the LIBOR falling to a record low this morning, there is a flashing red warning light, and that is the Baltic Dry Index. Its downward momentum has not yet shown any signs of turning positive, falling another 135 points overnight. Another warning light on our monitoring console is the Robry Paperboard Index. This index monitors flows of natural gas into cardboard box factories, which has a history of giving a fair hint to how healthy the economy is. Tentative July numbers came in lower than June, and numbers so far this month are the worse so far this year. The US BLS released its Employment Situation Summary this morning, and announced the overall unemployment rate dropped. The important part we watch reads "In July, the average workweek of production and non supervisory workers on private nonfarm payrolls edged up by 0.1 hour to 33.1 hours. The manufacturing workweek increased by 0.3 hour to 39.8 hours. Factory overtime was unchanged at 2.9 hours." This is positive news and hopefully, the beginning of a trend. The Canadian Globe & Mail did note that "If laid-off workers who have given up looking for new jobs or have settled for part-time work are included the unemployment rate would have been 16.3 %." Doesn't matter our Canadian friends, we have already prophesied the recession will be officially over by no later than 10 AM next Wednesday. And that you can take to the bank  .... we've only had 16 more of them close in the last 3 weeks so they are growing about as reliable as our crap shoot predictions. Not much in the news about bank closures these days, as they are apparently becoming, old news. 69 may be an interesting concept if you are reading  the Kama Sutra, but not so good when you are counting the number of banks closed in in the first 7 months of 2009. During the Great Depression, that kind of news would have easily caused a run on the banks. But today we have the FDIC and government backed coverage. We truly live in different times.
• Have a safe and restful weekend!!  

  Commodity/Economic Articles and Comments

• (Germany) German metallurgical plants produced 1.66 million tonnes of pig iron and 2.69 million tonnes of raw steel in July 2009. As reported by the Federal Statistical Office (Destatis), they produced 30.0% less pig iron and 28.8% less raw steel than in July 2008.
• (MB) China's stainless export offers up $200
• (WSJ) The unemployment rate actually fell in July, hitting 9.4% from 9.5%, even as the economy lost a quarter of a million jobs. Does this signal the peak for the jobless rate? Will the talk of 10% unemployment end? Not necessarily. The payroll figures — jobs lost — comes from a Labor Department survey of employers. The unemployment rate is measured through a separate survey of households — asking people whether they have a job, whether they want a job and whether they searched for a job (among other things). If people drop out of the labor force, the unemployment rate can decline because fewer people would be considered jobless.
• Stink boats and the forthcoming spectacular inventory bounce - more

  Vale Inco won't comment on force majeure reports  - Brazilian miner Vale's nickel production arm would not comment on Friday about reports that the company has declared force majeure on its Sudbury nickel shipments because of a labor stoppage. - more

   Zimbabwe: MMCZ, Chinese Nickel Company Sign MOU - The government-run Minerals Marketing Corporation of Zimbabwe has signed a memorandum of understanding (MOU) with Jinchuan Nickel Mining Company of China that might result in the bulk of nickel, copper and cobalt mined in the country being sold in the vast Asian state. - more

  BHP Billiton not to install president in China - BHP Billiton, the world's largest mining company, canceled plans to install a new president for the company's operations in China, the Beijing-based Jinghua Times reported today. - more

  Stainless Steel Sheet and Strip in Coils From Japan: Preliminary Results of Antidumping Duty Administrative Review - In response to timely requests by two manufacturers/exporters, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain stainless steel sheet and strip in coils (SSSSC) from Japan with respect to Hitachi Cable Ltd.and Nippon Kinzoku Co., Ltd.. The review covers the period July 1, 2007, through June 30, 2008. - more

  New ASTM Standard on Analysis of Nickel Alloys Published - A new ASTM International standard will help users properly prepare and analyze various nickel-based alloy samples by inductively coupled plasma emission spectrometry. - more

  7:35 am - (Before the report) Unemployment forecast to hit 9.7%, a 26-year high.- (after the report) Jobless rate dips to 9.4% as 247,000 payrolls lost (the Euro and nickel bounced on the news)

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:25 am CST show 3 month nickel trading around $.01/lb higher, after spending most of the morning much lower. Other metals are mixed, but in the last 1/2 hour most have moved into the green. The Euro is trading higher against the US Dollar by nearly 1/10 of 1% this morning, but trading has been choppy so far. NYMEX crude futures are off over 1/2 of 1% and around $71.50/barrel. Gold trading is flat, while silver is down 8/10 of 1%. In overnight trading, Asian markets ended the week lower, with European markets also lower this morning. US futures have yet to reveal what Wall Street will do this morning, off only slightly, with markets nervously awaiting the July employment numbers. Metals analysts are hurriedly updating their forecasts for nickel after the last week saw prices extend well beyond any of the published forecasts. One analyst, who was decrying an upcoming correction a few weeks ago, like most, is now proclaiming we are seeing the beginnings of another bull run. Another agrees and says the next bull run will make the last one appear like child's play. Yet another, watching the price slip the last few days, is claiming this might be the correction they forecast, finally starting. Whether it is or not, those 'correction' forecasts analysts were making, were made way back when nickel was in the mid $6/lb range. Since then, it has not only not corrected, but has climbed into the $9/lb range. Being an analyst has to be a tough job, and we tease them for being continuously  wrong, since their pontifications mean little to us personally on a financial basis. If we were traders, or miners, or stainless steel producers, we might be less amused.    
• Bloomberg morning base metal news - more
• Reuters morning comment - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "There were steep losses in the rest of the metals as well after an attempt to rally failed during mid-session. Energy and equities also ended lower, as investors pulled back ahead of the much-anticipated U.S. employment data out later today. Current expectations project that 325,000 jobs were shed in July, and given the fairly in-line weekly initial claims readings seen over the past several weeks, we do not think the actual number will deviate too much from this consensus. As a result, metals could continue to drift in uneventful trading for the balance of the day, but they nevertheless have capped an extraordinarily strong week. Right now, we are seeing modest losses in the metals group, although ali is bucking the trend, and holding onto a slight gain. Oil markets are lower as well, but holding well above the $70 mark. The dollar is not doing very much against the Euro, trading around 1.4365, while US equity markets are expected to open somewhat lower. However, all the markets are in a state of suspension as they wait for the key non-farm payroll data. ... Nickel is at $19,475, down $175, and holding up relatively well, although trading ranges are quite tight.  (read Ed Meir's complete morning base metals report here)
• (Asia Pulse) China's Jinchuan Group, Asia's leading nickel producer, raised the price of its electrolytic nickel to 153,000 yuan (US$22397) per ton on Thursday. Over the course of the first six days of August, the company lifted the price of electrolytic nickel prices four times. Today's price sits 17 per cent higher than the 131,000 yuan per ton seen at the beginning of August.
• Thompson Creek - Molybdenum production rose by 9.8% to 6.7 million pounds in the second quarter of 2009 from 6.1 million pounds in the first quarter. - Weighted-average cash costs in the second quarter were reduced by 12.1% to $5.21 per pound produced from $5.93 per pound in the first quarter.
• (Interfax) The uptrend of nonferrous metals futures contracts on both international and domestic markets is expected to continue over the next few years as investors hedge against the prospect of a depreciating U.S. dollar, an economist with China's Ministry of Commerce (MOFCOM) told Interfax on Aug. 6.
• (AAR) The Association of American Railroads today reported 1,319,387 carloads of freight in July 2009, down 17.5 percent (280,659 carloads) compared with July 2008. U.S. intermodal rail traffic, comprising trailers and containers on flat cars not included in carload figures, totaled 922,734 units in July 2009, down 18.0 percent (203,061 trailers and containers) compared with July 2008..... For just the week ended August 1, the AAR reported the following totals for U.S. railroads: 274,728 carloads, down 18.3 percent from the corresponding week in 2008; intermodal volume of 193,684 trailers and containers, down 16.1 percent; and total volume of an estimated 29.3 billion ton-miles, down 17.7 percent from the equivalent week last year.
• China's Massive Stimulus and U.S. Steel Companies - more

  Nickel miners in acquisition mode - China's two largest nickel miners are accelerating the pace of overseas acquisitions, signaling bright prospects for the nickel market in the second half of the year. - more

  Raw materials prices to ‘stay high and volatile’ - “The financial crisis has been addressed, the commodity crisis has not,” warned Goldman Sachs on Thursday, predicting that raw materials prices would remain high and volatile. - more

  Average Prices Of LME Nickel In July 2009 Had A Further Rise = Being Stimulated By Strike At Sudbury / Canada. LME Nickel Prices Recovered To Level Of US$7 / Lb. - The average prices of LME nickel in July of 2009 were known as <> US$15,984.57 per ton (US$7.25 per lb.) for cash and <> US$16,055.00 per ton (US$7.28 per lb.) for three-month futures, having risen by approximately US$1,000 per ton from the average price recorded in June and returned to the price level prevailed in August to September of 2008. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Strikes having affect on nickel prices, supply: American Metal Market - Speculation, combined with improving sales and strikes at two Vale Inco operations in Canada, have put a pinch on nickel supplies, leading to higher nickel prices, the website for American Metal Market is reporting - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Merrill Lynch Reverses Iron Ore Contract Price Call to 10% Gain - Iron ore contract prices may rise 10 percent next year on demand from China, said Bank of America Merrill Lynch, reversing its estimate of a 5 percent drop. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, August 6

• Baltic Dry Index - minus 144 to 2,907. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Bank of Japan Said to Anticipate Deflation Through 2011, Depressing Rates // China's `Fine-Tuning' Talk May Signal Monetary Tightening, Economist Says // Yen Falls Versus Euro, Dollar as Asian Stock Gains Spur Demand for Yields // Asian Stocks Rise on Confidence Economy is Recovering; Alumina, NTT Gain // Bank of England to Pump Extra $84 Billion Into Economy as Rate Maintained // Trichet Says ECB Interest Rate `Appropriate' After Holding Borrowing Costs // German Factory Orders Rose 4.5% in June for Biggest Increase in Two Years // European Stocks Advance; Lloyds, RBS, Aviva Rise on BOE, U.K. House Prices // Madoff Trustee's $14.7 Million Fee Is Approved by Judge as Victims Protest  // GM Needs More Time on Opel Bids, Has `Difficulties' With Magna, Smith Says // Mortgage Rates Fall to 5.22%, First Drop in Three Weeks, Freddie Mac Says // U.S. Stocks Fall as Energy, Health-Care Shares Drop; Exxon, Amgen Decline
• The US Dollar continues to gradually trade higher against the Euro, 1/3 of 1% higher at the moment. NYMEX crude is down 1-1/2%, while gold and silver are now trading flat. Base metals ended lower across the board, as the higher Dollar added downward pressure, forcing traders to take profits. Indicator charts show nickel fell early and took another dip toward the end of the session. Dow Jones reports three month nickel ended the day at $8.89/lb . LME stored inventories fell over 100 tonnes overnight, while cancelled warrants held above the 1-1/2% level. The Baltic Dry Index is becoming concerning, as it fell another 144 points, and slumped below the 3000 level. The BDI is used as a gauge of raw materials being shipped between countries. Listening to the largest producers, China is supposedly still buying all the iron ore they can produce, and while last months import levels don't dispute this claim, the BDI is starting to imply otherwise. In the States, MarketWatch reports "First-time filings for state unemployment benefits declined by 38,000 to a seasonally adjusted 550,000 last week, while the number of people who continued to collect regular benefits rose by 69,000 to a seasonally adjusted 6.31 million the prior week, the Labor Department reported Thursday." We received a lot of e-mail about our stainless steel advisory system this morning, and way too many to respond too individually. We thank you all. On some days you just have to look at things on the lighter side, or you'll find yourself nursing a bouncing baby ulcer. Till tomorrow.   

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• Are Specialty Metals Next in the Super Cycle? - more
• China Warns Developed Nations of Inflation, Currency Threats - more
• The debt-inflation myth, debunked by UBS - more
• The FDIC Is in Trouble - more

  Vale Inco stops delivering nickel: reports (Company declares force majeure due to strike) - Vale Inco will not confirm it has declared a force majeure on nickel deliveries, but a United Steelworkers official said he is expecting such a declaration any time. - more

  Indonesia's Inco says protesters lift mine blockade - PT International Nickel Indonesia said on Thursday that protesters had lifted blockade of a road leading to its nickel mine in Sulawesi and it would hold talks next week on a dispute over job cuts. - more

  BofA Merrill Lynch Boosts Metals Outlook - Bank of America Merrill Lynch is growing more bullish on metals and the global economy, hiking its 2009 and 2010 price forecasts for aluminum, copper, nickel and zinc. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:15 am CST show 3 month nickel trading around $.11/lb lower, but it appears the decline is being driven by the gaining Dollar more than anything else, at least for the moment. All other base metals are lower as well. The US Dollar is trading higher against the Euro this morning, by 1/5 of 1%. NYMEX crude is down 1/2 of 1% and over $71.50/barrel. Gold is off 1/2 of 1% while silver is 1/4 of 1% higher. In overnight trading Asian markets closed slightly higher, with China lower. European markets are trading higher this morning, with US futures showing Wall Street may open higher.
• Bloomberg morning base metal news - more

This site's unofficial stainless steel price advisory system has raised the pricing threat alert to level orange (high), completely bypassing the yellow 'elevated' level. This is only the second change to the threat level this year. On the afternoon of March 23rd, the market was raised to the 'guarded' level (blue). Earlier that morning, the price advisory had dropped from elevated to level low (green), where it spent an entire 5-1/2 hours. Please note since our last update, level "stable" has been permanently removed because no one really liked the color - and well, it hadn't been used in over 4 years anyway.
Those parties involved in the sale and distribution of stainless steel products should immediately cease their incessant whining about overpriced inventory, since it probably won't be much longer. Those individuals who purchase stainless steel should probably check to ensure your health insurance is up to date, as your salesperson is about to bring Doctor Bendover over for a visit.
This has been an unofficial update to the stainless steel price advisory system. Stay tuned to this website for further developments.

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices continued to race higher on Wednesday, with the advance being all the more impressive in that the complex did not get much help from restrained equity and energy markets. Neither did the macro readings out of the US (or elsewhere) provide much of a boost, as unlike the runaway commodity markets, the global economies seem to be recovering at a torturously slow pace. In this regard, out of the US, we learned yesterday that service industry activity shrank more than forecast in July, with the Institute for Supply Management’s index of non- manufacturing businesses falling to 46.4 from 47 in June. In addition, ADP Employer Services said companies cut another 371,000 jobs this past month, somewhat more than expected, showing no discernible improvement in labor conditions. Out of Europe, a report out earlier yesterday showed manufacturing and service industries contracting at their slowest pace in a year, but just like here in the US, there is still no sign of expansion. All this may finally be catching up with metals, which are finally undergoing their first serious correction in many days. ... The depth of the current correction in metals suggests that we could see somewhat more selling over the next day or two, but as long as energy and equity markets hold up, we do not see a serious setback in the cards. Rather, metals may be in the process of carving out a sideways trading range, with this week’s highs likely marking the top end of the range, while the bottom has yet to be defined, but likely not too far lower from here. After the relentless one-way advances of the past week, some sideways trading is long overdue and, at this stage, perhaps welcome. ... Nickel is at $20,140, down $310, but still higher than at this point yesterday. A likely hold above $19,400 later today should be constructive, underlying nickel’s very strong chart picture. However, despite the strike at Vale’s Canadian operations, we do think the fundamentals are less impressive, particularly in light of Chinese demand. In this regard, Reuters reported today that Chinese merchants are reducing bookings for spot refined nickel imports, and that imports may fall more than 30% in July from June's record of just over 41,000 tons. Apparently, a decline in orders has already driven down spot premiums by 50% from mid-June. (read Ed Meir's complete morning base metals report here)
• Bloomberg - "Vale stopped output at its Thompson mine and processing plant Aug. 1 for scheduled maintenance, bringing its entire Canadian nickel operations to a halt. This started the same day that a strike halted production at the company’s Voisey’s Bay nickel plant in Newfoundland."
• (Infocast) China Nickel Resources announced that in the wake of global economy becoming stable, it has resolved to fully resume the production of all its major products in the PRC since August 2009. The company may make further adjustments to its production volume in future, depending on the market conditions and the company's operations, with a view to achieving optimal operating efficiency. The company reduced its production of stainless steel base materials in the fourth quarter of 2008.
• (Dow Jones) China spot nickel imports fall on high LME prices
• (News Bites) Mirabela Nickel Ltd says it has reached a major milestone with the start of owner-operator mining at its Santa Rita open-cut nickel sulphide mine in Brazil. The mine will start with a production capacity of 4.6 mtpa moving to a capacity of 6.4 mtpa in second quarter 2009 and with a life of 19 years based on proven and probable reserves.
• (MBiz) Due to the rising of the international nickel price, POSCO plans to lift the domestic stainless steel price from September to offset the growth of cost. Source from the local traders noted that the demand of S.Korea in summer is usually weak and the local retailers have already increased purchase to fill void for the inventory.
• (JMB) Japan Stainless Steel Export Drops by 42.5% for Jan-Jun
• (SBB) Albanian Chrome has restarted production at its Elbasan ferrochrome plant, after temporarily suspending operations last December due to low demand
• (Yieh) French nickel producer Eramet company said that its nickel stocks have been reduced considerably recently due to production cut in the first half year of 2009.
• (China Daily) Baosteel, the country's largest steel mill, announced Wednesday it placed third on the "World's Top Steel Makers" list recently released by World Steel Dynamics, the world's leading steel information service, Xinhua reported today.
• Jim Rogers Says U.S. Commodity Curbs to Drive Markets Overseas - more
• Ken Talbot says next boom with be even bigger - more
• Perfect storm' will boost gold: Yamana - more
• Unemployment Rates by States - image here

  Indonesia Inco says nickel mine normal, despite protest - PT International Nickel Indonesia (INCO.JK) said its nickel mine on Indonesia's Sulawesi island was operating normally on Thursday after about 500 villagers blocked a key road to protest against job cuts. - more

  Kalgoorlie rests after Diggers, until next year - The bars of Kalgoorlie were abuzz this week as delegates flocked to the WA mining town for the annual Diggers & Dealers conference. - more

  Market Tendency On Imports Of Ferro-Alloys At 31st July 2009 = Chinese Electrolytic Manganese Metal Is Groping For A Further Rise Of Its Price - The market tendency by item on imports of ferro-alloys into Japan at the 31st July of 2009 is as follows: - more

• July-Sept Japanese Crude Steel Output Projected At 23,073,000 Tons - Japan's steel companies plan to produce a total of 23,073,000 tons of crude steel in July-September 2009 or in the second quarter of fiscal 2009 (April 2009-March 2010), up 3,976,000 tons or 20.8% from what they put out a quarter ago, according to a July 30 announcement by the Ministry of Economy, Trade & Industry (METI). The announcement is based on METI's hearings from the nation's various steel companies. - more

  Shapeways Offers 3D Printing in Stainless Steel - Shapeways announced the first 3D Stainless Steel printing technology. - more

  Dangers of keeping workers in the dark - As workers passed through the gates of the Tonghua Iron and Steel Group yesterday, there was little evidence of the violence that erupted 13 days ago, leading to the death of an executive. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• (Bloomberg) China, the world's biggest iron ore buyer, said its major ports handled 35 percent more of the steelmaking ingredient last month from a year ago. Ships unloaded 56.5 million metric tons of iron ore in July at major ports, the Ministry of Transport said on its Web site. The ministry didn't provide comparative figures.
• China iron ore prices top $110, up 10 pct on week - Iron ore prices topped $110 into China this week as the country's steel mills kept soaking up material, although some market participants expressed concern over the speed of a near doubling in prices since April lows. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, August 5

• Baltic Dry Index - minus 108 to 3,051. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Will Maintain Moderately Loose Monetary Policy, Central Bank Says // Indonesia Cuts Benchmark Interest Rate to 6.5%, May Be Last For This Year // Asian Stocks Decline as Isuzu, Elpida Report Losses; Sun Hung Kai Slumps  // Lloyds Banking Predicts Drop in Bad Loans After Posting $5.2 Billion Loss // U.K. Economic Recovery Signs Increase as Services, Manufacturing Expand // Europe Services, Manufacturing Contract in July at Slowest Pace in a Year // European Stocks Fall for Second Day; Deutsche Boerse, Swiss Re, Shell Drop // Goldman Sachs's $100 Million Trading Days Reach Record in Second Quarter // Service Industries in U.S. Unexpectedly Contracted at Faster Pace in July // Treasuries Rise as Service Industry Report Suggests Slow Economic Recovery // Stocks in U.S. Drop After Jobs, Service-Industry Data Worse Than Estimated
• The US Dollar is trading nearly 1/10 of 1% lower against the Euro, and NYMEX crude is nearly 1/2 of 1% lower, after inventories rose more than expected last week. Gold may have hit another cyclical peak, as it is down 1/2 of 1%, while silver is trading 1/2 of 1% higher. Base metals ended the day broadly higher across the board. Holy metals mania Batman, what is going on with nickel?! Traders sent nickel to $200 dollars short of $20,000 per tonne early in the session, where it stalled for awhile, then soundly broke thru the $20,000 tonne level, only to slip back under when US equity markets opened lower. But as soon as it fell thru that level, it stormed back with gusto. Having broke thru, traders apparently were in no mood to surrender it, although the session ended on a more hesitant note than we have seen the last two days. For the day, Dow Jones reports three month nickel ended the day at $9.27/lb . Higher nickel prices is shifting the pressure in the Canadian strike off the union and onto Vale. Nickel prices closed at $6.57/lb the Friday before the USW took to the picket lines. Vale must be growing uncomfortable about the profits it is losing. If these prices stick, we expect to see the two parties to return to the bargaining table soon. Nickel inventories stored in LME warehouses dropped another slight amount overnight, with total declines this week only totalling 88 tonnes. Cancelled warrants took a jump overnight, and are well over the 1-1/2% level. The Baltic Dry Index is giving no hints of slowing its decline, losing another 108 points. Here in the States, the U.S. ISM non-manufacturing industries fell 0.6% to 46.4% in July, for its 10th consecutive monthly drop. ADP commented no its finding that nonfarm private employment decreased 371,000 from June to July 2009 on a seasonally adjusted basis - "July's employment decline was the smallest since October of 2008 and continues the notable improvement between the first and second quarters of 2009. Nevertheless, despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months, albeit at a diminishing rate." The nation's premier hurricane forecasting team at Colorado State University lowered their forecast for Atlantic hurricanes today thanks to the developing El Nino in the Pacific. If this El Nino pattern continues we could see nickel production in potentially Indonesia affected due to lower water reserves feeding hydro electric dams that mines in the region use. Equity markets are docile today, as reports hint that the recovery won't be as V shaped as many are hoping.   

  Commodity/Economic Articles and Comments

• Standard Bank analyst Leon Westgate - "The continuing strike at Vale's Sudbury and Voisey's Bay operations are lending background support to prices, while a 642- ton increase in canceled warrants in Singapore this morning has also given prices a boost."
• Commerzbank  - "Within two days, the largest Chinese nickel producer, Jinchuan, raised its nickel prices twice by a total of 8% to an equivalent of $20,640/ton. This may result in higher nickel imports into China and thus lead to a reduction in the currently very high LME nickel stockpiles."
• (JMB) Nisshin Steel Announces First Stainless Steel Price Hike in A Year
• (CNBC) BHP's head of iron ore says the latest rise in spot prices is a 25% premium over the benchmark price.
• (SG) Chinese steel prices continued the surge on opening of August month with average gain of whooping 4%. The Chinese Long Product Price Index CLPPI improved by 334 points whereas the Chinese Flat Products Index CFPPI improved by 233 points.
• Eric Coffin: Stick with Commodities & Resources Exploration Stories that Work - more
• Stock Market Bubble-Mania in China Spreads to Global Markets  - more
• An Inventory Build Story? - more
• Shanghai Mayor Seeks to Check ‘Too High’ Home Prices - more

  Nickel still unsteady - Mincor Resources managing director David Moore says the price of nickel remains too volatile to restart the company's suspended Miitel mine in Western Australia. - more

  (Yesterday) AK Steel Announces Stainless Steel Price Increase - AK Steel said today that it will increase base prices for all 200, 300 and 400 series flat rolled stainless steel products by 6% to 9%, depending upon the grade and product form, effective with shipments on August 30, 2009. - more

• (last week) Effective with shipments Monday, August 17, 2009, ATI Allegheny Ludlum is increasing prices by approximately 6% for stainless cold rolled and hot rolled sheet and strip... - pdf here
• North American Stainless announced similar price hikes also

  Vale Inco declares 'force majeure' on nickel deliveries: report - Vale Inco declared force majeure on nickel deliveries from Sudbury operations at the end of last week, the website Metal Bulletin reports. - more

  China firm to own about 51 pct of Zambia nickel mine - China's Jinchuan Group Ltd. will take a stake of about 51 percent in Zambia's sole nickel mine Munali, which is due to resume output in September after stopping in March due to low prices, Zambia's mines minister said. - more

  Preliminary June 2009 Data Show Steel Imports Declined - The U.S. Census Bureau has announced that preliminary June steel imports were $0.9 billion (0.8 million metric tons), down from the preliminary May totals of $1.1 billion (0.9 million metric tons). - more

  South African power workers threaten strike - South Africa's biggest union said its members planned to strike at power firm Eskom next week after rejecting a wage offer, raising the threat of electricity disruptions in Africa's largest economy. - more

  Buy into ferrochrome near the bottom with IFM - With demand likely to start rising, now is a good time to get long-term exposure to the alloy. - more

  Fastener Distributors - one of our sponsors has requested we help them advertise some surplus screws. If any of the items below interest you, please contact us

• 6 X 1/2 Square Drive Pan Head Type A SMS 18-8 (these have a nylon patch and are painted black but the sponsor is willing to sell at a price you can have the parts stripped, if necessary, and still beat any import price) They have over 9 million painted black and another 1 million painted bronze.
• 10-24 X 3/4 Hex Washer Slotted Machine Screw 18-8 assembled with nitrile backed 3/8" OD washer - (they have over a million and willing to sell well below import pricing)
• If you don't need the parts but know someone that might, the sponsor will pay any reader a finders fee for a successful sale of these parts.

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:30 am CST show 3 month nickel trading around $.18/lb higher, but somewhat stabile for the last few hours. Other base metals are also higher but struggling to hold on earlier gains. The reason is the US Dollar, which was trading much lower earlier against the Euro, but is now only slightly lower. NYMEX crude futures are 1/3 of 1% higher and over $71.50/barrel. Gold is 1/3 of 1% lower while silver is 4/10 of 1% higher. In overnight trading, Asian markets ended lower for its first two day consecutive loss in over a month. European markets are trading higher this morning on better than expected earnings reports. And US futures have been flip flopping this morning, and currently show Wall Street might open slightly lower. Futures have edged lower after an ADP report was issued that showed 371,000 private-sector jobs were lost in July.
• Bloomberg morning base metal news - more

  Nickel leads commodities up as fundamentals assert - It's the turn of nickel to lead the commodities complex higher Wednesday, with the market at 11-month highs following what few industry participants deny are bullish underlying fundamentals. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Pipeline News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices finished mixed on Tuesday, with copper climbing to a 10-month high and pushing past key $6000 resistance, but the overall tone was certainly much less robust than what we have seen earlier in the week. The same was true in other markets as well, with both equities and energy markets finishing with modest losses in quiet trading. ... We do not have much to add to what we have written in previous commentary-- markets are well bid across the board, as they are drawing strength from favorable macro data. However, a sense of complacency may be setting in on the upside, and this could be particularly dangerous as we approach the dicey September/October time period. Moreover, many of the markets we follow are now clearly overbought and due for a pullback, which could be triggered either by a macro release that falls seriously short of expectations, or more likely, a realization that the current price levels have, by now, more than discounted where we are in the recovery cycle. ... Nickel is at $19,800, up $450, and nosing past our resistance target of $19,400. Two days of closes above this mark will warrant a shift higher in the trading range."  (read Ed Meir's complete morning base metals report here)
• (Angel Commodities) Base metal prices could head stronger in the coming days as further confirmation that de-stocking has ceased and re-stocking is beginning. This indicates that growth is stabilizing and accumulation of commodities could continue. In the near-term, any positive news and data could continue to drive the upside momentum in base metals.
• (Nirmal Bang) Base metals: We have seen an upside in most of them in the last five trading sessions. We expect profit taking in today’s trading session except in aluminium which still looks strong. The trend for the day is expected to be sideways to down.
• (CNBC India Commodities Editor) Manisha Gupta - All the base metal prices have been trading on the higher side and this is the fifth session where you have seen all those base metals make 2009 highs. Nickel has gained quite strongly, up nearly 16% in last four trading sessions and is trading at 11 month highs.
• (Reuters) China Jinchuan raises nickel prices 8 pct - paper
• (Sinocast) Asia's largest nickel producer Jinchuan Group Limited lifted the nickel price by CNY 10,000 per ton in total within two days.
• S.African union threatens power strike - more (could potentially drive chrome prices higher)
• (SBB) Taigang Stainless prices surge $145-337/t
• (JMB) Stainless steel cold-rolled sheet and tube/ Nisshin Steel to raise prices of Ni-type by 40 thousand yen/ To raise price of Cr-type cold-rolled sheet by 10 thousand yen in Sep. (Aug/05/2009)
• (Comtex) Jilin Ji En Nickel Industry Co., Ltd., a key nickel mining and refining company in China, announced that it bought 38.5 million common shares in Victory Nickel Inc., 14.7 percent of its capital stock, from Nuinsco Resources Ltd..
• Nigel Gault, IHS Global Insight - "Consumer spending rose 0.4% in nominal dollars in June (the biggest increase since February), but that’s not good news since all of the extra spending was eaten up by inflation. Higher gasoline prices drove the consumption price index up 0.5% and meant that spending fell 0.1% in real terms. The June decline takes real spending to its lowest level yet in this cycle, down 1.8% from a year earlier… When given sufficient incentive (as in cash-for-clunkers) consumers will spend. But reduced wealth, high debt, tight credit, and a weakening labor market are all weighing on consumers. Consumers remain a missing link in hopes for strong recovery."
• Naroff Economic Advisors - "The wallets are still being held quite tightly. Consumer spending rose in June but when you adjust for price changes, it was actually down slightly."
• Richard F. Moody, Forward Capital - "We simply do not expect the type of forceful rebound in consumer spending that would be a necessary ingredient in the robust, “V-shaped” recovery that many analysts are calling for. Whether by their choice – motivated by heavy debt loads and the loss of significant amounts of net worth over recent quarters – or by the choice of lenders less willing to extend credit, households are likely to maintain a higher savings rate than has been seen over the past decade."
• Surging Commodity Prices Could Crush the Stock Market Recovery - more
• U.S. Small Business Sector One of the Smallest Amongst Comparable Countries - more
• What does a double dip recession look like? - more
• China generated 348.5 billion kilowatts of electricity in July, up 4.21 percent year-on-year, according to figures from the power dispatch center of the State Grid Corporation of China Tuesday.
• (SSY) The number of Capesize vessels waiting to berth at China’s iron ore discharge ports appears to have declined recently. Over the past week, the number of Capes in queues has dropped from 65 to 59, according to local sources.
• "Shadow" inventory lurks over U.S. housing recovery - more
• New pension plan to benefit China’s 900 million farmers  - more
• (ENSO) Atmospheric indicators are increasingly showing patterns typical of a developing El Niño event. These indicators are driven by warm conditions in the tropical Pacific Ocean. If these warm conditions persist, as forecast by leading climate models, 2009 will be considered an El Niño year. Pacific Ocean surface temperatures continue to exceed El Niño thresholds.

  Mills plan August stainless steel price hike - Two major stainless steel flat-rolled mills are planning what amounts to a 3% increase in August transaction prices for cold-rolled sheet. - more

  Top 5 exporters to China for June 2009 for ferrochrome and chrome ore

• Ferrochrome (% of total imports)
• (#1) South Africa 46.9% (#2) Kazakhstan 27.1% (#3) India 12% (#4) Mozambique 7.8% (#5) Turkey 3.8%
• Chromium Ore
• (#1) South Africa 32.4% (#2) Turkey 19.4% (#3) India 11.3% (#4) Oman 7.4% (#5) Pakistan 6.5%

  Commodity prices too frothy, says Xstrata CEO Mick Davis - Commodity markets have become too frothy, which could lead to greater price volatility in the coming months, Mick Davis, the chief executive of Xstrata, has warned. - more

 Nickel Production At Sherritt International / Canada In Apr. - Jun. 2009 Quarter = Produced 9,277 Tons Of Mixed Nickel Sulfide As Increased By 7% From That In Same Quarter / 08 - Sherritt International Corporation (Sherritt) of Canada released on the 29th of July (local time) their settlement of accounts for the second quarter (April - June) of 2009. - more

  Union declares wage dispute with Columbus Stainless - Labour union Solidarity on Tuesday reported that it had declared a wage dispute with steelmaker Columbus Stainless and that talks would now move to the Metal and Engineering Industries Bargaining Council (MEIBC) for mediation. - more

• 'Battling against mining giants' Sunday Independent - Mtsweni is frustrated about the damage to her house and the poor quality of water, but fears her load will get heavier. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos
• Brazilian president takes aim at Vale SA - The Brazilian president's reported denunciation of huge job and investment cuts by mining giant Vale SA is being praised by the United Steelworkers union, which also decries the absence of such a position by the Canadian and Ontario governments. - more

  Iron Ore News // Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• (Reuters) The China Iron and Steel Association has suspended benchmark price negotiations with global miners because the spot market price has been "seriously distorted", the China News Service said on Tuesday. It said speculative behaviour in the spot market had led to high price rises, forcing it to suspend the negotiations with Australia's Rio Tinto and BHP Billiton.

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, August 4

• Baltic Dry Index - minus 92 to 3,159. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Toyota Cuts Annual Loss Forecast as Government Incentives Boost Car Sales // BHP Names Former Ford Chief Jacques Nasser Chairman, Succeeding Don Argus // Australian Central Bank Keeps Key Interest Rate at 3% as Economy Rebounds // Asian Stocks Fluctuate as Commodities Producers Gain, Carmakers Decline // Standard Chartered to Sell $1.7 Billion of Stock as Profit Beats Estimates // HSBC's Green Says U.S. Business Improving, Global Recovery May Be `Anemic' // Gruebel Says UBS Bracing for More Withdrawals After Third Quarterly Loss // European Stocks Decline; Standard Chartered, UBS, Legal & General Retreat // SEC to Ban `Flash Trades' of Stocks That Give Brokers Edge, Schumer Says // Pending Sales of Existing Homes in U.S. Surge 3.6%, More Than Estimated // Citadel Will Let Clients Withdraw $250 Million as Funds Gain 44% This Year
• The US Dollar is now trading lower against the Euro, by around .08%. NYMEX crude is now flat, with the IMF warning higher oil prices could slow the economic recovery. Gold and silver were bucking the commodity lower trend early on and strengthened more on the Dollar's move. Gold is up nearly 1-1/4%, while silver is up over 3-1/2%. Base metals ended mixed, as the dip the US Dollar took, kick started the laggards. Indicator charts show nickel spent the entire day in one continuous climb, and while the day's volumes did not appear to be as impressive as yesterday's, the degree of incline never showed signs of timidity. Dow Jones reports three month nickel ended the day at $8.77/lb , and another record close for 2009. Inventories of LME stored nickel saw another very slight decline, while cancelled warrants remained stalled. The Baltic Dry Index took another dip, down 92 points to 3,159. Sucden's day old chart shows nickel's climb thru yesterday's trading (here). In US economic news this morning, the National Association of Realtors reported pending sales of existing homes rose for a fifth straight month by 3.6% in June. Even May sales were revised higher. On the flip side, the Commerce Department reported US resident personal income fell 1.3% in June, erasing a 1.3% gain seen in May, which was thanks to a one time Social Security stimulus payment. It may only be Tuesday, but most equity markets are taking a breath today after yesterday's trading. Nickel, according to the technical charts, has been trading in overbought territory for 4 days now, but lines of resistance are falling faster than women's panties at a rock concert. Where will it stop? You could be a very wealthy person if you had the answer to that question. And if you were a member of a debate squad and had to defend a scenario charge to $10/lb, or a return to $7/lb, you could easily make arguments for either. Besides the economic recovery news which comes out looking better every day, nickel is contending with a strike at Sudbury and Voisey's Bay. These aren't just two small junior miners that one can dismiss lightly, and are major suppliers of nickel to the world. On the other hand, the lack of a serious drop in LME inventories, and the slump in the BDI reading, tells us that shipments to China of metals may be slowing again, and that China may have finally decided to halt its stockpiling. Time will tell, but in the mean time, we are firmly back on the nickel price roller coaster.  

  Commodity/Economic Articles and Comments

• MF Global analyst Edward Meir - ""Investors seem to be betting on a V-shaped recovery without giving much thought to a scenario where the economy either bumps along the bottom for months at a time, or more ominously, re-enters recession after a brief spurt higher."
• Xstrata - "Total mined nickel production increased by 7 percent in the first half to 28,505 tonnes due to increased production and higher grades from Raglan and Xstrata Nickel Australasia, and high-grade ores from initial production at the new, negative cash cost Nickel Rim South mine, which is on track to ramp up to 60% of full annual capacity by the end of 2009 (equivalent to approximately 7,400 t of nickel). .... Nickel Rim South will become a low-cost, cornerstone operation in Sudbury, generating annual production of approximately 18,000 t of recoverable nickel by 2010."
• U.S. Steel locks out Nanticoke workers - more
• Global economy at risk from oil price rise - more
• China’s long road to realizing fair employment - more
• Geithner Bullies Financial Regulators to Accept Fed as Top Dog - more
• Is a Jobless Recovery Your Best Friend? - more
• Income Loss Persists Long After Layoffs - more

  BHP Takes On 'Jack The Knife' - "Jack the Knife” is back. Jacques Nasser, the former Ford supremo, who acquired the nickname for his controversial cost-cutting efforts at the car maker, is going to chair BHP Billiton as it completes the merger of its Australian iron-ore business with Rio Tinto and continues with its price dispute with Chinese steel mills. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:35 am CST show 3 month nickel trading around $.04/lb , and off session lows. At the moment, the rest of the base metals complex is lower on profit taking. The Euro is trading lower against the US Dollar this morning, by a little over 1/10 of 1%. NYMEX crude futures are down 1-1/3% and under $71/barrel. Gold is flat, while silver is up by 4/10 of 1%. In overnight trading, Asian markets ended mixed and slightly lower overall. European markets are lower this morning, while US futures show Wall Street may open lower as well. No real news out this morning to drive markets lower. More of a cautious step back after breaking thru some important levels, such as the S & P breaking thru 1000 yesterday. With two major strikes happening, nickel appears to be holding its own while other commodities pause.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Fortis Asian metals monthly - pdf here
• Metals & Mining Weekly - pdf here
• Weekly Forecast by SMM Specialist - more
• Global Mining News - pdf here
• Markets Data  - more
• SMM Weekly Review and Forecast (July 27-31) - here
• SMM Daily Review (Aug. 3) - here
• Steel Producers Issues in Today's Economy - ppt here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Copper surged to a new 10-month high on Monday, and there were equally spectacular gains seen in the other metals as well. Robust manufacturing data from Europe and China both helped the advance, as did a weaker dollar and another strong session in global equity markets. However, it was the ISM manufacturing readings out of the US that really lit the fuse after investors noted that July’s reading came in at 48.9% from 44.8% in June.  ... Adding to yesterday’s macro surprises, US construction spending increased 0.3% in June, vs. consensus forecasts calling for a decline of -0.5%. Public construction lifted the figure, offsetting weakness in private construction, which is down -16.3% year-over-year.  ... We are seeing a modest retreat in most commodity complexes as of this writing, as investors take profits after several days of strong gains. However, it is unlikely that the selling will amount to much, as the dollar is still relatively weak, trading at just under the 1.44 level against the Euro. Interestingly, we are not seeing the dollar strengthen in what should be the traditional reaction of rallying on better-than-expected macro numbers. Instead, participants seem to be selling the greenback as they exit the safety of cash and put money to work in alternative markets-- many of them red-hot.  ... Nickel is at $18,756, down $74, and holding relatively well. We have to suspect that the stoppage at Vale’s Canadian operation is helping to keep the declines in check. In this regard, unionized workers at Voisey’s Bay began a strike on Aug. 1 after rejecting a labor proposal from the company. In addition, the company said overnight that it stopped output at its Thompson nickel mine and processing plant for scheduled maintenance, in effect bringing its entire Canadian nickel operations to a halt."  (read Ed Meir's complete morning base metals report here)
• (Angel Commodities) In the last few days, the base metals market has been running on a very optimistic note due to a rampant stock market recovery but, with only moderate seeds of consumer demand. The market also seems almost immune to any negative data. Despite slower summer physical conditions evidenced on the back of rising inventories and falling cancelled warrants, prices are witnessing an uptrend. However, we feel that base metals could come under pressure as prices are racing ahead of their fundamentals. Hence, prices may be due for a correction in the coming week.
• (Xinhua) China's crude steel output will top 500 million tons this year, Luo Bingsheng, vice chairman of China Iron and Steel Association, said last Saturday. In the first half of this year, China made 266.58 million tons of crude steel, up 1.23 percent over the same period last year. In June alone, the daily output was about 1.65 million tons on average.
• (JMB) Japan Oil, Gas and Metals National Corporation (JOGMEC), an independent administration agency in Japan, is scheduled to hold on the 5th of August three open tenders to stockpile cobalt metal, ferro-vanadium and molybdenum ore (crude oxide).
• (SG) Australian Associated Press reported that Xstrata has increased nickel production at its Australian operations by 185% YoY during the first half of calendar 2009 as compared to the same period a year earlier. It produced 7,734 tonnes of nickel in the 6 months to June 30th 2009, up from 2,712 tonnes for the previous corresponding period.
• Norbert Ore, chair of the ISM manufacturing business survey committee - "The data right now is probably more positive than the comments of our members. I don't expect new orders and production to improve all that much over where they are now. I don't think there's that kind of momentum right now based on the comments we're getting from members.'
• (China Daily) Throughput at Chinese ports reached 500 million tons in July, up 12.9 percent from the same month last year, marking the first double-digit growth since last September, according to a statement on the Ministry of Transportation website. Of the total, throughput of foreign-trade goods rose to 190 million tons, an increase of 13.8 percent from last July; throughput of goods for internal trade went up to 310 million tons, up 12.5 percent from the same month last year. 
• (JMB) Nickel price surges to surpass 8 dollars/ Highest in a year, supercharged speculative buying
• (MB) Jinchuan raises nickel price for second day in a row
• Do Not Be Fooled, Another Major Economic Collapse Could Be Coming Sooner Than Many Think - more
• More Signs of Strengthening Manufacturing - more
• Executives Receive One-Third of All Pay in the U.S. - more
• High-end housing sits out the "rebound" - more
• Employment situation still grave in China: official - more
• Remember the movie 'Outbreak'? - Something similar is happening in China - here
• The New Financial Media  - more

  Allegheny Ludlum September Stainless Steel Surcharges - here  (note - 304 SS raised from $.58 to $.6634/lb, 316 SS from $.8602 to $1.009/lb - both the highest this year)

• AK Steel September surcharges - pdf here
• Universal Stainless surcharges - pdf here

  Group forecasts $7 per pound nickel for a while - An expected protracted strike at Vale Inco's operations in Greater Sudbury and now Voisey's Bay will help drive -- and keep -- the price of nickel to more than US$7 per pound, CPM Group is projecting. - more

  Brazil's Vale Risks Mkt Share Loss From Canada Nickel Strike - A Canadian nickel miners strike could place Brazilian-owned Vale Inco in a delicate position, exposing it to loss of market share just as world demand recovers for the metal. - more

  Japanese Export Offers At $2,800 C&F For Ni-Based Stainless CR Sheets - Japan's stainless steel producers are contemplating offering a price increase of US$150 to US$2,800/ton C&F in their export deals of nickel-based CR sheets for September-October shipments to Asian destinations, mainly to China. They are expected to start their export negotiations with local customers next week. - more

  Courtesy AISI - "In the week ending August 1, 2009, domestic raw steel production was 1,269,000 net tons while the capability utilization rate was 53.2 percent. Production was 2,120,000 tons in the week ending August 1, 2008, while the capability utilization then was 88.8 percent. The current week production represents a 40.2 percent decrease from the same period in the previous year. Production for the week ending August 1, 2009 is up 1.2 percent from the previous week ending July 25, 2009 when production was 1,254,000 tons and the rate of capability utilization was 52.6 percent."

  Miners warned about carbon footprint - A business advisory group has warned miners, manufacturers and high energy companies will need to start measuring their carbon footprint or risk penalties of up to $200,000. - more

  Indonesia's Antam says Q2 sales hit by nickel prices - Indonesian state-owned miner PT Aneka Tambang Tbk  said its sales revenue fell 44 percent in the second quarter from a year ago on lower volumes and weaker nickel prices. - more

  Merafe posts H1 headline loss on rand, prices - South African ferrochrome producer Merafe Resources reported a first-half loss of 3 cents per share on Tuesday, pressured by low international ferrochrome prices and a firmer rand currency. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore News/ Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• China iron demand set to decrease - China is facing a stockpile of steel products after iron ore prices into the country made their biggest leap in the past eight years during July. - more
• China: Rio Exec's Actions Would Break Australia Laws - A senior Chinese official indicated Sunday that China's government believes that crimes allegedly committed by detained Rio Tinto (RTP) iron ore executive Stern Hu would have breached Australian laws if they occurred in Australia. - more
• Steel mills should accept one ore price - "China wants all of the country's steel makers to accept a single ore import price once the price for this year is determined." - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, August 3

• Baltic Dry Index - minus 99 to 3,251. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Roubini Says Commodity Prices May Rise in 2010 as Global Recession Abates // India Manufacturing Rises for Fourth Month on State Spending, Markit Says // Asian Stocks Rise, as Mitsubishi UFJ Leads Banks Higher; Nissan Advances // Emerging-Market Stocks Recoup Loss From Rout That Followed Lehman Collapse // Pound Advances to Nine-Month High Against Dollar on Bank Earnings, Economy // Europe Manufacturing Contraction Slows More Than Estimated, PMI Indicates // European Stocks Advance on Greenspan Forecast, Chinese Manufacturing Gain // Geithner Says U.S. Unemployment May Peak in 2010, Recession Is `Easing' // U.S. Stocks Rise as S&P Climbs Above 1,000 for First Time Since November // GM May Cut Additional U.S. Hourly Jobs as Buyouts Fall 7,500 Short of Goal // U.S. Stocks Advance as S&P 500 Exceeds 1,000 for First Time Since November
• The US Dollar is now trading over 1% lower against the Euro, while NYMEX crude is over 3% higher. Gold is higher by 2/3 of 1% and silver 3-1/3% higher.  
• Base metals had another big day, thanks to a slumping US Dollar and positive economic news. Indicator charts show nickel spent the day on the climb, albeit slower during the latter part of the trading day, but ended still pointing north. Dow Jones reports three month nickel ended the day at $8.54/lb , a new record high close for 2009.  Inventories of nickel stored in LME warehouses recorded a tiny loss overnight, while the Baltic Dry Index lost 99 points to read 3,251. Cancelled warrants remain just over the 1% level and are hovering. We reported on July 24th that a Chinese stainless steel index we were following had risen from 95.52 on May 26th to 103.36 that day. Today, that index reads 111.79. World purchasing manager indexes were out today, and carried positive news from different regions of the world (current and archived numbers here) The mining world has its eyes on the annual Diggers & Dealers Conference in Western Australia this week. One of the larger mining shows in the world, it offers analysts and media easier access to mining executives. And with Doctor Doom opening the conference, the show got more than typical international media attention. Up in Canada, members of USW 6480 of Voisey's Bay joined the 6500 of Sudbury's picket lines, with both unions now striking Vale. Speaking of Vale, Brazilian media is reporting the popular President of that country, Luiz Inácio Lula da Silva, wants to re-nationalize Vale. CVRD was state owned until it was sold in 1997, due in part to pressure from the World Bank and International Monetary Fund. While there has always been a faction in Brazil that has wanted Vale back under state control, this is the first time we have seen where the President has endorsed the idea. Vale stockholders don't seem to be too concerned, with shares in the company up over 4% this morning alone. Also out of Brazil comes news that the brand new Santa Rita mine begins production today. Votorantim Metals Ltda and MMC Norilsk Nickel have agreed to purchase all the nickel this mine can produce thru 2014, for their Fortaleza and Harjavalta smelters, with annual production to eventually hit 45,000 tons a year. Back in Canada, Liberty Mines announced it will re-start their McWatters nickel mine tomorrow., while FNX is reportedly continuing to stockpile nickel due to the Sudbury strike. Out of the US, Bloomberg reported this morning that "Spending on U.S. construction projects unexpectedly rose in June, led by an improvement in residential real estate and gains in government projects. The 0.3 percent increase to $965.7 billion followed a revised 0.8 percent drop the prior month, according to data from the Commerce Department today in Washington." World markets got a kick start this morning after former Federal Reserve Chairman Alan Greenspan told ABC the US economy could see a 2.5% gain in its third quarter GDP. This was followed by the Chinese PMI coming in at 53.3 after June's 53.2. In our opinion, this .01 gain is somewhat suspicious, but the market is bullish, and the rest of the world's PMI indexes showed gains from the prior month, so no one seems to care. It's the fifth straight month that the Chinese PMI has read over 50, while US July PMI numbers show continued contraction at 48.9, its 12th consecutive month under 50. Based on our highly analytical and thoroughly exhaustive formula, the US PMI numbers averaged a gain of .1783 points last month. If it continues that pace, we should roll over 50 next Monday about 9:50 am EST. Of course, things were better in June, where they saw a gain of .0909 points per day, so who knows - this worthless formula could have our US manufacturing sector out of contraction by the weekend. Then again, taking a three month average would not put us into the green until next Wednesday. And there you have it. Remember you heard it here first, as no one else would be dumb enough to publish such utter nonsense. We forecast the manufacturing sector of the United States to start growing by next Wednesday at 10 AM EST, which of course, means more jobs, more retirement funds to be invested, more commodity funds speculation, and $10/lb nickel by years end. And yes, we are just kidding. That is, unless it all comes true. And if it does, we should be invited to headline Diggers & Dealers next year. Back to the real world, Patriot Coal laid off 315 today, Ticona Polymers another 100, Marshfield Door Systems 164 more, True Textiles some 84, Virginia DOT some 600 workers .... and while 1200 GM workers in Ohio got called back to work this morning, the company as a whole still has about 7500 more employees than it wants to have by year's end.  Since November 1st of last year, Forbes lay-off tracker (here) has recorded 595,018 jobs lost at America's 500 largest public companies.    

  Commodity/Economic Articles and Comments

• (Dow Jones) - Canada-based metal-mining company Liberty Mines Inc. will restart one of its nickel mines this month due to higher prices and said it plans to reopen its second mine by the middle of next year due to higher prices for the metal, the company's chief executive said Monday. The two mines have been on care and maintenance since Oct. 31 last year. The McWatters Mine will restart on Aug. 4 and should be producing concentrate in "September at the earliest and November at the latest," CEO Gary Nash told Dow Jones Newswires.
• UC RUSAL transfers Norilsk Nickel blocking stake to Russian entity from off shore company - more
• All eyes turned to Xstrata - more
• Cuba cuts energy consumption to save economy - more
• Factory worker killed, 3 hurt by molten ore - more
• China shares hit 14-month high as manufacturing up - more
• Mark Colvin: Is it too soon for optimism? - One man who became world famous for predicting the global crisis Dr Nouriel Roubini of New York University, is tipping a weak global recovery; but not till next year. - more
• Financial crisis not over yet, says Dr Doom - more
• Andy Xie calls a bubble - more
• Unconscionable Math - more
• James Surowiecki of the New Yorker - “Even though direct aid would likely keep more people in their homes than current measures, the idea hasn’t gained much traction, not just because Americans are wary of spending more money but also because it would exacerbate our concerns about fairness. When Obama’s current plan was floated, public support was widespread but grudging; by a two-to-one margin, voters described it as unfair to ordinary homeowners. There’s a phenomenon in charity called the “identifiable victim” effect: the best way to get people to give is to focus on one person who’s going to benefit from the donation, rather than on a large group. When it comes to government programs, though, identifiability seems to be more a curse than a blessing. No one was happy about bailing out big financial institutions, after all, but the news that a group of A.I.G. employees were going to get bonuses really set people off. In a similar way, while voters may reluctantly support making refinancing easier or helping people lower their interest payments, they’re likely to balk at the idea of literally paying the mortgage of the guy down the street.”

  Nickel - It is now appreciated that since the end of last year, China has implemented a rapid increase in commodity imports to take advantage of GFC prices.- more

  Vale workers strike at Canada Voisey Bay mine - Some of the workers at the Voisey's Bay nickel mine in Canada, run by Brazilian mining company Vale, began planned strike action on Saturday over work conditions, the company said on Monday. - more

  Brazil’s Lula Wants to Take Control of Vale’s Board, Veja Says - Brazilian President Luiz Inacio Lula da Silva wants the government to take control of Vale SA, Veja reported, without saying where it obtained the information. - more

  African Eagle sees ‘promising’ results from another Tanzania nickel project - Diversified minerals exploration company African Eagle Resources’ Zanzui nickel laterite project, in Tanzania, has shown “promising” results, with acid leach test results comparable to that of its Dutwa project. - more

  Steelmakers see gradual recovery as they post losses  - The world's top steelmakers posted quarterly losses and warned the industry's return to growth from the bottom of the economic slump would be gradual, with China leading the recovery while the West lags. - more

• UAE local steel price ‘hurt by dumping’ - The UAE’s local steel prices are being hit by dumping from Turkish manufacturers of the metal, the chief executive of RAK Steel, a major steel manufacturing mill in Ras Al Khaimah, has said. - more

  Iron ore tops $100 in China, first time since 2008 - Cash prices for iron ore delivered to China rose above $100 a metric ton for the first time since last year because of surging demand from the world’s biggest consumer of the steelmaking material. - more

  Friedland no-show as Diggers ogle Oyu - There was huge disappointment at the Diggers & Dealers conference in Kalgoorlie when the billionaire mining entrepreneur Robert Friedland failed to turn up. - more

• Dr Doom opens at Kalgoorlie's annual big bash- If the number of delegates attending this year’s Diggers & Dealers bash in Kalgoorlie is any guide, the mining sector ain’t doing bad at all. - more

  Analysis-China seen going for mining JVs after Rio debacle - China, bruised by the collapse of a proposal to buy a Rio Tinto stake, could confine itself to project-level deals with miners to feed its hunger for metals and shun company acquisitions to avoid further loss of face. - more

• Ministry: EU tariffs on Chinese steel wire rods unnecessary - The European Union's imposition of anti-dumping tariffs on Chinese steel wire rods is unnecessary as Chinese exports to the EU have fallen since 2008, said a Chinese Ministry of Commerce (MOC) official who declined to be named Thursday. - more

  Morning Briefing (8:00 AM CST is 1PM in London)

• Indicators at 7:35 am CST show 3 month nickel trading around $.34/lb higher, and yet to show signs of slowing down. Other base metals are all trading higher. The US Dollar is trading 1/3 of 1% lower against the Euro this morning, helping commodities. NYMEX crude futures are up 2-3/4% and  over $71/barrel. Gold is 1/2 of 1% higher and silver is up 3%. In overnight trading, Asian markets were higher, with European markets solidly higher this morning. US futures imply Wall Street will open very positively this morning. Metals prices and equity markets are soundly higher this morning on positive economic news, and speculation world economies will rebound quickly. Union workers at Voisey's Bay strike, and Mirabela announces production at Santa Rita has commenced. Nickel, in our opinion, is entering bubble territory.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Weekly Scoreboard - pdf here
• Robry Sunday Night Economic Assessment - more
• P & E Piping Industry News - pdf here
• Maritime Market Economic Outlook - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals soared to multi-month highs on Friday, as a number of macro variables pushed prices higher. In this regard, the dollar tumbled to just under 1.43 against the Euro, a level not seen since early June, while the general dollar index hit fresh 2009 lows. In addition, news that second-quarter US GDP fell by 1%-- less than the 1.5% expected-- lured more money to the long side, as investors continue to discount the likelihood that the US recession is ending. On this score, most economists expect the US economy to show growth in the current quarter, and given that Q2 GDP carried a net 5.4% swing in its favor relative to Q1, the odds are indeed quite good that Q3 will end up being positive. ... All these variables are on full display as we start the new week-- copper is roaring ahead, reaching its highest level since October, with nickel and zinc at their strongest levels since September.  ... Nickel is at $18,600, up $650, and building a very bullish U-shaped formation on the charts. We could push substantially higher from here given the momentum in the rest of the group. For now, the upside seems clear until the $21,800 level, as noted by the red line on our chart." (read Ed Meir's complete morning base metals report here)
• (MB) China's Jinchuan Group raised its benchmark nickel price by over 3% on Monday following LME nickel gains last week. Jinchuan's new offer for benchmark nickel cathode product is 135,000 yuan ($19,751) per tonne, up 4,000 yuan higher than the previous offer, which was only updated last Friday.
• Chinese manufacturing kept a steady pace of expansion in July, reinforcing indications that recovery in the world's third-largest economy is under way. ... The PMI hit 53.2 in June and 53.1 in May sustaining a momentum that has been kept above 50 - the threshold indicating an expansion - for five straight months.
• (AP) Mirabela Nickel Ltd has joined the ranks of nickel producers with the commencement of mining at its flagship Santa Rita project in Brazil. Mirabela is the first Australian company to mine nickel in Brazil and says Santa Rita has a life of 19 years. The company will start with a production capacity of 4.6 million tonnes per annum (Mtpa), ramping up to 6,4 Mtpa in the December quarter.
• ThyssenKrupp Nirosta: Dillenburg stainless plant started production 50 years ago - more
• (JMB) Japan Stainless Import Drops by 26.2% in 1H
• (AP) Indonesian mining company PT Aneka Tambang (Antam) suffered a setback in performance in the first half of this year with sales shrinking 16 per cent on falling price of commodities.
• Commodities Jump to 5-Week High as Economic Growth Spurs Demand - more
• Roubini Says Commodity Prices May Rise in 2010 - more
• Sung Won Sohn, Smith School of Business and Economics - "Hopefully the bottom of the recession is here. The worst recession since the Great Depression is likely coming to an end. Economic growth beginning second half of the year will be made possible by a number of factors. Easy comparisons against last year, inventory buildup, the end of the drag from residential real estate, increased spending coming from the federal government and exports should be the key components."
• Nomura Global Economics - "Over the last two quarters, real inventories have declined by more than $250 billion, by far the biggest two quarter drop on record. However, these deep cuts should set the stage for increased production, beginning in the third quarter in our view."
• Richard F. Moody, Forward Capital - "We do not look for (expected stronger growth rates in the third quarter) to be sustained. As far as inventory restocking, those advancing this argument would do well to look at inventory-to-sales ratios, which remain quite elevated — while inventories have plunged, they have not kept pace with the decline in final sales, and barring a more robust rebound in domestic spending than we anticipate, the incentive to restock will be limited. Of course, this will be an industry-specific adjustment, for instance, auto production will be ramped up, but other manufacturing industries will see less of an increase in production. Moreover, even to the extent we see this restocking effect, it is a transitory phase and not a sustainable driver of growth."
• WSJ - "...Commerce Department’s Bureau of Economic Analysis today (Friday) released revised estimates of economic data going back to 1929 .... The update moves the current recession past the late-1950s downturn as the worst (in GDP terms) since the Great Depression. .... The BEA now says inflation-adjusted GDP increased just 0.4% in 2008. Earlier estimates had put the growth at 1.1%. GDP is now shown dropping in last year’s first quarter (reported earlier as a gain), posting a smaller gain in the second quarter than shown earlier, a larger drop in the third quarter and a slightly-less-large tumble in the fourth quarter. From the fourth quarter of 2007 to fourth quarter of 2008, real GDP is shown dropping at a 1.9% annual rate compared with the earlier estimate of 0.8%. The first quarter of 2009, which last month had been estimated as declining at a 5.5% annual rate, now shows an even worse 6.4% decline due to the benchmark revisions. That matches the first-quarter 1982 decline, but is still slightly better than the 7.9% drop in the second quarter of 1980."
• Prolonged Aid to Unemployed Is Running Out - more
• Good time to include some metals in your portfolio - more

  Voisey's Bay joins other locals on picket line - Strikes in Greater Sudbury, Port Colborne and Voisey's Bay are an attempt by Vale Inco to "squeeze the blood out of our members," a top Steelworkers official charged on Friday. - more

  IFM CEO sees "healthy" rise in Q4 ferrochrome price - The European ferrochrome price is expected to see good gains in the fourth quarter due to a stronger currency in South Africa and tight supply, the chief executive of International Ferro Metals Ltd said on Monday. - more

  North American Average Stainless Steel prices - Latest Forecast from MEPS - Alloy surcharges for austenitic grades will move higher again in August 2009. Our transaction figures have been adjusted accordingly. - more

  FNX stockpiling ore from Sudbury operation during strike - FNX Mining continues to stockpile ore being mined from its operations in Sudbury and can continue to do so for "several weeks" if necessary... more

  Mincor May Re-open Miitel Mine Next Year, Studies Acquisitions - Mincor Resources NL, an Australian nickel producer that supplies BHP Billiton Ltd., may reopen its mothballed Miitel mine in the first half of next year should prices extend gains. - more

• Nickel price too volatile for mine restart-Mincor - Nickel prices remain too volatile to reactivate one of Australia's largest nickel mines this year, owner Mincor Resources Ltd said on Monday. - more

  Restocking buoys minor metals - Prices of some key minor metals, such as cobalt, have risen to their highest levels since November, up on average 50 per cent from this year's lows, as consumers return to the market after running down stocks in the first half of the year. - more

  Sudbury Nickel Strike Coverage

• Sudbury Star
• Vale/Inco offer // Vale/Inco Company Site
• Union Strike Site //  USW  Local 6500
• Sudbury TV // Sudbury Northern Life Videos

  Iron Ore Talks / Spy Scandal Coverage

• China Daily Special Coverage
• SINA
• Chain of Events
• Battle shows China's will to block BHP-Rio - The detention this month of four Rio Tinto employees in China, in the midst of bruising iron ore prices negotiations, could be just a sign of things to come as BHP Billiton and Rio seek regulatory clearance for their iron ore joint venture, Chinese lawyers and officials said. - more
• China takes on steel sector - Iron ore is a commodity much of the world desperately wants. The dull grey or red ore isn't much to look at, but heat it up, add a little carbon and you create steel - vital to the construction industry. - more
• China: Evidence in Rio Tinto spying case is strong - A senior Chinese official on Monday defended Beijing's handling of the industrial spying case against an Australian executive for mining giant Rio Tinto, and urged Australia to respect China's court process. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• Industry In Crisis - Nickel Mine Closures - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

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