Nickel went green early this morning, and while it waffled a bit in afternoon trading, it maintained much of its gains. Why? Different analysts give different reasons, although the most logical is fund money came pouring in on the last day of the month. We also have our own opinion. While watching the market over the past few years, we have noticed that when it approached the big psychological dollar figures, the market tended to stall, and even recoil a little, before inevitably breaking thru. This was especially true on the climb, and the bull would act as if he was approaching a farm fence with an electric line strung along it. He knew he was in for a jolt, but eventually, he would have to suck it up, take the zap, and charge thru the fence. It is possible we are seeing the same with the bear on the slide. $30,000 per tonne is a big psychological barrier, maybe even as big as the $50,000/tonne mark was a few months back. And while stainless steel producers are on the sideline cheering the bear on, those who mine and trade nickel, really would rather this fence not get crossed. So, are we seeing a recoil today, as we did a few weeks back? We will have to wait and see, but for today, nickel ended the month of July at $14.25/lb ($31,405/tonne) (Dow Jones - more)           

  Goldman Sachs expects lower nickel prices up to $ 25 thousand - "The price of nickel could drop to $ 25 thousand per ton, as stocks of the metal to continue to grow in coming months, said agency Bloomberg, referring to Goldman Sachs analysts." - translated article here

  Norilsk raises 2007 nickel output forecast - "Russian metals giant Norilsk Nickel said on Tuesday it had increased its 2007 nickel output forecast to 295,000-300,000 tonnes from the earlier 270,000-275,000 tonnes due to acquisition of new assets." - more here

  Bre-X's Felderhof found not guilty - "John Felderhof has been found not guilty of insider trading after selling $84-million of Bre-X Minerals Ltd. shares in 1996, before the world learned there was virtually no gold at Bre-X's Busang site in Indonesia." - article here

  Quote from Eramet press release - "The physical nickel market was very robust during the first months of the year. Global austenitic stainless steel production grew by about 7% in the 1st half 2007. Nickel prices on the LME reached a new record in May 2007, rising to 23.7 USD/lb. However, a sharp correction began in June, causing nickel prices to drop back to 16.3 USD/lb at the end of the month. As previously announced, the effects of the industrial action seen in 2005 and 2006 in New Caledonia led to a reduction in metallurgical nickel production at Doniambo in the 1st half 2007. However, production is steadily returning to levels similar to those of last year: after dropping 14.3% in the 1st quarter 2007 compared with the 1st quarter 2006, it declined more slowly in the 2nd quarter (-5.7% compared with the 2nd quarter 2006), to reach 30,144 tonnes in the 1st half 2007, down 10.1% compared with the 1st half 2006." - press release here

  Indications at 7:50 am CST show 3 month nickel selling up by $.63/lb . LME inventories actually fell by 120 tonnes yesterday, and apparently the nickel bulls are grabbing on to this spark for motivation. One of the overseas metals sites states Credit Suisse is forecasting the nickel correction will conclude in the next few weeks. Considering their win/loss ration on recent forecasts, we wouldn't suggest you bet the farm on this one. (Bloomberg - more)

  ANZ Commodities Update - pdf here

  Haywood Securities - Metals & Mining Weekly - pdf here

  Reuters Metal Weekly - pdf here

  Commonwealth Bank - The Hard Line -  pdf here

  BMO Capital - The Goods - pdf here

  Copyright/courtesy Dow jones Newswire - "LME nickel prices may drop further over the next month, says UBS. Adds nickel stocks are expected to grow with the seasonal summer stainless steel output slowdown and stainless steel buyers reportedly on the sidelines. Says nickel prices could come under further pressure.Longer-dated nickel is approaching "value territory" with further downside limited, says UBS. It believes some nickel pig iron producers are scaling back production because of profitability issues. Sees $25,000/ton as a point where producers would half production."

  US steel trade group finds massive subsidies for Chinese mills - "China's steelmakers have benefited from more than $52 billion of government subsidies over the past ten years, many of which are in violation of World Trade Organization rules, a group of US steel industry representatives charged Monday." - article here  Copy of report can be downloaded from here

  Chinese steel export likely to drop in H2 – CISA - "Shanghai Securities News quoted Mr Luo Bingsheng deputy secretary of the China Iron and Steel Association as saying that China’s steel exports would reduce during the July to December 2007 period under the negative influence of Chinese government's macro control policies resulting in increased availability in Chinese domestic market breaking the balance between supply and demand at home." - article here

  South Korean stainless steel sales volume of 400 series increase substantially - "South Korea’s stainless steel sales volumes of 400 series cold rolled in June was first time to overpass 300 series." - article here

  Tisco will cut stainless steel production by 30~50% in August - "China’s main stainless steel manufacture, Taiyuan Iron & Steel Group (Tisco) will reduce the August production by 30 percent to 50 percent, after the 20 percent reduction in July." - more here

  Major Chinese steel producers see profits more than double in first half - "Seventy-seven large and medium-sized Chinese steel firms saw profits surge by 108.75 percent in the first half over the same period last year, the China Iron and Steel Association (CISA) announced on Monday." - more here

  Stainless, Nickel Consumers Drawing Dn Stockpiles-Eramet - "Stainless steel and nickel consumers are using stockpiled inventories in an attempt to limit their exposure to metal prices and benefit from more favorable prices later on, French metals and mining group Eramet SA (13175.FR) said Tuesday." - article here

  France's Eramet Sees 2007 Nickel Output At 63,000 Tons - "French metals and mining group Eramet SA (13175.FR) expects its metallurgical nickel output to reach around 63,000 metric tons in 2007, up from 2006 output of around 60,000 tons." - article here  AFX - more

  PT Aneka Tambang 1H Sales IDR6.86 Trillion, Up 226% On Year - (more here)

  Courtesy/copyright RosBusinessConsulting - "The net profit of Norilsk Nickel under Russian Accounting Standards (RAS) climbed more than 31 times to RUR77.747bn (approx. USD3.06bn) in the first six months of 2007 compared to the same period a year earlier, the Russian mining and metallurgical company's documents read. Norilsk Nickel's net profit amounted to RUR43.268bn (approx. USD1.70bn) in the second quarter of 2007 and RUR34.679bn (approx. USD1.36bn) in Q1 2006."

  Courtesy/copyright Dow Jones Newswire - "Mechel boosted net profit to US GAAP 226% year-on-year in the first quarter of 2007 to $205.014 million, the No. 5 Russian steel producer said in a statement. Sales revenue jumped 65.9% to $1.416 billion and EBITDA rose just over 160% to $355.45 million."

  Courtesy/copyright The Yomiuri Shimbun - "Nippon Steel & Sumikin Stainless Steel Corp., the nation's largest stainless steel producer, will cut output of wire rods in August and September by up to 50 percent, as orders from distributors decline. Production of the stainless steel rods would be cut by at least 40 percent, the Tokyo-based company said. Stainless steel sheet and coil inventories rose 3.2 percent to 122,136 tons at the end of June, according to the Japan Stainless Steel Coil Association."

  Accident at Jindal plant sparks workers’ agitation - "Tension prevailed in the Jindal Stainless Limited premises in Kalinga Nagar industrial complex, following a mishap at the site in which a contract labourer was critically injured today." - more here

  China Steel Association : 25% of iron ore rose also "is just speculation" - "International investment bank Credit Suisse recently released report said that next year the global iron ore supply will remain tight. iron ore prices are likely to increase by 25%. However, Luo Bingsheng, these comments are some investment institutions they represent the interests of the Group made a public opinion offensive." - translated article here

  Nickel prices soaring to promote nickel Rail project been started - "Since last year, the international price of nickel rose crazy. in May of this year the London Metal Exchange (LME) nickel futures prices in March reached the maximum 51,350 US dollars / ton. The high nickel prices, driven by domestic manufacturers have launched nickel Rail project some original ferroalloy production of iron and steel enterprises and small have also produce nickel iron." - (more on pig nickel if you can understand the translation) - translated version here

  Lithium ion battery using 3M cathode technology containing nickel, manganese and cobalt  makes batteries last longer and give off less heat. This patented technology is currently being used in lap top batteries, as well as rechargeable tools, with the company believing  hybrid electric vehicles are a future market.

  Today's beginning nickel inventory - minus 120 tons = 13,980 tonnes (3.48% - 486 tonnes cancelled warrants/ 13,494 net stock level)

Credit Suisse says to watch 3 reports this week, that usually have an effect on base metals trading sentiment. On Monday, Japan will release its Industrial Production data for June. On Wednesday, China releases its manufacturing PMI for July, and the US will release ISM manufacturing data for July. Not sure what good any of these reports can do for nickel, as it is slowly burying itself in negative sentiment. But no one ever knows what spark of positive economic news might end a price correction. We tend to think that LME trading has its eyes fixated on LME inventory figures each day, as they alone offer the best barometer for the worldwide supply/demand picture. At least that is what they were telling us when they were running the price up to $23.50/lb, just a few months back. The U.S. stock market took a step back this week, and with it, many of the mining stocks. If you read this site regularly, and are an investor, we suggest you spend some time at the Investor Village RNO board, where many base metal miner stock traders congregate. It is not nickel specific, but the forum members keep the conversations on-topic, the operators delete spam immediately, and the members keep others from getting too personal. You can find this board here.

Speculation has shifted from how high can nickel go just a few months back, to how long the correction would last, to how low will nickel fall. We still feel $12/lb is a figure that stainless steel producers can grudgingly accept. But even if we see the price fall that low, if nickel inventories continue to rise, the pressure to go lower, will remain strong. We had some regular readers give us the $13 - $14 range early on in the correction, and we are now into that range. We have yet to see anyone forecast the price to fall lower than $11.34/lb though. Considering prices started 2006 in the high $6/lb range, the price has a lot of room yet to move, but their seems to be a consensus growing, among those willing to make a prediction, that we may be approaching a possible turning point. In our opinion, the tension on the rubberband is slowly tightening, and while we felt by mid-August it might snap, there is evidence it may take a little longer. Stainless steel producers are not buying anymore than they have to. This isn't due to any top secret conspiracy to bring the price down, it is 'because' the price is coming down.

For those of you who might not be familiar with some of the why's and why not's of the market, we will attempt to furnish a very basic example. Let's use a very simplistic equation to explain a complex situation. You are a stainless steel distributor and you have in stock, 50 pieces of 304 stainless steel sheet for your customers. Each weighs 200 pounds. Stainless steel producers sell you stainless with a fixed cost per pound, and a monthly surcharge. The surcharge is determined by taking the average monthly cost of the raw materials, and seeing how far they are over the established base cost. For this explanation, let's call our base charge $1/per pound for 304 stainless steel (this is an example only to make the mathematics easier). At $1/lb, each of these sheets has a cost of $200 ($1/lb X 200 lbs). But we need to add the surcharge. Let's use some real surcharges for this demonstration. Let's say you bought 50 of the sheets back in May. In May, the surcharge by AK was $2.01/lb. Add the $1/lb base charge, and your cost is now $602/per sheet ($2.01 + 1.00 X 200lbs). Nickel started falling in May so you held off to buy your next 50 sheets till July, thinking your price would come down. It makes sense, right? Wrong! Back to our surcharge chart, and we see AK is charging a $2.28/lb surcharge for 304 in July. Say what? That's right, nickel has fallen by over 1/3, but the surcharge went up. Why? Because stainless steel producers use this months average metal prices, to determine a surcharge for two months later. The average price for nickel in July, will affect the surcharge for September. The surcharge for this month, was determined using the average price of the materials back in May. You remember May, when nickel hit a record high of $23.50/lb. This formula helps customers when prices are rising, but hurts when they are falling. Now if AK is charging a $2.28/lb surcharge for July, and already announced a $1.89/lb surcharge for August, and if you follow the price of nickel, you know they are going to go down further in September, when would you buy? The same 50 sheets that you paid $30,000 for in May, would cost you $32,800 in July, and will cost you $28,900 in August, and less in September. Now seriously, knowing this, if you were the distributor, and had to keep some sheets in stock to protect your customers JIT requirements, would you not hold off as long to buy as you possibly could? And remember, producers produce, not stock. You have a lead time to worry about with the factory, but your customers expects you to stock them. Conspiracy? Not hardly, it's smart business. Because if you buy wrong, and your competitor buys right, guess who can offer your customer a better price - and still make money? For the stockholders out there....if your stock was worth $20 today and you knew for a fact it was going to be worth $17 in September, would you go out and buy more today(those who trade short exempted)? Unlike those who trade in stock, the stainless steel distributor can't just dump all their inventory (shares) and open (invest in) a hamburger stand until prices find the bottom before they re-open for business(re-invest). And if you don't think the distribution market matters to producers, Outokumpu stated in this weeks quarterly report, that distributors make up 50% of their business. Much of the same principle applies to the producer. With their distribution markets slowing down overall demand, they must worry about the value of their nickel inventories. These guys don't order nickel by the pound, they order it by the tonne. If you have 20 tonnes of nickel sitting at your factory, and you bought it two weeks ago, it has already lost roughly $36,000 of its value. Maybe this will quell some of the conspiracy murmurs.

  Copyright/courtesy Dow Jones - "LME nickel prices, under "relentless pressure," could drop below $30,000 a metric ton with the next support level seen at $25,000/ton, Commerzbank says. Adds $30,000/ton is "psychologically significant."

  Manufacturing activities slowed - "Manufacturing activity in China expanded at a slower pace in June, according to a survey of purchasing managers released today." - more here

  Base Metals Bears - (excerpt from article) “They may be right, in the short term. But a year down the road, the base metals are going to be trading much higher than they are today.” - more here

  Quotes - Economic Times - India “The alloy surcharges will come off at some stage, probably like September or October and that’s simply what people are waiting for,” said analyst Michael Widmer at Calyon." “We see some pushback from customers because they do not want to absorb any more metal with a high surcharge attached,” said David Humphreys, chief economist at Russia’s Norilsk Nickel.

  National Mining Association Mining Weekly - pdf here

  Buoyant nickel price lifts debt-free Jubilee to a record profit - "West Australian nickel miner Jubilee Mines is set to announce a record annual profit late next month after producing 8633 tonnes of nickel for the 12 months to the end of June." - more here

  BRIC demand key driver for commodities - "Strong commodity demand from BRIC countries is pushing the natural resources sector forwards, according to BlackRock." - article here

 (comment - here is the article we mentioned Friday, now a respected Chinese metals paper has picked it up) Guard against low-quality iron nickel stainless steel market disruption - "As early sustained high nickel prices to low-grade laterite ore for the production of raw materials containing nickel buffeted by hot iron." - poorly translated article here (still looking for thoughts from nickel/stainless engineers)

And being as it was a rough week for many U.S. stockholders, we leave you with two interesting articles. First, in the "double take"column, the ACLU won a case against a school that tried to censor a student's right to put a religious saying in a school yearbook (here). And, "the Internal Revenue Service has lost a lawyer's challenge in front of a jury to prove a constitutional foundation for the nation's income tax." (here) Have a safe and restful weekend!

  Calling all nickel /stainless steel engineers - We are requesting input from qualified engineers, familiar with the nickel production process and its applications and effects on stainless steel. Here is what we are wondering. First, while many credit nickel with the corrosion resistance element of stainless steel, we understand it is actually a hardening/stabilizing agent in austenitic stainless. To what degree nickel assists chromium in the corrosion resistance, we aren't as clear on. Second, it is also our understanding that pig nickel ore is low grade laterite ore, and that after very expensive refinement, the nickel is basically the same as any other refined nickel. Hypothetical question - if we were to find an article in China media, about the Chinese stainless steel industry expressing concern about pig nickel ore affecting the quality and corrosion resistance of stainless steel - what exactly would they be talking about? If you have any ideas or thoughts, please contact us. You can remain anonymous, if requested. (e-mail) This is incredibly important, because the article wasn't hypothetical.  

  'The end of the bull market' - "So warns investment newsletter writer Dennis Gartman on Friday, saying the massive plunge in equities in the past 24 hours “dwarfs anything seen previously,” and is far more severe than the crash of 1987 or the emerging markets-Russian collapse of several summers ago." - more here  (ok, it's a slow news day so we get a pass)

  (posted on metals inventor forum) Domestic Demand: The Main Engine of Saudi Arabia's Growth - "Saudi Arabia's economic boom is all set to continue after four years of strong growth driven by rising oil revenues, which have stimulated massive project spending. However, domestic demand will take over as the main engine of growth for the period 2007-2010." - more here

  Update - The resistance we mentioned earlier has kicked in. Indicators show nickel is now selling up by $.10/lb. Will it hold or collapse?   

  Indications at 7:50 am CST show nickel has fallen below $14/lb and is selling down by $.12/lb . Traders don't like to fall thru these psychological barriers, so we should see some  increased resistance to falling further today. (Bloomberg - more) (AFX - more)

  TD Bank Weekly Commodity Price report - pdf here

  LME Nickel Fall From Grace To Continue On Steel Cuts - "Nickel's fall from grace as the London Metal Exchange top performer is set to continue as a result of enduring cuts at stainless steel mills in China and Europe, and speculators diverting attention elsewhere, analysts said this week." - more here

  Message to pessimists: super-cycles can last decades - "Are we five years into a commodity super-cycle that will last for decades due to China’s explosive growth or is this just a routine mining boom followed by a bust?" - article here

  Metals prices 'will stay sky-high for years' - "EUROPE'S top-ranked natural resources investor has given warning that sky-high metal prices will defy the skeptics for years to come." - more here

  Jim Rogers bullish on China stocks - (quote from article) "Rogers, in a presentation at a conference, also reiterated his suggestion to dump dollars and bonds and stay invested in commodities." - more here

  Taigang Says First-Half Profit May Have Quadrupled - "Shanxi Taigang Stainless Steel Co., China's biggest maker of the metal, said first-half profit probably quadrupled from a year earlier after buying assets from its parent, boosting output and sales." - more here

  Sumitomo Metal Mining Profit Gains 81% as Prices Gain - "Sumitomo Metal Mining Co., Japan's second-largest copper smelter and biggest nickel producer, said first-quarter profit rose 81 percent as metal prices climbed." - article here

  KRW 1 Trillion 247 Billion in Operating Profits for the 2nd Quarter - "POSCO recorded the sales of KRW 5 trillion 815 billion for the 2nd quarter of 2007, operating profits of KRW 1 trillion 247 billion and net profits of KRW 1 trillion 113 billion, attaining more than KRW 1 trillion of the operating income for 4 consecutive quarters." - more here

  Nickel price fall’s not yet a bait - "Nickel users will shrug off the sharp fall in prices and wait till the fourth quarter to step up their purchases as alloy surcharges remain high. The price of nickel, a key ingredient of stainless steel, has fallen by nearly 40% over the past two months, since hitting an all-time high of $51,800 in early May." - article here

  Comment - What a difference a few months make. A while back we posted some enquiries from China of business' looking for low grade laterite nickel ore (pig nickel ore). Now it appears the sellers far outnumber the buying enquiries. Here are just a few we found listed. Albania miner with over 1,000,000 tonnes of 1.05%. A UAB miner with access to 70 million metric tonnes, can ship 50-100,000 tonnes per month, 2% and up. Kalimanta, Indonesian miner can ship over 500,000 metric tonnes per month of 1.5% to 2.5%. Indonesia miner has 60,000 metric tonnes of 1.65%+. Another Indonesia miner can ship 50,000 tonnes per month of 1.2%. A Philippines miner can ship 50,000 tonnes a month of 1.4%-1.6%. All listed in the last 5 weeks. And on Monday we said China was paying $60-$70/tonne for .9 - 1.5% grade ore. That same grade is fetching $48 -$55/tonne today.

  Investika Releases Quarterly Report for the Period Ended - "Investika released its quarterly report for the period ended 30 June 2007. During the quarter, a total of 262,994t of laterite nickel ore at an average grade of 1.52% Ni (approximately 2,849t contained nickel on a dry basis) was shipped to China." - more here

  Toledo Mining says Berong ramp-up continues but sees equipment supply problems - "Toledo Mining Corp PLC said the ramp-up in production at the Berong nickel project to the export target of about 900,000 wet metric tons for 2007 is continuing, although the company is facing some difficulties with equipment supplies." - more here

  Today's beginning nickel inventory - plus 600 tons = 13,686 tonnes (3.51% - 480 tonnes cancelled warrants/ 13,206 net stock level)

The Los Angeles Business Journal is reporting the labor negotiations at the U.S.' largest port, may be resolved without a strike - here And for the future, UPS and the the International Brotherhood of Teamsters are in negotiations and hope to have a new contract by the end of 2007.

  Goldman Sachs Says Nickel May Fall to $25,000 a Ton - "Goldman Sachs Group Inc., the world's largest securities firm by market value, said nickel may fall to as low as $25,000 a metric ton as inventories continue to rise ``in the coming weeks." - article here

  AK Steel second-quarter profit soars - "AK Steel Holding Corp. said on Tuesday that higher steel prices and record shipments sent its second-quarter profit soaring, easily beating Wall Street estimates." - more here

  Universal Stainless 2Q Earnings Increase - "Specialty steel maker Universal Stainless & Alloy Products Inc. said Tuesday second-quarter earnings jumped 27 percent, driven primarily by strength in the aerospace market." - article here

  Acerinox H1 net 411.5 mln eur vs 101.5 mln; in line with forecasts - "Acerinox SA said it posted net profits in the six months to June 30 of 411.55 mln eur, up from 101.5 mln a year earlier, in line with forecasts between 349-422 mln as strong demand offset the impact of high raw material prices." - more here (from Friday)

  Macquarie: BHP - Strong Production Report - "This morning BHP Billiton (BHP) released a strong fourth quarter production which Macquarie Research Equities (MRE) believe will generate moderate upgrades from the market." - article here

  China imported 42,598/tonnes of refined nickel in first 6 months of 2007, 15.5% higher than similar period in 2006.

  Outokumpu webcast  - here (Points made by Juha Rantanen CEO) Believes user demand for stainless steel consumption will maintain a 5-7% annual growth. In market dynamics, distributor behaviour presently in de-stocking mode, accelerated due to nickel prices falling, which has huge impact on stainless steel production, as they make up 50% root market for stainless. End-user market remains strong. Short term of nickel prices falling will be negative to producers profits, due to losses in nickel inventory, but in long term is good for industry, as it makes nickel containing stainless steel more competitive. Significant price decrease in September and October as cheaper nickel works its way into transaction price. Will continue to cut production into 3rd quarter of standard stainless steel grades. Feels normal market will return by 4th quarter, if not sooner, based on history. Nickel inventory gains seen in second quarter results, will turn into losses in 3rd quarter.  In answers to questions, the profitability of ferritic's versus austenitic grades were similar, but ferritic prices are far more stabile. There will always be a large market for austenitic stainless, from those who require higher corrosion resistance. (in our opinion, presenters were pessimistic about 3rd quarter, but optimistic about 4th)   

  BHP hit by cost of own iron - "BHP Billiton is breaking production records but is still being squeezed by the rising price of one of its own products, iron ore." - more here

  (comments - excerpts from poorly translated article in China media) - Notes from China's stainless steel industry development forum who met July 19th in Ningbo. Majority of guest were in favor of prices falling, but its plummet has proved lethal. Without exception, all of the steel plants in attendance will be running at a loss. One guest suggested foreign steel giants were manipulating the price of nickel. China production of stainless steel has exceeded demand, and members were cautioned to learn from Japan's experience, "when the market products accumulated more than 5% of the demand, prices will drop". Stabilizing the stainless steel market was the main topic and a consensus among analysts present included the following steps - Get rid of the absolute dependence on nickel and development of new products (source)

  Indications  at 7:55 am CST show nickel selling down by $.43/lb. Last weeks mini-bull run has evaporated, with nearly all of its gains gone. Nickel stored in LME warehouses continue to grow.  Official prices posted below and nearly $1/lb less than yesterday.(Bloomberg - more)

  Worries of slackening demand put a dent in nickel - "Nickel prices fell Monday, paring the gains from last week on rising stockpiles and mounting speculation that manufacturers would reduce their use of the metal." - more here

  Behre Dolbear Global mining News - pdf here

  Commodity Price Update - pdf here

  Institute of Scrap Recycling Industries report - pdf here

  Production Activities Of Molybdenum At Mines Of Codelco / Chile In CY 2006 - "The annual report, concerning production activities in the calendar year ( January - December ) of 2006, was recently released by Codelco of Chile. According to this report, the quantities of copper and molybdenum concentrates produced by each mine of Codelco in 2006 were as per the table attached hereto." - more here

  Copyright/Courtesy Dow Jones Notes

• Chinese production of ferronickel, will add about 100,000 metric tons to overall nickel supply this year and is now the marginal source of nickel production, says Goldman Sachs. Notes that China has been aggressively importing very low grade ore from the Philippines and Indonesia to smelt in facilities originally intended to produce steel. This is high cost due to shipping and energy costs and results in a relatively poor grade of  ferronickel, which competes with scrap. "The long-term motivation price for production at the margin is now $23,000/ton," Goldman adds, up from $15,000/ton previously.
• LME nickel prices "may overshoot" to as low as $25,000 a metric ton on the downside but are seen fluctuating around $35,000/ton over the medium term, says Goldman Sachs.
• Recent sharp falls in London Metal Exchange nickel prices have forced cuts in Chinese nickel pig iron production, which should boost demand for primary nickel in the coming months, Macquarie Bank said in a report Tuesday. As a result of the 30% slump in nickel prices since the start of June, Macquarie has lowered its 2007 nickel pig iron forecast to possibly less than 85,000 metric tons, down from 95,000 tons of recoverable metal." - more here

  Jindal Stainless June qtr net up on cost cuts, high sales - "Jindal Stainless Ltd., India's largest stainless steel maker, on Monday reported a 63 percent rise in net profit for the quarter ended June on higher sales and cost-cutting measures, a senior official said." - article here

  PT Inco expects to start construction of Karebbe Dam next month - "Nickel miner PT International Nickel Indonesia (Inco) expects to start the construction of a new dam, called the Karebbe dam, on the Larona river in the Indonesian province of South Sulawesi, which will increase its hydroelectric power-generating capacity by 90 megawatts or 33 pct, company president Arif Siregar said." - more here

  BHP Copper, Nickel, Iron Output Rises to Records - "BHP Billiton Ltd., the world's biggest mining company, posted record annual production of copper, iron ore and nickel, fueling what will be its largest yearly profit." - more here

  Outokumpu News

• Finnish stainless steel maker Outokumpu quadruples 2Q profit to €565 million - more here
• Stainless Alloy Surcharge Seen Falling In August-Outokumpu - part 1 here  part 2 here

  Zimbabwe to open new nickel mine shortly - "A nickel mining company in Zimbabwe said Monday it planned to open a new mine in the central region of the country containing approximately 36.4 million tonnes of the mineral." - more here

  (comment) Based on current price of nickel, we estimate stainless steel surcharges for September will be at least $.30/lb lower for 304 and 316 stainless steel, unless the price of nickel climbs during its last 6 days of trading. 

  (comment) We have followed the metals theft stories since we began this site and have recorded some remarkable feats of theft. The stories have become so common and mundane, that we don't give the stories the coverage we used to. How could anyone top stealing an entire bridge, or a complete radar tower, as they did in Russia a few years back? And while we told you last fall to expect to hear a lot more about thieves stealing the inner workings of air conditioners (now making headlines in the mainstream media), we haven't seen this story - yet. But we are betting you will. We stumbled across an article called "Battery Toxicity" and found the following statement ..."Toyota and Honda place decals with a toll-free number on their hybrid battery packs. Toyota offers a $200 bounty to ensure that every battery comes back to the company. In a press release, Toyota states, "Every part of the battery, from the precious metals to the plastic, plates, steel case and the wiring, is recycled." - With catalytic converters the current hot item for thieves, stealing a hybrid battery would be much easier, with a much higher return on a crooks risk-of-jail investment. (article) 

  Today's beginning nickel inventory - plus 804 tons = 12,642 tonnes (4.51% - 570 tonnes cancelled warrants/ 12,072 net stock level)

For U.S. purchasing agents and buyers - "A last-minute appeal has averted a clerical workers strike at the ports of Los Angeles and Long Beach. Workers were heading out with picket-signs over the weekend, but company negotiators persuaded them back to the table. Contract talks with clerical workers at the nation's largest port complex will resume tomorrow."

  Metals Insider - Week In Review - "Battered nickel gets some respite" - more here

  Haywood Securities - Metals & Mining Weekly - pdf here

  Base metals may witness dips: Commtrendz - "Avinash Raheja, Senior Vice President, Commtrendz has a view that some dips in the base metals including nickel can be expected, as they remain on a firm uptrend in the short term." - more here

  Recycling & Recovery on the Rise in the PGM, Base Metals Sectors - "High and holding precious and base metals prices, rising operational costs - primarily due to high energy and transportation costs, long project development cycles, stricter and more uniform environmental standards, new recovery processes and long project development cycles are leading mining companies to do more recycling of waste ore and scrap equipment." - more here

  China May Further Restrain Semi-Finished Metal Product Tolling - "The Chinese government may further restrain semi-finished metal product tolling in order to control the export of high energy-consuming and resource-wasting finished products, industry officials told Interfax today." - more here

  Eramet Chief Sees No Change in Shareholding - "The chief executive of French metal and nickel mining group Eramet denied on Monday reports of a big change in the company's shareholding, saying that the business should remain anchored in France." - more here

  U.A.E.: Burj Dubai reaches a record high - "Today, the world has a new global landmark - Burj Dubai. At 512.1 metres (1,680 ft), Burj Dubai, developed by Emaar Properties, is the tallest building in the world." - more here

  The bulls among you will like this - video here

  Numbers for the crunchers or curious - There has been, and will be, a lot of talk about the importing of pig nickel ore into China and we thought we would supply some numbers to you. Here are some current market prices in China for this ore. From Indonesia, .9 to 1.1% nickel content ore, is running $60-$70/MT. This same ore was bringing $98-$105/MT five weeks ago. 1.1-1.5% nickel content ore, is bringing $90-$100/MT, compared to $153-$160/MT before. Jumping up to 2.1-2.4% nickel content ore costs producers $150-$160/MT compared to $205/$235/MT just five weeks ago. Comparable prices shown from Philippines. Ore from Indonesia shows containing 30% H2O, and from Philippines, 35% H2O. Which means even good mud will make you money these days! Also, noticed some chrome ore selling figures, showing imports from Pakistan, Indonesia, Zimbabwe, Oman, Philippines, and South Africa.  

  Sumitomo Metal Mining Co., Japan's largest nickel producer, is quoted in China media as saying Friday, it is now forecasting a 23,000 tonne surplus for the world nickel market in 2007, instead of its earlier prediction of a 12,000/tonne deficit, due to slowing demand. (www.jrj.com)

  Indications at 7:50 am CST show nickel selling down by $.36/lb . Inventories continue to gain, over 10% in last week.  In reference to the potential strike in Los Angeles, KESQ is stating the union and shipping companies have agreed to resume discussions tomorrow, but we are unable confirm this story with a second source.  (Bloomberg - more)

  Weekly Monday morning review of Chinese analysts forecasts for nickel price in upcoming week (Shanghai NonFerrous Metals) -  Last week the analysts dropped the ball, with all of them forecasting a down market, when in fact, nickel prices ended higher. This week, uncertainty returns with an apparent equal split on votes. Of 32 analysts submitting opinions, 11 (35%) felt the price would rise in the coming week, 7 (22%) feel the price will stay about the same, with the remaining 13 (41%) predicting the price will fall.  

  Chinese SS makers gather to discuss weak market price - "China Stainless Steel Industry Development Forum held at Ningbo in Zhejiang Province recently was attended by a host of large stainless makers including Tianjin Tianguan Yuantong Stainless Steel Products Company Ltd, JiangSu Daming Metal Products Company Ltd etc." - article here

  China's iron ore concentrate imports down 6.2 pct in June - "China imported 26.90 million tons of iron ore concentrate in June, down 6.2 percent from the same period last year. Australia was China's largest single iron ore supplier in June, exporting 9.64 million tons, according to statistics released by the General Administration of Customs." - article here

  BNG Steel cuts stainless steel prices - "Due to the weak demand, BNG Steel, South Korea-based steel firm reduced the stainless steel cold rolled price for 300 series by 380,000 won/ton (US$415) since July 10, 2007." - article here

  Miners going nuts over Brazil - "BRAZIL is a big player on the world mining scene and its iron ore giant CVRD is up there on the global stage with Rio Tinto and Anglo American. But, for all that, the country derives only 1 per cent of its GDP from extracting minerals." - more here

  Today's beginning nickel inventory - plus 492 tons = 11,838 tonnes (4.51% - 534 tonnes cancelled warrants/ 11,304 net stock level)

One more important thing for buyers and sellers of stainless steel. Keep your eye on what is happening in California with the port negotiations. The 15,000 members of the International Longshore Warehouse Union announced today that they would honor any picket lines  put up by the 750 members of the port's clerical workers if they are unable to reach an agreement with the port's shipping companies. Any strike would shut down the United States busiest port and would cause serious delays in imports. Very serious.  

  Missing Out On the Chinese Boom - "International media has in the past few days been dominated by the news that China's trade surplus with the rest of the world had reached a record US$26,1 billion in June." - more here

  Sudbury Basin not getting its share; Feds need to invest in mining research - "Sudbury wants to become the “Silicon Valley” of the mining sector. A major contribution from the federal government for mining research is needed to enhance the region’s globally significant cluster of mining related firms." - more here

  Indications  at 7:50 am CST show nickel presently trading up by $.25/lb . (Bloomberg - more)  (Dow Jones - more)

  TD Bank - Special Report - "Chinese Economy - The Song Remains The Same" - pdf here

  Rio Tinto denies CISA charges about cutting supplies ahead of price talks - "It is reported that Anglo Australia mining group Rio Tinto denied a charge by China Iron & Steel Association that the three global iron or majors are cutting supplies ahead of the price negotiations to achieve higher benchmark prices for next year." - article here

  Goro Nickel will owe floor before filling its mining pits - "The experts elected to study the solid rejections of Goro Nickel are leaning on another file: that of the filling of the mining pits. The process leaves at the very least perplexed specialists." - translated article here

  Imports Soar as Local Steel Makers Fail to Keep Up With Demand - "South African steel producers sold 2,8-million tons of carbon steel products in the domestic market in the past six months. The volumes were 8,6% higher than in the first six months of last year." - article here

  China's stainless steel market stepping out from the complete domination of nickel - "Since July, the steel supply has been decreasing gradually as the mills have started the practice of reducing output which is expected to have large influence towards the steel market." - more here

  BNG Steel cuts stainless steel prices - "Due to the weak demand, BNG Steel, South Korea-based steel firm reduced the stainless steel cold rolled price for 300 series by 380,000 won/ton (US$415) since July 10, 2007." - article here

  News Notes

• Not a single majority shareholder in MMC Norilsk Nickel voted for Vladimir Potanin's candidacy on the board of directors at the company's annual general meeting on June 28, according to a report on how shareholders voted at the meeting published in Rossiiskaya Gazeta.
• The London Metal Exchange has listed Incheon Port in South Korea as a good delivery point for aluminum, copper, nickel and aluminum alloy, it said Friday. (more)
• China raises benchmark interest rate by 27 basis points - Stocks rocket 3.73%, regain 4,000-point ground

  Norilsk Nickel Aims to Diversify With Help From BHP, Rio Tinto - "OAO GMK Norilsk Nickel, Russia's biggest miner, expects to expand into coal, diamonds, iron ore and molybdenum with help from BHP Billiton Ltd. and Rio Tinto Plc, two of the world's top three diversified mining companies." - article here  

  Metal Prices May Get Hit Hard By A China Slowdown -Dresdner - "Demand for base metals in China, the industry's biggest growth engine, may slow in the second half of the year and put an end to the rally in prices this year, Dresdner Kleinwort said in a recent report." - article here

  Funds Back Base Metals But Ignore Warning Signs - "The funds are back in the base metals markets with a vengeance, but this time they're playing the dangerous game of choosing to ignore the subprime tremors effecting the world's biggest economy in order to play up the positive." - article here

  Base-metal bargains may be good as gold: experts - "Nickel and zinc prices have dropped from their recent peaks, but the future for both points to strong demand and short supplies, say experts. Copper, tin and lead have potential as well." - article here

  Mining groups are emboldened by notions of a 'super-cycle' - "As the boom in commodities prices stretches into its fifth year, mining company executives are more bullish than ever." - article here

  Bullish on Metals - "I am bullish the metals complex for a number of reasons, one of which is the pressure the economy is under due to the troubles in the subprime lending sector." - article here

  Potential Strike Looms At Area Ports - "The risk of a strike that could shut down the ports of Long Beach and Los Angeles still looms, but talks between union clerical workers in the ports and the shippers whose goods they document have continued this week at a feverish pace, keeping the strike at bay." - article here (potential big problem for Asian imports into US, including stainless steel products)

  Today's beginning nickel inventory - plus 396 tons = 11,346 tonnes (4.97% - 564 tonnes cancelled warrants/ 10,782 net stock level)

• Nickel to invest 1 billion USD in Kola Peninsula - "By year 2020, mining and metallurgy giant Norilsk Nickel intends to invest about 1 billion USD in its facilities in the Kola Peninsula. In an interview to Rosbalt.ru, company director of Norilsk Nickel’s regional subsidiary Kolskaya GMK, Yevgenii Potapov, also says that his company remains heavily dependent on ore from Norilsk." - article here
• Russians promise full clean-up at Nikel - "The management of the Russian nickel works at Nikel, across the border from Norway, has promised that there will be a complete clean-up at the factory, following the recent concern over the increasing emissions from the smelter." - more here

  China/Asia News

• China's GDP Grows at Fastest Pace in 12 Years - "China's economy grew at the fastest pace in 12 years in the second quarter and inflation accelerated the most in nearly three, adding pressure on the government to raise interest rates and cool investment." - article here
• Baosteel raises ferritic stainless steel output - "China’S Baosteel Stainless Steel said that the company has increased the type of ferritic stainless steel output by 50 percent of the company's total stainless steel output in 2007 in order to up its sales profits." - article here
• China’s output of rolled steel in May 2007 - "China produced 47,505,000 tons of rolled steel in May 2007. The output in January-May reached 219,094, 000 tons, up 23.9 percent year on year, according to the National Bureau of Statistics." - article here
• China publishes floor price for ferroalloys exports - "Chinese Customs has published floor export price for ferroalloys causing panic in the weak ferroalloy market." - article here
• Dow Jones - "South Korea's state procurement agency has issued tenders for 100 metric tons of nickel cathode and 6,000 tons of aluminum ingot, a senior official at the agency said Thursday."
• Dow Jones - "LME nickel prices will be dominated by technical moves in the short-term but after the summer slowdown the market will focus on Asian steel mills expected to crank up output, Standard Bank says. Adds nickel prices may have found support at current levels but there are signs that "sentiment is turning" with an increase in consumption anticipated towards the end of the year."

  Indonesia News

• Weda Bay To Develop Nickel Reserve in Halmahera - "PT Weda Bay Nickel will start construction of its nickel mining project in Halmahera, North Maluku in 2010." - article here
• Inco To Build US$280 Mln Hydropower Plant in South Sulwesi - "International Nickel Indonesia (Inco) said it has set aside US$280 million to build a hydropower plant in Karebbe fed by the Larona river in South Sulawesi." - article here
• Inco appoints new director and commissioner - "An extraordinary shareholders' meeting of the country's biggest nickel producer, PT International Nickel Indonesia (Inco) Tbk, agreed Wednesday to the appointment of Michael D. Winship to the board of directors and Naoyuki Tsuchida to the board of commissioners" - article here
• Govt to put mining rights out to tender under law - "The government will use a tender process, rather than the existing direct-appointment mechanism, to award the mining permits that will be issued under the proposed new mining law" - article here

  Other News

• Mining companies - even those without mining operations - profit from commodities boom - "A shoe manufacturer, a former telephone company and a onetime shrimp farmer are among the 10 best-performing Asian stocks this year. Their new focus: mining." - more here
• Commodities ETFs Protect The Little Guy - "After reading this Wall Street Journal report about the "little guy" investing in commodities, it's hard not to come away with the impression that author Anita Raghavan is either hopelessly behind the times or still smarting from her own commodity futures trading experience gone bad." - more here

  New Caledonia News

• Goro Nickel: Green light of the experts for the storage of waste - "Results of the counter-evaluation carried out by a trio independent specialists consolidate the industrialist in his orientations. The surface of storage of the solid residues of Western Kwé remains however subjected to an authorization of exploitation which must be delivered in the months to come." - more here
• The SLN “deeply regrets” the emission of black dust - "Tuesday morning, of the inhabitants of certain districts of Noumea noticed on their premises an unusual deposit of fatty dust. Yesterday, Nickel explained the phenomenon by an incident of combustion." - article here

  Ok Tedi’s final chapter - "Without too much fuss or fanfare what is arguably the most important corporate position in Papua New Guinea has changed hands. As noted in The National yesterday, Alan Breen has taken over from Keith Faulkner as managing director of Ok Tedi Mining Ltd." - article here

  Today's beginning nickel inventory - plus 126 tons = 10,950 tonnes (3.84% - 420 tonnes cancelled warrants/ 10,530 net stock level)

• Nickel market in deficit from Jan-May on tight fundamentals - WBMS- "Robust nickel demand at a time of critically low supply sent the market into a deficit in the first five months of this year, said the World Bureau or Metals Statistics (WBMS)." - article here  pdf report here
• Specialty Metals Industry Group Releases Four Month Market Data - pdf here
• Behre Dolbear Global Mining News - pdf here

  Forecasts   

• Transcript of interview with Jessica Cross from commodities consultancy VM Group - (quote) " On the sort of warning side there for nickel the Chinese seem to be increasingly sourcing low grade nickel internally to feed their own refining requirements. I think that’s a possible weakness coming on the horizon, and I think these record nickel prices have induced stainless steel producers to cut output of high grade stainless steel." - more here
• Metals prices to rise by average 12% this year, EIU says - "Prices for metals such as copper and nickel will rise an average 12% this year as demand from China stays “strong,” offsetting declines in other nations, the Economist Intelligence Unit said." - article here

  America's News

• Cuba, Venezuela to Create Companies - "Cuba and Venezuela are working to form joint metal working companies as part of the projects derived from the Bolivarian Alternative for the Americas (ALBA) announced Cuban minister, Marta Lomas." - more here
• Stalled manufacturing growth slows North American purchasing - "North American use of stainless steel remains erratic: After increasing a robust 21% in 2006, consumption is on pace to decline by 7–10% in 2007." - more here
• Nickel-based steel buyers investigate material substitutes - "The status quo of stainless steel purchasing is about to change as prices for traditional sheet mill products have risen 90% over the past 18 months." - more here
• Steel wire rod prices in US coming down from their recent peaks - "US wire rod producers are facing a slowdown in their major construction and automotive markets at the same time that a surge of imports from China has limited their ability to raise mill prices to cover higher operating costs for energy and raw materials. " - more here

  Asia News

• China's Steel Consumption Demand Seen To Grow 4-5% in 2007 - Market monitoring shows that China's market demand for steel consumption will be about 400 million tons this year, growing 4-5 per cent year-on-year, a slight increase over 2006." - article here
• Posco expects global steel prices to rebound in Q4 - "Although the current stainless steel market is not active, the global fourth-largest steel manufacturer, South Korea Posco said on Monday that the situation will be improved in fourth quarter." - article here
• Stainless steel output grows 25% - "Asian production (including India) of stainless steel amounted to 4.191 million tonnes in the March 2007 quarter, a growth of 25.2 per cent y-o-y, according to data recently released by the global industry body, International Stainless Steel Forum (ISSF)." - more here

  Pacific News

• Indonesia May Pass New Mining Law Sep; Some Special Contracts - "A proposed new law governing mining contracts in Indonesia, likely to be passed in September, will designate nickel, tin, bauxite, iron ore and some types of coal as "strategic commodities," allowing companies mining those commodities to obtain special contracts, a senior official said Wednesday." - article here
• Black dust irritates the neighbors of the SLN - "Yesterday morning, of tens of inhabitants of the central districts of Noumea discovered a layer of fatty dust on their cars or their houses. The SLN, in all the spirits, did not answer them." - translated article here
• Publicly-listed nickel company PT International Nickel Indonesia (Inco) said it would extend its cooperation with publicly-listed national diversified mining firm PT Antam. - more here
• Indonesia needs to process mining exports for added value - "Indonesia needs to transform itself from a raw commodities exporter into a value-added commodities exporter." - more here
• Miners may be slapped with deposit obligation - "A regulation is being drafted that would oblige mining firms to conduct post-exploration activities after their concessions end, a senior lawmaker says." - article here

  News Notes

• Dow Jones - Alfredo Ramos told reporters the Berong Nickel Corp., its unit that started shipping nickel in January, is likely to ship between 900,000 to 1 million dry metric tons of ore, primarily to China.
• Dow Jones - Berong Nickel Corp. said Wednesday it plans to build a $200 million to $300 million nickel processing plant at its mine site in the central Philippines.

  Today's beginning nickel inventory - plus 300 tons = 10,824 tonnes (4.21% - 456 tonnes cancelled warrants/ 10,368 net stock level)

Source - pdf
And BHP showed the top 20 in April 2007 page 3 pdf here

• Canada Commodity Price Update - pdf here
• Reuters Metal Weekly - pdf here
• Eurofer Steel Statistics - pdf here (Eurofer is short for European Confederation of Iron and Steel Industries)  

  News Notes

• Australia's Sally Malay Mining Ltd. (ASX: SMY.ax) said on Tuesday its output of contained nickel rose 17 percent in 2006/07 to 13,255 tonnes, while a ramp-up in production to more than 20,000 tonnes a year remained on track. The Sally Malay project produced 8,010 tonnes of nickel in concentrate in 2006/07, while its 100 percent owned Lanfranchi JV produced 5,215 tonnes of contained nickel in ore....Reuters
• Consolidated Minerals Ltd will defer a shareholder meeting that was to decide on a takeover bid from Pallinghurst Resources after receiving a $966 million counter offer from Territory Resources Ltd....Dow Jones
• Quote from article - "The ferrochrome market is notoriously volatile, owing to the fact that 80% of the metal’s end-use is in the manufacture of stainless steel. It also has relatively low barriers to entry, so when the price of ferrochrome is high – as it currently is – a number of marginal players crowd into the industry. Ferrochrome spot prices have recently been as high as $1.20/lb, while contract prices have averaged around $0.75 to $0.85c/lb." - more here
• Japan's largest stainless steel producer Nippon Steel & Sumikin Stainless Steel Corp (NSSC) is hardening its stance in third-quarter talks with ferro-chrome producers, on expectations that prices will fall later this year due to weakness in the Chinese stainless market. - Metal Bulletin
• Continued production of lower grade pig iron from China is keeping LME nickel under pressure, says Morgan Stanley, while falling demand for stainless steel mills has been "the catalyst of the precipitous fall as producers fear being caught long of cheap metal." - Dow Jones

  China Moly faces hit from export curbs - "China Molybdenum (3993) has been hit by an expanding move to curb exports of the strategically important metal." - more here

  Asian News Notes (from Chinese media)

• Shanghai Nonferrous Metals Net cash Week commentary -"May - China's imports of nickel ore as much as 1.64 million tons, with those from Indonesia, the Philippines and New Caledonia the import volume of 518,000 tons, 960,000 tons and 125,000 tons. Nickel-metal equivalent of about 15,500 tons." (source - Antaike - more) (this refers to shipments of what the industry is calling "pig nickel ore")
• China's Baoshan Iron and Steel News Network - "Stainless new product development momentum. First half of the year, a total of 21 new stainless steel products, has reached a total of 30,000 tons, with Ferritic Stainless Steel ratio exceeding 40%" - source
• Japan's largest stainless steel production enterprises in stainless steel, Nippon Steel Corp. (NSSC) will lower domestic prices of austenitic stainless steel for the first time in nearly two years.....Austenitic stainless steel demand is still strong. - source
• National industrial policy adjustments on the nickel market impact - "China's Ministry of Finance announced the latest export tax rebate policy, and from July 1 start, which hydrometallurgical nickel intermediate products, nickel and nickel alloy pipe, the other nickel foil, nickel net of the export tax rebate rate will be reduced to 5%. But these products in China's exports of nickel is not a lot, so the impact on the domestic market is not significant. - more here
• Taiwan Ye together to be cut austenitic stainless steel production - "According to reports, China Taiwan the largest stainless steel production enterprises Ye Alliance Steel Corporation (YUSCO) will continue to cut 300 stainless steel-producing materials volume, while raising 400 and 200 stainless steel output. The company plans to the Department of austenitic 300 stainless steel production to 50% of total output. Currently, the company austenitic stainless crude steel output accounts for monthly production (7.6-8 million tons) of 60%." - more
• The Ministry of Commerce (China) warns that there will be more trade conflicts in 2007, given the nation's booming exports, low price and small number of export destination countries. Figures show that in the first 11 months of 2006, the steel exports hit 37,460,000 tons, a 100% year-to-year growth. - Metals About

  Miners may be slapped with deposit obligation - "A regulation is being drafted that would oblige mining firms to conduct post-exploration activities after their concessions end, a senior lawmaker says" - more here

  Today's beginning nickel inventory - plus/minus 0 tons = 10,524 tonnes (4.28% - 450 tonnes cancelled warrants/ 10,074 net stock level)

• Fox-Davies Capital Limited Mining Weekly - pdf here  (hosted by minesite)
• Quantum Direct Commodities Insight - pdf here

  News Notes

• Shanghai Baosteel Stainless Steel Co. Ltd., a Shanghai Baosteel Co. Ltd. subsidiary, will increase ferritic stainless steel production to more than 50 percent of the company's total stainless steel output this year in an attempt to stabilize sales revenues, a company official told Interfax today.
• The China Securities Journal reported that Luo Bingsheng, Secretary-General of the China Iron and Steel Association, said, "The estimate of 400 million tonnes (of iron ore) predicted by overseas institutions is obviously too high." - more here

  Some Friday the 13th views on nonferrous prices - "Is there a black cat crossing some forecasts?: It’s Friday the 13th (feeling lucky?) and the London Metal Exchange is kind of mixed with lead trading to another all-time high early in the day ($3,040/metric ton, or $1.38/lb)…nickel, however, continues to lose ground…" - more here

  Posco News

• Posco Exec: Sees Nickel Prices Likely To Rebound In 4Q - "South Korea's Posco (005490.SE) said Monday it expects nickel prices to rebound starting in the fourth quarter of this year due to the high demand season then, which will help revive stainless steel prices in the latter half." - article here
• Posco To Cut Stainless Steel Production in July, August - "South Korea's leading steelmaker, said Sunday it plans to reduce output of stainless steel products in July and August as its inventory level rises due to falling demand." - article here
•   Posco Has Highest Profit in Two Years as Prices Rise - "Posco, Asia's third-biggest producer of steel, reported second-quarter profit climbed 55 percent, as it raised prices to benefit from rising demand from car makers and shipbuilders." - article here

  Domestic steel prices possibly to decline in second half year - "Further release of new capacities, export control and serious oversupply may take joint effects to pull down the prices of steel products in China in the second half of this year, as predicted by Chen Kexin, a guest analyst of Xinhua." - article here

  China stainless firms see output cuts' impact muted - "Chinese stainless steel mills' plans to cut output of finished products this month will have a limited impact on domestic supplies, as some will not cut primary production and other processors will take up the slack in finished products, company sources said." - article here

  Chinese contractors in PNG "rubbing locals up the wrong way" - "Madang: In a cleared patch of jungle on the shores of Papua New Guinea's Rai coast, Chinese contractors and local workers toil at a drill rig under the baking sun to prepare the site for a nickel ore processing plant." - more here

  Eramet gives varied signals in New Caledonia nickel project - "There have been mixed messages from the French mining conglomerate, Eramet, about Swiss miner Xstrata’s position on New Caledonia’s so-called northern project." - more here

  Today's beginning nickel inventory - plus 210 tons = 10,524 tonnes (4.62% - 486 tonnes cancelled warrants/ 10,038 net stock level)

Since 3 month nickel peaked at $23.50/lb on May 9th, it has lost over 1/3 of its value. Has the price drop affected nickel producers stock value yet? For some of those smaller miners, who are limited to producing nickel only, it has had an effect. But for the mega-mining companies, diversified in other metals, the answer would be not yet. In fact, the stock in these companies has continued to increase. For instance, CVRD (RIO), the largest or second largest producer of nickel in the world, depending on who's statistics you choice to believe, has seen its stock go from $44.71 on May 9th, to close at $51.94 Friday. While we expect CVRD will release some staggering results for the second quarter of 2007, the decline in nickel prices will have an adverse effect on third quarter profits. But CVRD's 14% increase, is limited compared to some of its competitors. Xstrata (XTA.L) has seen its stock value climb from 2800 on May 9th to 3422 Friday, a gain of 18%. BHP (BLT.L) share value has grown from $1224 to $1527, an increase of 20%, during this same period. Apparently many stock holders are gambling, that while nickel prices are down, the bull market for metals is not over yet. $1224 to $1527    

  MILF to 'defend' self in impending major clash with AFP - "The Moro Islamic Liberation Front (MILF) on Saturday said it will defend itself "in the face of [an] impending major offensive by government forces." - article here (worth noting as the Philippines is a major source of nickel, although not on this particular island - this is in response to an ambush on July 10th, where 14 Marines were killed and their bodies mutilated)

  News Notes

• China's iron ore imports have fallen to their lowest level in the past six months. The total amount of iron ore imported last month was 26.9 million tons, down 6.37 percent on June last year, and down 2.61 percent on the previous month. The total volume of iron ore imported for 2007 will reach 367 million tons. The average price of imported iron ore in June was US$84.03 per ton, up 42.9 percent on the same period last year. The price hike is due mainly to rocketing ocean freight rates. (more)
• The Rashtriya Ispat Nigam Limited (RINL) is mulling over importing one ship load of iron ore from Brazil and a long term shipping contract.
• Credit Suisse in weekly report forecasts any further downside to nickel prices seem contained and the price should stabilize around psychologically important $30,000/tonne ($13.61/lb) mark.

  Week in Review - (we use a different source for weekend reviews than we do for daily reports - these numbers are indicators) On Monday, nickel opened trading at $16.06/lb, reached as high as $16.15/lb, fell to $15.48/lb, and ended at $15.54/lb. Tuesday, the market opened at $15.48/lb, which was also the high of the day, fell to $14.18/lb, and closed at $14.83/lb. Wednesday, trading opened at $14.72/lb, rose to $15.24/lb, after a low of $14.49/lb, and ended at $15.04/lb. On Thursday, trading opened at $15.04/lb, rose to $15.32/lb, fell to $14.95/lb, and finished at $15.06/lb. On Friday, markets opened at $15.20/lb, once again the high of the day, fell as low as $14.70/lb, and finished the day and week at $14.76/lb. Last Friday. markets closed at $16.08/lb, so for the week, 3 month nickel fell by over 8%. So far this year, the price is down 2.2.%.

  National Mining Association Mining Weekly - pdf here

  Low Prices Force Nickel Pig Iron Producers to Cut Production - "China's nickel pig iron producers have been forced to either cut or suspend production due to recent low prices and decreased demand from downstream stainless steel mills, industry insiders told Interfax yesterday." - article here

  The waltz of the applicants continues around Koniambo - "Side of the FLNKS, one ensures that the revision of the costs is finished and that the project will be done with Xstrata for single partner. During this time, Eramet lets know that it is ready “to render service” in the event of defection…" - translated article here

  (comment - no comment, just linking to it) Doomsday for the greenback - "The American people are in La-la land. If they had any idea of what the Federal Reserve was up to, they’d be out on the streets waving fists and pitchforks. Instead, they go about our business like nothing is wrong." - (more here)  Iran Asks Japan to Pay Yen for Oil, Start Immediately - "Iran asked Japanese refiners to switch to the yen to pay for all crude oil purchases, after Iran's central bank said it is reducing holdings of the U.S. dollar." - (more here)

  Summer Sale - "We are witnessing a generational bull-market in all types of natural resources (energy, food and metals). This boom in commodities is largely due to supply and demand imbalances plus the ongoing monetary inflation which is adding fuel to the fire." - more here 

  Countries the Secretary of State Has Designated as State Sponsors of Terrorism - here (comment - found this on an investor blog - US government now targeting company's who do business with countries that they have determined are terrorist states - in our personal opinion, by adding Cuba to the list, the State Department loses credibility. The reasons each country made the list are here)

• Dow Jones - Jinchuan Group Limited (JNMC), a large integrated non-ferrous metallurgical and chemical engineering enterprise engaged in mining, concentrating, metallurgy and chemical engineering, further cut the factory price of nickel by CNY 28,000 to CNY 298,000 per ton from the earlier CNY 326,000 per ton on July 10.
• An updated forecast by Brazil's mining institute Ibram states that capital spending in the country's mining industry will total $28 bn during 2007-2011.
• Mechel, a leading Russian producer of special steel and alloys, has announced that it will invest $2.7bn in 2007-2011 to develop its mining and steel businesses.
• The Indian Steel Alliance (ISA), a representative entity for the steel industry, feels that the steel industry should oppose the new mining policy's proposal to allow unlimited exports of iron ore. However, the steel companies are accepting the proposal without any protest. The steel industry had asked the Government of India to limit the export of iron ore to 90 million tonnes, similar to the 2006 level.
• Xinhua -China's iron ore imports fell to their lowest level in the last six months in June, according to the China General Administration for Customs (CGAC). The total amount of iron ore imported last month was 26.9 million tons, down 6.37 percent on June last year, and 2.61 percent on the previous month.
• All India Duty Drawbacks Revised - more here

  Mining Rich Seam of Merger Mania - "While politicians and environmentalists fret over the declining state of the globe's natural resources, the tycoons who run the giant mining groups are making sure they grab what is left while they can." - more here

  US steel import market is going through the lowest market sentiment - "The US steel market in this summer is so quiet that have made the international traders to experience a lowest buying mood ever than before." - more here

  Counting on commodities as an investment - "If only we’d had the foresight to stock up on lead. With just a few hundred tons of it we’d be sitting pretty today." - more here

  Today's beginning nickel inventory - plus 12 tons = 10,302 tonnes (6.34% - 654 tonnes cancelled warrants/ 9,648 net stock level)

• State-owned mining company PT Aneka Tambang (Antam) reported Rp2 trillion (US$222.2 million) in net profit in the first half of this year, exceeding the company's full year net profit of Rp1.49 trillion in 2006.
• Anglo-Australian miner Rio Tinto Ltd/Plc has agreed to buy Canada's Alcan Inc. for $38.1 billion to create the world's biggest aluminium producer, the two firms said on Thursday
• China's foreign exchange reserves increased by $40 billion in June, pushing the total figure to $1.33 trillion, the central bank said yesterday. It was a 41.6 percent increase year-on-year, the People's Bank of China said in a statement on its website.

  ThyssenKrupp Acciai to nearly double its capacity - "According to an agreement signed by Italian based SS producer ThyssenKrupp Acciai Speciali Terni and Danieli, the Terni facility is expected to see a doubling of its stainless steel production from 850,000 tonnes per year to around 1.5 million tonnes following expansion work to be carried out by Danieli The production due to commence by December 2008." - article here

  International mediation in the file Goro Nickel - "On the initiative of Rheebu Nuu, a mission of ONG Kreddha (the international Council of the States, people and minorities) comes to accomplish a first stay in Calédonie to provide the foundations of a mediation between the antagonists of the file Goro Nickel. The mission met last week, together then separately, the committee Rhebbu Nuu, the industrialist and the province Southern." - translated article here

  Mining bill close to completion - "Moving one step closer to the wrapping up of the deliberations on the mining bill, lawmakers and the government clinched a deal Wednesday on a special scheme, similar to the current contract of work (CoW) arrangements, for major mining projects" - more here

  A blighted Russian city pans for cash - "A former Siberian gulag with a population of about 210,000, this decrepit city has some of the worst air quality in the world. It is surrounded by dead trees, as far as the eye can see, poisoned by acid rain." - more here

  Today's beginning nickel inventory - plus 222 tons = 10,302 tonnes (6.52% - 672 tonnes cancelled warrants/ 9,630 net stock level)

Inventories grew again overnight, and it wouldn't take a big gambler to figure out who got all the gain - again. Helsingborg, Sweden took in another 192 tonnes, while shipments of 24 tonnes left Busan, South Korea, 78 tonnes left Rotterdam, and 18 tonnes left Singapore. Even a new record low for the U.S. Dollar against the Euro couldn't help nickel today. Three month nickel ended the day at $14.81/lb ($32,640/tonne) (Dow Jones - more)     

  GFMS Consulting - Market Analysis: Nickel - here

  Nickel Prices Plunge, Drag Down Metals - "The price of nickel slumped to a six-month low Tuesday as inventories of the metal keep swelling in the face of competition from a a cheaper, Chinese-made substitute." - article here

  S.Korea's POSCO says cuts stainless steel prices - "POSCO Co. Ltd. , the world's fourth-largest steel maker, has cut prices of stainless steel products by 300,000 won ($326.1) per tonne due to slower demand and lower nickel costs, a key raw material, a company official said on Tuesday." - article here

  Unsafe at Any Speed - The downside of China's manufacturing boom: deadly goods wreaking havoc at home and abroad. - "Wang Hai's mobile phone keeps buzzing with calls from clients. He's China's most famous crusader against fraudulent, shoddy and dangerous goods." - article here (referred by reader)

  News Notes

• Shares in MMC Norilsk Nickel tumbled 5.07% in London following the drop in world metal prices.
• Dollar Hits All-Time Low Vs. Euro
• Customs: Russia's nickel exports down 4.2% in Jan-May
• The changes macro economy is expected to increase demand for non-ferrous metals, according to the "Strategy for the Development of Russian metallurgical industry for the period up to 2015" Industry Russia. -  translated article here

  Iron-Ore Will Advance Through 2009 on Chinese Demand, UBS Says - "Iron-ore will rise through 2009 for a record seven consecutive years of price gains as global production of the key steelmaking raw material fails to meet Chinese demand, UBS AG said in a report." - article here

  Russian exports of nickel during first 5 months of 2007 are at 102,400 tonnes, compared to 106,900 tonnes during same period in 2006.

  Comment - our local scrap yard has dropped the price on non-magnetic stainless steel scrap from $.85/lb to $.50/lb in the last two months.

  Update - 10:00 am CST - Indications show nickel selling down by $.77/lb - Nickel sinks to 7-mth low as stocks increase, copper down - "Nickel prices sunk to a seven month low after the LME reported stocks rose again, adding fuel to the idea that supply is nowhere near as tight as it has been in the past few months." - more here

  And we called yesterday a bloodbath? Indications at 7:55 am CST show nickel selling down by $.90/lb or around $2000/tonne . (Bloomberg- more) All of the price increases seen in 2007, have now been erased. While stainless steel and nickel users are relieved to see the price of nickel drop, the volatility and degree of the decline is making purchasing impossible.

  LME nickel drops 5.2 pct on falling demand - "London Metal Exchange nickel dropped 5.2 percent on Tuesday to touch a fresh six-month low of $32,500 a tonne on cutbacks in stainless steel use, traders said." - more here

  HansonWesthouse Metals & Mining News & Views - pdf here  (courtesy minesite.com)

  Rand Merchant Bank - Base Metals Weekly - pdf here

  Reuters Metal Weekly - pdf here

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

  Mindoro to Ship 1 Million Tons of Nickel Ore, Executive Says - "Mindoro Resources Ltd., a Canadian mining company whose shares have more than doubled in the past year, aims to ship as much as 1 million tons of nickel laterite ore to China from the Philippines each year by 2009." - article here

  EU stainless steel market remains quiet - "Outokumpu and ThyssenKrupp has announced to decrease alloy surcharge by €270/ton from August compared to previous month and other mills are expected to be following. " - more here

  Yusco cuts 300 series stainless steel output - "Yusco, the largest stainless steel producer in Taiwan, is going to reduce its production of 300 series flat rolled stainless steel products." - article here

  Courtesy/copyright Dow Jones Newswire - "LME nickel is now targeting a move down to $32,500/ton as continued weakness pervades prices, says Triland's Michael Khosrowpour. "A steady trend of increasing stocks combined with slowing demand from the stainless steel sector has helped maintain the bearish sentiment recently underpinning the market," Khosrowpour adds.

  Jinchuan lowers local nickel prices by Yuan 28,000/mt on July 10 - "China's largest nickel producer Jinchuan Group has lowered its two domestic electrolytic nickel prices by Yuan 28,000 ($3,692)/mt each, with effect from July 10, 2007, the company said in a statement on Tuesday." - article here

  Fox in talks with Chinese about iron ore project - "Base metal miner Fox Resources Ltd is in discussions with a major Chinese group in relation to the development of its recently discovered Mt Oscar iron ore prospect." - more here

  News Notes on Scrap Thefts

• Guam - Thieves stole dozens of brass panels from a World War II memorial that were etched with the names of thousands of Guam residents and U.S. military members tortured or killed during the war, officials said Thursday. - (later Sunday) Gov. Camacho orders cessation of outbound scrap-metal shipments until panels are recovered
• Stolen kegs have $50 million impact on beer industry - more here
• Catalytic converters now a prime target in vehicle thefts - more here

  Today's beginning nickel inventory - plus 72 tons = 9,954 tonnes (5.61% - 558 tonnes cancelled warrants/ 9,396 net stock level)

As mentioned before, inventories of nickel stored in LME listed warehouses took another large jump Friday. Once again, Helsingborg, Sweden did the receiving, taking in 618 additional tonnes. On the outgoing side, Busan, South Korea shipped 24 tonnes, Gothenburg, Sweden shipped 48 tonnes, Rotterdam shipped out 18 tonnes, and Singapore shipped out 6 tonnes.  Cancelled warrants gained by a percentage point, and the BDI gained a third of a percent to 6,220. The market ended 2006 with the price of 3 month nickel at $15.10/lb. We see another day like today, and prices will fall below that level. Today, 3 month nickel ended the day at $15.56/lb ($34,300/tonne) (Dow Jones - more)    

  Read Frank Veneroso's explosive speech as presented to the World Bank April 2007 - pdf here  (comment - another speech given by Mr Veneroso back in 2004 - notes here)

  BNP Paribas raises metals price forecasts on tight inventory, strong demand - "Tight global copper inventories and robust demand currently and in the future have prompted investment bank BNP Paribas to rethink its price outlook." - article here

  Metals Insider - Week in Review - Nickel clings to support, fearing chasm below - report here

  China Driving Force Behind Asia's Q1 Stainless Steel Production Growth - "Stainless crude steel output throughout the Asia region amounted to 4.19 million tonnes in the first quarter of this year, rising 25.2% compared with the same period of last year, with China as the driving force behind the production increase, according to statistics released by the Stainless Steel Forum (ISSF) last Friday." - more here

  Large Copper and Nickel Deposit Discovered in Henan - "A large deposit containing 110,000 tonnes of copper reserves and 325,000 tonnes of nickel reserves was recently discovered in the city of Nanyang in central China's Henan Province, a local government official told Interfax today." - more here

  China's fuel drive draws ire in Papua New Guinea - "China's relentless drive for resources to fuel its booming economy, which is already drawing charges of neo-colonialism in Africa, is causing growing resentment in Papua New Guinea." - article here

  Indications at 7:50 am CST show nickel selling down by $.19/lb . (Bloomberg - more)

  In the weekly poll of metal analysts for Shanghai Nonferrous Metals, there was a consensus by those who voted. For the week of July 9, the 26 experts voted 100% that the price of nickel would fall this week.

  Rand Merchant Bank - Base Metals Monthly - July 2007 - pdf here

  JP Morgan raises outlook for base metals prices - "J.P. Morgan has raised its forecast for average base metals and platinum prices in 2007 and 2008, due to expectations that fund redemptions will occur later than previously anticipated, its metals analysts said on Monday." - article here

  Stainless firms see output cuts' impact muted - "Chinese stainless steel mills' plans to cut output of finished products this month will have a limited impact on domestic supplies, as some will not cut primary production and other processors will take up the slack in finished products, company sources said." - more here

  What’s Happening With Nickel? - "Commodity bull markets can often experience a speculative peak followed by a dramatic collapse in price. These sharp peaks are sometimes associated with an attempt to corner the commodity by either a single large entity or collusion of smaller participants. With the exception of DeBeer’s which has allegedly been successful at manipulating the diamond market for decades, these activities often end in financial disaster when the aim of the manipulator becomes widely known. They may find themselves becoming the only buyer in order to keep the price high and prevent a catastrophic collapse." - more here

  News Notes -

• Interfax - The average reference FOB price of Indian grade 63.5 percent iron ore was between $75 and $76 per ton last week, remaining flat from the previous week, while the CIF per-ton-price was between $103 and $104, also unchanged from the previous week, according to the Indian iron ore national reference price from the China Chamber of Commerce of Metals, Minerals, and Chemicals Importers and Exporters (CCCMC) released today.
• Agencia Lusa - Brazil, India and China should maintain their trend of "steady economic expansion", whereas Russia should undergo "economic acceleration," according to indicators established by the Organisation for Economic Co-operation and Development (OECD) regarding the month of May, which were disclosed on Friday.
• Dow Jones Newswire - " The global nickel market is seen in a surplus of 16,700 metric tons in '07, up from 8,000 tons previously forecast, says JP Morgan. This is a result of the rapidly-increasing contribution from nickel pig iron to production growth, the bank notes. For '08 the expected nickel surplus rises to 24,000 tons, the peak-oversupply period for the balance of the decade. Forecasts a surplus of 11,800 tons for '09,  reversing to a deficit of 18,400 tons in '10 as nickel pig iron output becomes uneconomical in the face of sharply lower nickel prices.
• Dow Jones Newswire - LME nickel is seen averaging $39,353/ton in '07, falling to $27,525/ton in '08 and $18,768/ton, says JPMorgan. Prices are still "extremely expensive" and current price volatility reflects a steady rise in LME stocks, moving the market to tight from critically tight status, growth in the production and use of low nickel pig iron, and changes to LME guidance on nickel, the bank notes.

  Investors abuzz as BHP and Rio ride the commodities super cycle - "WHEN Marius Kloppers addressed BHP Billiton's Melbourne staff for the first time as the mining giant's chief executive-elect, he ended with a warning that global rivals were catching up and that if BHP was to stay ahead it would have to pick up speed." - article here

  A research center on nickel in North - "The Northern province approved, Friday, the constitution of the grouping of public interest “CNRT Nickel and its environment”. A laboratory on nickel called upon to work in three major fields: technology, the company and natural environment." - poorly translated article here

  Russia almost doubled export of coke - "During this year, Russia sufficiently increased volumes of coke export. According to the results of January-April, almost 0,9 mln.t of products of by-product coking enterprises were shipped from the country. This result exceeds indicators of last year by 80% for the same period of time." - more here

  Russia January-May Copper, Aluminum Export Up, Nickel Down - "Russia exported 118,300 metric tons of copper in January-May, an increase of 5.6% compared with the corresponding period last year, the federal customs service reported Monday." - article here

  Today's beginning nickel inventory - plus 516 tons = 9,882 tonnes (5.95% - 588 tonnes cancelled warrants/ 9,294 net stock level)

• Minara Resources Ltd, Australia's second largest nickel producer, has revised its full year output for 2007 to 31,000 to 33,000 tonnes of nickel, down on the previous forecast of 32,000 to 35,000 tonnes.
• After seeing the largest plunge in comparative terms in a month yesterday, Chinese stocks made a U-turn and achieved the biggest growth for a month today. The Shanghai Composite Index closed at 3,781.35, up 165.48 points or 4.58% from yesterday's closing
• Indonesia's index rose 1.13 percent, following an interest rate cut, and the Philippines jumped 1.89 percent, both hitting new all-time highs.
• North China ranks the top in crude steel production among China's administrative regions so far this year, according to steelhome.cn, a steel information institution in Shanghai.
• MMX Mineracao e Metalicos SA, the Brazilian mining company controlled by billionaire Eike Batista, acquired rival AVG Mineracao SA for $224 million in cash.
• India - A new mining policy passed by a group of ministers on Friday does not propose a cap on exports of iron ore, Mines Minister Sisram Ola said.

  Yusco, Tang Eng to cut production in July - "Taiwan’s Yusco and Tang Eng have announced to slash production continuously in July." - article here

  NDRC data shows that Chinese domestic steel prices stops decline - "China Securities News agency reported that Chinese domestic steel prices have shown sign of stabilizing during the week ended July 1st 2007, after declining for 5 continuous weeks." - article here

  Zimbabwe: BNC to Open New Mine - "Bindura Nickel Corporation will begin exploitation of nickel at its US$100 million Hunter's Road project in the next three months, "if things go according to plan"." - article here

  Kloppers flags BHP boosting nickel, copper - "Incoming BHP Billiton chief executive Marius Kloppers has flagged further expansions of the group's copper and nickel operations, along with fiscal discipline when he takes up his post in October." - more here

  Turn LU into the ‘Harvard of the Mining Sector’ - "By consolidating Ontario’s university mining engineering and geology programs at Laurentian University, the McGuinty Government could turn that institution into an international “Harvard of the mining sector.” Centralizing these programs in Sudbury would also further the community’s global reputation for mining research." - more here

  The Current Term Structure Hurts Commodity Returns - "As Tom Lydon from ETF Trends recently pointed out more investor education on contango and backwardation - the two forms of the term structure of commodity futures markets - is necessary. As an investor in commodities you have the choice between buying the physical commodity or a derivative (e.g. a futures contract) on a commodity to profit from the price appreciation of the commodity." - more here

  Today's beginning nickel inventory - plus 276 tons = 9,366 tonnes (4.93% - 462 tonnes cancelled warrants/ 8,904 net stock level)

• Yieh - "China’s Taiyuan Iron and Steel Group Co. Ltd. (Tisco) has announced to cut its prices in order to stabilize market price. Consequently, the price for 304 HR and CR stainless steel sheet will reduce by RMB8,000/ton, and the price of 430 cold rolled stainless steel sheet will decrease by RMB3,000/ton."
• Mining Journal - "Mirabela Nickel Ltd, an Australian nickel explorer, expects to start construction work at its Santa Rita project in Brazil in October after a study found development of a US$263 million mine was commercially feasible. The mine will produce 16,000 t of nickel concentrate annually from 2009, the Perth-based company said on Thursday in a statement to the Australian Stock Exchange."
• Shanghai index plunges 5.25% amid panic selling
• China top choice for investors
• RTT - Germany June Pig Iron Production Up 1.6% On Year, Raw Steel Grows 2.7% - German pig iron production increased 1.6% on year to 2.58 million tonnes in June, the provisional results of the Federal Statistical Office showed Thursday. Raw steel production rose 2.7% to 4.10 million tonnes in the month of June.

  Japanese steel makers facing cost pressures - "Bloomberg reported that Japanese steel company costs might rise more than expected this year as raw material prices gain." - article here

  Mwana sets nickel production target, shares rise - "Africa-focused miner Mwana Africa Plc set a new production target for a Zimbabwe nickel mine on Tuesday, sending its shares higher." - article here

  Russia to Suspend Import Duty on H/R Coil for Stainless Steel - "Russia will suspend the 5% import duty on selected types of hot-coiled roll, used to make stainless steel, for a period of nine months effective August 3." - more here

  Commodity Predictions: The Future Is Uncertain - "Predicting the future is a notoriously precarious business, particularly if the time frame exceeds five years. What I find fascinating about futurology is that it gives an insight into the way people think about the future." - article here

  New mining policy may get India $2 bn - "With the group of ministers on mining likely to clear the new mining policy at its meeting on July 6, the country is expected to attract as much as $2 billion foreign direct investment annually in the metals and minerals sector and create five lakh additional jobs in the next five years." - article here

  Are “moly mania” prices here to stay? - "Strong demand, as well as production bottlenecks, may keep molybdenum prices high for the next few years" - more here

  Today's beginning nickel inventory - minus 24 tons = 9,090 tonnes (6.01% - 546 tonnes cancelled warrants/ 8,544 net stock level)

• Globe & Mail - "And a report from Standard Chartered suggests nickel prices are expected to stabilize at current levels, after dropping 30 per cent from a record high in May. “With the market expected to be near balance this year and inventories low at only 2.3 days of demand cover, nickel prices are still well supported,” it adds."
• Reuters - "Mexico's mining union plans a 24-hour nationwide walkout on Thursday unless the labor ministry meets its demands to improve safety in mines, a top union official said on Wednesday."

  Eramet says nickel prices should fall further, in line with 'reality' of market - "Nickel prices should continue falling in order to reflect "the reality" of supply and demand in the market, although heavy Chinese reliance on a substitute product may be distorting the market, according to Alain Robert, head of the nickel division of French mining group Eramet, said at a press conference here." - article here

  Indications at 7:50 am CST show nickel selling up by $.07/lb  (Bloomberg - more) (We have about ten different sources for daily cancelled warrants and apparently they are all on holiday. May be tomorrow morning before we can post the info)

  Voisey's Bay royalties 'wasted' in past: Innu chief - "The newly elected chief of an Innu community in Labrador said he is pleased royalties from the Voisey's Bay nickel mine are bypassing his band's bank account." - article here

  Goro Nickel plays charts on table - "The industrialist has just deposited a new file of request for authorization of exploitation. According to the administrative advance of the file and decision which the province will make Southern, the new decree - or not - will be delivered within one year." - translated article here

  Strong dollar hits junior miners - "The soaring Australian dollar is squeezing junior resource companies, forcing miners to abandon projects and placing billions of dollars worth of exports at risk." - article here

  Molybdenum prices fall in USA - "As American stainless steel and special steel producers reduced their consumption on molybdenum, the price of molybdenum began to fall." - article here

  News Notes

• Courtesy/copyright Dow Jones Newswire - "LME 3-month nickel should find floor short term after sharp correction, as market remains finely balanced, says Standard Chartered. Forecasts 3-month nickel to average $35,000/ton in 3Q, falling to $34,000 in 4Q, while average for 2008 pegged at $35,000. Notes though stainless steel demand weakening, and LME inventories have more than tripled from February lows, LME stocks still only equivalent to 2.3 days annual consumption. "Near term, there is some weakness in demand from the stainless steel sector, but it remains to be seen how much this is due to an inventory cycle, and how much is due to substitution."
• EU Purchasing Manager Index Services rises to 58.3 in June from 57.3 in May
  

  Haywood Securities - Metals & Mining Weekly - pdf here

  Mining investments to reach US$28bn in 2007-11 - "Investment in Brazil's mining industry will reach US$28bn in the 2007-11 period, according to an updated forecast by the country's mining institute Ibram." - article here

  Thainox Stainless joins Arcelor Stainless Internationale to expand exports - "Thainox Stainless is joining hands with Arcelor Stainless International (ASI), a unit of Arcelor Mittal, the world's largest maker of steel and stainless steel, to seek opportunities in new export markets with innovative products, The Nation reports." - more here

  Steelmakers face high cost on ore price hike - "Japanese steel company costs may rise more than expected this year as raw material prices gain, said Shoji Muneoka, executive vice president of Nippon Steel Corp, the world's second-largest steelmaker." - article here

  Today's beginning nickel inventory -  plus 228 tons = 9,114 tonnes (7.97% - 726 tonnes cancelled warrants/ 8,388 net stock level)

US markets are closed Wednesday for Independence Day celebrations. The London Metal Exchange will be open, so we will report as normal. For those interested, the History Channel has posted a short video on "The History of the Fourth of July" here

  Stainless Steel Plate and Nickel Price Forecasts from MEPS - Hot Rolled Plate type 316 transaction values moved up during June in both the EU and North America, but fell in Asia for the first time since December 2005." - more here

  Mining giant Rio Tinto repeats it can't meet China-led demand for iron ore - " Anglo-Australian miner Rio Tinto Ltd. reiterated Tuesday that it can't meet demand for iron ore, particularly from China." - more here

  China's Largest Stainless Steel Mill Cuts Core Product Prices - "China's largest stainless steel mill, Taigang Stainless Steel Co. Ltd., the Shenzhen-listed arm of Taiyuan Iron and Steel Group Co. Ltd. (TISCO), has cut the price of its core product, series 304 stainless steel sheet, by RMB 8,000 ($1,051.59) per tonne this month, a company official told Interfax yesterday." - article here

  News Notes - (from a reader)

• Taiwanese SS wire rod mill Yieh Hsing Enterprise Co. Ltd., the subsidiary of E-United Group, has announced a reduction of its July shipment SS wire rod price by NTD 28,000/mt ($852/mt) compared to June. Accordingly, the SS SUS304 5.5-12 mm wire rod price is currently at NTD 161,000-164,000/mt ($4,898-4,989/mt) ex-works, including five percent VAT. - source steelorbis
• SteelOrbis has been informed that the price of SUS 304 stainless steel wire rod of 5.5-32 mm in the local Taiwanese market is being quoted at NTD 160,000-170,000/mt ($4,869-5,173/mt) ex-warehouse, including five percent VAT, for late July shipments. The above prices indicate a drop of around NTD 18,000-25,000/mt ($548-761/mt) compared to last week. - source steelorbis

  High Nickel Prices Make Production Viable In Zimbabwe - CEO - "High nickel prices are offsetting the deteriorating economic situation in Zimbabwe and making production of the metal in the southern African country worthwhile, Kalaa Mpinga, chief executive of Mwana Africa PLC, said Tuesday." - article here

  (comment - a large and growing user of stainless steel in the US, are the ethanol plants being built. Here is a list of active and under construction plants) List here

  Indications  at 7:50 am CST show nickel selling up by $.37/lb .  (Bloomberg - more)  (Reuters - more) U.S. markets close at 1 pm today to begin celebration of US Independence Day holiday. U.S. markets closed Wednesday, July 4th.

  Metals Insider - Week in Review - "Nickel slides further as sentiment deteriorates" - here

  June 2007 Manufacturing ISM Report On Business® - PMI at 56% - report here

  Commodities bull run not at an end - Jim Rogers, investment guru - "THE commodities bull run was expected to continue because there was no extra supply to drive prices down, said investment guru, Jim Rogers." - article here

  Rand Merchant Bank - Weekly Base Metals Report - pdf here

  Reuters Metal Weekly - June 25-29 - pdf here

  Citigroup forecasts sustainable $3/lb copper price but nickel picture ‘murky’- "In their most recently published analysis, Citigroup Global Markets Equity Research advises that that mining and metals stocks "are shifting from a period of dizzying M&A speculation, to the cold numerical reality of the 2Q earnings reporting cycle." - more here

  Manufacturing activities slowed - "Manufacturing activity in China expanded at a slower pace in June, according to a survey of purchasing managers released today." - more here

  News Notes -

• China’s exports of steel billets reached 2.65 million tons in the first four months this year, increasing by 92.2 percent compared with the same period last year, according to statists from China Iron & Steel Association. The exports of steel products totaled 21.28 million tons, up by 132 percent compared from a year ago. The exports of steel products and billets amounted to 8.03 million tons.  - Yieh Corp
• Indonesian miner PT Antam Tbk has said that repairs to its FeNi III smelter in southeast Sulawesi will take longer than initially estimated and that it is not likely to meet its nickel production target this year. - more
• NY Times says ready to face lawsuit over Indonesia stories - more here

  China to cut tax rebates on metal products exports - "The global metals market is a buzz with reports that China will reduce or remove metal products export tax rebates effective July 1. According to the Ministry of Finance, on export of more than 500 products value-added tax rebates will be cancelled and on more than 2,000 others rebates will be reduced." - article here

  Russia Scraps Stainless Flat Steel Roll Import Duty For 9 Mos - "The Russian government said Tuesday it will introduce for nine months a zero import duty for flat steel roll containing nickel." - more here

  June 2007 - Passing the can test on nickel ore cargoes - pdf here (this problem has been blamed for numerous incidents recently, and was suspected in two ships sinking's - 8/26/98 when the Sea Prospect went down with 10 hands on board, and 12/16/88 when the OBO carrier Mega Taurus went down with 30,000 tonnes of nickel ore and 20 hands were lost) more photo's  and news from reader - pdf here and here

  Pay Dirt - AIM miners going into production - Edison Investment Research  - (courtesy of minesite.com) - pdf here

  Aluminium to beat other metals as takeovers squeeze supply - (quote from article )"“Aluminium futures are the best place to park your money,” says Jon Bergtheil, head of global metals strategy at JPMorgan in London. “Copper and nickel have more downside potential than aluminium.” - rest here

  Oriel sees sustained demand for metals - "Oriel Resources expects a strong market to continue for steel and nickel throughout 2007 and for the company to be a good position to service this demand." - article here

  Miner accused of evicting townsfolk - "BHP Billiton faces an investigation into its possible role in the forced eviction of the population of a Colombian town that was then bulldozed to make way for a coalmine." - more here

  Today's beginning nickel inventory -  plus 30 tons = 8,886 tonnes (7.22% - 642 tonnes cancelled warrants/ 8,244 net stock level)

• US imports of stainless steel cold rolled sheet in May totaled 32,100 million tons, increasing by 15% from previous month, but lower than the 36,900 million tons in the same period of 2006. - Yieh
• China will produce more than 6 million tons of stainless steel this year, with total capacity expected to exceed 10 million tons, a senior official with the Stainless Steel Council of China Special Steel Enterprises Association (CSSC) - Interfax

  Indonesia Antam: Feni III To Operate At Full Capacity In Oct - "Indonesian nickel miner PT Aneka Tambang (ANTM.JK), or Antam, Monday said it expects its Feni III smelter to operate at full capacity only in October, after a metal leakage was discovered last month, a senior official at the company told reporters." - article here

  Today's beginning nickel inventory -  minus 54 tons = 8,856 tonnes (6.64% - 588 tonnes cancelled warrants/ 8,268 net stock level)

• Courtesy Interfax/Dow Jones - "Vladimir Potanin, co-owner of MMC Norilsk Nickel, has not been re-elected to the Russian mining and smelting giant's board of directors, Norilsk Nickel said in a press release. The board members elected at the AGM are Denis Morozov, CEO; Andrey Bugrov - Managing Director of Interros Holding Company; Guy De Selliers - Non-Executive Director of Allied Resources Corporation; Vladimir Dolgikh - President of the Management Board of the Krasnoyarsk Fellow- countrymen association; Tav Morgan - Deputy General Director, member of the Management Board of MMC Norilsk Nickel; Ekaterina Salnikova, Deputy Director for Corporate management at the Financial Department at the Interros Holding Company; Kirill Ugolnikov - Director of tax department of JSC Vneshjurkollegia; and Heinz S. Shimmelbusch - Managing Director, partner of Safeguard International Fund L.P." (note - Potanin was the only dissenting vote to increase the offer for LionOre, that trumped a bid from Xstrata)
• Universal Stainless & Alloy Products, Inc. (Nasdaq:USAP) announced today that due to the recent retirement of one its independent directors who also served on its Audit Committee, it received notification on June 25, 2007 from Nasdaq Listing Qualifications indicating that the Company no longer complies with Nasdaq's audit committee requirements set forth in Marketplace Rule 4350. The Rule requires that the Company's Audit Committee be comprised of at least three members, each of whom is independent.
• China domestic consumption of nickel statistics - (2003) 127,000 tons (2004) 150,000 tons (2005) 208,000 tons (2006) 228,000 (source Antaike)
• Alibaba issues daily prices for Shanghai market during June - started on 6/1 at 405750, and ended the month at 341750. The traded low June was 341000 on 6/29 and the high was 409000 on the 4th.
• July 1, 2007 - Implementation of the new export tax rebate policy in China on copper, aluminum, lead, zinc, nickel, tungsten, molybdenum, antimony, and other non-ferrous metal products .

  Neighbors, mining firm clash over way of life - "Oregon Resources Corporation's bid to boost industry on the South Coast by establishing a chromite mining operation collided head-on Thursday night with a group of neighbors who contend the mining operation would threaten their way of life and health." - article here

  New chromite supply potential - "The supply shortage in the market for special-grade chromite will likely ease with the arrival of new producers. Demand for chromite has been surging in ferrochrome production, tightening supply of special-grade chromite and bringing prices to new record highs." - article here

  Phelps Dodge desperate to hire 600 mine workers - "Phelps Dodge is making a push in Phoenix and Tucson to recruit workers for its mines in Safford and Morenci." - article here

  Thanks to a reader from Germany - World's Most Polluted Places - Norilsk Nickel rated #8 - here

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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 = 2204.6 pounds ) Updated daily before 8 am CST and before 1 pm CST weekdays, with some weekend updates - Disclaimer Original content and opinions copyright www.estainlesssteel.com