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

Thursday, January 31
  Afternoon Nickel/Stainless Roundup
  • 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)
Wednesday, January 30 (15 days till Valentine's Day - you've been warned)
  Afternoon Nickel/Stainless Roundup
  • 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)
Tuesday, January 29
  Afternoon Nickel/Stainless Roundup
  • 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)
Monday, January 28

  Afternoon Nickel/Stainless Roundup
  • 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)
Weekend Review, January 26 & 27

  Metal theft mainly occurs beneath the surface, out of sight. But wire by wire and pipe by pipe, metal thieves are gutting homes and businesses. They're hitting churches, parks and power poles -- up to 20,000 of them -- across Wichita and into the suburbs. - more

  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

Friday, January 25
  Afternoon Nickel/Stainless Roundup
  • 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)
Thursday, January 24
  Afternoon Nickel/Stainless Roundup
  • 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)
Wednesday, January 23
  Afternoon Nickel/Stainless Roundup
  • 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)
Tuesday, January 22
  Afternoon Nickel/Stainless Roundup
  • 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... combining the two would create "the" nickel heavyweight. Vale would not only become the world's largest nickel producer, but also the world's largest ferrochrome producer, world's largest iron ore producer, world's largest exporter of thermal coal, world's largest exporter of iron blast furnace pellets, and no telling what else. Let us hope they don't decide to produce stainless steel, because they will control nearly all of the ingredients. ) 

  Russia's United Company RUSAL, which is buying a strategic stake in metals major Norilsk Nickel, is discussing a full buyout or a merger, one of RUSAL's shareholders told a newspaper on Tuesday. - more

  Chengguang Stainless Steel Company in Qingdao has come under fire for searching each of its 1,000 plus employees after work every day because it doesn’t trust them not to steal company products. The company uses a metal detector to detect steel items. - translated article here

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - plus 168 tons = 46,344 tonnes (2.29% - 1062 tonnes cancelled warrants/ 45,282 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 244500-251000 RMB/t, minus 3000   (charts)
Monday, January 21
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.39/lb 3 month buyer - $12.54/lb (5.29% higher than 12/31/07) (chart)
  • Baltic Dry Index - plus 51 to 6513. (chart)
  • LME nickel inventories - plus 12 tonnes into Rotterdam, Netherlands warehouse, minus 192 tonnes from Rotterdam warehouse, minus 60 tonnes from Singapore warehouse, minus 6 tonnes from Gothenburg, Sweden warehouse
  • Vale confirmed today that it is in takeover talks with Xstrata. This would be huge, and make the nickel mining company mega mergers of the last few years, pale in comparison. Vale warned though, that it's talking to banks to fund any takeover deals, and said "the current conditions prevailing in the global financial markets may constrain the realization of a major strategic move."  Except for the closed US market, worldwide nickel mining stocks got beat up today. World markets are incredibly nervous about the US economy, and for those who look to the US market for guidance, last weeks slide and today's holiday closure was like breaking an overly tightened rubber band. Major nickel miners Norilsk Nickel was down over 7% in Russian markets, Vale was down over 7% in Brazilian markets, and BHP was down over 7% in Australian markets. Dow Jones reported British shares had their worst single trading day since Sept 11th, of 2001. Nickel suffered the days loss in the first half of the day, with trading in the latter part, running fairly mute. Three month nickel ended the day at $12.56/lb ($27,700/tonne)
  • Closing Metals Report - more

  Industrial metals tumbled on Monday, dragged down by falling equity markets, fears of a U.S. recession and the dollar's rise against the euro, analysts said. - more

  Reuters Metals Insight Weekly - pdf here

  Metal prices may fall as much as 15 percent this year as a global economic slowdown curbs demand for industrial commodities, BNP Paribas analyst David Thurtell said. - more

  The Russian Federal Antimonopoly Service (FAS) has instructed MMC Norilsk Nickel to sell nickel in Russia according to standard exchange-related practices. - more

  Cia. Vale do Rio Doce, the world's largest iron-ore producer, confirmed it's in talks with Xstrata Plc. - more

  Copyright/courtesy Credit Suisse (from China Basic Materials Monthly report)


Nickel


Molybdenum

  Courtesy China Fastener Info

  Companies sitting idle after getting mining rights, beware! The government proposes to introduce new regulations for mining operations to penalise companies delaying development of mines by levying higher rent on the leasehold area. - 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 $.41/lb . Metal trading, both precious and base, appears to be selling in the red this morning, across the board. While US markets are closed, overseas markets are taking a beating here. Shanghai Composite fell by over 5% (more). And while Shanghai nickel closed up mirroring LME's Friday gain, LME nickel is down this morning.  
  • Bloomberg - more
  • Financial Times - more

  Stainless Steel News would like to welcome our newest sponsor - Duraloy Technologies, Inc. We thank Duraloy for their support of this site and encourage those of you in need of the services they offer, to allow them an opportunity to quote you.

  • Duraloy Technologies, Inc. is the leading U.S. manufacturer of specialty high alloy, centrifugal and static cast components and assemblies for the steel, petrochemical, refining and heat treating industries. Duraloy produces everything from basic as-cast static and centrifugal castings to the most complex, finished assemblies. Typical products include furnace rolls, large calciners, spiral and bottle/batch retorts, ethylene pyrolisis coils, catalyst tube assemblies, and galvanizing pot rolls. Since its founding in the early 1920's, Duraloy has differentiated itself by its commitment to development and introduction of new and improved alloys. Proprietary alloys include 22H®, Super 22H®, MO-RE® 2, Supertherm®, and the TMA® family of alloys.

  Reliance Money Weekly Metal Report - pdf here

  KBC Commodity Report - pdf here

  SMM Specialist Weekly Forecast - Of 35 analysts responding, 9 (25%) forecast the price of nickel to increase this week, 4 (11%) forecast teh price to fall, and the remaining 22 (63%) feel the price will remain unchanged by weeks end.

  A nation-wide power blackout over the weekend hit copper and cobalt output in Zambia and briefly trapped workers underground, as mines also ground to a halt in neighbouring Zimbabwe, officials said on Monday. - more and more

  Xinhua reported that China's apparent refined nickel consumption in January to November reached 183.50 tonnes up by 15.5%YoY. It included refined output of 105.70 tonnes up by 14.9%YoY and net refined import of 77.80 tonnes up by 16.3%YoY. - more

  Brazilian metals miner CVRD is preparing to offer as much as $90-billion (U.S.) to buy Swiss mining company Xstrata PLC, two leading Brazilian newspapers reported Monday. - more and more

  The market tendency by item on imports of ferro-alloys into Japan at the 15th January of 2008 is as follows - more

  A worldwide iron ore supply deficit of between 20 million and 25 million tonnes is likely in 2008, Credit Suisse forecast in a report on Monday, on the back of high demand from steel mills. - more

  It is reported that Chinese hot rolled steel coil export offers have kept firm now and there is strong likelihood that prices would continue to edge up as producers continue to raise export quotations citing tight supply and excessive orders. - more

  Outokumpu Stainless, one of the region’s largest employers, has announced plans to increase its intake of apprentices, graduates and placement students for 2008 and 2009. - more

  A maritime expert of harbour and underwater work, Bertrand Sciboz, currently on mission in Goro, brought in his files L’history D’an ore tanker come from Calédonie, Barsac, run in 1917 by a German submarine. He seeks to find the site of loading of this ship. - more

  Ian Ashby, President BHP Billiton Iron Ore, addresses media in Perth on BHP Billiton's iron ore operations in Western Australia. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 246 tons = 46,176 tonnes (2.88% - 1,332 tonnes cancelled warrants/ 44,844 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 248500-253000 RMB/t, plus 3750   (charts)
Saturday, Sunday, January 19 & 20
Updated thru out the weekend

  Sreading credit woes and bearish economic data have wiped tens of billions of dollars off global stock markets since the start of the year, intensifying fears that the US may already be in a recession, but analysts say base metals will withstand the pressure from a slowing global economy. - more

  Mikhail Prokhorov, a billionaire investor in Norilsk Nickel, accused management Friday of using the "company's resources" to favor Vladimir Potanin, another billionaire shareholder, escalating a dispute between the business partners. - more

  June 2007 article - "All Tight for Chromite" - pdf here

  Inventories of steel increased during December at service centers across North America, according to the Metals Service Center Institute’s December 2007 activity report, suggesting that a long period of inventory reduction may be ending. - more

  Courtesy /copyright AFX News - "China's crude steel output is projected at about 540 mln tons in 2008, compared to 490 mln tons expected for 2007, the official Securities Times reported, citing Qi Xiangdong, a vice-secretary general with the China Iron & Steel Association. Qi said steel consumption growth in 2008 will be about 12 pct, compared with 12.9 pct expected for 2007. "

  Taiyuan Iron & Steel (Tisco) will commission a stainless steel cold rolled project in 2008 with an annual output of 1.5 million tons. The company’s steel output in 2007 was 10 million tons, of which 3 million tons were stainless steel.

  China iron ore imports (source - Tex Report)

  Reliance Money Commodities Insight - pdf here

  China Eyes Latin American Commodities - more

  A constant of the Chávez administration has been its systematic dismantling of foreign investments, particularly those from the United States or the United Kingdom, in most cases breaching contracts and violating laws and treaties. - more

  State-owned power producer Eskom’s capacity crisis could delay the construction of up to ten planned smelters in South Africa’s ferroalloys industry, a well-placed source said on Friday. - more

  Copyright/courtesy Reuters - "Prices of steelmaking additives known as ferro-alloys rose in Europe after major producer China raise export taxes, merchants said. Ferro-molybdenum, which hardens steel for use in oil pipes, traded between $79 and $80 per kg in the week started Jan. 14, up from $73-74 at the end of last year. "Export taxes are half the reason, and the other half is tightness in (raw material) moly oxide," a dealer said. "European demand is also strong." Molybdenum oxide rose around $2 from last week to $33.50-34 per lb. Beijing doubled export taxes on ferro-alloys to 20 percent at the start of 2008, in a an effort to encourage domestic retention of valuable resources, and to deter investment in industries that are both energy-intensive and a polluting." (source)

  Like the gold price, the price of molybdenum has been rising for the last five years, and quite nicely, too. The price has quadrupled to the $40/lb range. - more

  Steelmakers could focus their acquisition sights on raw materials in 2008, in a bid to reduce costs which are set to climb on the back of higher iron ore prices, a senior industry expert told Reuters this week. - more

  Iron ore and Chrome ore Price trends Sourcing Insights Bureau - more  

  It was known on the end of last week about the realities on supply of electric power for industrial purposes, which the Government of Guizhou Province has cut from the 1st January of 2008 to a considerable extent. According to an information from Guizhou Province, the industries, which have been entirely stopped to be supplied electric power, are <> ferro-alloys, <> electrolytic manganese metal, <> tin and <> silicon metal. - more

  Allegheny Technologies Incorporated announced Friday that Hunter R. Dalton, 53, has been named president of ATI Allvac, effective April 1, 2008. ATI Allvac is the largest operating company within ATI’s High Performance Metals segment and is recognized as one of the world’s premiere suppliers of titanium and titanium alloys, nickel-based alloys, and specialty alloys to the aerospace and defense, power generation, and medical markets. Mr. Dalton will succeed Thomas E. Williams, Jr., 67, who is retiring from his current position as president of ATI Allvac, effective March 31, 2008.

  Rio Tinto Group may sell as much as 10% of the steelmaking raw material supplied under contracts agreed recently at spot prices, which are at a record. - more

  Why stainless steel production revival, even if limited to Europe, is still big news....

  According to the company website, Voisey's Bay is sheduled to receive its first ore carrier in over six weeks, when the MV Umiak1 arrives on Tuesday, and departs loaded, the following Sunday. (Umiak I is a 31,992 tonne icebreaking bulk carrier, the most powerful ever of its kind. The vessel moves 360,000 tonnes of nickel concentrates a year in 12 voyages from CVRD/lnco Ltd/s Voisey's Bay mine in the northern Labrador to its smelters in Sudbury, Ontario and Thompson, Manitoba, Canada.) More on the MN Umiak1 - here

  Xstrata was the day's biggest blue-chip gainer as rumours again swept the market that Vale, the Brazilian mining giant formerly known as CVRD, was preparing a takeover. - more

  Voisey’s Bay Nickel Company has now changed its name to “Vale Inco- Newfoundland & Labrador.”

  ThyssenKrupp Materials opened a new branch in the capital of Tatarstan to provide customers with a broad range of ferrous and stainless steel metal roll and services. A service metal center of the Company is also to be opened in Nizhniy Novgorod in late 2008. At present ThyssenKrupp has branches in six Russian regions. Source: IIS

  Thio Nickel Mine - from a postcard dated Sept 26, 1908 (source with other New Caledonia photo's)

History of Nickel in New Caledonia - Jules Garnier, Explorer - online diary - here

  Takeover target Allegiance Mining NL says it has been approached by third parties about making a bid for the company, after rejecting a takeover offer from Zinifex Ltd. - more

  (not nickel related, but another reason mining in foreign countries can be unpredictable) Breaking News: Gambia Expels Australian Mineral Firm !! Gambia's Dubious Deal With Main Land China Exposed! - more and more

  Largest Oil Producers/Consumers - here

Friday, January 18
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.52/lb 3 month buyer - $12.63/lb (6.04% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 10 to 6462. (chart)
  • LME nickel inventories - plus 60 tonnes into Gothenburg, Sweden warehouse, minus 162 tonnes from Rotterdam, Netherlands warehouse
  • For most of the day, nickel was trading in the ho-hum column. Started just slightly in the red, then drifting up to slightly in the green. Then PM kerb trading time came, and nickel went ballistic. Dollar was up a little which is usually negative on metals. In an otherwise pessimistic week of consumer news, the U.S. consumer sentiment Reuters/University of Michigan index, rose to 80.5 from a reading of 75.5 in December. Three month nickel ended the week at $13.05/lb   ($28,775/tonne).
  • For the week, nickel traded up by 1/2 of 1%, and the bears took a break (video here) Have a safe weekend!!
  • Closing Metals Report - more

  We have placed numerous forecasts made over the last few weeks for 2008 nickel on our forcast page here

  November 2007 Production of Canada's Leading Minerals - pdf here

  National Mining Association Mining Week - pdf here

  SPREADING credit woes and bearish economic data have wiped tens of billions of dollars off global stock markets since the start of the year, intensifying fears that the US may already be in a recession, but analysts say base metals will withstand the pressure from a slowing global economy. - more

  CONCERN is growing that SA’s electricity crisis could tarnish its appeal to investors, after news that several new mining projects and a ferrochrome expansion project had been put on the back burner because Eskom lacked the power needed to run them. - more

  Rio Tinto Group., battling a $110 billion takeover bid from BHP Billiton Ltd., said any recession in the U.S. may cut China's growth this year by less than one percentage point and won't dent demand for metals. - 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 $.08/lb . While up this morning, nickel appears to be struggling to hold on to its gains.  
  • Bloomberg - more
  • Forbes - more

  BMO Capital Markets - "The Goods" (monthly) - pdf here

  GFMS Market Analysis: Nickel - here

  Reliance Money Commodities Insight - pdf here

  Monthly Molybdenum Commentary - pdf here

  Iron ore freight rates have slumped over the past few months on the back of slowing iron ore imports to China and uncertainty over the ongoing 2008 iron ore benchmark price negotiations. However, strong demand from China will support iron ore freight rates in the long run, analysts told Interfax today. - more

  First it was the turn of the steel industry to unleash a campaign against iron ore export on the grounds that India needed to conserve this vital raw material. - more

  - A slowdown in demand for stainless steel and lower prices have dented the profits of German steel and engineering giant ThyssenKrupp, though investors had been expecting worse. - more

  Steel inventories at metals service centers in the United States and Canada closed 2007 up slightly from November levels as year-over-year shipments in both countries fell 4.1% from those of December 2006, the Metals Activity Report from the Metals Service Center Institute shows. - more

  China-Africa Development Fund (CADF) is expected to inject part of US$90 million earmarked for four African projects into a joint venture ferrochrome plant being built by the state-owned Sinosteel Corp in Zimbabwe, reports this week indicated. - more

  Credit Suisse's theoretical iron ore supply and demand model suggests that 2007 ended short by about 25 million tonnes (Mt), which is almost the output of the world's fourth largest iron ore exporter. - more

  Today’s Wall Street Journal has a story entitled “Rio Tinto to Lift Ore Prices,” and it points out that the reason Rio Tinto is lifting ore prices is twofold: it is trying to increase its share price to where a takeover bid by (hostile) competitor BHP Billiton is prohibitively expensive, and it is raising ore prices because it can. - more

  Not stainless steel related but for buyers out there, if you use steel nails in volume in the US, you may want to buy quick. "(Reuters) - The U.S. Commerce Department on Wednesday set preliminary anti-dumping duties on steel nails from China and the United Arab Emirates it said were being sold in the United States at unfairly low prices.....The preliminary duties range from 20.77 to 118.04 percent on imports from China and 4.47 percent on imports from UAE."

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 102 tons = 46,422 tonnes (2.60% - 1206 tonnes cancelled warrants/ 45,216 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 244000-250000 RMB/t, minus 500   (charts)
Thursday, January 17
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.57/lb 3 month buyer - $12.70/lb (6.63% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 443 to 6472. (chart) (new record one day drop - 4th record set in last 7 business days)
  • LME nickel inventories - minus 78 tonnes from Rotterdam, Netherlands warehouse
  • Nickel trading spent much of the day in the green, with prices jumping up quickly by around $350/tonne, retreating, re-gaining, then retreating again after the second ring. After official prices for the day were set, the price climbed once again, then lost gas. As US Fed Chairman testified in Washington D.C., markets worldwide began to slump. No investor wanted to hear the US economy 'could use' a governmental economic stimulus package. By mid afternoon, three month nickel had slipped into the red, where it would spend the rest of the day. Three month nickel ended the day at $12.52/lb ($27,600/tonne)
  • Closing Metals Report - more

  Copyright/courtesy CNN - "'Reports indicate that Chinese firms are holding off purchases of nickel hoping for weaker prices, although this could be a dangerous game with significant increases expected this year in terms of demand from new stainless steel capacity and production,' Fairfax IS analyst Marc Elliot"

  Copyright/courtesy Dow Jones - "Given the weak outlook for the U.S. economy, base metal prices are likely to fall "significantly" later in 2008 as over the long run the global economy will could be dragged down, said Base Metals analyst Will Adams. "However, near term we think there is room for some rebounds as China steps up imports and reduces exports across the metals and as consumers switch from de-stocking mode to hand to mouth buying which may be enough to suck metal out of LME warehouses which we think would unnerve some shorts," Adams said.

  "Labour disputes will support some base metals prices again in 2008, helping to keep markets with tight supplies, such as copper and lead, in deficit....But metals already in over-supply, or with a large surplus looming, such as zinc and nickel, might need disruptions such as strikes to help limit further price falls." (source)

  Key Takeaways from Scotia's 2008 Commodities Outlook Conference - nickel (quoted here), molybdenum (quoted here), iron ore (quoted here), price behavior of metals (quoted here). (comment - we got the expected e-mail from a disgruntled investor, who took issue with the quote from the Scotia conference about the $4.50/lb nickel, and our follow-up remark this morning. While we may not necessarily agree with the $4.50/lb amount, we do agree with the point the speaker was trying to make. The price of nickel IS being guided by factors beyond true supply/demand fundamentals. Compare today's numbers to early 2006. The description of 'market fundamentals' may now include "fund investment" or "fund interest" factors, but the fact remains, that inevitably, a true price is only accountable to actual supply/demand parameters. Everything else is speculation, gambling, trading, whatever you want to call it. That would be our opinion - and if you are a regular reader, you know our theories on opinion's. Even our own.)  

  Shipping costs for iron ore, coal and other commodities may rebound in the second half of this year after annual iron ore price talks are completed, CIMB-GK Research Pte said. - more

  The Chinese government is considering levying a 17% value-added tax (VAT) on scrap metal recycling enterprises in an attempt to aid the healthy development of the industry, an industry official told Interfax. - more

  Brazil's Vale, the world's largest iron ore producer, has cancelled 30 iron ore cargoes to China for shipment during the first quarter this year, traders and shipping sources said. - more

  Eskom Holdings Ltd. may face a government investigation into a spate of power cuts that have disrupted supply to customers including BHP Billiton Ltd. and Xstrata Plc. - more (thanks CO)

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

  • Indications at 7:50 am CST show 3 month nickel selling up by $.17/lb.  Metals are a mixed bag this morning, with some selling in the red, but the majority of base and precious metals selling in the green. We posted a link to some notes posted on an investor's forum  below. Maybe this sentence, from another presentation given at the same conference, will get your attention - "Bloomsbury estimates that the price of nickel could be as low as $4.50/lb if the effect of fund-related commodity holdings was eliminated." Might save that remark for those who like to claim the fundamentals justify nickel selling for double what it was this time in 2006, when we are sitting on a whole lot more inventory these days.
  • Bloomberg - more

  KBC Commodities Report - pdf here

  Standard Bank - Weekly Commodity Research - pdf here

  Special Report from Metalword India Magazine - " A Glance at Main First -Use Industry for Nickel in Stainless Steel" - pdf here

  Yesterday's 'Daily Edge' reported on Scotia Capital's 10th annual Commodities Outlook Conference which took place on January 15th in Toronto. Among the metals discussed wes nickel. In a presentation given by Sean Mulshaw, Brook Hunt & Associates, the following  notes were taken - (notes posted on an investors forum here)  (more later)

  Chinese firms are cutting nickel imports in 2008 due to enough stocks left from last year and looking to lower prices in the future. - more

  European stainless steel mills indicate that after a series of stock adjustment actions, the base price of stainless steel has increased and the alloy surcharge has decreased. - more

  China’s biggest stainless producer, Taiyuan Iron & Steel (Tisco) has announced to commission in 2008 a stainless steel cold rolled project with an annual output of 1.5 million tons. - 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

  Budget 2008 may bring in good news for homemakers. The finance ministry is considering cutting import duties on ferro nickel from present 5% to 2%.  - more

  China's largest steel maker Baosteel said Thursday it is still in iron ore price talks, denying a report it had walked out of negotiations over the price demanded by ore producers. - more

  Baosteel, China's biggest steelmaker, may or may not have have walked out of iron contract price negotiations, but if this year's talks with the top three ore producers are more contentious than usual it is because the Chinese government is urgently signaling the need to contain inflation, analysts said. - more

  The Central Government of China ( Ministry of Commerce ) announced recently the quantities of molybdenum products allocated to be exported by each enterprise in the calendar year ( January - December ) of 2008. - more

  The Newfoundland and Labrador government has asked the Voisey's Bay Nickel Co. to revise its environmental impact statement behind a proposal to build a nickel smelter. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 78 tons = 46,524 tonnes (2.89% - 1344 tonnes cancelled warrants/ 45,180 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 245000-250000 RMB/t, mins 2000  (charts)
Wednesday, January 16 (LME Third Wednesday) 
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.63/lb 3 month buyer - $12.75/lb (7.05% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 421 to 6915. (chart) (largest one day drop in history of index - worst one week drop in index history)
  • LME nickel inventories - plus 72 tonnes into Singapore warehouse, minus 162 tonnes from Singapore warehouse (movements continue to indicate European stainless steel market is rebounding, while Asian and American markets are quiet)
  • Except for tin, all of the base and precious metals were selling in the red today. Nickel started slumping from the bell and never looked back. Inventories of  nickel stocked in LME warehouse are down nearly 3% on the year, and when considering cancelled warrants, down nearly 5%. While they have a long way to go before they fall into the dangerously low levels we saw in the early part of last year, their drop will start weighing on traders present negative sentiment. We wont get too concerned until China returns from its New Year/Spring Festival, which begins on Feb 7th and ends 15 days later. If we figured this right, that would put the Chinese returning to work on Feb 25th. And while we have no reason to suspect the Chinese stainless steel industry will show the immediate signs of recovery that we are seeing in Europe, this could be an ideal time for things to pick up. Three month nickel ended the day at $12.65/lb ($27,900/tonne)      
  • Closing Metals Report - more

  Copyright/courtesy Dow Jones - "Jones)--The global nickel market was in a surplus of 10,800 metric tons in the first 11 months of the year, the World Bureau For Metal Statistics said Wednesday....In November, nickel smelter production was 118,600 tons and consumption 113,600 tons."

  Piping & Equipment Stainless Steel Market News - pdf here

  The head of the world's second-biggest mining company, Rio Tinto, has dismissed concern that a US economic meltdown would spell a hasty end to the five-year resources boom. - more

  All sectors but other consumer products recorded growth in exports in November, according to Statistics Canada records, with energy products and industrial goods and materials accounting for the largest share of the increase...For metal ores, exports of nickel, copper and zinc were particularly robust as strong Asian demand continued to be a factor. In contrast, nickel and alloys declined for the fifth time since peaking in June. - more

  A billion dollar Chinese nickel mine project in Papua New Guinea has come under fire over plans to dump slurry waste into the pristine Astrolabe Bay. - more

  Baltic Dry Index suffers worst single day and worst week since index began in 1985. Here is a chart by UBS we found in Chinese media

  A stainless steel products company is receiving nearly $3 million in state loans and incentives for an expansion promising new jobs for Bradford and McKean County. - more

  Duferco predicts a period of lower prices & weaker demand as a result of delayed reaction to the credit crunch. The global steel industry faces the possibility of its first prolonged slowdown since 2001 in the second half of the year, according to the head of Duferco, the world's biggest steel trading company. - more

  When communist rebels attacked a mining camp in the southern Philippines two weeks ago, foreign executives grimaced -- the second such incident in three months showed one of their worst fears coming true. - more

  Recently listed mining firm Oriental Peninsula Resources Group yesterday welcomed President Arroyo’s call for the aggressive promotion of the local mining industry as among the measures to cushion the impact of a weak dollar and rising oil prices on the economy. - 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 $.07/lb .
  • Bloomberg - more
  • Financial Times - more
  • Forbes - more

  World Bureau of Metal Statistics - January to November 2007 Metal Balances - pdf here

  Reliance Money Commodities Insight - pdf here

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

  The Australian press has reported that China's lead negotiator Baosteel has halted annual price talks with major iron ore suppliers BHP Billiton Ltd, Rio Tinto and Vale saying the miners' price demands are too high. - more

  Copyright/courtesy Dow Jones - "LME base metals will be watching the release of US December industrial production figures due later in the session, says JP Morgan analyst Michael Jansen. Says a softer industrial production environment is weighing on the base metals complex."...."Global growth sentiment has deteriorated sharply in the past 24 hours and this is weighing heavily on the LME base metal complex with further falls expected as a result, says JP Morgan analyst Michael Jansen."...."LME base metals trade lower following the stock markets' falls, and it will take a change in sentiment for the metals to reverse losses, says Triland's Michael Khosrowpour."

  Chinese firms are cutting imports of refined nickel on an annual basis in 2008, and will instead rely on material left over from last year or gamble on falling prices, industry sources said on Wednesday. - more

  A couple of poorly translated Chinese articles, but each contain a few nuggets.... including one confirming our warning of possible Chinese "surplus" stainless steel production capacity - here and here

  Brazilian miner Vale has cancelled about 5 million tonnes of iron ore shipments to China in the first quarter, causing freight rates to plummet but supporting spot iron ore prices as talks over term prices continue, traders said on Wednesday. - more

  Brazilian President Luiz Inacio Lula da Silva offered Cuba lots of credit and commitment to help explore for oil in the Gulf of Mexico Tuesday. - more

  Courtesy AISI - "In the week ending January 12, 2008, domestic raw steel production was 2,050,000 net tons while the capability utilization rate was 85.9 percent. Production was 1,877,000 tons in the week ending January 12, 2007, while the capability utilization then was 78.2 percent. The current week production represents a 9.2 percent increase from the same period in the previous year. Production for the week ending January 12, 2008 is up 1.1 percent from the previous week ending January 5, 2008 when production was 2,027,000 tons and the rate of capability utilization was 85.0 percent."

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 90 tons = 46,602 tonnes (2.85% - 1326 tonnes cancelled warrants/ 45,276 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 247000-252000 RMB/t, minus 3000   (charts)
Tuesday, January 15
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.88/lb 3 month buyer - $13.02/lb (8.68% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 318 to 7,336. (chart) (from Financial Times yesterday - "The Baltic Dry Index, a gauge of freight cost for raw commodities such as iron ore, coal and grains, has suffered its biggest two-day absolute fall since records started in 1985....The index has fallen by about 30 per cent since it hit an all-time high of 11,039 points last November. Analysts hesitate to interpret the fall as a bad omen for the world economy. They still forecast prices to remain substantially higher than the 2,000 level which was prevalent during the 1980s and 1990s.")
  • LME nickel inventories - plus 60 tonnes into Gothenburg, Sweden warehouse, minus 168 tonnes from Rotterdam, Netherlands warehouse, minus 36 tonnes from Singapore warehouse, minus 72 tonnes from Liverpool, England warehouse
  • Lloyd's List, which has been continuously published since 1734, carried a story yesterday, referring to the plummeting Baltic Dry index as a 'bloodbath'. The headline's in the media on Friday of last week, read "The biggest one day drop since records began in 1985". The same headline was posted again on Monday, after the index fell another 384 points. Others proclaimed it was the largest single two day drop in its history. Depending on what the figures will read, tomorrow's headlines could possibly read "BDI's suffers its worst week ever". Nickel spent the day in the red, with its biggest fall coming in late afternoon trading. Three month nickel ended the day at $12.88/lb ($28,400/tonne)
  • Closing Metals Report - more

  Behre Dolbear Global Mining News - pdf here

  ASA (American Supply Association) Materials Market Digest - pdf here

  Nickel was in a surplus of 94,100 tons in the first 11 months of 2007, the International Nickel Study Group reported today. According to the group, production rose 5.1%to 1.3 million tons and consumption dropped 5.8% to 1.21 million tons.

  Copyright/courtesy Dow Jones - "Base metals see renewed pressure into the afternoon session after lower-than-expected US data compounds bearish sentiment following large writedowns from Citigroup, says a trader. "Overnight markets got hit in China; zinc was limit down and copper sold on the back of that, triggering stops from dealers who were long in London," he says. "This morning...saw stocks hit and all base (metals) got hit by some CTA selling, and are not recovering at all."

  Copyright/courtesy Bloomberg - "Hyundai Steel Co., South Korea's second-largest steelmaker, dropped the most in five months in Seoul trading after brokerages cut fourth-quarter profit estimates....Posco, Asia's biggest steelmaker by market value, last week posted a larger-than-estimated drop in fourth-quarter profit because of slowing demand for stainless steel from makers of appliances and builders." (we posted some stats from the Appliance Magazine last month, but it did not break down the figures so that we could decipher how bad the stainless steel appliance business might get hit by the sub prime debacle. This is the first time we have found something in  print that backs up our theory.)

  The Cuban nickel industry surpassed tourism as the country's top foreign exchange earner for the first time in 2007, an economic commentator said on state-run television on Tuesday. - more

  Prime Minister Sir Michael Somare has allegedly refused to accept a Lutheran Church-produced environmental study on possible pollution from the Chinese-operated Ramu nickel mine. - more

  (from an investor oriented report, but provides some interesting info reference 'pig nickel') Hoodless Brennan report - "Direct shipping ores (DSO) have become a significant factor in the nickel market....Chinese metallurgical plants have developed techniques to produce a nickeliferous pig iron from DSO; this nickeliferous pig iron can in turn be converted into a low quality stainless steel. Their technology has moved on such that higher quality stainless steels can now be produced.....DSO's are however very price and grade sensitive. DSO pricing is a matter of negotiation between buyer and seller. Rusina Mining (RMLA) quotes a pricing mechanism whereby the grade of nickel is multiplied by the current nickel price. Hence at US$25,000/t, a DSO grading 1% nickel would sell for $25/t, whereas 1.5% nickel would retail for $37.50/t....Metals Exploration (MTL) recently presented the following table for DSO's grading a minimum 1.5% nickel. ($20,000/t = $36/t... .25,000/t = $45/t....$30,000/t = $54/t) Recent low prices for nickel have been compounded by increased shipping rates, as these DSO gross revenues above are pretransportation costs. If one deducts transportation costs of up to $20/t, one can further see the dependency on firm nickel prices." (source)

  China has shut down more than 6 percent of the power generating capacity in its southern provinces because of a coal shortage, with the region bracing for the worst electricity shortage in at least five years. - more  (could this be the beginning of a "pig nickel trickle pickle?") Thanks CO

  The London Metal Exchange still intends to explore the option of introducing contracts in minor metals, including cobalt and molybdenum, having announced its intention not to proceed with magnesium. - more

  Stainless Steel Sheet and Strip in Coils from the Republic of Korea: Final Results of Countervailing Duty Administrative Review - 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 $.20/lb . Gold and platinum are up, but other precious and all base metals are currently down.
  • Bloomberg - more

  Reliance Money Market Report - pdf here

  TD Bank Weekly Commodity Price Report - pdf here

  Rand Merchant Bank Base Metal Weekly - pdf here

  Copyright/courtesy Dow Jones - "A further fall in the Baltic Freight Index, a barometer of global freight rates, could be a sign of falling metals demand and an indicator of an upcoming recession, says analyst Robin Bhar of UBS. Notes the index suffered its largest one-day fall on Friday since records began in 1985. "The BFI appears to be more of a coincident rather than leading indicator and base metals have already fallen quite sharply; but a further sharp fall in the BFI could signal recession and weakening demand," he says."

  China's apparent refined nickel consumption in Jan-Nov reached 183.5 kt, up 15.5% y-o-y. It included refined output of 105.7 kt, up 14.9% y-o-y, and net refined import of 77.8 kt, up 16.3% y-o-y. - more

  Philippines nickel-ore shipments to China, the biggest producer of stainless steel, nearly halved in December as prices of refined nickel dropped, reducing the appeal of the cheaper alternative raw material. - more

  Britain's Elementis, the world's biggest producer of chromium chemicals, said on Friday it raised its prices because of rising raw material and energy costs. - more (thanks CO)

  Russia exported 226,200 metric tons of nickel in January-November 2007, 5.4% less than in the corresponding period in 2006, the federal customs service reported Tuesday. - more

  Papua New Guinea's Lutheran Church has petitioned prime minister Michael Somare to consider the harmful impact on the environment by tailings from the Ramu Nickel mine in Madang province. - more

  The gold, silver and copper for the medals the winners will be wearing around their necks at the Beijing Olympics this summer was handed over to the Games organizers Tuesday in Shanghai. - more

  The Canadian International Trade Tribunal, an independent quasi-judicial body, has lifted anti-dumping duties on hot-rolled steel plate from South Africa and Russia, saying they aren't likely to harm Canadian steel producers. - more

  Previously published

  • Worldwide consumption of nickel for 2007, according to an INSG report, would total around 1,350,000 tonnes (3.6% lower than 2006 - 1.4 million tonnes in 2006), with world production of refined nickel reaching 1,470,000 tonnes (8% higher than 2006 - 1.36 million in 2006).
  • Antaike predicted last October, that China would consume about 315,000 tonnes of nickel in 2007(22.2% higher than 2006). Of this, Antaike forecast nearly 30% of this total would come from pig nickel production (90,000 tonnes).
  • MEPS estimates 2007 stainless steel production would reach 27.5 million tonnes (2.5% lower than 2006). It forecast global stainless steel output rising to 29 million tonnes in 2008.
  • And as a reminder of  the year that was, here are a few headlines from Purchasing Magazine.... Sept 6, 2006 "Nickel forecast to crash in ‘07"....Jan 18, 2007 "Metals prices will drop 10% this year"...March 12, 2007 "Nickel prices rise to another all-time high"....March 28, 2007 "Nickel rationing may be needed in 2008"...April 27,2007 "Nickel bull looks at $25/lb" ....June 13, 2007 "Nickel prices drop on demand slump"...Aug 15, 2007 "Nickel prices decline disrupts stainless steel market"...Sept 5, 2007 "Nickel prices dip under $13/lb on LME"....Nov 15, 2007 "Nickel: Big drop expected for 2008 prices as world market goes into surplus" (and here we go again)

  The price of copper has tripled in five years. Zinc has doubled. Wheat and soybeans rose 70 percent in 2007. Futures prices of crude oil, gold, silver, lead, uranium, cattle, cocoa and corn are all at or near records. - more

  China is starting to gain control of its turbocharged economy, just as a U.S. slowdown raises the risks of doing so. - more (thanks CO)

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 216 tons = 46,692 tonnes (2.87% - 1338 tonnes cancelled warrants/ 45,354 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 250000-255000 RMB/t, plus 3000  (charts)
Monday, January 14
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $13.02/lb 3 month buyer - $13.15/lb (10.4% lower than 12/31/07) (chart)
  • Baltic Dry Index - minus 295 to 7654. (chart) (31% lower than its all time high last year)
  • LME nickel inventories - minus 474 tonnes from Rotterdam, Netherlands warehouse, minus 66 tonnes from Singapore warehouse, minus 72 tonnes from Liverpool, England warehouse, minus 24 tonnes from Helsingborg, Sweden warehouse.
  • Inventories of nickel stocked in LME warehouses have taken an interesting twist in the last few days. From the last 4 business day, only 84 tonnes have been received into any of the accredited warehouses, and that was 96 tonnes into the US. In the same period, 1,260 tonnes have been taken from European warehouses, and 84 tonnes from Asian warehouses. This doesn't say much for the North American or Asian markets for demand, but it gives a clue that European markets are recovering.  Bloomberg reports "``Mills in Europe said they are fully booked in January and February and some through March,'' Davidson said (Vanessa Davidson, research manager for CRU's special steels and alloys division). So-called lead times, the period needed to make and ship goods after receiving orders, are about 10 weeks in Europe, she said. Typically mills take four to six weeks to fulfill customer orders and lead times above that suggest there is a backlog." CRU forecasted today that worldwide stainless steel production will return with a bang this year (article below). With this type of news floating around, and a declining day for the U.S. dollar, it was not surprising to see nickel trading in the green today. Three month nickel ended the days trading at $13.27/lb ($29,250/tonne)
  • Closing Metals Report - more

  Stainless-steel production will grow as much as eight times faster this year than in 2007 as steel mills replenish stockpiles, according to research group CRU. - more

  Copyright/courtesy Dow Jones - "Spot gold's break above $900/oz "spooked" shorts to cover early in the session, a London-based trader said, adding if gold breaks above $1,000/oz that could aid in pushing base metals higher. But analysts said base metals are expected to more closely follow U.S. economic indicators for the time being and there is a slew of data scheduled for this week that could weigh on prices....Even though base metals may still benefit from further temporary gains on key breaks in gold prices, investors are expected to refocus their attention on deteriorating fundamentals as base metals remain more correlated with poor economic data, particularly from the U.S., rather than record high gold metal prices, said Barclays Capital analyst Gayle Berry.....And although industrial metals prices may struggle in the first half of 2008 against U.S. economic jitters, if the world continues to realize sustainable growth, and particularly as long as developing markets make up an increasingly larger proportion of that growth, some of the industrial metals may make a recovery during the year, analyst Michael Lewis at Deutsche Bank said."

  China media excerpts

  • China's apparent refined nickel consumption in Jan-Nov reached 183.5 kt, up 15.5% year on year. It included refined output of 105.7 kt, up 14.9% year on year, and net refined import of 77.8 kt, up 16.3% year on year.
  • Sichuan Enterprise and Philippine HPT industrial corporation invest $300 million US dollars in Philippine Palawan province for nickel production.
  • Pohang steel and iron association president Li Gui Ze indicated that, "we anticipate the stainless steel market will change for the better in February."

  Aluminum, copper, zinc and nickel forecasts for this year were reduced by Macquarie Group Ltd. and platinum estimates were increased. - more

  Recap from last week - "Venezuela President Hugo Chavez has struck again. Since taking office, Chavez has ruffled business feathers worldwide, by seizing and nationalizing foreign owned enterprises, within his country's borders. Last Tuesday, Radio Nacional de Venezuela reported that permits for Anglo American’s largest nickel operation, Loma de Niquel, had been revoked and that the company had 90 days to surrender its 248 hectare concession, as well as all equipment and installations on it, to the government. Loma de Niquel produced 16,600 tonnes of nickel in 2006. Anglo has issued no official comment."

  Consolidation among global steel and mining giants could speed up the pace of deals in the Chinese steel industry, making big acquirers as well as their potential targets a good bet for stock investors, analysts say. - 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 $.10/lb . Market has been in the green from the bell this morning, on news that LME warehouse inventories continue to fall. If inventory 'departures' are any clue, then European stainless steel producers could be getting busier.
  • Bloomberg - more

  Copyright/courtesy Dow  Jones - "If LME nickel inventory drops continue, prices could rise further, says Gayle Berry of Barclays Capital. LME nickel inventories fell by 636 metric tons Monday after smaller drops last week. Berry adds that ultimately nickel pickup will depend on a rise in stainless steel demand."

  Reliance Money Base Metals Weekly - pdf here

  As nickel price has been rebounding in the last 10 days, Asian stainless steel price has risen by around US$50/mt. - more

  Expectations of higher benchmark iron ore prices are rising with the rumour that Brazilian mining giant Vale has pitched a massive 70 per cent price increase at Chinese negotiators. - more

  SMM Specialist Weekly Forecast - of 35 analysts responding, 24 (69%) felt the price of nickel would rise this week, with the remaining 11 (31%) forecasting teh price of nickel would stay about the same as last week.

  The Department of Trade and Industry said the Philippines should prepare for a surge of mining-related investments this year. Trade Undersecretary Elmer C. Hernandez said mining will be the biggest investment story this year on the back of the appreciating value of metals. - more

  When communist rebels attacked a mining camp in the southern Philippines two weeks ago, foreign executives grimaced -- the second such incident in three months showed one of their worst fears coming true. - more

  Platts reported that freight rates for iron ore cargoes originating in the Atlantic have fallen sharply this week as more ships have become available globally on the spot market that were previously tied up in port congestion. - more

  When it comes to the resources boom, analysts say China will have more impact than a US slowdown, writes Felicity Williams. Surging global demand for raw materials has stretched Australian miners to the limit and delivered the nation unprecedented economic prosperity. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 636 tons = 46,908 tonnes (2.67% - 1254 tonnes cancelled warrants/ 45,654 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 247000-252000 RMB/t, minus 1000   (charts)
Weekend Review, January 12 & 13
  The London Baltic Exchange's chief dry sea freight index, which gauges the strength of the global seaborne dry commodities trade, sank to a 3 month low on a seasonal downturn and on fears of recession. - more

  It is reported that domestic construction steel price has held steady in the wake of the New Year with no drastic ups and downs across the country. - more

  It is reported that National Development and Reform Committee signed responsibility letters with 18 provinces including Heilongjiang province. According to the requirements that Heilongjiang province must eliminate 150,000 tonnes of iron, 580,000 tonnes of steel in these three years. - more

  Courtesy Dow Jones - "UPS Inc.'s (UPS) over-the-road heavy freight division will raise its general rate an average of 5.4% on noncontractual shipments in the U.S. and Canada. The increase goes into effect Feb. 4 and applies to minimum-charge less-than- truckload and truckload rates....Last month, FedEx Corp. (FDX) said its freight segment will implement a 5.5% general rate increase, effective Jan. 14, and its long-haul less-than-truckload business will impose a similar increase for its general rates. The rate increases for the Memphis, Tenn., transportation company's FedEx freight and FedEx National LTL businesses will apply to interstate and intrastate traffic and certain shipments between the U.S. and Mexico and Canada."

  Takeover target Allegiance Mining was buoyed yesterday by its largest shareholder, Chinese nickel giant Jinchuan, strongly backing the board in the face of a hostile bid from zinc giant Zinifex. - more

  Philippine police and troops will step up security at Xstrata Plc's planned $2 billion copper and gold mine after a New Year's day attack by rebels highlighted the risks for overseas companies in the Southeast Asian country. - more

  The M. K. Morse Company has developed a new 14" (356mm) circular saw blade engineered for cutting stainless steel. - more

  Reliance Money Report - pdf here

  Copyright/courtesy Dow Jones - "Lehman Brothers sees '08 LME nickel price average at $13 per pound ($28,652/metric ton), and above $10/pound per year to 2010. Expects stainless inventory destocking to end this year, nickel demand to rebound. "There are signs already that inventory destocking in the US and Europe has come to an end, although stainless inventories in China are still at a high level." Sees nickel pig iron production at 90,000 tons in a 1.4 million ton market in '07, which could rise by 30,000-50,000 tons this year. High cost of pig iron production seen supporting nickel prices at at least $11/pound. A quick supply response from this sector should cap nickel upside."

  London Metal Exchange nickel prices fell back with a bang last year and although demand in the stainless steel sector, which absorbs 70% of global nickel production, may be returning nickel won't make runaway gains in 2008, analysts say. - more

  Desjardins Securities - Commodity Trends - pdf here

  Brook Hunt - "Cash nickel prices increased during the first week of November and reached a peak on the 12th and 14th. Thereafter, prices decreased to a low of on the 28th." - more

  Citigroup, in its Commodity Heap report published Friday, states it remains negative on nickel for the following reasons...

  • Stainless steel producers in the US, China, Korea and Japan have cut production forecasts as much as 30% for the first quarter 2008.
  • Low or no nickel containing stainless steel alloys have made headway against the nickel containing 300 series. The success of these low nickel alloys suggests some permanent substitution of high nickel alloys.
  • Merchant premia continue to slide further evidence of demand weakness.
  • LME stocks continue to rise and are now at the highest level in 8 years
  • Supply from Goro and Ravensthorpe is looming. Nickel in pig supply is profitable above $8/lb and improved technology allows this to supply the 300 series market (previously was restricted to 200 series).

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

  U.S. nickel exports fell 80.4% in November from the previous month, and was down 74.6% from the previous year, the Commerce Department reported Friday. - more

  U.S. nickel imports rose 5.2% in November from last month, but was down 14.4% from the previous year, the Commerce Department reported Friday. - more

  Chinese steel mills will face greater pressure in the on-going long-term contracted iron ore benchmark price negotiations as Australian miners have postponed recent iron ore deliveries, Vale's iron ore shipments from Brazil have been disrupted since December last year and the Indian government is considering increasing the export tax on iron ore, analysts and officials close to the industry told Interfax today. - more

  Residents in the north end of Garson near Garson Mine are used to daily blasting, dump trucks laden with ore rumbling by on Falconbridge Road, as well as a steady flow of slurry trucks headed to and from the Xstrata Nickel smelter in nearby Falconbridge. - more

  The state has delayed a decision on whether to lease land for a controversial new copper and nickel mine in the Upper Peninsula. - more

  Chinese import and export data for 2007 released by customs  - more

  Mining companies in the Philippines have been advised by the government to up security after communist guerrillas sabotaged a major copper project of global mining outfit Xstrata, an official statement said Saturday. - more

  The US International Trade Commission has determined that revoking the existing countervailing duty order on stainless steel bar from Italy and the antidumping duty orders on this product from France, Germany, Italy, Korea, and the United Kingdom would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. - more

  Brazil's main stock index fell the most in a week, led by Cia. Vale do Rio Doce and Petroleo Brasileiro SA, as prices of nickel and oil slumped on concern a global economic slowdown will crimp demand. - more

  Re-elected to the head of the trade union, Thursday, Sylvain Néa delivered the orientations of the CSTNC for L’year which starts. The topics remain the same ones, but the method will be different. The law, only the law, " of A to Z ". - translated article here (this is big news for Eramet and Vale)

   An appeal regarding a potential chromite mining business in Coos County will be under review by the Oregon Land Use Board of Appeals next week. - more

  National Mining Association Mining Week - pdf here

  Cold Finished Bar Market Update and Outlook for 2008 by Roger Bassett, President & Chief Operating Officer, Plymouth Steel Corp (not stainless but good info) - word file here

  Steel Insights Bureau  - International Long Steel Markets Bullish Trend Continues - pdf here / International Flat Market in December 2007 - pdf here / International Raw Materials : Apprehension over price rise continues - pdf here / Steel Market Fundamentals for January 2008 - pdf here

  When the movements of price for Chinese electrolytic manganese metal in 2007 are traced, an extraordinary fluctuation of the price has come up to the surface as its characteristic. - more

Friday, January 11
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.52/lb 3 month buyer - $12.72/lb (6.8% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 384 to 7,949. (chart)
  • LME nickel inventories - minus 264 tonnes from Rotterdam warehouse, minus 54 tonnes from Liverpool, England warehouse, minus 24 tonnes from Vlissingen, Netherlands warehouse
  • Metals were mixed in London today, with nickel trading in the red for much of the day, although a late day rally nearly put it back into the green. Nickel ended the week lower, remains higher on the year, and is selling around 16% less than where it started last year at. For the week, three month nickel ended trading at $12.98/lb ($28,625/tonne).
  • Closing Metals Report - more (the title - "BASE METALS: To Revert To Fundamentals Next Week" - wanna bet?)
  • And for those of you sick of watching the London Metal Exchange give a new description to market volatility, they are now looking into possibly trading cobalt and molybdenum in the future. Ughh! Have a safe and restful weekend!!  

  Copyright/courtesy Bloomberg - "Commodities will be 'well supported' by rising demand and curbs on supply even as the U.S. economy slows, Goldman Sachs Group Inc. said. ``Supply and demand offsets to the weaker economic backdrop will largely keep supportive fundamentals intact,'' analysts led by Jeffrey Currie wrote in a report today. Any price declines on concerns over economic growth are a ``buying opportunity,'' the bank said....Metals prices have ``already absorbed the bulk of the slowdown'' in the U.S., where a housing recession curbed demand for construction materials, Goldman said in today's report."

  Courtesy Bloomberg - "Shanxi Taigang Stainless Steel Co., China's biggest maker of the metal, will be suspended from trade as the regulator reviews its plan to sell shares. The China Securities Regulatory Commission will assess the plan today, the company, based in northern Shanxi province, said today in a statement to the Shenzhen Stock Exchange. The company plans to sell as many as 350 million yuan-denominated shares to fund the construction of a cold-rolled stainless steel plant.  (apparently they missed our report that China was already suffering from over-production capacity. Or just didn't believe it.)

  According to Russian news service, IATS, Chinese officials have taken further steps to slow the export of molybdenum minerals from China. After raising export duties on January 1st, China has licensed , with quota's, 20 companies who will be allowed to export up to 23,711 tons. Quota's range from a high of 7950 tons for Jinduicheng Molybdenum Co., Ltd, to a low of 223 tons for Jiangsu Fengfeng Tungsten and Molybdenum Materials Co., Ltd.

  The Baltic Dry Index, a measure of shipping costs for commodities, fell the most since 1989 on concern that economic growth in the U.S. and China is slowing. - more

  (reader CO sent this in and worth posting from last fall) ArcelorMittal - Transforming the stainless steel industry, Investor Presentation, Paris, 2007 - pdf here

  Miner Rio Tinto said it has completed the $1.4bn Dampier Port upgrade project in Western Australia on time and budget. - more

  OAO GMK Norilsk Nickel, OAO Severstal and Oleg Deripaska's Basic Element holding company will bid for exploration and mining rights to a Siberian nickel field, Vedomosti said, citing unidentified officials at the companies. - more

  AL 201HPTM (UNS S20100) alloy: a high-performance, lower-nickel alternative to 300 series alloys - pdf here

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

  • Indications at 7:50 am CST show 3 month nickel selling down by $.63/lb .  LME stores nickel inventories slip into the negative column on the year, with today's numbers lower than 1/2/08
  • Bloomberg - more

  (quote) "High net worth investors should be looking at softs, liquefied natural gas and selective metals such as nickel to shine within commodities this year, wealth managers at Merrill Lynch said on Thursday....Merrill forecasts nickel will rise 27.8 percent to around $37,000 per tonne and zinc 12.4 percent to $2,800 per tonne. Nickel would benefit from renewed Chinese buying after last year's run down in inventories, Dugan said." - source (note - in the Reuters poll published earlier this month, Merrill's forecast of $16.76/lb was the highest)

  Copyright/courtesy Dow Jones - "UBS gives nod to nickel as likely best performer in 2008, warns softening demand growth this year to result in "tempered performance" for base metals, with "strong" likelihood of weakness in 1H08..... Says more bullish position on nickel due to its rising production costs, while nickel traditionally responds faster to recoveries in economic activity, which UBS foresees in 2H08. Maintains average cash nickel price forecast for 2008 at $29,211/ton..."

  UBS Securities Canada Inc. has lowered its forecast for base metal prices this year by between 8 per cent and 23 per cent, while at the same time it has raised its prediction for gold. - more

  (excerpt) "He (Cochilco Executive Vice President Eduardo Titelman) said Cochilco estimated molybdenum production in Chile to fall in 2008 to 40,000 tonnes, from an estimated 44,500 tonnes in 2007." - source

  2007 - Review of random China stainless steel prices (y/ton) (courtesy cssm and umetal)

  • 304/2B 2.0*1219 Cold Roll SS Plates from TISCO to Foshan, China - Jan 11 - 34,800 /  Feb 1 - 36,800 / Mar 9 - 38,100 / Apr 9 - 41,300 / May 8 - 43,200 / Jun 11 - 41,800 / July 9 - 34,400 / Aug 10 - 28,500 / Sept 11 - 33,400 / Oct 9 - 34,600 / Nov 9 - 32,100 / Dec - 30,800 / and this week, Jan 9, 2008 - 32,500 (chart)
  • 304/No.1 Style 3 Lianzhong acid cleaned from BaoSteel to Foshan, China - Jan 11 - 32,000 / Feb 1 - 33,500 / Mar 9 - 35,500 / Apr 9 - 40,500 / May 8 - 40,500 / Jun 11 - 38,900 / July 9 - 33,800 / Aug 10 - 28,800 / Sept 11 - 32,300 / Oct 9 - 32,300 / Nov 9 - 29,100 / Dec 29,800 / and this week, Jan 9, 2008 - 30,300  (chart)
  • Average price of LME nickel (courtesy AK Steel) Jan - $16.70/lb / Feb - $18.68/lb / Mar - $21.01/lb / Apr - $22.80/lb / May - $23.67/lb / June - $18.92/lb / July - $15.16/lb / Aug - $12.54/lb / Sept - $13.40/lb / Oct - $14.09/lb / Nov -$13.88/b / Dec - 11.79/lb  (chart)
  • Chart of laterite ore import prices into China (for production of pig nickel) - image here

  Courtesy Vedomosti - "Russian metal giant Norilsk Nickel could increase its production by 50 percent by 2016 if the company won a tender for rights to develop a huge nickel field in Siberia's Irkutsk region set for March 13, an analyst forecasts."

  The global steel industry faces the possibility of its first prolonged slowdown since 2001 in the second half of the year, according to the head of Duferco, the world's biggest steel trading company. - more

  An inter-agency panel of the Philippine government vowed on Thursday to prevent attacks on mining projects but rejected a proposal to set up a special military unit to protect mines. - more

  The Philippines ' exports earnings from mineral products from January to November 2007 rose by 17.19 percent to $2.26 billion from only $1.92 billion during the same period in 2006, figures of the the National Statistics Office show. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 342 tons = 47,544 tonnes (3.91% - 1860 tonnes cancelled warrants/ 45,684 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 248000-253000 RMB/t, minus 3500   (charts)
Thursday, January 10
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.77/lb 3 month buyer - 12.93$/lb (8.56% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 288 to 8,333. (chart)
  • LME nickel inventories - minus 84 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore warehouse, minus 48 tonnes from Liverpool, England warehouse
  • The Business Week article below gives a good example of the debate going on among analysts about what a US recession may or may not have on commodity prices this year. Nickel started trading up by around $400/tonne this morning, but spent the rest of the day in a tumble down. Three month nickel ended the day at $13.02/lb   ($28,700/tonne) 
  • Closing Metals Report - more
  • Monday night in Southwest Missouri - article and maps here The 26 mile long F3 is the one that passed by us.

  Copyright/courtesy Business Week - "Globalization has also diluted the impact of a U.S. recession on commodity prices, Duke University professor Cam Harvey notes. "Extreme caution needs to be exercised in comparing historical growth episodes," Harvey says. "The strong correlation between the commodity prices and the U.S. business cycle has been diminished by the rise of key emerging markets." - "Once we actually get into a recession and the numbers start to look really weak, commodities will be vulnerable," says Edward Meir, a commodities analyst at MF Global (MF) in Chicago. Much of China's growth depends on demand from U.S. consumers, too, he says. "Our economy is seven times bigger than China's, and we have a $200 billion trade deficit with them," Meir says. "Everything is still mainly focused on the U.S." - more

  (quote from article) "In practice, nationalistic-induced emotions are powerful, but irrelevant. What really counts is share price. The only issue that should concern us is the share price of the companies affected." - more here (we take issue with certain points this respected author makes, but maybe another day.)

  "The outlook for the global coking coal markets" presentation given 13-14 November, 2007 by James Ley - Consultant to the International Steel Industry Forum in Moscow - pdf here

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

  • Indications at 7:50 am CST show 3 month nickel selling down by $.49/lb . Market opened and traded in the green early, but its been downhill ever since.
  • CNN - more

  Reliance Money research Report - pdf here

  Copyright/courtesy Dow Jones - "Some signs of demand from stainless steel consumers are showing, but this isn't likely to be reflected in nickel prices until the current destocking phase has wound up and the global economy picks up in the 2H, says a London trader. "You'll probably see the price jump around for now." With LME stocks still just below 50,000 tons "you're looking at at a week and a half of global consumption, it's still not a lot," he says. Sees nickel prices building a base at $26,000/ton."

  Aluminum, copper and zinc forecasts for this year were cut by UBS AG analysts, who cited ``softening demand growth'' for industrial metals. - more

  Courtesy Rusmet - "According to the country's press agency, in the eight largest cities, after a long lasting reduction, the price of stainless roll CR 304 2 2 mm has increased. The average price of January 4 was 32325 Yuan/ton ($ 4449 /t), which is 601 Yuan per tonne higher than the average price of December."

  South Korea's Hyundai Steel has announced plans to raise production levels of cold rolled stainless steel to 160,000 tonnes in 2008, from 140,000 in 2007.

  Top 10 accomplishments of the Chinese stainless steel industry in 2007

  • Stainless steel production in China to exceed 7 million tons, ranking the country first in the world, and attaining a self-sufficiency rate of 70%
  • China's production of ferritic stainless steel products rose to 1.8 million tons, 25% of the country's total stainless steel percent. 5% higher than 2006. Ferritic stainless uses no or very little nickel.
  • New technology instrumental in production of "pig nickel" from low grade laterite ore. It is estimated China imported 14 million tons of ore and produces about 90,000 tonnes of nickel from it.
  • more   (poor translation)

  Apprehensive about dumping of stainless steel by China, the domestic industry has sought more protection from such imports. - more

  MBMI Resources Inc reports that its Philippine subsidiary has completed its first nickel material shipment from the Alpha, Philippines nickel project. Approximately 53,000 wet metric tonnes of nickel material averaging 1.9% Ni/tonne has been loaded and shipped to a Chinese nickel consumer. - more (This little piggy's heading to market, this little piggy called laterite ore. This little piggy's heading to China, where this little piggy will become so much more. And all the Chinese went "he-he-he", all the way home.")

  South Korea's POSCO, the world's fourth-largest steelmaker, said Thursday its operating profit in the fourth quarter fell 20 percent from a year earlier as a drop in stainless steel prices outweighed the impact of its cost-saving efforts. - more

  Trade groups representing U.S. manufacturers and foreign concerns disagreed over a report claiming that the United States lost 1.8 million factory jobs over the past seven years, caused in large part by a Chinese steel industry bolstered by $27.1 billion in energy subsidies. - more (report mentioned in article here)

  China's steel product exports increased 16.59 percent month-on-month in December 2007, after five months of decreasing exports, to reach 4.78 million tons, down 13.9 percent year-on-year, according to preliminary statistics released by the General Administration of Customs today. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 150 tons = 47,886 tonnes (3.11% - 1902 tonnes cancelled warrants/ 45,984net stock level) (charts)
  •   Shanghai Jinchuan nickel - 252000-256000 RMB/t, minus 3000   (charts)
Wednesday, January 9
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $13.02/lb 3 month buyer - $13.20/lb (10.8% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 109 to 8,621. (chart) (unconfirmed)
  • LME nickel inventories - minus 216 tonnes from Rotterdam, Netherlands warehouse, plus 96 tonnes into Baltimore, MD, USA warehouse
  • Another roller coaster ride day. Markets started off in the red, bounced into the green, settled back down, rose, fell, rose again, and finally fell back into the red zone. Except for the precious metal, platinum, most traded metals got beat on today, either ending or still trading in the red. Metals are benefiting from the "r" word being used more frequently in reference to the US market outlook. Stainless steel production is, for the most part, flat. China appears to be suffering from a slowdown or, as we tend to think, over production capacity, which makes things look a little gloomier than they really are. With new import/export duties reflecting that country wants to import more and export less of the base metals it has, if and when the market turns around, we could see China importing more than it has in years past. That is, if the price of nickel will ever drop to a level that producers find making pig nickel unprofitable. That industry is singing the blues in China media, due to increased governmental pressure on pollution controls and electricity allocation. Something also to keep in mind about the Chinese market this year, or at least the first three quarters of it. We have noticed the government shutting down mills, or steel furnaces, in the area surrounding the Olympic arena. Pollution is a very big concern in China, and the government does not want their best opportunity to show off to the world, to be smogged in. Not sure how big of an impact this might have on stainless steel production in China, but its worth keeping an eye on. Three month nickel ended todays trading at $13.38/lb ($29,500/tonne)      
  • Closing Metals Report - more quote - "Another reason that makes us cautious about the metals advance is the wobbly state of the U.S. stock market," said MF Global analyst Edward Meir. "Although commodities and stocks seem to be going their own way for the time being, we do not think the two will be able to maintain their divergent paths indefinitely."

  Copyright/courtesy Dow Jones - "A bearish economic outlook suggests the downtrend for base metals will continue, says UBS analyst Robin Bhar. Notes DJ-AIG reweighting is supporting LME zinc prices, nickel, aluminium and to a small extent, copper. New year fund allocation also keeps prices afloat. "Once this speculative and investment interest has subsided, however, physical demand will be needed to maintain prices at current levels," he says. Adds, "we have doubts that current price strength will be sustained in an environment of slowing growth and most metals are forecasted to move into surplus this year."

  Courtesy Forbes - "Nickel's rise since the start of the year has been supported by expectations for higher stainless steel production levels and the reweighing of index fund portfolios. Nickel has been under pressure since hitting a record of nearly 52,000 usd per tonne last May, losing almost 45 pct in value because of demand destruction and stainless steel producers searching for cheaper alternatives."

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

  • Indications at 7:50 am CST show 3 month nickel selling down by $.45/lb . Volatility haas been incredible over the last few days. If you can afford to wait on the sideline, you are probably better off. With nickel up and down in price by as much as $1-2000/tonne per day lately, buying nickel right could prove to be a huge gamble - even more so than it has been over the last 6 months. Metals were green across the board yesterday, base and precious. Today they are all in the red.  
  • Bloomberg - more

  Reliance Money Market Report - pdf here

  Tight supplies and a recovery in demand from the key stainless steel sector will help to underpin global nickel prices in the first half of 2008, analysts say. - more

  Major Chinese stainless steel producer Taiyuan Iron & Steel (Tisco) has announced a price decrease for products rolled of austenitic stainless steel by $344/ton

  Jinchuan Group, China's largest producer of nickel, cobalt and platinum group metals and a major producer of copper, has entered into a strategic agreement to acquire an 11 percent stake in its Australian copper and nickel supplier Fox Resources Ltd., Fox Resources announced today. - more

  London-based miner Anglo American's (LSE: AAL) Venezuelan nickel concessions have been revoked by the country's mining ministry (Mibam) on supposed contract violations, national information service Radio Nacional de Venezuela (RNV) reported. - more

  Courtesy AISI - "In the week ending January 5, 2008, domestic raw steel production was 2,027,000 net tons while the capability utilization rate was 85.0 percent. Production was 1,877,000 tons in the week ending January 5, 2007, while the capability utilization then was 78.2 percent. The current week production represents a 7.9 percent increase from the same period in the previous year. Production for the week ending January 5, 2008 is down 0.6 percent from the previous week ending December 29, 2007 when production was 2,041,000 tons and the rate of capability utilization was 85.6 percent."

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 120 tons = 48,036 tonnes (3.92% - 1884 tonnes cancelled warrants/ 46,152 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 255000-259000 RMB/t, plus 8000   (charts)
Tuesday, January 8
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $13.09/lb 3 month buyer - $13.21/lb (10.9% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 2 to 8730. (chart)
  • LME nickel inventories - plus 6 tonnes into Rotterdam, Netherlands warehouse, minus 36 tonnes from Rotterdam warehouse, plus 60 tonnes into Gothenburg, Sweden warehouse
  • It was one of those trading days where you did a double take, then made sure you didn't miss some major news item that might have affected trading. And no, there was no news. Not even a whisper. No, there was no announcement that stainless steel producers were suddenly falling all over themselves to return to full production. Nor were there any reports of strikes, fires, explosions, terrorist bombing's, or of a barge sinking at any of the world's nickel mines. We couldn't even find a report that scientists might possibly have discovered that the so called 'pig-nickel' causes some new viral skin disease to those who come in contact with it. In other words, there was no change in the market fundamentals. None - zip - nada. With that in mind, fund managers, the guys controlling your retirement funds, couldn't seem to find enough nickel to buy today. Three month nickel ended at $13.56/lb ($29,890/tonne) up $1,690/tonne for the day.    
  • Closing Metals Report - more

  Copyright/courtesy Bloomberg - "Copper and nickel rose in London as investment trusts including the Dow Jones-AIG Commodity Index Fund increased purchases of industrial metals. ...Investments in funds and other products tracking commodity indexes will rise to $150 billion this month, from $110 billion last year, according to Standard & Poor's. Dow Jones Indexes and Lehman Brothers Holdings Inc. said they boosted industrial- metals in their commodity funds at the start of the year. ``There's potential for metals to go higher,'' said Andy McClelland, head of industrial metals at Sucden (U.K.) Ltd. in London. Investors don't ``want to get caught short'' as index funds shift in favor of metals, he said."

  Spot prices for iron ore in China, the world's biggest buyer of the steelmaking raw material, may test a record after Cia. Vale do Rio Doce said one of its Brazilian ports will halt shipments until February, mills and traders said. - more

  Steel Consumption to Rise by 28% to 2011 - The appetite for steel continues unabated. World steel demand is forecast to reach over 1.45 million tonnes in 2011. - more

  BSSA Workshop: An Introduction to Stainless Steel - NMC, West Bromwich (Jan 23rd) - info here

  Wonder where all the rock goes? These reports might help - "Characterization of the Stocks and Flows of Nickel" (A project of the Enhanced Recycling Program of Action Plan 2000) - pdf here Yale School of Forestry & Environmental Studies - The contemporary Nickel Cycle April 2006 - pdf presentation here UK resource-efficient building materials for a sustainable built environment - pdf here  Yale School of Forestry & Environmental Studies - "Metal Stocks, Flows, and Sustainability" - pdf here  Canary Research Institute for Mining, Environment and Health - "Scrap Mining: An Overview of Metal Recycling in Canada" Oct 2004 - pdf here

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

  • Indications at 7:50 am CST show 3 month nickel selling up by $.26/lb .
  • Bloomberg - more
  • Reuters - more

  Behre Dolbear Global Mining News - pdf here

  TD Bank Weekly Commodity Price Report - pdf here

  Commodity Price Update - pdf here

  China probably imported three times more ferrochrome last year than in 2006 as it used more of the metal in stainless-steel making, said Samancor Chrome Ltd., the world's second-biggest producer. - more (thanks CO)

  Vale announced that during the next few weeks the Itaguaí maritime terminal in the Brazilian state of Rio de Janeiro will stop operations in order to reconstruct its structure damaged in an accident in December 2007. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - plus 30 tons = 48,156 tonnes (3.19% - 1452 tonnes cancelled warrants/ 46,704 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 246000-252000 RMB/t, plus 250   (charts)
Monday, January 7
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.66/lb 3 month buyer - $12.79/lb (7.4% higher than 12/31/07) (chart)
  • Baltic Dry Index - plus 30 to 8732. (chart)
  • LME nickel inventories - plus 390 tonnes into Rotterdam, Netherlands warehouse, minus 24 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore warehouse, minus 6 tonnes from St Louis, Missouri, US warehouse
  • Nickel had another rollercoaster ride day. Lot of up's and down's, but the day ended basically where it started. Not much in the way of news for the day. Researched Chinese media over the weekend for metals news. Markets appear to be generally very soft in stainless steel production and the sale of its primary ingredients. Lot of producers overseas getting nervous. Moly prices could get interesting again, as supply has yet to meet demand, and no with China supply now more expensive, we could see the price for moly oxide rise in the rest of the world. Nickel started the day by climbing up about $650/tonne, then falling back to a gain of only $100/tonne, where the day's official price was published. This was followed by a shot up to nearly a $1000/tonne gain in price, followed by a gradual decline into the red...and then a small recovery into green territory. Three month nickel ended today's trading at $12.79/lb ($28,200/tonne)
  • Closing Metals Report - more

  Copyright/courtesy Reuters - "Another key feature of markets this week will be the re-weighting of commodities indices, commonly-used investment tools. This process could see some of the better-performing metals sold, and contracts that have lost value bought in the expectation prices will rise. "There's a general expectation this will start tomorrow (Tuesday), and maybe there's been some buying ahead of it, but in general things haven't changed much since last week," a trader on the floor of the exchange said. Some metals may be relying on the prospect of rebalancing for support, Standard Bank said. "It will be interesting to see if prices push higher or whether they just stutter along," it said in a note. "Given that the physical market in many of the metals has yet to pick up, and is lagging the investment interest, once the feeding frenzy of the past few days subsides, a downwards correction cannot be ruled out."

  Copyright/courtesy Dow  Jones - "Fundamentals for the nickel market are set to tighten during '08 against renewed stainless steel demand, particularly in Europe and North America, says Deutsche Bank. Expects supply side problems to persist and the substitution risks associated with increased Chinese nickel pig iron production will not become a major threat in '08."

  3 month nickel averaged $16.55/lb in 2007 and $11.01/lb in 2006 (using Citigroup figures)

  AK Steel and Allegheny Ludlum stainless steel surcharges for February have been updated and posted here. Our Excel spreadsheet has been updated with average monthly prices here

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

  • Indications at 7:50 am CST show 3 month nickel selling up by $.02/lb . Earlier this morning, nickel was up nearly $1000/tonne. Afternoon trading has seen most of that gain evaporate.
  • Bloomberg - more
  • Reuters - more

  Haywood Securities - Metals & Mining - pdf here

  SMM Weekly Forecast - of 39 analysts responding, 17 (43%) felt the price of nickel will rise this week, 18 (48%) felt the price would trade in the same price range, and only 4 (10%) felt the price would fall.

  A second batch of 45 Chinese ferroalloy plants shut down their inefficient and outdated production units end of 2007, according to an announcement from the country's National Development and Reform Commission Monday. - more

  POSCO, the world's fourth-largest steelmaker, is expected to report an 11 percent fall in quarterly profit as customers, hoping for a further drop in prices, continue to hold back orders. - more

  Vancouver-listed Tyler Resources Inc. said on Monday it had agreed to be acquired by Jinchuan Group Ltd., China's largest nickel producer, for about C$214 million in cash. - more

  But whether the Chinese are shaping as a counter-bidder to Melbourne-based Zinifex is another question, given that they already have an off-take deal for production from Allegiance's Tasmania Avebury nickel mine. - more

  The Indian steel industry is shining bright. The industry has all the elements that are vital to make any industry successful, from government support and domestic help to high foreign investment. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - plus 342 tons = 48,126 tonnes (2.34% - 1128tonnes cancelled warrants/ 46,998 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 246500-251000 RMB/t, minus 1750   (charts)
Weekend Update, January 5 & 6
  The Russian entrepreneur Alexander Mamut has bought the US blogging website LiveJournal. Its many Russian users are worried that the Kremlin loyalist will use his ownership to censor the blog.....Money is certainly something he's got plenty of...and Forbes, the US financial publication, estimates his personal worth at $950m. His main British operation to date is Aim-listed Oriel Resources, specializing in ferro-chrome and nickel.

  Reliance Money Commodity Research - pdf here

  Base metals market is likely to remain destabilised this week with choppy trade expected from the organised sector players and need-based stocking by small time operators. - more

  Courtesy/copyright Dow Jones -  "Fundamentals for the nickel market are set to tighten during '08 against renewed stainless steel demand, particularly in Europe and North America, says Deutsche Bank. Expects supply side problems to persist and the substitution risks associated with increased Chinese nickel pig iron production will not become a major threat in '08."

  (Getting news from Russia is only slightly easier than China but we stumbled upon this little trinket) 12/17/07 Barents Observer/Finland - "When the Northern Iron Ltd. in 2009 restarts iron ore extraction in the Norwegian Syd-Varanger mines along the border to Russia, it might be with the help of Russian miners.....Mr. Tschudi, who arrived in Kirkenes last Wednesday after having secured the necessary investments for the mining project, believes Russians from the border town of Nikel easily will be able to commute to and from the Syd-Varanger mines. He also does not exclude that Russian mining giant Norilsk Nickel in few years will abandon its plant in the town of Nikel, thus opening up for access to available Russian work force."

  Courtesy Yieh - "According to Venezuela’s government’s information, Aceros del Alba, the newly planned Cuban-Venezuelan stainless steel joint venture has annual capacity of 500,000 tons. This joint venture is going to running by a holding company established by both countries."

  The hiring process has begun for professional positions at ThyssenKrupp Steel and Stainless USA's new $3.7 billion carbon and stainless steel processing facility in Mobile. - more

  National Mining Association Mining Week - pdf here  

  Ukrainian billionaire Gennadiy Bogolyubov on Thursday won control of the hotly-contested Australian manganese miner Consolidated Minerals Ltd, a month after upping the bid to A$1.3 billion ($1.1 billion). - more (thanks CO)

Friday, January 4
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $13.39/lb 3 month buyer - $13.52/lb (13.5% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 54 to 8702. (chart)
  • LME nickel inventories - minus 78 tonnes from Rotterdam, Netherlands warehouse, minus 6 tonnes from Vlissingen, Netherlands warehouse, minus 24 tonnes from Helsingborg, Sweden warehouse
  • We might call the last few days "Nickel on vacation at a ski resort". For the last two days and much of the morning, our little rock was on a gondola, heading up to the peak. Apparently, $30,000/tonne was that peak, because nickel stumbled off the gondola, and without taking a breath, hit the slopes. And while the gondola ride up was fast, gravity is even faster. Employment news out of the US took the wind out of the buyers sails, and even a weaker dollar couldn't puff it back up. While the price of nickel ended yesterday under $29,000/tonne, it eclipsed the $30,000/tonne peak today, and almost fell to $28,000/tonne before traders called it quits and probably headed for the nearest pub. It was not a pretty day, for buyers or sellers. It was like watching investors in a brand new drug company with high hopes of success driving the stock price sky high. Then suddenly finding out that the only drug the company has to market is an anti-depressant for lesbians called "Trimenagain". Ouch! Stainless steel producers, who just yesterday were beating their heads on their desks wondering if the spring of 2007 was back, will now just throw up their arms, scratch their heads in disbelief, and probably head for the nearest pub after work. Nickel producers, who saw nickel go up by 13-1/2% in value in 3 days, watched helplessly as half of that gain evaporated in less than a day. Nickel miners, who get bonus' based on the price their hard work sells for, will probably be heading for the local pub after shift....and find the company brass already there. The morale to the story? Tell the spouse you are going to be home late tonight, and call a cab. Somebody needs to buy a beer for that analyst that predicted January was going to be volatile. Either that or beat him to death for being right. Three month nickel ended the trading day and short week at $12.75/lb ($28,100/tonne)   
  • Closing Metals Report - more
  • This site needs monthly sponsors as Adsense revenues have fallen since November. If you use this site and would like to reach producers, distributors, investors or users of stainless steel or nickel, please consider sponsorship.  
  • Have a safe and restful weekend. Video 1 2

  Copyright/courtesy Dow Jones - "London Metal Exchange copper and nickel continue to gain Friday assisted by commodity index fund re-weighting that goes on at this time of year, but traders and analysts said more bearish macroeconomics are expected to resume pulling prices down after the re-weighting period."...."``Index buying and the new year have seen prices surge,'' David Thurtell, an analyst at BNP Paribas, said today. Thurtell started monitoring commodities in 1999."...."The nickel stockbuild from last year is ``sizeable'' and ``highlights ongoing weakness in stainless steel with a recovery in the first quarter now looking less likely,'' Barclays Capital analysts led by Kevin Norrish said in a weekly report dated yesterday."...."LME nickel is getting a boost from a rise in stainless steel orders from North America and Europe and U.S. dollar weakness, but overall fundamentals remain weak due to large supply, Smith said (Standard Chartered analyst Dan Smith)."

  According to Chinese media, production of thick stainless steel among the seven major Japanese steel producers, grew 5.4% in November over the prior month.  For the first 11 months, production was up 2.2% over 2006.

  According to Chinese media report, South Korea's BNG steel plant produced 270,000 tons of cold rolled stainless steel production in 2007. 60% of this production was in 300 series stainless, 40% was 400 series stainless. Only 6,000 tons of 200 series stainless were produced. 75% of the produced stainless was sold internally, with the remaining 25% exported. With concerns about economic slowdown, as well as possible anti-dumping penalties under review in the EU, BNG plans to concentrate its 2008 export sales into the Southeast Asian market.

  The year 2007 saw China taking centre stage on several fronts - industrial, political and economical. - more

  The Brazilian unit of mining major Anglo American is completing initial studies on a new nickel deposit in northern Brazil's Para state, according to a report Friday by local business daily Valor Economico. - more

  Wary of the holiday season and investor forgetfulness, Tasmanian nickel miner Allegiance Mining has reminded holders that it is still considering Zinifex's $775 million takeover bid, recommending they take no action for now. - more

  We have received a few e-mail's asking about inexpensive ways to determine if a stainless steel is 200 series or 300 series. This question will become more prevalent as more and more 200 series stainless enters the supply chain, especially among scrap yards, who have typically determined 300 series stainless as being non-magnetic. The simple key to identifying 200 series from 300 series will be a simple test for manganese. 200 series stainless has it, 300 stainless doesn't. There are numerous manganese test kits on the market, but they seem to be primarily for testing manganese content in liquid, mostly pool water. We spoke with Koslow Scientific Company in Englewood, NJ, and they currently have a chemical test kit that will identify manganese in stainless. They also advised that they are getting more and more enquiries on this, and are currently working on a less expensive kit to check specifically for manganese. They will advise us when they have it ready for the market, and we will pass the info on. (Also, before we get an e-mail on this, there is an old machinist trick that allows very experienced individuals, i.e. old-timers, to identify different grades of metals by watching the sparks when the part is placed against a grinder. We haven't heard if this works for identifying 200 series stainless yet, but we know it works in helping customers identify if they are getting steel or 400 series stainless steel self drilling screws. Since both usually come coated or plated, and both are magnetic, this simple test can sometimes prove very beneficial.  If anyone out there knows a simple inexpensive test to identify manganese in stainless, let us now, and we will spread the word. And before you start grinding or welding 200 series stainless, you might want to read up on the hazards of manganese dust to your employee's health.)

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

  • Indications at 7:50 am CST show 3 month nickel selling up by another $.43/lb . Three month nickel jumped up this morning and poked thru the $30,000/tonne level, but has since fallen back. In the Bloomberg article below - "Investors in the Dow Jones AIG Commodity Index may buy an additional 3,000 lots of nickel, equal to 18,000 metric tons, RBC Capital Markets said in a report yesterday. That's more than a third of stockpiles tracked by the London Metal Exchange. Nickel's weighting in the index will rise to 2.79 percent from 2.72 percent, Dow Jones said." So, investors in the AIG Commodity Index may own 1/3 of LME nickel inventories. Will they use the nickel for anything? No. Will they ship the nickel out of the LME warehouses? No. Will they sell to the first buyer that comes along - at whatever the LME official price is that day? Yes. So what difference does it make - in the 'real' world? Absolutely none. Once again, any thought of stainless steel producers coming off the sidelines has proven to be incorrect, as the games of trading over shadow any fundamentals.
  • Reuters - more
  • UPI - "World commodity markets hit the roof" - more

  Nickel headed for its biggest weekly gain in almost 18 years in London on speculation investment demand will increase as commodity indexes increase the metal's weighting. - more

  Shanghai copper and zinc jumped by their 4 percent daily limits on Friday, buoyed by rising domestic spot prices, expectations of an eighth weekly fall in Shanghai copper stocks and gains in other commodities. - more

  Nickel futures rose tracking gains in copper and as more funds were allocated to the metal, one of the worst performing commodities of 2007, in global index weightages for this year, analysts said. - more

  courtesy Bloomberg - "``Oil and gold are the two flagship commodities,'' said Brian Hicks, who helps manage $1.5 billion at U.S. Global Investors Inc. in San Antonio. ``With those both hitting new highs, it's drawing a lot of attention to the entire commodity complex. The weakness in the dollar is drawing in financial players. It bodes well for commodities through the year.'....Copper rose 4 percent, nickel surged 6.4 percent and other industrial metals rose. ``That's an indicator that the global economy is performing well and positive for commodities,'' Hicks said."....``There's an allocation toward hard assets,'' said A.C. Moore, who manages the $500 million Dunvegan Growth Fund in Santa Barbara, California. ``Investors are somewhat leery about paper assets.' (source)

  China's consumer spending, blamed for lusterless contribution to the world's fastest-growing economy compared with investment and trade, will hit a record low in more than two decades, despite anticipated higher growth in urban income than that of the aggregate economy, according to experts. - more

  Classification of Stainless Steels.(Tech Notes) - more

  Mining Equities - 2008 Outlook - Patersons - pdf here

  The export price of HMS ferrous scrap in Europe gained 21%, or $60/mt, to a midpoint of $345/mt FOB Rotterdam Thursday, based on transactions reported to Platts. - more

  Courtesy AISI - "In the week ending December 29, 2007, domestic raw steel production was 2,041,000 net tons while the capability utilization rate was 85.6 percent. Production was 1,733,000 tons in the week ending December 29, 2006, while the capability utilization then was 75.0 percent. The current week production represents a 17.7 percent increase from the same period in the previous year. Production for the week ending December 29, 2007 is down 1.9 percent from the previous week ending December 22, 2007 when production was 2,081,000 tons and the rate of capability utilization was 87.2 percent."

  Outlook for the US Steel Market in 2008 - speech here

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 108 tons = 47,784 tonnes (1.39% - 666 tonnes cancelled warrants/ 47,118 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 248000-253000 RMB/t, plus 9000  (charts)
Thursday, January 3

  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.75/lb 3 month buyer - $12.86/lb (7.3% higher than 12/31/07) (chart)
  • Baltic Dry Index - minus 135 to 8,756. (chart)
  • LME nickel inventories - minus 36 tonnes from Rotterdam, Netherlands warehouse, minus 6 tonnes from Singapore warehouse
  • On a day like this, those who buy or use nickel or stainless steel turn to music like this (here). Did we mention stainless steel producers have been looking for some stability in the market ? It didn't happen last year, and this year isn't starting out any different. When we posted our morning update this morning, nickel was up about $900/tonne. It went higher in afternoon trading. It went much higher in late afternoon trading. Inflationary hedge? Upcoming index fund realignment? New fund allocation?  Whatever the reason, the forgotten step-child of the base metals market apparently got invited to the table. And while all metals traded on the LME were up today, nothing was up quite like nickel. Anyone who had been selling nickel short lately is probably very nervous these days. Two weeks ago we were talking about testing support levels. Now we are testing resistance levels. Day two saw nickel trading close at $13.11/lb ($28,900/tonne). We are using $11.91/lb as the ending price for 2007 trading on 3 month nickel. With that in mind, nickel is up 9.2% in its first two days of 2008 trading.     
  • Closing Metals Report - more

  None of the large US stainless steel producers have published their stainless steel surcharges for February 2008 yet. They are forecast to be lower than January's.

  courtesy Minor Metals - Numis Securities reports that the first quarter price for ferro-chrome have been set at $1.21 a pound. This is 21% more than the 4th quarter of 2007 and is a new record high.

  Copyright/courtesy Bloomberg - "Traders are buying raw materials on speculation the Federal Reserve will continue to lower U.S. borrowing costs and spark inflation, said Michael Smith, president of T&K Futures & Options in Port Saint Lucie, Florida." - " An economic slowdown in the U.S. won't lead to a decline in commodity prices, said Evy Hambro, managing director at BlackRock Investment Management Ltd. in London. Hambro's $15 billion World Mining Fund rose the most among Europe's 10 largest stock funds last year. ``You have to look at what's been driving commodity prices for the last few years, and it hasn't been the U.S. economy,'' Hambro said in a television interview. ``Given that the U.S. hasn't driven commodity prices higher, it's not going to contribute much to the downside.'' " - (article)

  The two biggest mining stories of the year in Greater Sudbury were a booming economy and the exploding price of nickel. - more

  Chinese analyst (Yang Guoping?), in 12/28 metals report, puts cost of producing low grade laterite ore ("pig nickel") at 200,000 yuan - or $12.42/lb ($27,383/tonne)

  Out with stainless steel, in with copper? It might be a new hospital trend - not for looks, but for germ-fighting. - more

  (a touch of history) 1957 - Ever since nickel became industrially important in the late 19th century, Canada's giant International Nickel Co. - 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 $.41/lb . Here is an analyst report from 12/31 explaining the nickel market technical outlook - "Momentum studies have turned bullish; will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from over bought level, which is bearish and should support lower prices. The market's short-term trend is positive as the close remains above the 18-day EMA. The downside closing price reversal on the daily chart is somewhat positive." This apparently makes perfect sense to those who engage in the buying and selling of stocks and bonds, and apparently rocks.... but its Greek to us. We still feel its more funds making new annual appropriations that explains the increase in nickel over the last few days.... because the fundamentals have not changed. We give it the "go-figure" explanation.
  • Bloomberg - more
  • Reuters - more

  Reliance Money Commodity Report - pdf here

  The Financial Times reports Xstrata was opening its mining assets to be taken over by multiple suitors. The newspaper reports Vale (formerly CVRD), Xstrata's cross-town rival in Sudbury, might have the inside track. - more

  In December 2007, European stainless steel alloy surcharge stayed between €1,884-1,958/ton, but it went down by €300 to €1,595-1,635/ton in January 2008. - more

  The Indian Ministry of Steel's proposed 10 percent to 15 percent tax on iron ore exports to reserve mineral resources for the development of India's steel industry reported by Indian media yesterday has prompted Chinese analysts to voice concerns over the impact such taxes would have on domestic steel mills. - more

  China's Anshan Municipal Government is awaiting final approval from the central government for its 1.4 million mt/year stainless steel project in Anshan City in the northeastern Liaoning Province, an Anshan Municipal Government official said Thursday. - more

  Communist rebels have warned of more attacks on the facilities of Australian-controlled mining firm Sagittarius Mines Inc. (SMI) in Tampakan, South Cotabato. - more

  Primarily of interest to investors but contains valuable info for others who follow metals -
Presentations to Raw Materials Group 4th Annual Exploration & Mining Investment in November 2007  (use IE browser)
(this has to do mostly with copper, but interesting market dynamic info) video here
(this has to do with iron ore - very intereting) video here
(this has to do with economic commodity pricing models) - video here
other presentations - here

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 48 tons = 47,892 tonnes (1.34% - 642 tonnes cancelled warrants/ 47,250 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 235000-242000 RMB/t, plus 2000 (charts)
Wednesday, January 2
  Afternoon Nickel/Stainless Roundup
  • Official LME nickel closing prices - cash - $12.02/lb 3 month buyer - $12.11/lb (chart)
  • Baltic Dry Index - minus 252 to 8,891. (chart)
  • LME nickel inventories -  minus 6 tonnes from Rotterdam, Netherlands warehouse
  • "Gold rose beyond $850 an ounce in London, breaching the record set more than a quarter-century ago as investors sought to hedge against accelerating inflation and the dollar's decline." Except for tin, base metals traders were in a buying mood today. This was most likely due to hedge funds making new allocations today. The enthusiasm included precious metals, where gold hit an all time high today, after the dollar fell on news that the Institute for Supply Management reported its manufacturing index fell to 47.7. This is the first time in nearly a year with the index falling below 50, and suggests "contraction in the U.S. factory sector". In other words, bad economic news and traders took the old Prudential Insurance advice to "buy a piece of the rock". The World Bank reported that the US is now number two in manufacturing behind China. The question everyone should be asking, is how dependent is China on the U.S. economy. With elections coming up in the US, and all the negative propaganda the parties will be throwing at each other, coming on the back of a slowing economy, we are looking at a dicey year economically.  How this will effect the rest of the world, will tell us a lot about what stainless and nickel markets will do this year. Nickel trading started out on the plus side from the bell, but didn't do much for much of the morning. Rose again in the afternoon, but backtracked later. Most of the rise in price came in late kerb trading, with prices rising to near $27,250/tonne. Markets then backed off slightly, before trading ended. Three month nickel closed the first trading day of 2008 at $12.34/lb ($27,200/tonne)
  • Closing Metals Report - more

  Reliance Money Commodities Insight - pdf here

  Despite breathless media reports about the World Bank revising downward its estimate for the size of China's economy, what the figures really show is that China has indeed overtaken the United States in manufacturing output. - more

  BHP Billiton is showing signs it is closer to starting a new nickel laterite project in Indonesia, with the mining giant posting job advertisements for the development on its website. - more

  Advances in arc and laser welding as well as new solid-state approaches offer opportunities to substitute less expensive, lower content nickel stainless steels in certain types of mechanical assemblies. - more

  (This is an old story but it will be interesting to follow. If it turns into anything, we feel it could be quite newsworthy for nickel) US and UK regulators probe alleged collusion and manipulation by some hedge funds - 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 $.16/lb . So far today, markets have been solid green. And thus begins another year in the stainless steel and nickel industry's. What does 2008 hold in store for producers, distributors, and consumers? Stay tuned.  
  • Bloomberg - more
  • Reuters - more

  courtesy Bloomberg - ""We've seen the worst in nickel," said Jon Bergtheil, head of global metals strategy at JPMorgan Securities Ltd. in London. He expects miners will produce 16,000 tonnes more than consumers need in 2008, down from 25,000 tonnes this year, because Chinese demand will jump 23 per cent, compensating for slower growth in the U.S., Japan and Europe."

  Major stainless steel mills have decreased core product prices for January in response to low demand from the domestic market. - more

  Taiwan’s Formosa Plastic Group has applied to the Ministry of the Economical Affairs for a new investment plan of building a stainless steel plant in Changchou, Fukien, southern of Mainland China. - more

  Prices of high carbon ferro manganese have reached Rs 62,000 per ton, a level never reached before. Silico manganese prices are at Rs 54,000 per ton. Earlier, the highest ever price of high carbon ferro chrome was Rs 60,000 per ton. - more

  Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the US imported a total of 2,280,000 tons of steel in November 2007, including 1,922,000 tons of finished steel down by 18% MoM and down by 1% MoM respectively. - more

  (not nickel but worth watching as there are nickel miners in area) Xstrata Plc's proposed $2 billion copper and gold mine in the Philippines, the country's largest mining project, was attacked by communist rebels in a pre-dawn raid yesterday, hurting the government's bid to lure investors. - more  another

  The purchasing manager's index (PMI) for the manufacturing sector fell to 55.3 points in December from 55.4 in November, the China Federation of Logistics - more

  If you were standing in Milwaukee - or what would become Milwaukee - some 1.85 billion years ago, you would have witnessed one of the most cataclysmic events to happen on Earth. And then immediately died. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

  •   London Metal Exchange - minus 6 tons = 47,940 tonnes (1.34% - 642 tonnes cancelled warrants/ 47,298 net stock level) (charts)
  •   Shanghai Jinchuan nickel - 231000-242000 RMB/t, minus 5500 (charts)
2008 Nickel Forecasts
2008 Nickel Forecasts taken from annual Bloomberg survey of metals analysts - median $13.38/lb

ABARE - $12.47/lb

CPM - $13.73/lb

Logic Advisors - $13.38/lb

ABN Amro - $12.00/lb

Credit Suisse - $15.00/lb

Merrill Lynch - $16.763/lb

Barclays - $13.80/lb

Deutsche Bank - $14.88/lb

RBC - $14.00/lb

BNP - $13.55/lb

EIU - $13.60/lb

Sanford C. Bernstein - $10.66/lb

Citigroup - $10.00/lb

Goldman Sachs - $11.45/lb

UBS - $13.25/lb

Commerzbank -  $10.89/lb

JP Morgan - $13.15/lb

Westpac - $14.23/lb


Previous day / December Archives


Daily Comparison         (* = per lb) or (+ = per tonne)

Date

LME Stock Level +

Cancelled Warrants

Net Stock Level

Official Cash Close *

Official 3 months close *

Day's Ending *

1-31

47,214

2.25%

46,152

$12.47

$12.63

$12.43

1-30

47,064

1.82%

46,206

$12.45

$12.56

$12.34

1-29

46,914

1.65%

46,140

$12.39

$12.50

$12.59

1-28

46,806

1.92%

45,906

$12.00

$12.12

$12.25

1-25

46,656

1.93%

45,756

$12.25

$12.41

$12.19

1-24

46,590

2.11%

45,606

$12.18

$12.34

$12.34

1-23

46,398

2.11%

45,420

$12.13

$12.25

$12.20

1-22

46,344

2.29%

45,282

$12.02

$12.18

$12.47

1-21

46,176

2.88%

46,176

$12.39

$12.54

$12.56

1-18

46,422

2.60%

45,216

$12.52

$12.63

$13.05

1-17

46,524

2.89%

45,180

$12.57

$12.70

$12.52

1-16

46,602

2.85%

45,276

$12.63

$12.75

$12.65

1-15

46,692

2.87%

46,692

$12.88

$13.02

$12.88

1-14

46,908

2.67%

45,654

$13.02

$13.15

$13.27

1-11

47,544

3.91%

45,684

$12.52

$12.72

$12.98

1-10

47,886

3.97%

45,984

$12.77

$12.93

$13.02

1-9

48,036

3.92%

46,152

$13.02

$13.20

$13.38

1-8

48,156

3.18%

46,704

$13.09

$13.21

$13.56

1-7

48,126

2.34%

46,998

$12.66

$12.79

$12.79

1-4

47,784

1.39%

47,118

$13.39

$13.52

$12.75

1-3

47,892

1.34%

47,250

$12.75

$12.86

$13.11

1-2

47,940

1.34%

47,298

$12.02

$12.11

$12.34

3 month nickel averaged $11.01/lb for all of 2006, $6.69/lb in 2005, and ended 2006 at $15.10/lb
Cancelled warrants are goods sold


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INSG - The London Metal Exchange acts as a barometer of nickel supply/demand world-wide. Trading on the LME takes place in two daily sessions (morning and afternoon). The two sessions are each broken down into two rings made up of five minutes trading in each contract (cash and 3-months). The official prices for the day are assessed after the second ring of the morning session by a "quotation committee" in light of the dealings and prices quoted during the day's morning session. LME official nickel prices are used as bench mark prices by the international trade.


All prices, unless marked official closing prices, are indications only of LME 3 month buyer traded prices and courtesy newswire services. To understand what our prices mean, see "A Guide To LME Trading"...pdf here or "The ABCs of a Metals Exchange" ...pdf here (Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless) (all ton listings are metric tons = 2204.622 pounds ) Updated daily before 8 am CST and before 1 pm CST weekdays, with some weekend updates - Disclaimer Daily closing price listed uses afternoon kerb trading price. Original content and opinions copyright www.estainlesssteel.com


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Updated Weekly
12/29 Market Prices

Ferromolybdenum (65-70%)
$34.75/lb
 

Moly Oxide (>51%)
$33.00/lb
 

Ferrochrome (60-65%)
$1.70/lb
 

Ferrochrome (low carbon)
$2.75/lb
 

Ferromanganese (C<.5%)
$1.95/lb
 

Philippines Nickel Ore (1.5%)
Tianjin Port

$750/Yuan/MT
 

Indonesia Nickel Ore (1.8%)
Rizhao Port

$1080/Yuan/MT
 

Ferrochrome (LC) Gr 50
Taiyuan Port

13450/RMB/MT
 

12/29 Scrap Prices

(small qty)
$.??/lb
 

(LTL/ton)
$.77/lb
 




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