Updated twice daily M-F before 8:00 am CST and by 1 pm CST

• Official LME nickel closing prices - cash - $12.47/lb 3 month buyer - $12.63/lb (6.05% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 152 to 6052. (chart)
• LME nickel inventories - plus 240 tonnes into Rotterdam, Netherlands warehouse, minus 150 tonnes from Rotterdam warehouse, plus 60 tonnes into Gothenburg, Sweden warehouse
• London markets gave the appearance of waffling sharply this morning, waiting for US markets to open and give them a sign of confidence. The London Stock Exchange was down early, but went green with US markets. London Metal Exchange nickel trading gave traders quite the ride today. In pre-market, nickel started up, then slumped by nearly $500/tonne below yesterday's close. At the first ring, prices went back into positive territory, with nickel soon showing a positive price of around $500/tonne. In later trading nickel slumped back into the red by about $200/tonne, then returned into the green. There it ended the day, closing at $12.43/lb ($27,400/tonne)
• Closing Metals Report - more

  January transaction prices for austenitic stainless grades fell in most parts of the world. Exceptions were the United States and Spain. - more

  Copyright/courtesy Dow Jones - "Nervousness continues to grip markets in Asia and Europe following the Fed's cut along with news of further write-downs at Swiss bank UBS. Futures markets are pricing in further short-term weakness in the U.S. and Asian equity markets, and that's spilling over into base metal prices, a London-based trader said..... Base metal prices are seen rangebound in 2008 while the supply-side for several of the metals is expected to remain tight. With the exception of nickel, there hasn't been a massive increase to LME inventories and this will provide some support, Triland said."

  Norilsk Nickel , the world's No. 1 nickel and palladium producer, said on Thursday it expected nickel output to rise this year and production of copper, palladium and platinum to decline. - more

  (from Outokumpu annual report issued today) "Underlying demand for stainless steel is healthy. End-user demand and demand for special grades also continues healthy. The current global economic turmoil has however created some uncertainty that might have an impact on overall stainless steel fundamentals. Distributor inventories for standard products have declined and are at or below long-term average levels. Outokumpu's order intake for standard products has improved and lead times have normalized. Due to the pick-up in demand for standard products, Outokumpu's delivery volumes are expected to be close to capacity. The gradual recovery in base prices is expected to continue during the first quarter. Towards the end of the quarter, base price for cold rolled 304 2mm sheet is expected to be 100-125 EUR/t higher than the December price of 1 125 EUR/t reported by CRU. Following the decline in nickel price in the fourth quarter, the January alloy surcharge is lower than in December but will rise slightly in February.... Demand for ferrochrome was up by 6% compared to the previous quarter partly as a result of increased production of ferritic stainless steel. The average price was 1.05 USD/lb, up by 5% from III/07. The contract price for I/08 was agreed at 1.21 USD/lb. Supply of molybdenum was fairly balanced in the period and the average price increased by 2% to 32.66 USD/lb. The price of recycled steel increased to 283 USD/ton, up by 4% from the previous quarter....As of January 2008, Outokumpu is applying a new method for calculating the alloy surcharge. The alloy surcharge is based on the 30-day average raw material prices calculated backwards from the 20th day of the previous month. In this new method, only the reference period has changed, and all other parameters remain as before. The old alloy surcharge calculation method was based on average raw material prices in two and three months prior to delivery. Outokumpu has changed the calculation method for the alloy surcharge in its stainless steel pricing in order to bring more stability in the stainless steel market and to ultimately reduce the raw material price volatility. The new alloy surcharge calculation period is shorter than the Group's production cycle. If nickel prices are very volatile, this may result in substantial nickel-related inventory gains or losses.... Market volatility continued for main alloying materials used in the production of stainless steel: nickel, ferrochrome and molybdenum.... The main focus area in 2007 was development new low-nickel and nickel-free stainless steels, which reduce dependence on the volatile nickel price in steel price. Much effort has been put on development of duplex grades, which offer a good combination of high strength and good corrosion resistance. Outokumpu has been able to substantially increase volumes of these products, and customers have also shown growing interest in Outokumpu's LDX 2101®. Production technology for this grade has been improved and new applications are continuously being developed. Studies on optimum process parameters and product properties for several ferritic grades at production scale continued. The capability to sell and produce different type of Cr-Mn-Ni grades (200-series) is now available."

  (from today's Eramet press release) "These meetings allowed for a review of the Weda Bay Nickel project on the island of Halmahera (Indonesia), which is progressing very satisfactorily and could allow the Eramet group to double its scale in nickel from 2013, with targeted local production capacity of 60,000 tonnes, almost equal to the current production of Eramet Nickel in New Caledonia. The main stages of this project will be as follows: - 2009: completion of the feasibility study and decision by the Board of Directors of Eramet In the event of a decision in favour: - 2010: construction work starts - 2013: nickel production starts. The Weda Bay deposit, in terms of both size and quality, is one of the world's largest nickel deposits not yet exploited."

  Fears of a global recession could add impetus to BHP Billiton's bid plans for Rio Tinto, pushing BHP to shield itself with merger cost cuts and by swallowing a rival less exposed to weaker metals prices.- more

  Consumption replaced investments as the most powerful engine of China's economic in 2007 for the first time in seven years, a senior official with the National Bureau of Statistics (NBS) said on Wednesday.  - more

  Kommersant is reporting quite the battle going on behind the scene between Vladimir Potanin and Rusal for control of Norilsk, which could be determined in an extraordinary general shareholders' meeting to be held on April 8th. - more (also courtesy Rusmet) Ufaleynikel hit the black list of environmentally unsafe enterprises. Rostekhnadzor recently unveiled all violations of the plant. This week, Governor Pyotr Sumin decided to conduct its own inspection of the enterprise.

  It’s the deadliest conflict since World War II. More than 5 million people have died in the past decade, yet it goes virtually unnoticed and unreported in the United States. - more  video from last week's 60 Minutes here (comment - point - To those fellow American's who cry foul when China does business with Sudan - "He that is without sin among you, let him first cast a stone at her." counter-point - Because one mine's within another's borders, does not mean one sanctions the actions of that country.)

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling up by $.11/lb. Nickel has joined the other LME traded metals, which are all selling up this morning. Asian markets ended mixed overnight, and European stock markets are nearly all in the red. Metals do not appear to be following the equity markets this morning.
• Bloomberg - more

  Standard Bank Report Weekly Commodity Research - pdf here

  KBC Commodities Report - pdf here

  Reliance Money Metals Report - pdf here

  Outokumpu reported a small profit for the fourth quarter -- contrary to market expectations for a loss -- but said it expects the recent volatility in the price of nickel to further impact earnings in the first three months of this year. - more  (press release here)

  Engineering firm Sandvik posted fourth-quarterly pretax earnings below market expectations on Thursday, hit by higher than anticipated write-downs of inventories, but said demand had remained firm. - more

  China remained the world's number one producer of stainless steel last year, taking up more than one quarter of the global output, figures with the China Iron and Steel Association (CISA) have shown. - more

  China's worst-ever power shortage and severe winter weather have combined to reduce production of aluminium, copper, lead, zinc, antimony, ferroalloys and stainless steel in some Chinese provinces. - more

  A survey by Botswana Power Corporation on power demand in the next five years has shown that Tati Nickel Mines could surpass BCL on power consumption. - more

  The French Pacific territory of New Caledonia on Wednesday was put on "pre-alert" mode, the first stage of the local system, as tropical cyclone Gene is approaching its waters. - more

  PT International Nickel (Inco), a subsidiary of the Canadian-based INCO Ltd will build a new nickel processing facility in Soroako in Sulawesi, where it has a large nickel mine. - more

  French metals group Eramet said on Thursday its annual turnover for 2007 was up 24.1 percent to 3.8 billion euros ($5.63 billion), above an average analyst expectation of 3.66 billion. - more

  Mystery shrouds the deal between the Singapore office of Deutsche Bank and the local mining company called Platinum Group Metals Corp. - more

  Norilsk Nickel Mining and Metallurgical Company may resolve to buy back its shares to thwart a takeover by UC RUSAL, analysts polled by RBC tend to believe. However, Norilsk Nickel itself has made no official comment so far on media reports alledging its buy-back plans. - more

  COAL exports worth as much as $750 million will be lost because of the Queensland floods, with full production not likely to return to some mines until the end of the year. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 150 tons = 47,214 tonnes (2.25% - 1062 tonnes cancelled warrants/ 46,152 net stock level) (charts)
•   Shanghai Jinchuan nickel - 239500-250000 RMB/t, minus 1750   (charts)

• Official LME nickel closing prices - cash - $12.45/lb 3 month buyer - $12.56/lb (5.46% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 285 to 5,900. (chart) (more)
• LME nickel inventories - plus 276 tonnes into Rotterdam, Netherlands warehouse, minus 108 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore warehouse
• LME nickel had a wild ride, with most of the up and down movement coming in pre-market trading. Markets started out dropping nearly $400/tonne, before going green and rising by nearly $400/tonne. But by the first ring, it became apparent, traders were no longer in a risk taking mood, and for the rest of the afternoon, the price of nickel slumped. In a few hours, we will know the Fed decision and this should have an effect on the equities market tomorrow. If equities markets react dramatically, we could see it affect metals trading. In the mean time, three month nickel ended the day at $12.34/lb ($27,200/tonne)  
• Closing Metals Report - more

  Copyright/courtesy - "A 50 basis point rate cut by the US Fed later in the session would likely buoy base metals prices in Asia overnight, says analyst Leon Westgate of Standard Bank, before "buy the rumor sell the fact" trade, kicks in at London open. Says profit taking is likely after Tuesday's strong rally. "

  China's top stainless steel mill Shanxi Taigang Stainless Steel Co Ltd 000825.SZ has shut 10-20 percent of its capacity due to power shortages in Shanxi province, its general manager said on Wednesday. - more

  Power and transport outages due to snow have reduced coal and coke stocks at some Chinese steel mills to critical levels, with less than three days' worth of supplies in some areas, the China Iron and Steel Association said on Wednesday. - more

  Comment - seeing report sin Chinese media that ferrochrome prices have risen by RMB100-200/tonne already this week.

  Although Teck Cominco’s Norm Keevil jokes about his track record predicting mining’s future, he suggests that the longer mining markets stay strong, the more inevitable the prospect of overcapacity. - more

  Managers from China Metallurgical Construction Company (MCC), the Chinese state-owned firm running the project, and four local chiefs held crisis talks on Tuesday in Madang town, capital of Medang province in PNG's north, over a range of grievances. - more

  South African state utility Eskom needs 15 million tonnes of additional coal over the next three months including 5.4 million tonnes immediately, South African Chamber of Mines Chief Executive Zoli Diliza told Reuters on Wednesday. - more (comment - China needs more, South Korea needs more, Japan needs more, now South Africa needs more. Australian flood damage will last for months. Watch coal prices -  from a reader - "Thermal coal prices will escalate tomorrow after this article. The prices are already 15% up since Friday after China stopped coal exports to supply domestic power plants to generate sufficient power." - thanks CO)

  (comment - sign of the times? We have reported of the tire shortage mining companies are experiencing but this move by a mining company is worth a double take. Building a factory for your vendor to supply you?) Barrick Gold Corporation announced today a 10-year agreement with Yokohama Rubber Co. Ltd. of Japan to secure the supply of potentially more than $200 million in tires. - more

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling up by $.01/lb . Markets will be watching for the announcement today by US Fed Chairman Ben Bernanke of another possible rate cut. Metals have been taking their cue lately from the equities market, which is betting on another 50 point (1/2%) drop to be announced at 2:15 PM Eastern time. London Metals Exchange will be closed by then, so traders are hesitant today.  
• Bloomberg - more
• Reuters - more
• Forbes - more

  KBC Market Commodities Report - pdf here

  Courtesy Stainless Steel World - "Chinese nickel imports are expected to be flat in 2008, as a weaker global economy keeps nickel demand in check while nickel pig iron continues to provide stainless steel makers with an alternative raw material.....Only one third of the nickel used in the stainless steel industry in China is now from refined nickel, with the rest from steel scrap and nickel pig iron, industry sources say. But if nickel prices fell below USD 25,000, prices of nickel pig iron would become less attractive and users would switch to nickel, traders said."

  Courtesy Scotia Capital China Update - " In December 2007, China imported 9.699 tonnes of refined nickel, up 1.2% MOM and 6.8% YOY. In the full year of 2007, China imported 105,300 tonnes of refined nickel, up 8.2% YOY. On the nickel ore side, China imported 1.286 million tonnes of ore in December 2007, up slightly from November and October. For the whole year of 2007, China’s total imports of nickel ore reached 15.56 million tonnes, along with 7.97 million tonnes from the Philippines, 6.29 million tonnes from Indonesia, and 1.02 million tonnes from New Caledonia."

  Investika said Wednesday that market conditions remain strong for Berong ore, especially for shipment grades above 1.4% Ni, but that mining in the Philippines had been impacted by bad weather. - more  Toledo Mining Corporation PLC said its total shipments from Berong nickel mine during 2007 amounted to 530,168 wet metric tons, and that a further 141,000 wet metric tons of ore were stockpiled awaiting shipping. - more

  Formosa Plastics group may obtain government approval before the presidential elections to establish a stainless steel joint venture in China, the Commercial Times reported, citing Formosa Plastics Corp chairman Lee Chih-tsun. - more

  Papua New Guinea landowners have staged a protest at the headquarters of a nickel mine project being developed by a Chinese-led venture in Madang province.- more

  Some of China’s largest electric steelmakers are cutting output, to conserve power on request from the state-owned electrical utility. China is enduring what is described as its worst winter weather in 50 years, with severe low temperatures and heavy snow — which has strained power supplies. - more

  South African mines would start to return to normal by the end of the week, as 80% of their power would be restored today, increasing to 90% by Friday, said power utility Eskom and the government yesterday. - more

  Coal News (thanks CO)

• BHP Billiton Ltd., the world's biggest mining company, said coal production at its joint venture with Mitsubishi Corp. in northeastern Australia will be reduced for as long as six months due to flooding. - more
• Russia, the world's third-biggest coal exporter, probably won't be able to increase sales of the fuel this year to compensate for shortfalls from China, South Africa and Australia, OAO Siberian Coal Energy Co. said. - more
• Annual coal contract prices will rise more than earlier forecast because of an increase in demand from India and constraints on global exports, JPMorgan Chase & Co. said. - more

  Although US inventories are down at the distributors, they report that business is not robust. However, margins are holding. Supply-side tightness and ongoing escalating costs for raw materials, energy and freight are driving transaction prices up as producers announce a series of increases - $US30 per ton in January to be followed by $US40 per ton for February shipments. - more

  Queensland mining magnate Clive Palmer, the chairman of Mineralogy has pledged to donate millions of dollars in Chinese mining royalties to help improve the standards of health and housing in local Pilbara Aboriginal communities. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 150 tons = 47,064 tonnes (1.82% - 858 tonnes cancelled warrants/ 46,206 net stock level) (charts)
•   Shanghai Jinchuan nickel - 241000-252000 RMB/t, plus 1500   (charts)

• Official LME nickel closing prices - cash - $12.39/lb 3 month buyer - $12.50/lb (4.95% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 77 to 5,615. (chart) (on Nov 13, 2007, the BDI was at 11,039)
• LME nickel inventories - plus 270 tonnes into Rotterdam, Netherlands warehouse, minus 162 tonnes from Rotterdam warehouse, plus 12 tonnes into Busan, South Korea warehouse, minus 12 tonnes into Baltimore, MD, US warehouse
• While not directly affecting nickel supply, moves by Ecuador to cancel mining concessions in that country, flare-up's in Congo, power problems in South Africa, Zimbabwe, Zambia, and Namibia, Zambia proposing the raising of mining taxes last week, flooding in Australia, power problems in China, military offering security to Philippine mines, etc, etc, etc, gives the reader an idea of the difficulties mining company's face. And that is the news from the last week!! Nickel may be flowing freely today, but tomorrow is another day. The sad fact of mining is, that every mine operates with the potential of suffering a force majeure event at any moment. Nickel jumped at the first ring today, again at the third ring, and got as high as around $650/tonne higher, before it calmed down a smidgen. A potential of a rate cut tomorrow, power problems in South Africa, and hopes of a recovery in China stainless steel production, helped traders overlook an ever increasing supply of nickel in LME warehouses, and drive the price up.  Some also believe stainless steel producers may stop substituting nickel with ferrochrome. We will see. The market has been doing a lot more "hoping" for a recovery in nickel demand to happen since late last fall, than is actually happening. But just like the analyst who has been predicting the "end is near" for high nickel prices over the last 7 years, eventually, someday, they will prove to be correct. Three month nickel ended the day at  $12.59/lb ($27.745/tonne)  
• Closing Metals Report - more

  MF Global Base Metals Outlook 2008 - pdf here (1.4 meg)

  Base metals were sharply higher as a stronger tone in global equities reduced demand side worries, and as supply side disruptions linked to power shortages in China also lent support.- more

   Copyright/courtesy Dow Jones - "Base metals rally Tuesday as a 50 bps rate cut by the US Fed Wednesday is priced in, says Sempra Metals analyst John Kemp. Says price strength is also coming from a strong session in Shanghai on signs of Chinese demand and to a lesser extent, electricity cuts. "The last time they had electricity shortages in 2004 was due to a lack of generating capacity. This time, what you're seeing is a loss of transmission because of snowfall. The transmission can be restored relatively quickly," he says."

  China produced 489.24 million tonnes of crude steel in 2007, up 15.7% year-on-year, while crude steel output reached 41.31 million tonnes in December alone, up 4.6% from the same period of the previous year, according to the latest statistics from Shanghai Mysteel. - more

  In 2007, Taigang produced 1.28 million tons  of stainless steel, increasing 76.5% over 2006 totals. This included 816,000 tons of cold rolled sheet and plate, up 31.9% YOY.

  Shares of mining companies operating in Ecuador took a hit on Friday after word hit the market that the government cancelled more than 500 mining concessions covering 536,000 hectares. - more

  Eramet SA, operator of the world's largest ferronickel plant, rose the most in more than 19 months in Paris trading on speculation it is a takeover target. - more (thanks CO)

  Copyright/courtesy Reuters - List of top 5 producers of mined nickel in 2007: Norilsk Nickel 18.0%, Vale 14.0%, BHP Billiton 9.0&, Xstrata 6.0%, Eramet 5.0%. Global nickel mine output around 1.7 million tonnes. Sources: CRU Analysis, Brook Hunt, Reuters Metal Production Database.

  The M.K. Morse Company has developed a 14-inch circular saw blade engineered for cutting stainless steel. The newest blade in the Metal Devil line of metal cutting circular saw blades combines optimized tooth geometry, vibration dampening, and specM.K. Morse Circular Saw Bladeialized micro-carbides to provide superior cutting performance and reduced tooth chipping while greatly reducing blade vibration. Results are smooth, fast cuts and a long blade life as well as reduced secondary work. This 90 tooth blade is ideal for cutting thin wall tubing, small bar stock and strip material where smooth, clean cuts are required.

  Courtesy The Times - "Namibia has become the latest southern African country to freeze all major investment projects due to an energy crisis that threatens to overshadow the region’s growing FDI prospects. The mining industry will be among the sectors worst hit, with Namibia’s state electricity utility NamPower placing a moratorium on all new mines, saying they would have to wait until at least 2009 to get power. NamPower has also been forced to resort to load shedding and time-of-use tariffs for electricity usage at peak times as it grapples with the energy shortage across the southern African region."

  Mining companies in South Africa will receive 90% of their power consumption needs by the end of the week, clearing the way for resumption of production after being brought to a standstill by electricity utility Eskom on 25 January. - more

  Back in November, Roger Agnelli, the charismatic chief executive of Companhia Vale do Rio Doce, stood before investors in Paris as the proud leader of the world's 33rd-largest company and second-largest miner. - more (note Dow Jones reports - "Citigroup maintained its "Buy" rating on shares of Brazilian mining giant Companhia Vale do Rio Doce (RIO), saying Tuesday that the possible merger of Vale and Anglo-Swiss mining group Xstrata PLC appears "almost inevitable.")

  The Ukrainian Antimonopoly Committee approved on Saturday purchase of a 25%-plus-one stake in MMC Norilsk Nickel by United Company RUSAL . - more

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling up by $.23/lb . The media, which "must" have a reason for any movement in the market, will find a trader who will pontificate that the price going up today has to do with China going on vacation next month, and will most certainly set the world on fire when they get back to work. No need to build a cellar, we are referring to the hope that the Chinese will return from some rest and relaxation and decide they need lots and lots of nickel laden stainless steel. Tomorrow the headlines will most likely read, "Nickel price falls on inventory gains and concerns China demand will slow."   
• Bloomberg - more
• Forbes - more

  Haywood Securities Metals & Mining Weekly - pdf here

  Behre Dolbear Global Mining News - pdf here

  TD Bank Weekly Commodity Price Report - pdf here

  Reliance Money Commodities Insight - pdf here

  KBC The Commodities Report - pdf here

  Metal Center News Outlook Survey - pdf here

  AIIS January 2008 Public Survey - document here

  Canada Commodity Price Weekly - pdf here

  Nickel prices are likely to remain weak for several months as a much-heralded recovery in the stainless steel sector has not yet taken off and ample quantities of pig iron are boosting substitution. - more

  Controlling shareholders of Brazil's mining giant Vale, including government representatives, said that a study of a takeover bid for Swiss-based rival Xstrata can go ahead to see if a deal is viable. - more

  Courtesy Yieh - "China’s biggest stainless producer, Taiyuan Iron & Steel (Tisco) has announced to increase prices by about RMB200/ton. The move reflected the soaring prices of raw material, according to the company. It is predicted that domestic stainless market will improve after Chinese New Year Holidays and the market demand could pick.

  Therefore, the benchmark price of South African charge chrome for January - March quarter of 2008 has come to 129 US-Cents per lb. CIF Japan. - more

  Coal shortages have closed down more power stations with an aggregate capacity of up to 40.99 million kilowatts, said the State Electricity Regulatory Commission (SERC) on Monday. - more

  Floods in Queensland and power cuts to mines in South Africa have reduced supplies from key coal exporters, while China is cutting coal exports to manage production for its own soaring power demand. - more

  Coal prices in Asia jumped to a record high on Monday as the region suffered acute shortages because of disrupted supply in Australia, South Africa and China. The impact is spilling into other regions, with coal costs rising sharply in the US, Latin America and Europe. - more

  Mine owners say the 70% power supply by Eskom is not sufficient for mining operations. Eskom has struck a deal with mines to provide some companies with 70% capacity of power supply. - more (thanks CO)

  Power shortages and icy weather have halted production in ferroalloys plants in Guizhou and are disrupting operations at copper smelters in eastern China, plants officials said on Monday. - more

  It is reported that South African ferrochrome producers have announced that they had closed their smelting operations in order to reduce electricity demand to a minimum. - more

  Banks are lining up to lend Companhia Vale do Rio Doce (RIO) the estimated $30 billion to $50 billion it will need to buy Xstrata PLC (XTA.LN), even though credit markets where such debt is sold are in turmoil. - more

  A deal between Brazilian miner Vale and London-listed miner Xstrata could be finalized this week. Martin Wood, MD of Vicarage Capital Limited, discusses the consolidation in mining sector. - more

  The Philippines has offered to provide security assistance to foreign mining companies after communist guerrillas attacked two sites in the last three months, the head of the military said. - more

  Courtesy AISI - "In the week ending January 26, 2008, domestic raw steel production was 2,101,000 net tons while the capability utilization rate was 88.1 percent. Production was 1,877,000 tons in the week ending January 26, 2007, while the capability utilization then was 78.2 percent. The current week production represents an 11.9 percent increase from the same period in the previous year. Production for the week ending January 26, 2008 is up 0.8 percent from the previous week ending January 19, 2008 when production was 2,084,000 tons and the rate of capability utilization was 87.4 percent."

  Sealed Bid Sale of Misc Scrap Aluminum and Stainless Steel from NASA - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 108 tons = 46,914 tonnes (1.65% - 774 tonnes cancelled warrants/ 46,140 net stock level) (charts)
•   Shanghai Jinchuan nickel - 240000-250000 RMB/t, plus 500  (charts)

• Official LME nickel closing prices - cash - $12.00/lb 3 month buyer - $12.12/lb (1.76% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 88 to 5692. (chart)
• LME nickel inventories - plus 90 tonnes into Rotterdam, Netherlands warehouse, minus 132 tonnes from Rotterdam warehouse, minus 6 tonnes from Singapore warehouse, and plus 198 tonnes into Busan, South Korea warehouse
• We received an e-mail from a long time reader and contributor, and while an opinion, we felt it was worth passing along. In reference to the topic of chrome - "China is now in real "deep <trouble>". First they have to pay more to import their contractual 1000k mt ChCr (double amount of 2007) in 2008 to South African's to make a deal attractive to them and on the other side, huge power black outs are <putting> pressure on the domestic ferroalloys and stainless steel industry. The black outs will vanish in March and we all will see a tremendous bull run in March at the domestic FeCr, domestic Nickel pig iron, imported FeCr and domestic SS prices in China. South African Cr ore prices already went 10% up because one of the biggest Cr mine Nkomati can not operate due to the power black outs." If this reader were an investor, we wouldn't have posted it. These are the concerns of an individual involved in the chrome trade. From our own perspective, we believe chromite and ferrochrome could prove to become a very big story in 2008.  Even without the power outages in South Africa, there has been a lot of tension building within sources of supply of chrome to China. Coal is another material that is getting dicey, and while we don't normally cover events with coal, you may see us post some stories so that we will keep you aware of major events there. Again, the floods in Australia, have only exacerbated an already tense situation in China, which appears to be spreading to other Asian nations. It will have an effect on Asian stainless steel prices, and thus, we will keep a watch on it. With iron ore prices still in limbo, and under negotiations, nickel seems to be one of the ingredients of stainless steel, without troubles these days. Nickel followed equities market lower this morning, but began a slow recovery later in the morning. By mid-afternoon, the price of three month nickel had snuck into the green, where it held on for the remainder of the day. For the first day of the week, three month nickel ended trading at $12.25/lb ($27,000/tonne)
• Closing Metals Report - more

  Nickel advanced, erasing an earlier decline, on speculation that stainless-steel mills will increase purchases after reducing their own stockpiles. - more

  Japanese and South Korean utilities scrambled on Monday to get details on China's move to ban coal exports for the next two months, but said they had been bracing for more bad news following a year of uncertain shipments. - more

  Copyright/courtesy Dow Jones - "Base metal price movements this week will get direction from a batch of US data, says UBS analyst John Reade. Says notable releases include durable goods orders on Tuesday, GDP on Wednesday, Chicago PMI on Thursday, and manufacturing ISM and the final reading of the University of Michigan consumer sentiment index for January on Friday. Says "watch out for a knee-jerk spike in base metals midweek should the Fed again cut rates," but adds a cut would be bearish for the metals.".....""I don't see why prices should remain high when we're entering a financial crisis," said one London-based trader. "It's going to be a rough time for the next nine to 12 months." The trader added that even demand from emerging markets like China will not be able to counteract disappearing money from "western pockets". LME copper could trade as low as $4,800/ton in 2008 if the credit crunch worsens, the trader said.

  Courtesy UKTD-Ukrainian Chinese Trading House - "Xstrata Alloys of South Africa announced on the 25th of January through their home-page that, in accordance with the regulations for supply of electric power implemented by Eskom, the Company will decrease the quantities of ferro-chrome and ferro-vanadium to be produced hereafter. Xstrata said that, until a further notice from Eskom, this cutback of the production will continue and Eskom anticipates as these emergent measures will remain in place for approximately 2 to 4 weeks. However, according to an information from South Africa, the producers there are supposed to have already stopped their operations, and Samancor Chrome declared on the 25th of January force majeure for fulfillment of ferrochrome under the existing contracts as reported by separate article published in today’s The Tex Report. The circumstances surrounding production of ferro-alloys in South Africa are nowadays changing bewilderingly."

  China's base metals output soared to a record high in 2007, with the majority of metals experiencing double-digit growth from the previous year, according to the statistics released by the National Bureau of Statistics (NBS) last Friday. - more

  South African mining companies said on Monday they hoped to resume production later this week, but there was no official word on when a power crisis that has put jobs and economic growth at risk could ease. - more

  Power shortages and icy weather have halted production in ferroalloys plants in Guizhou and are disrupting operations at copper smelters in eastern China, plants officials said on Monday. - more

  YOU can hardly blame Vale, the Brazilian miner once known as Companhia Vale do Rio Doce, for wanting a bigger slice of the pie. Awash with funds thanks to sky-high commodity prices caused by China's seemingly infinite capacity for economic growth, the mining industry is going through an unprecedented wave of consolidation - hence its eat-or-be-eaten mentality. - more

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling down by $.03/lb . Nickel fell by about $.18/lb this morning, before beginning a slow climb. World markets were/are mixed today, but mostly in the red in reaction to Friday's slide on the Dow. (more)
• Bloomberg - more "Nickel Falls in London on Higher Inventories, Demand Outlook"

  SMM Specialist Weekly Forecast - Of 33 metals analysts responding to this weeks poll, 6 (18%) felt the price of nickel would rise this week in China, another 6 (18%) felt the price would stay basically the same, while 21 (63%) felt the price of nickel would fall this week.

  Taiwan’s stainless steel mills, such as Yieh United Steel Corp. (Yusco) and Tang Eng Iron Works, will announce new list price this week. - more

  Eurofer, the lobby group for the European steel industry, started to file anti-dumping suits against stainless steel cold rolled flat products from China, South Korea and Taiwan. The investigation will start seven to ten days later. - more

  According to China news agency, on January 24, the Brussels-based International Iron and Steel Institute (IISI) revealed that with 489 million tons of steel, China was once again the world's largest producer of crude steel in 2007. - more

  China's booming economy is expected to consume more than half of the world's key resources within a decade, according to Rio Tinto PLC, reports The Times. - more  (another)

  Blurb - Interfax - "Gansu Jinchuan Group, Asia's largest nickel smelter, recorded a net profit of RMB 7.8 billion ($1.08 billion) for 2007, up 95 percent on the previous year due to growth in nickel and copper prices, a company official said today."

  IISI - World Steel in Figures contains essential facts about the world steel industry including steel production, consumption, trade, and basic statistics on scrap, iron ore, pig iron and crude steel production. - pdf here

  Xinyuan Stainless Steel Corp., a privately-owned mill in Gaoyao city, Guangdong province in southern China , announced that it will start its meltshop and APL production line in 2008. According to the company, the products mainly composed of 201 and 304 grades, with width up to 510mm and thickness between 2.2 and 5 mm. The production capacity of both the stainless meltshop and the APL will reach about 200,000 tpy. - thanks CO

  Copyright/courtesy Bloomberg - "The nation's largest producer of the metal lost the right to mine chromium in Orissa state, allowing Tata Steel Ltd. and rivals to bid again. Orissa's government canceled Jindal's planned venture with state-owned Industrial Development Corp. and reopened the bidding, Solicitor General of India Ghulam E. Vahanvati said in New Delhi yesterday. Jindal fell 14.35 rupees, or 9.5%, to 136.65."

  Asia's giant steel makers are growing increasingly uneasy at the prospect of BHP Billiton swallowing Rio Tinto and monopolising the iron ore trade, but are beginning to admit there is little they can do. - more

  Power outages designed to safeguard residential supplies have forced outages at mines and plants controlled by the parent of Hunan Nonferrous Metals, executives in Hunan Province said on Monday. - more

  South African mining companies were allowed to resume underground maintenance work overnight as a power crisis that has crippled the country's mining industry entered a third day. - more

  It is reported that Chinese coal buyers, faced with a shortage of domestic coal and rising local prices, are making active spot enquiries for Indonesian coal supply this month. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 150 tons = 46,806 tonnes (1.92% - 900 tonnes cancelled warrants/ 45,906 net stock level) (charts)
•   Shanghai Jinchuan nickel - 239000-250000 RMB/t, minus 1250 (charts)

  The Chinese Government is once again shutting down unproductive plants in tune with its green policy and the march toward sustainable development. - more

  A power shortage halted production in South Africa's lucrative mining sector for a second day on Saturday, and mining company officials said they still did not know when they could resume operations. - more South African ferrochrome producers said on Friday that they had closed their smelting operations in order to reduce electricity demand to a minimum. - more

  The base, aiming to export stainless steel scrap from Japan, is born at Sodegaura City of Chiba Prefecture as a joint venture company established by Metal One Corporation of Japan and ELG Haniel GmbH of Germany. - more

  The Brazilian mining giant Vale has taken a decisive step towards a bid for rival Xstrata by lining up a $50 billion (£25 billion) financing package from a powerful group of global banks. - more  Brazilian mining firm Vale, the world's largest iron ore producer, is days away from unveiling an agreed takeover bid for Swiss-based rival Xstrata worth over $80 billion (40.4 billion pounds), a newspaper said on Sunday. - more (what it could mean in Sudbury - more)

  BHP Billiton's board will this week meet to discuss its strategy in its £70bn potential bid for rival mining company Rio Tinto, as it faces the prospect of having to raise its price or go hostile. - more

  It is reported that Chinese nickel imports are expected to remain flat in 2008, as a weaker global economy keeps nickel demand in check while nickel pig iron continues to provide stainless steel makers with an alternative raw material. - more

  Institute of Scrap Recycling Industries, Inc. Scrap Market Report - pdf here

  National Mining Association Mining Weekly - pdf here

  Stainless Steel Wire Rods From India: Final Results of Antidumping Duty New-Shipper Review - more

  Back in November, Roger Agnelli, the charismatic chief executive of Companhia Vale do Rio Doce, stood before investors in Paris as the proud leader of the world's 33rd-largest company and second-largest miner. - more

  Metal Pages reports that European Nickel expects production at its Caldag nickel project to start in early 2009, if the Turkish government grants the miner a forest permit this quarter. Since a new government was sworn in last year, the issuance of a permit has been delayed, since it will allow the mining company to cut 140 thousand trees.

  It is reported that China told its miners and port authorities on Friday to stop coal exports for the next two months to help end its most severe power crisis yet, sending benchmark Newcastle coal swap prices to record levels. - more   Interfax China reported that tight supplies and transportation bottlenecks in China have driven domestic coke prices to a high of CNY 2,000 per tonne and analysts predict that the coke shortage will not ease until early March. - more

  Organizers of next week's Mineral Exploration Roundup conference expect a strong turnout for the 25th annual event, which last year attracted a record 6,000 participants from 30 countries. - more

  Idaho was founded on mining. That is true of many states in the American West. Christian missionaries were often the first Europeans to visit many parts of the West, but it was mining that spurred the large-scale settlement of these places. - more Today, the Senate Energy Committee held its second hearing on Reform of the Mining Law of 1872. As a former water rights and mining lawyer and former director of Colorado's Department of Natural Resources, United States Senator Ken Salazar brings an experienced perspective to mining issues. - more

  China Minmetals, a state-controlled corporation existing under the laws of the People's Republic of China, is a diversified metals and mining company based in Beijing, China. China Minmetals is engaged in the production and trading of metals and minerals, including copper, aluminum, tungsten, tin, antimony, lead, zinc and nickel. In 2006, China Minmetals had revenue of approximately US$4.84 billion. China Minmetals is located at 5 Sanlihe Road, Haidian District, Beijing, China 100044.

  Comment - If you wonder why there were stories being published about the Brazilian government possibly being against a Vale-Xstrata merger,  here is an article from last October that might show the pressure the government is under when it comes to their leading miner - here

• Official LME nickel closing prices - cash - $12.25/lb 3 month buyer - $12.41/lb (4.2% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 168 to 5780. (chart)
• LME nickel inventories - plus 294 tonnes into Rotterdam, Netherlands warehouse, minus 228 tonnes from Rotterdam warehouse
• Not much news out these days about nickel, but for those involved in the supply/demand chain of stainless steel, eyes have shifted to ferrochrome, coal and iron ore. Negotiations are on going over iron ore prices for 2008, but analysts are forecasting from anywhere from a 35% to 70% increase in price. Coal is going up, due in part to China's renewed appetite and floods in Australia. And ferrochrome, already selling in record territory, now has to worry about major electrical problems in South Africa, the world's largest producer. None of these problems should be taken lightly. The Baltic Dry index continues to plummet, but this is largely due to iron ore shipments being cancelled from Brazil due to port problems, and more likely, a strategy in the iron ore price negotiations. Nickel was up in pre-market trading, a continuation of yesterday's trading. By the first ring at 12:15 London time, the mornings increase appeared to be in trouble, and prices stumbled, then began to slide. By the end of the day, the week's gains had evaporated. Three month nickel ended the day and week #4 at $12.19/lb ($26,875/tonne). For the week, nickel ended down 6.6%, but remains 2.35% above it's annual start.
• Closing Metals Report - more
• Have a safe and enjoyable weekend!!

  "Lehman expects stainless steel inventory destocking to come to an end this year and nickel demand to rebound. On the supply side, it says the emergence of nickel pig iron in China, in 2007, has significantly changed the nickel industry and estimates that nickel pig iron production costs of $9/lb and $15/lb support nickel prices of at least $11/lb. Its 2008 nickel price forecast is $13/lb, versus a current price of $13,25/lb, with the average at $10/lb-plus until “at least” 2010." - source

  Xstrata has cut production across its chrome ferrochrome furnaces and vanadium and platinum operations in South Africa following a request from Eskom to reduce demand. - more

  Japan's top two steelmakers, including world No. 2 Nippon Steel Corp (5401.T: Quote, Profile, Research), may report small profit gains for October-December thanks to price increases, and solid demand is likely to keep boosting their earnings in the year from April. - more (thanks CO)

  Clashes between supporters and opponents of a planned steel mill got out of hand on Thursday, leaving one protester dead and four wounded by gunfire. - more

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling up by $.03/lb . Nickel started off the day adding to it gains from yesterday, but support appears to have collapsed in early afternoon trading. If it hasn't already, we anticipate the market will dip into the red any time now. Worldwide equity markets are in the green worldwide so far today (here).
• Bloomberg - more

  Reliance Money Commodities Insight - pdf here

  KBC Commodities Report - pdf here

  The January 2008 Steel Founders' Society of America Casteel Reporter - pdf here

  Copyright/courtesy Dow Jones - "International Ferro Metals said Friday that it has this morning been instructed by Eskom, the South African electricity provider, to switch off its two ferrochrome furnaces. Eskom has requested that all industrial electricity consumers reduce their electricity consumption to an absolute minimum, in order to ''prevent equipment damage, health hazard and protect life.'' Eskom has advised that production may be halted for about two to three weeks." (more on outages here)

  China's industrial metals production showed breath-taking rises in 2007, but this headlong expansion is set to slow in 2008 after as power shortages, efforts to cool investment and an uncertain economic environment start to bite. - more

  Extension to prompt dates for primary aluminium, copper, zinc, nickel and lead futures contracts - more

  Baosteel Special Steel Branch shut down its old No 8 electric furnace built in 1959 at No 2 Steel Works on January 20. As a result, the branch has eliminated all 1.5 million tons of outdated steel capacity. - more

  Brazil-based Vale, formerly known as Companhia Vale do Rio Doce, cancels shipment of 180,000 tons of iron ore that would be transported by 50 ships from Brazil to China in the two months starting from January 2008. - more

  Thanks to BC Minerals website - "Thermal coal is by far the most common, and cheapest coal. It is used in the production of electricity at thermal power stations." - excerpt from article "Japanese utilities have agreed to pay international mining conglomerate Xstrata $78/t for Australian thermal coal, a 40% increase from last year." - more  (note - the crux of the article is how desperate China is getting for coal these days)

  Soaring raw material costs coupled with slower demand growth could render this year a difficult one for the steelmakers across the globe, leading US-based investment banker Lehman Brothers has warned. - more

  Brazil's government has taken no position yet on Cia. Vale do Rio Doce's offer to buy Xstrata Plc, O Estado de S. Paulo reported on its Web site, citing Brazilian President Luiz Inacio Lula da Silva. - more

  Extensive flooding has forced mining giant BHP Billiton to declare force majeure on contract deliveries from its seven mines in central Queensland as it battles to return to normal production. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 66 tons = 46,656 tonnes (1.93% - 900 tonnes cancelled warrants/ 45,756 net stock level) (charts)
•   Shanghai Jinchuan nickel - 240500-251000 RMB/t, plus 2750  (charts)

• Official LME nickel closing prices - cash - $12.18/lb 3 month buyer - $12.34/lb (3.61% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 298 to  5948. (chart)
• LME nickel inventories - plus 270 tonnes into Rotterdam, Netherlands warehouse, minus 54 tonnes from Rotterdam warehouse, minus 24 tonnes from Helsingborg, Sweden warehouse
• Three month nickel went green early today and never looked back. From a traders standpoint it was a wild ride, with ups and downs, but for those who chart trades and trace lows and highs in search for a pattern, the last three "peaks" and preceding three "valleys", would leave the impression that tomorrow could see further gains, even though it ended off its daily highs. That is, if you buy into the chart theory. With metals watching the equities markets so closely right now, our contention that trading had left fundamentals behind a long time ago, has only been exacerbated. So tomorrow's trade could depend greatly on what stock markets do. For today, three month nickel ended at $12.34/lb      
• Closing Metals Report - more

  Global metals prices are likely to decline between 20% and 30% this year on the back of a U.S. economic slowdown and a downturn China's growth. - more

  Rusmet reports stainless steel alloy surcharges for Europe rose by 6.3% for February to 1696-1745, from 1595-1864 in January. This is approximately 14% lower than surcharges were in October, 1968-1989. For 316 Stainless Steel, surcharge rose 4.48% to 3192-3284 from 3055-3121 in January, and is 13.5% lower than last October (3623-3650).

  Indonesia's PT Kartika Selabumi Mining (KSM) has said it will team up with China's Zhejiang Huaguang to build nickel and coke smelters with an investment of US$50 million in Central Sulawesi. - more

  Metals are increasingly being stolen from premises across the country - including from the structures themselves. - more

  (sign of things to come?) The UK's diplomatic row with Russia shows no sign of cooling - now Rusal's London IPO is under threat. - more

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling up by $23/lb . Nickel jumped into the green from the get go this morning, rising nearly $400/tonne immediately. Since then it has been up and down, treating $27,000 as a temporary support, and $27,400 as a temporary resistance point. Worldwide stock exchanges seemed to have shaken the panic many saw earlier in the week, with most in the green today (more).
• Bloomberg - more

  Reliance Money Base Metals report - pdf here

  The International Iron and Steel Institute (IISI) has announced that world crude steel output reached 1,343.5 million metric tons for the year 2007. This is an increase of 7.5% on 2006. - more

  Blurb - Cochilco forecasts 1,962 tonne molybdenum deficit in 2008. 56% of molybdenum sold is a by-product of copper mining, while the remaining 44% is mined as a primary product (primarily in China). According to Cochilco, Chile is the world's largest producer of molybdenum, accounting for 28% of world output, with 10% of produced molybdenum used as catalysts in the oil industry, with 76% of molybdenum going into stainless steel production.

  It is reported that as global iron ore shipping rates have tumbled at the beginning of New Year after hitting the peak in November 2007, Chinese steelmakers have been urged to expedite the yearly negotiations to drive some advantage out of this situation. - more

  After the sharp drop of nickel price in December last year, the LME price of nickel has stuck around US$28,000/ton in recent weeks. - more

  China's GDP growth hits 11.4 % year-on-year in 2007 - China's CPI rises 4.8% in 2007 - China's industrial output up 18.5% last year

  The ferrochrome price stands to benefit from the power crunch that has threatened to halt new ferrochrome projects and expansions until at least 2012. - more

  Blurb - Price Of South African Charge Chrome For Q1/08 Is Settled By Rise Of 21 US-Cents Per Lb.

  Shipping costs for iron ore, coal and other commodities may rise after a record drop last week, boosted by demand for larger bulk carriers ahead of the Chinese New Year holidays next month. - more

  As investors were wiping $110billion off the share market on Tuesday, out in Western Australia's Pilbara region the red dust was swirling faster than ever as iron ore was blown up, dug up, trucked, railed and shipped at record rates and at a scale unheard of five years ago. - more

  The uncertain economic outlook compounded by seasonally low demand led to reduced shipments of steel and aluminum products from service centers in the United States and Canada in November. - more

  It is reported that Mr Luo Bingsheng vice chairman of China Iron and Steel Association, during a conference of www.custeel.com held in Beijing on January 19th 2008 to January 20th 2008, has expresses five views on China's steel industry for 2008. - more

  Brazil's government opposes an attempt by mining giant Vale to buy Swiss-based rival Xstrata, a local newspaper reported on Thursday citing unnamed sources in the presidential palace. - more

  Colorado's mining rush is in full swing. But this time, it's not gold. It's rich deposits of uranium, molybdenum and other hardrock minerals that are luring miners to try their luck in the state's semi- arid public lands as world demand skyrockets. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 192 tons = 46,590 tonnes (2.11% - 984 tonnes cancelled warrants/ 45,606 net stock level) (charts)
•   Shanghai Jinchuan nickel - 237000-249000 RMB/t, minus 3000   (charts)

• Official LME nickel closing prices - cash - $12.13/lb 3 month buyer - $12.25/lb (2.85% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 191 to 6246. (chart)
• LME nickel inventories - plus 240 tonnes into Rotterdam, Netherlands warehouse, minus 114 tonnes from Rotterdam warehouse, minus 48 tonnes from Liverpool, England warehouse, minus 24 tons from Singapore warehouse
• Except for tin, base metals traded on the London Metal Exchange were all down in today's trading. Nickel started out in the red, and slid most of the day, although it ended about $200/tonne higher than its low point for the day. Generally, Asian markets approved of yesterday's Fed cut, while Europeans proved to be more skeptical (more).  LME 3 month nickel ended the day at $12.20/lb ($26,900/tonne)
• Closing Metals Report - more

  Standard Bank: Weekly Commodity Research - pdf here

  Fortis Asian Metals Monthly - pdf here

  (more power problems!) Weekend electrical outages in Chile's northern grid (SING) have led to rationing among mining companies, according to local press reports. - more  

  (excerpt) The People’s Daily reported yesterday that China now faces a 69.63 million kilowatt electricity supply shortfall, and a total of 13 provincial level power grids have been temporarily switched off to limit power usage. National coal stocks are low – 17.7 million tons, from 20 million less than two weeks ago – and not much above what government officials say is the minimum required level (14 million tons). - more

  Copyright/courtesy Dow Jones - "Base metals markets will keep a sharp eye on equities for an indication of whether markets think the move is enough to avert a descent into recession. "Markets do not know what they are doing at the moment," said a London trader."...""The complex has been given a reprieve, but we're uncertain how long it will last," said analyst Robin Bhar of UBS. China continues to remain the "one bright spot amidst all the doom and gloom," with recent trade data showing strong net imports for copper and nickel and or falling net exports for lead and tin."....

  BHP Billiton Ltd. (BHP.AU) Wednesday posted record quarterly iron ore output, ahead of a board meeting next week that will decide whether the mining giant ups its offer for rival Rio Tinto Ltd. (RTP). - more

  The Federal Anti-monopoly Service (FAS) approved the request of a group of entities on the purchase of 60.15% of the core production assets and intangible assets of Norilsk Mining and Metallurgical Combine by A. P. Zvenyagin. - more

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:50 am CST show 3 month nickel selling down by $.62/lb. While Asian markets rebounded today on the US rate cut news, European markets are more suspicious, pondering if the emergency nature of the cut isn't a sign that the Fed has a lack of confidence in its own economy. Except for tin, all precious and base metals are in the red this morning.  
• Bloomberg - more
• Financial Times - more

  Reliance Money Metals Report - pdf here

  KBC The Commodities Report - pdf here

  Damstahl Stainless Steel Report - January 2008 - pdf here

  Copyright/courtesy Dow Jones - "The sustainability of yesterday's base metals price rally depends on how markets digest the US 75bps rate cut, says Barclays Capital analyst Gail Berry. Notes a rate cut had been priced in, but came earlier and was a bit larger than expected. Expects to see some consolation as markets decide whether the cut will just stem impending weakness or can instill positive economic momentum. Barclays expects a further rate cut next week."

  Nickel prices are likely to remain weak for several months as a much-heralded recovery in the stainless steel sector has not yet taken off and ample quantities of pig iron are boosting substitution. - more

  With such turmoil on global stock exchanges, one might wonder if Xstrata CEO Mick Davis and Vale CEO Roger Agnelli are trying to perform their proposed merger/takeover – difficult enough at the best of times – on the deck of a financial Titanic. - more

  Metals processor Allegheny Technologies Inc said on Wednesday that fourth-quarter profit fell 9 percent because of weak stainless steel sheet sales and start-up costs at a new tungsten products plant. - more

  Mirabela Nickel Ltd. said its Santa Rita mine in Brazil may hold about 508,000 metric tons of nickel, the largest deposit of the metal in Latin America. - more

  Headlines from the week so far - China Daily "Black Monday for Chinese stocks, down 5%" Toronto Sun "Black Monday again" Italy's Velino "A new Black Monday, by far the worst in years" Turkey's Sabah "Black Monday" India's Financial Express "Black Monday revisits Indian bourses as FIIs book profits" Sydney Morning Herald "Black Tuesday: $104b wiped off share index" Russia Today "Black Tuesday’ for Russian stocks markets?" Malta Star "Black Tuesday fuels recession fears" AAP "IMF head says the world economic situation is "serious" and probably most important to John Q Public with a 401K - Evening Standard "Billions wiped off pension funds" (Is Your 401(k) Taking a Hit? No Time to Sit on the Sidelines - more)

  Timken Co. Chairman Ward Timken said he expects large takeovers in the U.S. steel industry this year after smaller companies were bought last year. - more

  Bloomberg reported that thermal coal prices at Australia's Newcastle port, a benchmark for Japan, South Korea and Taiwan, rose by 0.5% to near a record as rain cut output at mines in Australia's Queensland state. - more

  In Germany, service centres still have high inventories and mills are holding stocks which have yet to be called off by customers. - more

  Comment - "Bush said any plan, to be effective, would need to represent roughly 1 percent of the gross domestic product, or about $140 billion to $150 billion." $150,000,000,000 divided by US population of 300,000,000 = $500/each.

  Henri Luciano lived the Valley-of-Shooting. But Doniambo was its second house. A life dedicated " to Nickel ", the risk to lose it sometimes. And yet, it " aimai(t) this trade ", so dangerous and abrasive was it. The colleagues were " his other family ". - translated article here

  Commodity Boom Over For Now - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 54 tons = 46,398 tonnes (2.11% - 978 tonnes cancelled warrants/ 45,420 net stock level) (charts)
•   Shanghai Jinchuan nickel - 241000-251000 RMB/t, minus 1750 (charts)

• Official LME nickel closing prices - cash - $12.02/lb 3 month buyer - $12.18/lb (2.27% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 76 to 6,437. (chart)
• LME nickel inventories - plus 360 tonnes into Rotterdam, Netherlands warehouse, minus 174 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore warehouse (comment - first large shipment in a few weeks comes on the day 'after' the BDI rises for the first time in a few weeks.)
• It was a trading day of two halves. In the first half of the day, nickel took a steep decline. Then, after the US Fed announcement of an emergency funds rate cut of 75 basis points, to 3.5%, the market reversed itself, and spent the rest of the trading day in an equally steep climb. By the end of the day, the market had ended nearly where it started. For the day, three month nickel closed at $12.47/lb ($27,500/tonne). If today's latter half rise holds tomorrow, then we can expect official prices to be higher tomorrow.
• Closing Metals Report - more

  Haywood Securities Metals & mining Weekly - pdf here

  Copyright/courtesy Dow Jones - "The Federal Reserve, citing a weakening economic outlook, cut its target for the federal funds rate 75 basis points to 3.5%"......""It depends how the market digests the information," said Barclays Capital analyst Gayle Berry, adding if the markets decide they point to worsening conditions in the U.S. then fears of a U.S. led slowdown will resume pulling the complex lower. A London-based trader said base metal investors are viewing the rate cut as bearish given its size and subsequent falls after the cut, which indicates the economic situation in the U.S. is worse than expected and further base metal price falls are therefore expected......Stability in US equity markets could be a sign that a bottom in base metals is not too far away, says UBS' Robin Bhar. But says sentiment remains negative and fresh risk exposure is unlikely to be added to amid the current period of de-leveraging over fears of a US recession.....The commodities supercycle theories have been "shot in the foot" as the markets slide in line with equities, said JPMorgan analyst Jon Bergtheil. "The China story isn't going away, but investors are now looking for a really good entry point," Bergtheil said. Base metal demand "really is dependent on China," said Standard Bank analyst Leon Westgate. He said signs China is "getting hurt" will affect the market. "The uncertainty right now is whether China can weather the storm," Westgate said."

  The global slowdown in stainless steel demand triggered 4th quarter cutbacks in nickel-based steelmaking worldwide. Data from the International Stainless Steel Forum shows that stainless steel production in the first three quarters of 2007 of 20.9 million metric tons was just 0.4% higher than in the first nine months of 2006

  Courtesy Dow Jones - "Jindal Stainless Ltd (JSL), the country's largest stainless steel manufacturer, has reported a 55.24 per cent dip in the net profit for the third quarter ended December 2007"

  AK Steel Holding Corp. said Tuesday it swung to a fourth-quarter profit from a year-ago loss which included a hefty one-time employee health care benefit charge. - more

  Russian UC Rusal, the world's largest aluminium and alumina producer, intends to buy a stake in Norilsk Nickel from shareholder Vladimir Potanin, after agreeing in December to purchase 25% plus one share in Norilsk from Mikhail Prokhorov. - more

  Chinese nickel imports are expected to be flat in 2008, as a weaker global economy keeps nickel demand in check while nickel pig iron continues to provide stainless steel makers with an alternative raw material. - more

  China's refined lead exports fell 56.1 percent on an annual basis to 235,758 tons in 2007, while refined zinc exports dipped 15.2 percent year-on-year to 275,649 tons, and refined nickel and nickel alloy exports dropped 25.2 percent year-on-year to 16,930 tons, according to figures released by the General Customs Administration today. - more

  Credit Suisse's theoretical iron ore supply and demand model suggests that 2007 ended short by about 25 million tonnes when seaborne trade totaled about 790 million tonnes. - more

  Universal Stainless & Alloy Products Inc. said Tuesday it expects weaker first-quarter profit because of continued volatility in nickel prices and limited production capacity. - more

  According to the customs-statistics released in China, China exported 16,338 tons in total of molybdenum products in January - November of 2007, consisting of 8,342 tons in material of ferro-molybdenum and 7,996 tons in material of molybdenum oxide. - more

  A federal magistrate is expected to decide this week on the procedures to be used in the Feb. 12 fairness hearing into a proposed $663 million settlement covering health-care benefits for nearly 4,900 AK Steel retirees and their families. - more

  China's state-backed miners have looked at Xstrata but are unlikely to bid for it, leaving Brazil's Vale or Anglo-American best placed to snap up the Anglo-Swiss miner. - more

  Courtesy AISI - "In the week ending January 19, 2008, domestic raw steel production was 2,084,000 net tons while the capability utilization rate was 87.4 percent. Production was 1,877,000 tons in the week ending January 19, 2007, while the capability utilization then was 78.2 percent. The current week production represents an 11.0 percent increase from the same period in the previous year. Production for the week ending January 19, 2008 is up 1.6 percent from the previous week ending January 12, 2008 when production was 2,050,000 tons and the rate of capability utilization was 85.9 percent."

  US Fed cuts prime by 75 basic points in emergency session - pdf here

  Morning Briefing (8:00 AM CST is 2 PM in London)

• Indications at 7:55 am CST show 3 month nickel selling down by $.27/lb. Metals are a mixed bag this morning, with precious metals up, and most base down.
• Reuters - more

  TD Bank Weekly Commodity Report - pdf here

  Reliance Money Commodity Report - pdf here

  Rand Merchant Bank Base MEtals Report - pdf here

  Canada Commodity Update - pdf here

  Thru November of 2007, China imported 5.63 million metric tonnes of chrome ore, compared to 4.035 million tonnes during the same period in 2006. The top 6 suppliers to China, in order of volume imported, are South Africa, Turkey, India, Iran, Philippines, and Pakistan. As of November 2007, China had imported 1,343,907 metric tonnes of ferrochrome. In November China imported 130,952 mt of high carbon ferrochrome, and 3,445 metric tonnes of low carbon ferrochrome, a 43.5% increase over October figures (93,634 mt).

  South Africa Electrical Problems (comment - watch ferrochrome prices. This could drive prices even higher.)

• Copyright/courtesy Business Day - "South Africa must cut its overall electricity consumption 20% as soon as possible to cope with a power shortage which has led to a spate of blackouts in the past week, a senior Eskom official has said. Ideally the cutbacks should be shared across all sectors of the economy - residential, business and industrial - as the utility expands its capacity, said Andrew Etzinger, Eskom's GM for demand-side management......"There is no quick fix in sight, serious steps must be taken to address the situation," he said. "For the next seven years SA is going to be short of power. How we deal with that needs to be answered urgently -- in the next week or two."
• (excerpt) "Solidarity further said that they have been informed that Zimbabwe does not pay for the electricity supplied to it by Eskom – something that will not sit well with electricity starved South Africans." - more
• Zimbabweans had no electricity or water again this past weekend after nationwide power failures led to the complete shut down of basic services from Saturday evening until Sunday afternoon. - more (comment - Bindura Nickel Corp's nickel mines production have already been affected by power outages throughout 2007, and with an annual production of around 7000 tonnes, it is doubtful this news will have much of an effect on nickel prices)
• According to Mining Weekly, Eskom's top 5 customers are mining companies BHP Billiton, Anglo American, Xstrata, Sasol, and Richards Bay Minerals.

  Media reports out of Australia last week, claimed that China's Baosteel had walked out of iron ore negotiations with BHP, Rio and Vale. Baosteel quickly denied the report, and since Baosteel is not leading negotiations for China, as it has in the past, we aren't real sure what effect any walkout, if it had happened, would have really had on the negotiations. Chinese media reports this year China is being represented by Zhao Xiaogang, Chairman of Angang Steel and head of the China Iron & Steel Association. Steelmakers from Europe and Japan are also represented in the negotiations.

  Blaming the paper market for sharp falls in the Baltic dry indices was “a bull***t theory” from those who do not understand how forward freight agreements worked, according to a shipping hedge fund manager, writes Jamie Dale. - more

  The potential combination of Brazilian mining company Companhia Vale do Rio Doce, or Vale, and Anglo-Swiss mining group Xstrata PLC makes strategic sense, but Vale will face a challenge financing a possible deal. - more (quote - "A possible tie-up would allow Vale to achieve "critical mass" in coal and copper, Cliff said. Vale has been trying to increase exposure to the two key minerals, with plans to develop coal deposits in Australia and Mozambique and copper deposits in Brazil. The combined Vale-Xstrata also would be a heavyweight player in the key nickel market.") (comment - would "be" a heavyweight player?? Both company's are already heavyweight's... combi