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Friday, July 31

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 95 to 3,350. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China's Steelmakers Say Iron-Ore Producers Stoking Speculation, Seek Curbs // China Lodges First WTO Complaint Against EU About Tariffs on Screws, Bolts // Asian Stocks Rise on Profit Reports; MSCI Index Set for Fifth Monthly Gain // European Prices Fall 0.6%, Most in 13 Years; Jobless Rate at Decade High // Ackermann Says Rising Delinquencies Represent `Next Wave' of Bank Crisis // Stocks in Europe Decline; Air France, Eni Drop as Earnings Trail Estimates // Treasuries Set for Longest Decline Since 1996 on View Recession Is Easing // `Clunkers' Incentives Program May Boost July U.S. Auto Sales to 2009 High // Economy Contracts at 1% Rate; Consumer Spending Falls More Than Estimated // First Year of U.S. Recession Worse Than Initial Estimates, Revisions Show // UBS Tax-Evasion Agreement Is Worked Out by U.S., Switzerland, Lawyer Says // Stocks in U.S. Gain After GDP Report Is Better Than Forecast; GE Advances
  • The US Dollar continues to fall against the Euro, now down over 1-1/4%. NYMEX crude is up over 1-1/2% and over $68/barrel. Gold is nearly 2% higher, while silver is up by 3-1/3%. Base metals had another positive ending day, with nickel getting the spotlight. Traders had $8/lb in their sites and were determined to hit it. Indicator charts show nickel shot up early to over $8/lb, retreated after US GDP second quarter figures were released, but after about an hour and a half of heading down, kicked it back into gear and rose sharply. For the day, week, and month, three month nickel closed at $8.14/lb , it's first time over $8 since September of last year. LME inventories of nickel slumped again overnight, and now rest under 106,000 tonnes. The Baltic Dry Index took another hit, down 95 points to 3,350. And thus we bid farewell to July 2009. Nickel closed last month at $6.96/lb and spent all but 4 days of July closing above $7.00/lb. LME stored inventories started the month over 109,000 tonnes, and ended the month under 106. Most analysts began the month fairly convinced we would see a major correction in nickel pricing during the month, but the bull refused to bow. A major strike began in Sudbury, Canada, with a second starting this weekend at Voisey's Bay. BHP has reportedly put Ravensthorpe on the market, the start-up of Goro was delayed temporarily ... again, the construction of Ramu suffered delays... again, Ambatovy is caught up in political upheaval .... again, and Santa Rita is scheduled to begin producing later this year ... after it raises some money. The iron ore negotiations turned from nasty to down right mean with Chinese officials arresting the Rio Tinto team on espionage allegations. Xstrata wants to marry Anglo American, but Anglo says no. Overall economic news either got better during the month, or remained "less bad". Today, the Chicago purchasing managers index rose to 43.4% in July. It was a month of renewed optimism coming from many corners of the globe. Let's hope it continues.  
  • Have a safe and restful weekend.

  Reports

  • Base Metals 3rd Quarter Outlook - pdf here

  Nickel prices push up as premiums rangebound on uncertain demand - As nickel futures prices relentlessly continue to defy gravity, making a determined effort to follow the rest of the base metals complex on the London Metal Exchange on their march to higher numbers, traders and producers in Europe paint a mixed picture regarding physical demand for the metal, according to sources contacted by Platts this week. - more

  Vale Voisey’s Bay Nickel Workers Say They’ll Strike at Midnight - Vale SA’s Canadian nickel workers at the Voisey’s Bay mine say they will begin a strike at midnight after failing to clinch a labor agreement. - more

  Rusina Mining says heap leach trial complete at Acoje nickel project, Philippines - Rusina Mining NL said the heap leach trial (HLT) at the Acoje nickel project in the Philippines is now mechanically complete, and 3,000 tonnes of laterite ore is in the process of being crushed for the pad. - more

  Analysis-Will China metal stocks "time bomb" detonate on credit? - Traders fearing that China's record copper, aluminium and nickel imports might suddenly reverse course should probably be watching data on the domestic supply of money, not metal. - more

  ENRC says to withdraw from China Gateway project - Kazakh miner Eurasian Natural Resources Corporation Plc is to withdraw from the 'China Gateway Project', a concession to build a rail link between China and Kazakhstan. - more

  China steel body threatens to enforce single price - China's steel industry body threatened new rules to enforce a single price for iron ore, as it struggles to regain control of marathon contract price talks with global miners in which it vowed to achieve a "reasonable result". - more

  • Iron ore spot price shipped to China rose 21.5% in July - The price of imported iron ore sold spot into China, rose 21.5% in July. Platts IODEX 62% Fe content price assessment for the steel making raw material increased by $17 in total to close the month at $96/dry mt CFR North China. - more

  Hannans in a deal to buy land from Kagara, St Barbara - Junior minerals explorer Hannans Reward Ltd has done a deal with Kagara Ltd and St Barbara Ltd to buy unexplored ground considered prospective for nickel and gold in Western Australia. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.25/lb higher, and trading just off its 2009 high. The rest of the base metals are also higher. The US Dollar is trading lower against the Euro, assisting commodities, and down by 4/10 of 1%. NYMEX crude is quiet after a two volatile days, a hair over $69/barrel. Gold is also quiet, while silver is higher by 1/2 of 1%. In overnight trading, Asian markets rebounded, following the US lead from yesterday. European markets are quiet and slightly higher this morning, while US futures show a positive opening for Wall Street is possible. US GDP numbers for the second quarter of 2009 were just released and came in much better than expected, slipping 1%. This could give all active markets an additional boost. In nickel news, a strike will begin at the Voisey's Bay nickel mine tomorrow night.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - on vacation next report August 3rd (read Ed Meir's complete morning base metals report here)
  • (Yieh) China’s Taiyuan Iron & Steel Co. (TISCO) has increased its stainless steel price by RMB1,000/ton (US$147/ton) for domestic market this week. European stainless steel mills also raised their stainless steel price. Their nickel base stainless steel price has reached US$3,030 – US$3,100/ton
  • (Yieh) Korean Hyundai Steel has announced to raise its CR stainless steel price in line with increase of Posco’s HR stainless steel price recently. Accordingly, the company’s CR 304 price will increase from 3.194 million won/ton to 3.404 million won/ton effective from August 1st.
  • (Asia Pulse) A South Korean company plans to invest US$2 billion in nickel mining in Southeast Sulawesi province, an official said. The unnamed South Korean company would exploit nickel and build a stainless steel plant in the province, Southeast Sulawesi Governor Nur Alam said here on Thursday.
  • (Religare) It is expected that nickel market may show a surplus of 91,000 tonnes in 2009, which could largely be worked off by the end of 2010. But with plenty of spare idled capacity available, the price will be as much a hostage to supplier responses as to the size and rapidity of the global economic recovery.
  • (JMB) Japanese raw steel output will increase by 20.8% to 23.073 million tonnes in July-September from April-June while the output is 24.2% lower than same period of 2008, announced by Ministry of Economy, Trade and Industry on Thursday.
  • AAR - The Association of American Railroads today reported that rail carloadings for the week ended July 25, 2009 continue to show slight improvement, but rail traffic remains down compared with the same period last year. U.S railroads reported originating 273,943 cars, down 17.4 percent compared with the same week in 2008. Regionally, carloadings were down 15.6 percent in the West and 20 percent in the East.
  • Four Bad Bear Markets update (courtesy dshort.com) - graph here and inflation adjusted version - here
  • The price of Wal-Mart coming to town - more
  • Commodities soar as investors' risk appetite grows - more

  Recovery In Stainless Steel Production But No Bonanza In Sight - A recovery in the stainless steel sector is underway. World steel production in the second half of this year will be significantly higher than in the first six months. - more

  Optimism Cautiously Returns To Stainless - Stability in raw material prices and depleted inventories give stainless producers and distributors hope that the worst of the specialty market’s doldrums are in the past. - more

  Sumitomo Metal Widens Loss Forecast on Seamless Pipes  - Sumitomo Metal Industries Ltd., Japan’s third-biggest steelmaker, more than doubled its forecast for a loss this fiscal year because of a delayed recovery in export markets for pipes used in oil and gas production. - more

  Carpenter Technology sales down; auto takes biggest hit - Carpenter Technology Corp. today reported that sales of its specialty stainless steel and other metals were down 54 percent in the fourth quarter. - more

  New Caledonia Nickel Plant to Cut 500 Jobs – The French Eramet company says its nickel-producing SLN subsidiary in New Caledonia should ideally shed 500 jobs by 2012. - more

  Dig it: Climax Mine plans still on hold - Mine restart depends on worldwide demand and price of molybdenum - more

  China Steel Demand to Gain in Second Half, Group Says - Steel demand in China, the world’s largest consumer of the metal, will improve in the second half from the first six months as economic growth accelerates, the China Iron & Steel Association said. - more

  US Employment - certain sectors since Jan 1999 thru June 2009 - not seasonally adjusted (source - BLS)


Durable Goods Manufacturing


Construction


Wholesale Trade - Industrial Supplies


Wholesale Trade - Hardware


Manufacturing - Bolts, Nuts, Screws, Rivets and Washers


Manufacturing - Corrugated and Solid Fiber Boxes

  China launches dispute with EU over screw imports - China launched its first trade dispute against the European Union on Friday, complaining that anti-dumping duties imposed on imported Chinese screws and bolts are discriminatory and protectionist. - more

  Sudbury Nickel Strike Coverage

  • Sudbury Star
  • Vale/Inco offer // Vale/Inco Company Site
  • Union Strike Site //  USW  Local 6500
  • Sudbury TV // Sudbury Northern Life Videos
  • Picket line protocol agreed - The labour dispute at Vale Inco's Sudbury operations made its way into the courts Wednesday, as the company slapped the United Steelworkers with a $26-million lawsuit as part of a bid for new rules governing picket lines. - more
  • Vale Inco strike to reach Brazil - United Steelworkers members, on strike against Vale Inco in Sudbury, are heading to Brazil this weekend to escalate" their public campaign against the global mining giant and cement ties with international trade unionists. - more
  • Voisey's Bay Strike Looms - For the second time in three years, workers at Vale Inco in Labrador appear headed for a strike. No talks are planned, and the United Steelworkers Union doesn't expect any last-minute return to the table. Approximately 300 employees will take to the picket lines as of midnight tomorrow. Wayne Fraser of the Steelworkers Union accuses the company of corporate greed in trying to strip them of their bonus pay.

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • BHP, Chinese steelmakers clinch an iron ore sales deal - A face-saving agreement over iron ore sales between Chinese steelmakers – who produce 38 percent of the world’s steel – and BHP Billiton was finally clinched this week. - more
  • Rio Tinto: Will China's detention of employees scare off foreign firms? - The lack of transparency over the case of executive Stern Hu raises questions about rule of law – even as many agree China is within its rights to investigate. - more
  • Iron ore price negotiation still underway: CISA - China is still in talks with the world's major iron ore firms for the annual supply deal, Friday's Shanghai Securities News reported, citing Shan Shanghua, secretary-general of the China Iron & Steel Association (CISA). - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, July 30

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 54 to 3,445. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Nintendo Wii Sales Fall for First Time as PlayStations Drive Sony to Loss // State Bank of India First-Quarter Profit Beats Estimates on Trading Gains // Japan Factory Output Climbs, Taking Quarterly Gains to Fastest in 56 Years // Asian Stocks Rise as Mitsubishi Electric, Honda, Nissan Advance on Profit // Volkswagen Profit Beats Estimates as Brazil, China Offset European Slump // Alcatel-Lucent Posts First Profit After 10 Quarters of Losses on Cost Cuts  // Stocks Climb as Earnings Top Estimates; BT, Honda, Alcatel-Lucent Advance // Stocks Rise as BT, VW Profits Top Estimates; Stoxx 600 at Eight-Month High // Initial Jobless Claims in U.S. Climb; Continuing Claims Unexpectedly Drop // Tyco International Earnings Climb on Workforce Cuts; Revenue Declines 19% // Stocks in U.S. Advance on Earnings, Unemployment Data; Motorola, GE Gain
  • The Euro continues to trade higher against the US Dollar, up by a little over 1/10 of 1%, while NYMEX crude is up nearly 5%, and over $66/barrel. Gold is higher by 1/2 of 1% and silver is up 1-1/2%. Base metals had a big day, all ending solidly in the green. Indicator charts show nickel took two pauses during a day of climbing, once in early afternoon that saw a hesitant $100/tonne retreat, and another $100/tonne retreat at teh end of the session. Other than those momentary pauses, it was solid climbing throughout the day. Dow Jones reports three month nickel finally closed above the $17,000/tonne mark for the first time since Sept 26th of last year, closing at $7.73/lb , and a new annual closing high for 2009. Inventories of nickel stored in LME warehouses took another hit overnight, but remain above the 106,000 tonne level. Cancelled warrants stalled above the 1% level. And the Baltic Dry Index ended its three day spurt and fell 54 points to 3,445. Its another worldwide rally day, as speculation that the worst of the recession is behind us and economic recovery is taking place. Market bears grow quieter by the day, as their March 'bear market rally' refuses to peak out. In the US, initial weekly unemployment claims rose higher than expected last week, ongoing claims dropped by 54,000 to 6.19 million. Besides the humanitarian aspect to more people returning to work than losing their jobs, more workers means more income, and that allows more consumer spending to enter the economy. Definitely positive news! Let's hope it sticks.   

  Reports

  • Commodity Watch - more

  Commodity/Economic Articles and Comments

  • (Dow Jones) Russia's OAO Norilsk Nickel, the world's largest nickel producer by volumes, Thursday said its second quarter nickel output was 71,394 metric tons, up 3.7% from 68,835 tons year-on-year, and confirmed its 2009 production target is unchanged. Earlier in 2009 Norilsk said it plans to produce between 285,000 tons and 300,000 tons of nickel this year. A spokeswoman told Dow Jones Newswires that Norilsk hasn't changed its production plans.
  • Vale CFO Fabio Barbossa - "Global industrial production has started to recover, that's clear, and our business is deeply connected to industrial production ..."the stainless steel industry outside China (where "mills are operating at high levels of capacity utilization") has started to increase production, adding pressure to nickel demand. The scrap market has tightened further, with prices rising relative to the LME nickel prices. Due to the low relative prices of the 300 series stainless steel , the highest grade of nickel intensive steel, its output is increasing strongly. The combination of these two developments means that more nickel has been consumed per ton of stainless steel produced"
  • (SG) The Canadian International Trade Tribunal issued orders following the expiry review of its findings made on July 30th 2004, in Inquiry No. NQ-2004-001, concerning the dumping of stainless steel wire originating in or exported from the Republic of Korea, Switzerland and the United States of America and the subsidizing of stainless steel wire from India. The Tribunal found that the dumping of stainless steel wire from Korea, Switzerland and the United States, and the subsidizing of stainless steel wire from India were unlikely to result in injury. The Canada Border Services Agency will therefore not continue to impose anti-dumping and countervailing duties on these products.
  • (WSJ) The latest WSJ/NBC News poll shows that 44% of those surveyed think the economy will improve in the next year – roughly the same estimate they gave last month. Just 21% said it would get worse and 32% predicted it would stay the same. Their job security, though, continues to decline. Six in 10 people said they were somewhat or very satisfied with their job security, down eight percentage points from April and 10 points from the beginning of the year.
  • This Recession Is Over - more
  • Don't Be Fooled - more

  Indonesia Inco Q2 net slumps, plans cost cuts - PT International Nickel Indonesia on Thursday said it would improve efficiency after posting an 89 percent plunge in second-quarter net profit due to lower prices and weak demand in the economic slowdown. - more

  Sherritt's Madagascar mine hits new snag  - Sherritt International Corp.'s troubled nickel project in Madagascar faces a major stumbling block after a legal firm hired by the country's new president said the certification for the $4.5-billion (U.S.) mine may be invalid. - more

  POSCO May Emerge as Major Player in M&A Market - A tumble in profits for the latest quarter doesn't appear to be a major hurdle to POSCO's merger and acquisition attempts. - more

  Vale Sees Metals Demand Recovery After Profit Slumps - Vale SA, the world’s biggest iron- ore producer, said demand for metals is starting to recover and it may boost output after second-quarter profit slumped. - more

  ArcelorMittal CEO says steel business is recovering, posts third straight quarterly loss - The world's largest steel maker, ArcelorMittal SA, on Wednesday reported a loss of US$792 million for the second quarter, its third consecutive quarterly loss, but said demand was recovering and that it would increase production. - more

  (old news - add details) Jilin province: 30000 workers at Tonghua Steel on strike to protest against privatisation - Striking workers violently clash with the police, the chief executive is dead, dozens of police vehicles destroyed and dozens of workers arrested - more

  Iron ore market likely to remain tight into 2010: analyst - Rising demand for iron ore worldwide means the iron ore market is likely to remain tight into 2010, according to an analyst note published Thursday by Australian bank Macquarie. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.27/lb higher, and not showing any solid signs yet of slowing its pace. Base metals are all trading higher this morning. The US Dollar is trading lower against the Euro, but by less than 1/10 of 1%. NYMEX crude futures are up 1-1/4% to $64/barrel. Gold is 1/3 of 1% higher and silver is up nearly 1-1/4%. In overnight trading, Asian markets were slightly higher, while European markets are also higher this morning. US futures imply a strong opening on Wall Street. The US Labor Department just reported jobless claims for last week rose by 25,000 but the continuing claims fell to 6.19 million. World equity markets are higher thanks to overnight earning reports coming in better than expected, for the most part. Base metals are being helped by speculation that the worst of the recession is behind us, and yesterday's rise in the US Dollar halting.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - on vacation next report August 3rd (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) Mining company PT International Nickel Indonesia, also known as PT Inco, produced 16,300 metric tons of nickel in matte in the quarter beginning April, up from 16,200 tons in the previous quarter, according to a statement issued by the company Thursday. It produced 32,500 tons of nickel in matte in the first half of this year compared with 35,250 tons during the second half of last year, the company said.
  • (Dow Jones) Southern Cross Equities director Charlie Aitken tips strong recovery in LME nickel prices, based on expectations of a strong pickup in stainless steel prices, confirmed by restarts in stainless industry. Aitken says rumors of an imminent sharp drop in LME stocks, as restocking from stainless producers is about to commence.
  • (Yieh) In line with the price increase of raw materials like nickel, chrome and molybdenum, Taiwan’s Yieh United Steel Corp. (YUSCO) has announced that they will raise their price list for August. According to YUSCO, the domestic price of 300 series hot rolled and cold rolled stainless steel coils and sheet increased by NT$5,000/ton.
  • (Yieh) It is reported that one Japanese trader has increased the stainless steel scrap price from ¥14,000/ton to ¥164,000/ton. Therefore, Japan’s domestic stainless steel scrap prices are also increasing, because the LME nickel price recently hits as high as US$17,000/ton on July 27th. 
  • (Sino) Jinchuan Group, one of the largest nickel producer in China and even the whole Asia, will buy an over 70% stake in the Munali nickel mine of Zambia next month, according to an official with the Zambian government.
  • (AP) Junior minerals explorer Hannans Reward Ltd has done a deal with Kagara Ltd and St Barbara Ltd to buy unexplored ground considered prospective for nickel and gold in Western Australia.
  • (SSY) The latest SteelBenchmarker from World Steel Dynamics shows global hot rolled band export prices to have risen to an 8-month high of $507/t in July, a gain of $61/t (+14%) over the past month, compared with the year-to-date low of $395/t set in April. However, the current price remains 54% lower than the all-time high of $1,113/t from a year earlier.
  • China Steel to raise domestic prices for the second time this year as demand improves - more
  • Western banks might restructure Rusal's $7.4 billion debt if the aluminum giant considers selling the 25% plus one share stake in Norilsk Nickel it bought from Mikhail Prokhorov last year, a creditor and two sources close to the company's management told Vedomosti.
  • RUSAL has 7 weeks to convince banks on debt - more
  • Japan Factory Output Rises 2.4%, Fourth Monthly Gain - more
  • Sumitomo Metal Widens Loss Forecast on Seamless Pipes - more
  • Profit in China's major steel makers expands in June -  more
  • China’s industrial power consumption stood at 1.20 trillion kWh in the first half of this year, a drop of 5.9 percent from the previous year, People's Daily reported. Industrial power consumption accounted for 72.6 percent of the nation’s total during Jan-Jun, a drop of 2.9 percent year on year. During January and February, China's power consumption dropped by 5.2 percent from last year; then in March to May, the figure dropped by 4.3 percent, 3.6 percent and 2.6 percent year on year respectively. In June however, total power consumption experienced the first increase since the beginning of the year, rising by 4.3 percent.
  • While some analysts are proclaiming the recession "HAS" ended the Fed apparently does not agree. (Beige Book) "Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level."

  Eramet Forecasts Second-Half Loss After Steel Slump  - Eramet SA, operator of the world’s biggest ferronickel plant, said it’s likely to post a second- half operating loss after demand from the steel industry weakened. - more

  • DJ Eramet: Cut Surplus Doniambo Stocks, 1H Output 50,000 Tons - Surplus nickel inventories at French nickel producer Eramet SA's (ERA.FR) Doniambo plant in New Caledonia have been reduced following lower output in the first half, the company said Thursday. - more
  • Eramet expects to stay in red in H2 despite China - French nickel and manganese group Eramet said on Thursday it expected to post an operating loss in the second half, despite improved demand in China, as it reported a heavy first-half loss. - more

  Prices Of FeCr In Europe Rise Further For Tightened Actual Cargoes = Price Of High Carbon FeCr Has Risen To 105 US-Cents Per Lb. / Cr, Having Exceeded Benchmark Price - The market prices of ferro-chrome in Europe have risen further in last week and, in view of a scarcity of actual cargoes, the current prices on DDP base have risen to the levels of 95 - 105 US-Cents per lb. of Cr for high carbon ferro-chrome and of 180 - 190 US-Cents per lb. of Cr for low carbon ferro-chrome with carbon 0.1% max. respectively. - more

  The MEPS World Carbon Steel Price Increases Again in July - Major steelmakers in the US have announced a series of transaction price hikes over recent weeks for strip mill products. These are steadily being implemented. - more

  Courtesy AISI - "In the week ending July 25, 2009, domestic raw steel production was 1,254,000 net tons while the capability utilization rate was 52.6 percent. Production was 2,120,000 tons in the week ending July 25, 2008, while the capability utilization then was 88.8 percent. The current week production represents a 40.9 percent decrease from the same period in the previous year. Production for the week ending July 25, 2009 is up 0.8 percent from the previous week ending July 18, 2009 when production was 1,244,000 tons and the rate of capability utilization was 52.1 percent."

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • BHP strikes blow against pricing regime - BHP Billiton has revealed significant gains in meeting the ambition of its chief executive, Marius Kloppers, to bring down the global iron ore benchmark pricing system that has held sway for more than 25 years. - more
  • BHP Billiton's new iron-ore pricing may collide with Chinese import curbs - Iron-ore pricing moves on Wednesday saw BHP Billiton remove 30% of its iron-ore from traditional benchmark pricing, accompanied by reports that China may issue far fewer iron-ore import permits in order to restore pricing balance. - more
  • Vale Sees Recovery in Ore, Metals Demand After Profit Slumps - Vale SA, the world’s biggest iron- ore producer, said demand for metals is starting to recover and it may boost output after second-quarter profit slumped. - more
  • Ore imports set to slump at key port - Iron ore imports into one of China's main ports are set to slump by up to 50 percent over the next few months in the wake of events surrounding the Rio Tinto affair, according to a leading official. - more
  • China steel body chief dodges question on iron ore deal - The head of the China Iron and Steel Association emerged from a closed-door meeting in Beijing to wave off suggestions that an iron ore price deal with foreign miners was imminent. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, July 29

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 24 to 3,499. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China State Construction Jumps on Debut After Biggest IPO Since March 2008 // Honda, Nissan Earnings Beat Estimates as Governments Offer Aid to Buyers // Toshiba First-Quarter Net Loss Widens to 57.8 Billion Yen From 11 Billion // Asian Stocks Decline, Snapping 11-Day Rally, on Commodity Prices, Earnings // Rebound at Daimler, Peugeot, Honda Suggests Automakers May Be Past Worst // European Stocks Advance as Earnings Beat Estimates; Akzo Nobel, Bayer Gain // U.S. Durable Goods Orders, Excluding Cars and Planes, Unexpectedly Advance // Biggs Says S&P 500 Index Will Climb 22% to 1,200 as World's Economy Heals // Stocks in U.S. Decline a Second Day as Shares in China, Crude Oil Tumble
  • The US Dollar continues to strengthen against the Euro, up nearly 1%. NYMEX crude is taking a beating, down over 5-1/2% after government data show a larger than expected increase in crude oil inventories. Gold is lower by 1% and silver is off nearly 3-1/2%. Base metals ended lower, but considering the increase the Dollar is showing today, they held up fairly well. Indicator charts for nickel looked more like a $250/tonne ranged heart monitor than the ski slope the Euro was sliding on. After a day of up and down movements, Dow Jones reports three month nickel ended the day at $7.37/lb , $.31/lb off Monday's close, and only $10/tonne more than we closed last Wednesday at. Inventories of nickel stored in LME warehouses took a whack overnight, and now sit just under the 106,500 level. Cancelled warrants slipped and are in danger of slipping below the 1% level. The Baltic Dry Index increased for a third day, gaining 24 points to 3,499, but losing momentum again. News on the metals front was nearly non-existent today, but we supply what we could below. Reuters is reporting US taxpayers will become the largest shareholders in Citigroup tomorrow, in connection with the February bail-out. We leave the finger pointing and blame gaming to the political party hard-liners, on whether these tax payer funded moves were socialistic in nature, or were mere moves to influence, ie manipulate, a plummeting stock market. Correction. We shouldn't say 'tax payer' funded, as anything funded these days, won't be paid for until our grandchildren are old and gray, unless of course, they copy our fine example of fiscal responsibility, and leave their debts to their 22nd century offspring. We can't help but remember the words logged by Commander Robert Lewis piloting the Enola Gay, after witnessing the first atomic bomb explode over Hiroshima. He wrote in his log 'My God, what have we done?'.

  Commodity/Economic Articles and Comments

  • Universal Stainless President and CEO Dennis Oates - "In a sign that business is starting to return, total order entry has improved each month since April. However, bookings are well below normal levels and our backlog has dropped to $38 million at June 30 as our end markets remain challenged and inventory restocking has not resumed in the supply channel. Our lean operations, low fixed costs and continued aggressive working capital management should allow us to generate positive cash flow and maintain our strong financial position in the third quarter in spite of the current low volume environment."
  • (Dow Jones) The London Metal Exchange Wednesday announced changes to the cobalt and molybdenum contracts it plans to launch in February 2010.   The molybdenum lot size was increased to six metric tons of molybdenum delivered in 10 tons of molybdenum concentrates, the LME said in a press statement.
  • (Infogeo)Chinese imports of chrome ore and concentrate in June increased by 9% but is expected to decline as prices climb. Prices for chrome ore rose to 250 U.S. $/tonne compared to 220 USD/ton, and there are reports of purchases at 270-289 USD/ton. Nevertheless, growth in demand is limited, because Chinese steel mills and manufacturers needing ferrochrome are operating close to maximum capacity
  • (Reuters) African Eagle says optimistic on Tanzania nickel deposits - Says feasibility study on dutwa nickel project indicates that project would
  • (Reuters) ArcelorMittal, the world's biggest steelmaker, said it was not buying any iron ore on a spot basis and all its ore purchases were based on traditional contracts.
  • (MW) China today ranks as the world's leading producer of coal, iron ore, gold, aluminum, antimony, barite, bismuth, fluorspar, graphite, lead, phosphate rock, rare earths, talc, tin, tungsten, and zinc. It is also global No #1 in pig iron and crude steel. China also ranks among the top three countries globally in the production of many other mineral commodities, such as molybdenum, titanium, salt, and sulfuric acid. China ranks as the world's leading exporter of antimony, barite, coal, fluorspar, graphite, rare earths, and tungsten. There are opportunities for outsiders where China's demand exceeds supply: iron ore, copper, bauxite, chromium, cobalt, manganese, nickel, lead, potash, and, of course, oil.
  • The Commerce Department reported U.S. imports of steel in June were only 850,000 tons, down 18% from May and down 68.9% compared with June 2008.
  • Tanzania says 48 firms eye coal, iron ore projects - more
  • China the 800lb Gorilla of Commodities Demand - more
  • Timeline of the Great Depression - more

  European stainless steel surcharges for August

  Vale Says No Talks Scheduled With Canadian Workers Amid Strike - Vale SA, the world’s biggest iron- ore producer, said no talks are planned with striking workers at its Sudbury nickel operations in Canada and that the plant remains closed after a planned stoppage. - more

  Devil in the detail for Tassie's nickel mines - Andrew Michelmore must love the fresh air down in Tasmania. When he was in charge of Zinifex, he paid an extravagant $905 million for Allegiance Mining and its Avebury nickel prospect. - more

  • End to two booms sparks another - The number of companies forced into liquidation rose by 20 per cent in the 12 months to May, driven by the end of mining and property booms in Queensland and Western Australia, according to a new report. - more
  • PM, the mining boom is not a passing phase - This week’s Newspoll shows again that Kevin Rudd is a skillful and successful political strategist. These qualities are also evident in his weekend essay, aimed at positioning the government for an election that could be fought in tricky economic circumstances, with unemployment and interest rates rising, a possibility confirmed by Reserve Bank of Australia governor Glenn Stevens. - more

  New Ausmelt nickel smelter in China is a massive success - Ausmelt has successfully completed provision of its Top Submerged Lance (TSL) smelting technology for the new nickel smelting plant built by Jinchuan Nonferrous Metals, China’s largest nickel producer, in the Gansu Province of China. - more

  Universal Stainless posts surprise Q2 adjusted profit - Universal Stainless & Alloy Products Inc posted a surprise adjusted second-quarter profit, helped by cost cuts, and said order entry has improved since April. - more

  Sherritt International Q2 profit sinks 70 pct - Sherritt International posted a 70 percent fall in second-quarter profit hurt by lower nickel, cobalt and oil prices due to weakened global industrial demand in the base metals markets. - more

  Courtesy Merrill Lynch / Bank of America

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.06/lb lower, with all base metals trading lower this morning. The US Dollar is trading 1/3 of 1% higher against the Euro and adding pressure to base metals trading. NYMEX crude futures are down 2-1/3% and under $66/barrel. Gold is lower by 1/10 of 1% and silver is off over 1/2 of 1%. In overnight trading, Asian markets followed American and European markets and ended lower. European markets are rebounding this morning, while US futures show a potential lower opening on Wall Street. The Commerce Department has just reported U.S. durable goods orders fell 2.5% in June, the biggest drop since January and follows two monthly gains. After yesterday's fall in consumer confidence, numbers, this will not give the bulls much to cheer about this morning. Metals news is very light so far today.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - on vacation next report August 3rd
  • (Yieh) Some market analysts expected that the price of molybdenum oxide may hit US$18 to 20/lb in the following few weeks.
  • (Yieh) People expect that the orders on stainless steel in August will be the same level as in July and as the rising raw material cost pushed the stainless steel market price up. Some people predict that the stainless steel output will be increasing further in August.
  • (Dow Jones) Mirabela Nickel Ltd. Tuesday said mining at its Santa Rita nickel mine in Brazil will start in the next few weeks and construction will finish in late September this year.
  • Brazil flat steel inventory returns to '08 levels - more
  • Top steelmakers post losses, see slow recovery - The world's top two steelmakers posted quarterly losses and warned the climb back to growth from the bottom of the economic slump would be gradual, with China setting the pace of recovery. - more
  • BHP Agrees on New Ore Price System for Some Customers - more
  • Domestic Steel Producers Release Study Showing Negative Effects Of China’s Economic Policies On The U.S. Economy - pdf here
  • (China Daily) Average wage per capita for Chinese urban employees grew 12.9 percent year-on-year to 14,638 yuan ($2,150) in the first half of this year, said the National Bureau of Statistics Wednesday.
  • (MorningStar) June data recently reported by the Fibre Box Association and American Forest and Paper Association suggest some signs of life in corrugated box demand. While volume was still down from the prior-year period, the rate of decline slowed noticeably, coming in at a drop of 4.3%, or 8.6% when adjusted for shipping days. Using the crude "split the difference" method that often provides a better sense of underlying volume, June's drop was 6.5% versus a 10.3% decline in May and a 10.6% decline for the January-May period.
  • Typical Influence of El Niño - more
  • Surviving the 'End of Civilization' 2050 - more
  • Insiders are selling - more

  Indonesia Inco cuts almost 3 pct of staff, no impact on output - PT International Nickel Indonesia Tbk plans to cut 87 jobs, nearly 3 percent of its workforce, to reduce costs in response to the global financial crisis, a company official said on Wednesday. - more

  Mirabela Nickel plans share offering for Santa Rita cost overruns - Mirabela Nickel is planning another round of capital raising to pay for cost overruns at its flagship Santa Rita nickel project in Brazil, the Australian nickel producer said Tuesday. - more

  Chinese firm takes over Zambia nickel mine in Aug - China's largest nickel producer Jinchuan Group Ltd. will take over Zambia's sole nickel mine Munali next month after the operations were suspended in March due to low nickel prices, the mines minister said on Wednesday. - more

  JPMorgan Raises Base-Metals Forecasts, Expecting Revived Demand - JPMorgan Chase & Co. raised forecasts for prices of industrial metals on prospects for a second-half rebound in demand driven by expanding worldwide factory output. - more

  China’s 71 Biggest Steelmakers Record Second Month of Profit - China, the world’s largest steelmaking nation, said 71 of its largest mills posted a combined profit of 3.55 billion yuan ($520 million) in June, the second monthly gain after seven straight months of losses. - more

  JSL posts Rs 95-cr profit in Q1 - Ratan Jindal-led stainless steel firm JSL’s net profit more than trebled to Rs 95 crore for the first quarter ended June 30, 2009, over the same period a year ago on the back of increased demand and productivity at its plant in Hissar (Haryana). - more

  Yesterday, we posted a chart from the Association of American Railroads. In their 'Weekly Rail Traffic and Carloading Report', they report shipments of metals and metal products fell 6.7% in 2008, compared to 2007. As of July 18th, shipments of metals and metal products by rail had fallen 55.2% compared to the same period last year. During the week of July 18th, they were down 45.5% compared to the same week in 2008.  

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, July 28

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 68 to 3,475. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg)  China to Cut Gasoline, Diesel Prices Tomorrow, State Broadcaster CCTV Says // Indonesian Government to Unveil More Investment Initiatives, Boediono Says // Asian Stocks Rise for 11th Day; Sumitomo Mitsui, JFE Gain on Broker Calls // Deutsche Bank Declines After Provisions for Bad Loans Soar to $1.4 Billion // BP Says It Sees Little Evidence of Recovery in Demand as Profit Drops 53% // EU Said to Plan WTO Complaint Against Philippine Taxes on Imported Liquor //
  • European Stocks Fall From Eight-Month High; Deutsche Bank, BP Shares Drop // Home Prices in U.S. Cities Post Monthly Rise; Consumer Confidence Declines // Fed's Yellen Seeing `First Solid Signs' of Emergence From U.S. Recession // Stocks in U.S. Retreat After Gauge of Consumer Confidence Trails Estimates
  • The US Dollar continues to trade higher against the Euro, now by 1/2 of 1%. With the Dollar rising and equity markets lower, it's a safe bet it was going to be ugly in commodities today. NYMEX crude, down over2%. Gold - down over 1-1/2%. Silver - down nearly 2-1/2%. Base metals - only aluminum squeaked out a gain. Indicator charts show nickel was holding its own until mid-afternoon, when it finally succumbed to the pressure. Dow Jones reports three month nickel ended the day at $7.54/lb . Inventories of nickel stored in LME authorized warehouses rose a tad overnight, the same amount they fell the prior day, and remain just under the 107,000 tonne level. Cancelled warrants remain below the 1-1/2% level. Sucden's day old chart shows the invisible ceiling we mentioned in yesterday's trading (here). The Baltic Dry Index had its second day of gains, up 68 points to 3,475. Conference Board reported consumer confidence continued to slide this month, down from 49.3 last month to 46.6 this month. And the Case-Shiller home price index rose for the first time since July 2006. We posted some analysts comments on this below. Posted three charts below showing that while most economists seem to agree we are at, or past the recession "bottom", it has yet to show up in the transportation sector. One that is more inclined to show a potential bottom, is the BDI chart, which we link to daily above. Indicators are classified as leading, lagging, or coincident, and transportation indexes would be, in our opinion, procyclic in nature and fairly reliable as leading indicators.

  Reports

  Commodity/Economic Articles and Comments

  • (News Bites) Mirabela Nickel Ltd has filed and received a receipt for a preliminary short form prospectus in all of the provinces of Canada except Quebec in connection with a proposed overnight marketed offering of ordinary shares in the company. .... Net proceeds will be allocated for cost overruns at the Santa Rita nickel sulphide project of $US28.1 million ($A33.7 million) in total, including a cost overrun of 6% of the initial capital cost estimate for the project of $US434 million, pre-production costs of $US5.3 million and recovery of a forex loss of $US5.3 million.
  • (MBiz) Taiyuan Stainless Steel Company's June yield was 200,000 tons, and the company's output in July will remain at the same level. An official with Taiyuan Stainless Company noted that its stainless steel production goal for this year is 2.2mln tons.
  • (AUM Capital Market Pvt. Ltd.) The 3M Nickel forward prices advanced above its recent reaction high of $16,600 and settled the week at $16750 levels. Prices are expected to trade firm above the $16,600 levels. The market is trading in a bullish trend channel and we may prices approaching $18,000-$18.500 levels, in the short term. Stay long in Nickel for the week.
  • (Sudbury Star) Liberty Mines Inc. announced Wednesday its McWatters Mine is going back into production. The mine had been in care and maintenance mode since October.... Liberty Mines will send its nickel concentrate either to Xstrata Nickel's smelter in Falconbridge or the Jilin Jien Nickel Industry Company in Panshi City, China. Thanks to a $30 million Cdn transaction completed in the spring, Jilin Jien is now Liberty Mines' largest shareholder, holding a 51 per cent stake in the company.
  • (SSY) The FOB price of Indian iron ore of 63.5% Fe content rose to a year-to-date high of $75/t at the end of last week, compared with the year-to-date low of $50/t set in March, according to data from U-Metal. This takes the delivered price into China to $95/t, the highest level since October 2008.
  • (SSY) The number of Capesize vessels waiting to berth at Australia’s coal load ports and China’s iron ore discharge ports appears to have declined recently. In the last week the number of Capes in queues at Australian coal terminals has dropped from more than 30 to 18, according to local sources. Meanwhile, there are currently 65 Capesizes waiting to berth at PRC iron ore ports compared with a peak of 88 in mid-June.
  • China H2 ore imports to fall 21 pct, prices to stay firm - more
  • Wells Fargo John Silvia - "“Once again TV commentators that emphasize the year-over-year numbers being down 17% are welcome to have their sarcasm but they are missing the point as well as the turn ... Recession is over, economy is recovering — let’s look forward and stop the backward looking focus.”
  • Ian Shepherdson of High Frequency Economics - "“We would not expect any gains [in home prices] to last, because prices are still high relative to incomes and rents, and also because the uptick in sales will, we think, prompt a new wave of supply. But this is still very welcome news today.”
  • Business Outlook: A Second-Half Recovery Could Be Fleeting - more (quote - The question arises because the early stage of the recovery is going to be production-led, not demand-led. Businesses have slashed output so far below the level of overall spending that some increased production will be needed just to slow the overly rapid depletion of inventories. That boost to output will be necessary even without much growth in demand. And there's the rub. To keep the production rebound—and the recovery—going into 2010, overall spending will have to pick up, and that's the big uncertainty given the headwinds facing consumers.)
  • The Leaner Baby Boomer Economy - more (quote - When 79 million people—nearly a third of Americans—start spending less and saving more, you know it won't be pretty.)
  • China's New 'Great Wall' Built on Easy Money, Speculation and Toxic Debt - more
  • The Long-Term Budget Outlook - Today I had the opportunity to testify before the Senate Budget Committee about CBO’s most recent analysis of the long-term budget outlook. Under current law, the federal budget is on an unsustainable path, because federal debt will continue to grow much faster than the economy over the long run. - more
  • The Real Reason Unemployment has Skyrocketed - more
  • Want to stay alive? Survival secrets from an expert who REALLY knows - more

  Posco deny studying a stainless steel JV with ArcelorMittal - In an email to Platts, Korean steelmaker Posco Tuesday denied rumors which emerged Monday of a possible joint-venture with ArcelorMittal on stainless steel. - more

  Shine on nickel lifts hope for Avebury mine - The bounce in nickel prices has raised hopes that the mothballed Avebury nickel mine near Zeehan on Tasmania’s west coast could be reopened by its new owner, China’s Minmetals. - more

  • Mirabela Nickel hits both sides of globe - Mirabela Nickel is trying to raise money on both sides of the globe Tuesday with an approach to selling stock that’s caused heartburn of late. - more 

  Analysis: Steel boss killed as Chinese privatisation risks rise - As the crowd of Chinese steel workers meeting with their new boss grew angrier, someone hurled a chair. Others kicked and hit. Finally, Chen Guojun was thrown down some stairs to his death. - more

  Imports and Exports thru LA, Long Beach and NY/NJ ports (Jan 07 thru June 09)

(note - all 3 terminals showed a drop in exports in June from May, only NY/NJ showed an increase in imports for the month)

  American Trucking Association's Advance Seasonally Adjusted For-Hire Truck Tonnage Index (Jan 07 thru June 09)

  Rail Time Indicators (courtesy Association of American Railroads)

(source

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.04/lb higher, although the US Dollar has recently started gaining on the Euro, and all base metals are off earlier highs. The US Dollar spent much of the morning lower against the Euro, but has recently gone positive, albeit slightly. NYMEX crude futures are off 3/4 of 1% and under $68/barrel. Gold is off 4/10 of 1% and silver is down the same. In overnight trading, Asian markets ended higher, with European markets trading lower this morning. US futures show Wall Street may open lower as well.  MarketWatch reports "Goldman and other big investment firms are scheduled to appear at a series of hearings held by the Commodity Futures Trading Commission starting Tuesday, as the Obama administration launches its biggest move yet to clamp down on commodities speculation, which has roiled prices from oil to corn and wheat in recent years." Bank of America has announced it will close approximately 10% of its 61,000 branches. Later this morning, we get the S&P/Case-Shiller® home price index, and Consumer Confidence numbers. More reports out of Papua New Guinea that the Ramu nickel mine under construction there has been shut down temporarily, and today, the China Metallurgical Construction Group Corp is not denying the reports.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - on vacation next report August 3rd
  • (CBI) - Jinchuan Group, which has suspended a flash furnace for maintenance, has raised its nickel benchmark price by 3.2% after strong LME nickel gains. The new list price for nickel is 128,000 yuan ($18,740) per tonne, up 4,000 yuan from the previous offer, said Jinchuan, China's largest nickel producer.
  • (press release) The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index fell 2.4 percent in June. In May, SA tonnage jumped 3.2 percent. June’s decrease, which lowered the SA index to 99.8 (2000=100), wasn’t large enough to completely offset the robust gain in the previous month. The not seasonally adjusted (NSA) index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 107.3 in June, up 5.2 percent from May.  Compared with June 2008, tonnage fell 13.6 percent, which surpassed May’s 11 percent year-over-year drop. June’s contraction was the largest year-over-year decrease of the current cycle, exceeding the 13.2 percent drop in April.
  • Federal Reserve Board Chairman Ben Bernanke - "A lot of things happened, a lot came together, [and] created probably the worst financial crisis, certainly since the Great Depression and possibly even including the Great Depression."
  • Capital One CEO Richard Fairbank - "We expect further increases in U.S. card charge off rate through 2009 as the economy continues to weaken. It is likely that … our U.S. card charge off rate will increase at a faster pace than the broader economy as a result of the denominator effect and our implementation of OCC minimum payment requirements ... We expect monthly U.S. card charge off rates to cross 10% in the next couple of months."
  • Money week - "The International Monetary Fund reckons that of the $1,914bn in outstanding US consumer debt, 14% will go bad."
  • Get ready for banking's next headache - more
  • Peering up from depths of the recession - more

  Merafe Resources Says 1st Half Ferrochrome Production Falls 60% - Merafe Resources Ltd. Tuesday said ferrochrome production at its joint venture with Xstrata PLC fell 60% in the first half of the year after it idled furnaces in response to a sharp fall in demand for the stainless steel ingredient. - more

  PNG stops Ramu nickel project over safety - Construction of Papua New Guinea's Ramu nickel mine and processing plant has been stopped due to health and safety concerns, PNG's chief mines inspector said in a statement on Tuesday. - more

  • Ramu nickel mine closed by Govt - Operations at the huge Ramu nickel and cobalt project were shut down last week by order of the Government’s chief inspector of mines. - more

  Xstrata's H1 nickel output up 185% - Swiss mining giant Xstrata increased nickel production at its Australian operations by 185 per cent during the first half of calendar 2009 compared to the same period a year earlier. - more

  • MMG reviews reopening Avebury mine - Minerals and Metals Group (MMG) is reviewing whether to reopen the mothballed Avebury nickel mine and is restarting a drilling program at its Rosebery lead and zinc mine, both in Tasmania. - more

  JPMorgan Raises Base-Metals Forecasts, Expecting Revived Demand - JPMorgan Chase & Co. raised forecasts for prices of industrial metals on prospects for a second-half rebound in demand driven by expanding worldwide factory output. - more

  EU Hits China with Anti-dumping Duties on Steel Wire Rods - The European Union decided Monday to slap anti-dumping duties on imports of Chinese steel wire rods for five years, a statement said. - more

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • China's CISA urges end of spot iron ore trade -paper - Senior Chinese steel industry officials called on Beijing to consider abolishing spot iron ore trade and sharply reduce the number of licensed importers, which they blame for undermining their position in deadlocked iron ore price talks, Chinese media said. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, July 27

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 62 to 3,407. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China May Press Geithner on Dollar, Deficit, Economy in Washington Talks // Vale Resisting Chinese Demands for Price Cuts as Steel Industry Recovers // Asian Stocks Gain on Profit Hopes; Index Set for Longest Streak Since 2004 // Dollar Libor Declines to Below 0.50% for First Time as Banks Unlock Credit // Stocks in Europe Climb to Eight-Month High; Pearson Surges, Ryanair Drops // Geithner Pledges Smaller Federal Budget Deficits as Talks With China Start // New-Home Sales in U.S. Climbed 11% Last Month, Biggest Gain in Eight Years // U.S. Stocks Drop as Aetna, Verizon Earnings Blunt Optimism Over Home Sales
  • The US Dollar continues to trade lower against the Euro, but by only by 13/100 of 1%. This turnaround had an immediate impact on commodity trading, with NYMEX crude now up 4/10 of 1%, and under $68.50/barrel. Gold is up less than 2/10 of 1% while silver is higher by 8/10 of 1%. Base metals all ended higher, but thanks to the Euro sliding, were off session highs. Indicator charts show nickel trading was choppy today, as if the market was beating itself against an invisible wall, finally succumbing at the end of the session. Dow Jones reports three month nickel still ended the day at $7.68/lb , it's highest close since late September 2008. Nickel inventories stored in LME warehouses fell only slightly overnight, with cancelled warrants still under the 1.5% level. The Baltic Dry Index bounced back into the positive today, gaining 62 points to 3,407. The Commerce Department reported new home sales rose 11% in June to a seasonally adjusted annual rate of 384,000. Higher than expected but put into context that few media outlets relay, the 384,00 number compares to 488,000 last June, and 834,000 in June 2007 (report here). The good news in the report is the supply in available new homes fell sharply. The major news in the metals industry today, was the murder of a Chinese steel manager over the weekend, at the hands of irate steelworkers. More below on this.  
  • Found a video over the weekend that is worth seeing. Taken at the world's 2nd largest aquarium in the world located in Japan. Notice the diver in the tank.  

Click the video and go to original page / watch in high definition

  Reports

  Commodity/Economic Articles and Comments

  • Na Liu, China strategist with Scotia Capital - "It should also be noted that China imported 1.7 million tonnes of low-grade nickel ore last month, up 81% MOM and 44% YOY, to the highest level since May 2008. This shows that China’s nickel pig iron output has been rising, and should continue to rise..... During the month, China produced 18,185 tonnes of molybdenum concentrate (45%), up 17% MOM to the second-highest level ever. This shows that some high-cost producers are ramping up output in China as prices have climbed. .... With more evidence of a supply-side response, and sharply higher sector valuations after the recent rally, we now choose to be less bullish and more neutral. A steadfast bull since the winter months, we now reserve the right to downgrade the global raw materials sectors to “market weight” from “overweight,” from a China perspective, at any time going forward. That said, given the accelerating Chinese economy, as well as the emerging re-stocking process in the rest of the world, we are definitely not bearish. We just want to flag the warning signs of potential supply-side response and the recent quick run-up of equity valuations."
  • Angel Commodities - Base metal prices could remain upbeat but may come under selling pressure by the end of the week as 1) profit booking after higher prices could come in and 2) prices may come under pressure as we approach the weekend and funds may liquidate their positions prior to the weekend. However, the overall trend is expected to remain bullish on the back of better-than-expected corporate results. The global economy is on its road to recovery but the pace of improvement could be slow. The Federal Reserve Chairman has indicated that the pace of the economic decline in the United States has slowed down significantly and the final demand of production has shown tentative signs of stabilization. But the labour market continues to look weak and the unemployment rate could rise going forward. The currency and equity markets play a crucial role in determining price direction.
  • China Iron Ore Price Deal Unlikely This Week - more
  • Probe Mines Provides Update on McFaulds Lake Drilling, Massive Chromite Horizon Identified - more
  • (China Daily) The per capita consumption spending volume of Chinese urban residents stood at 5,979 yuan ($875) in the first half of this year, up 8.9 percent year-on-year, the National Bureau of Statistics (NBS) announced Monday. Deducting price factors, the growth reached 10.3 percent.
  • As copper price rises, rumours abound of market manipulators - more
  • Beer Sales Sputter During Key Fourth of July Holiday - more
  • Suicide rates show more Colorado farmers losing hope - more
  • Welsh Investment letter – July 22 - more
  • Five Firms Hold 80% of Derivatives Risk, Fitch Report Finds - more
  • Are we done with this recession? An economist, an historian, and a billionaire argue what is to come. - CNN video here
  • Is the Recession Over? - more

  Chinese province scraps steel plant takeover after riot - Jianlong Group has been told to abandon takeover plans for China's state-owned Tonghua Iron & Steel Group after a company executive was beaten to death Friday as 3,000 steel plant workers protested job cuts, a provincial government official told local media Monday. - more

  • Manager killed in plant riot - An executive was beaten to death on Friday as 3,000 steel workers threatened with job cuts protested following the takeover of their company in Tonghua, Jilin province. - more
  • Q+A-Chinese steel executive killed by protesters - Last week, an executive at a private Chinese conglomerate named to manage the takeover of state-owned Tonghua Steel was beaten, kicked and finally thrown down some stairs to his death. - more
  • How China's Steel Boom Turned Deadly - Chinese officials say they are on course to achieve GDP growth of about 8% this year, and the fall's dire predictions of massive unemployment leading to social upheaval haven't been borne out. - more
  • Iron and steel industry remains under pressure - China's steel industry shows signs of revitalization thanks to the economic stimulus package in the first half this year. - more
  • (Dow Jones) China became a net steel importer in the second quarter for the first time since the fourth quarter 2005 as domestic appetite for the metal continues to grow, according to the Iron and Steel Statistics Bureau. China posted a 3.1 million metric ton steel trade deficit in the second quarter of 2009 as imports rose 59% on-quarter to 6.6 million metric tons and exports dropped 23% to 3.5 million tons.

  Nickel Price Forecast Raised by CPM for Final Quarter on Strike - Nickel will average 6 percent higher in the fourth quarter than previously forecast after a strike at Vale SA and increased imports by China, according to CPM Group. - more

  Steel prices likely to fall 3-5% by September - CMIE also views that the uptrend in international prices seen in June might not sustain due to overcapacity in the global steel industry and that the domestic steel prices move in tandem with international prices - more

  Stability in steel prices to continue in the short term - Steel prices in the Middle East continues to remain stable amid minor fluctuations with rebar priced between $460 (Dh1,689) and $480 per tonne. - more

  Iran Produces Low-Cost Nickel Oxide Nanoparticles - Findings of a new study revealed a new method for practical and low-cost synthesis of nickel oxide nanoparticles for alkaline batteries. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.07/lb higher but trading very choppy, with all base metals trading higher this morning. The US Dollar is adding momentum to commodity trading, down nearly 1/2 of 1% against the Euro. NYMEX crude futures are up 1% to near $69/barrel. Gold is up 1/3 of 1% and silver is higher by over 1%. In overnight trading, Asian markets ended higher, with European market following suit this morning. US futures, at the moment, show uncertainty and a flat opening.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  on vacation next report August 3rd
  • (Yieh) According to the Macquarie Group, the world stainless steel output has increased by 24 percent in the fourth quarter of this year as compared to the same period of last year.
  • (Yieh) Taiwan’s stainless steel prices could continue to rise in August for the 5th month in a row, as last Friday, LME nickel price hit a new high point for this year.
  • Numis Securities - "We believe that much of the immediate recovery has been priced in and we expect base metals to maintain current levels - with downside risk should macro indicators suggest that the economic recovery will be more sluggish than expected."
  • (SG) It is reported that UK stainless steel scrap goes up again due to stronger demand along with soaring nickel prices.
  • (SMM) Jinchuan Group, which has suspended a flash furnace for maintenance, has raised its nickel benchmark price by 3.2% after strong LME nickel gains. The new list price for nickel is 128,000 yuan ($18,740) per tonne, up 4,000 yuan from the previous offer, said Jinchuan, China's largest nickel producer.
  • Stirrings of new demand for base metals - As China's stockpiling cools, West seen picking up part of slack in improving economy - more
  • Rioting Chinese Steel Workers Kill Boss Over Layoffs - more
  • Anshan Steel May Build Plants in Western Australia - more
  • Latest Newsletter By John Mauldin - more

  PNG mining chief halts nickel operations - Papua New Guinea's chief inspector of mines has revealed that work at a $1.7 billion nickel mining project has been suspended because of health and safety concerns. - more

  • (Dow Jones) China Metallurgical Construction Corp., or MCC, denied media reports Monday that operations at its majority-owned nickel operation in Papua New Guinea have been halted due to health and safety concerns. "We're not aware of any halt in operations in Papua New Guinea," said an official with MCC's news department, who declined to be named.  - source

  ArcelorMittal eyes $3 bln stainless spin-off - FT  - ArcelorMittal, the world's largest steelmaker is looking into a possible joint venture spin-off of its stainless steel business, worth around $3 billion, the Financial Times reported on Monday. - more

  • Dow Jones - ArcelorMittal (MT), the world's largest steelmaker, Monday said it "has no intention to dispose of its stainless steel business" despite a Financial Times report saying it was considering a joint venture spin off of its stainless steel division. - more

  Steel Prices For Flat Products Increasing in All Main Developing Countries - Turkish long product quotations were raised at the beginning of this month, but have since fallen back due to low demand. - more

  EUROFER, the European steel makers association, has announced in Its July newsletter that the European Industrial Fastener Institute (EIFI) lodged a complaint with the European Commission on 30 June alleging dumping of stainless steel fasteners by India and Malaysia. Under EU anti dumping regulations the Commission has 45 days to publish a decision whether or not to instigate an investigation.

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • China tightening control over steel industry  - China's stolen secrets case against an Australian working for Rio Tinto Ltd. may have more to do with Beijing's push to tighten control over its huge steel industry than trying to dampen industrial espionage. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, July 24

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 10 to 3,345. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) South Korean Economy Grows at Fastest Pace in Almost Six Years on Stimulus // China to Ensure `Appropriate' Growth in Credit as Loans Rise, PBOC Says // Thailand's Central Bank Lowers This Year's Economic, Inflation Forecasts // Asian Stocks Rise for Ninth Day on South Korea Growth, Brokerage Upgrades // German Business Confidence Rises as European Economy Moves Toward Recovery // U.K. Economy Shrinks Twice as Much as Forecast as Banking, Building Slump // Euro Advances as Manufacturing Contraction Diminishes, Confidence Climbs // De Beers Diamond Sales Fall Most in Three Decades as Recession Saps Demand // European Stocks Decline, Ending Longest Rally Since 2006; Ericsson Slides // Consumer Sentiment Gauge in U.S. Posts First Drop Since February on Jobs // U.S. Auto Sales May Reach 10 Million Pace on `Clunkers' Plan, Analysts Say // U.S. Stocks Drop as Microsoft, Amazon.com Fall; Exxon Mobil Shares Advance
  • The US Dollar continues to trade lower against the Euro, down over 1/2 of 1% at the moment. NYMEX crude is very quiet today, up 13/100 of a percent and just over $67/barrel. Gold is up 1/2 of 1% while silver is over 1% higher.  Base metals trade in London ended mixed, but mostly higher. Indicator charts show nickel did peak this morning, as we reported, slumped a little, then climbed right back to its prior peak. Dow Jones reports three month nickel ended the day at $7.60/lb, a new closing high for 2009. Inventories of nickel store din LME warehouses fell below the 107,000 tonne level overnight, while cancelled warrants slumped back below the 1-1/2% level. This is the first time we have seen levels of nickel below 107,000 since April 28th. The Baltic Dry Index appears to be coming to an end, only down 10 points to 3,345. Sucden's day old chart shows nickel trading thru yesterday, and today's trading broke thru resistance (here). Edward Meir of MF Global says Monday's close will be important because if nickel closes above his resistant line of $7.55/lb for a second day, it would imply a technical breakout to the upside.  MarketWatch reports "U.S. consumer sentiment fell in July, according to a survey released Friday by the University of Michigan and Reuters, dragged down by a big drop in expectations about the economy. Sentiment rose to a revised 66.0 from a reading of 64.6 in early July, but was down from the June reading of 70.8." Many analysts are forecasting the recession is over, or coming to an end. Things are looking better, at least for now. Something worth noting are two reports out of China today showing electricity usage in Beijing and Liaoning provinces for June. Liaoning reports a 19.84% drop in electricity usage during June, worse than the 15.23% drop it experienced in May. For the year, usage is down 33.4%. The Beijing province reports a gain of 5% in June after a gain of 25.47% in May and plus 50% gain in both March and April. For the year, usage is down 38.33% in this province. Considering power usage was cut to the bone last summer in preparation for the Olympics, so while gains are expected in the Beijing province, the decline in recent gains is pretty steep. Overall electric usage is reportedly in the positive this month, but these are the only two provinces we can find broke down. Beijing is not one of the larger industrial provinces, but Liaoning is. Take the info with a grain of salt but it's there to be considered. Our slightly higher theme this morning is not working out, as European markets ended a nine day winning streak, their longest since 2006. Wall Street is also trading "slightly" lower at the moment, but with the volatility index still lower, we don't expect much change more from the day.  
  • Have a safe and relaxing weekend!!

  Reports

  • Commodities Daily - pdf here
  • EUROFER Newsletter Issue 06 - July 2009 - pdf here

  Commodity/Economic Articles and Comments

  • (BL) India - Market analysts said the fresh rise in nickel prices was mostly attributed to speculators buying who indulged in creating fresh positions on expectations of pick up in demand in the spot markets
  • (MF) As chrome ore demand recovers in China, exports volume of chrome ore from Turkey and South Africa have been rising. Just in June alone, Turkey has exported 208,200 tons with a 207% increases from May.
  • Russia needs democracy to overcome crisis - Russia risks being a Third World-style raw material exporter mired in economic crisis unless it boosts democracy and the rule of law, the European Union's top official in Moscow said in an interview. - more
  • The Economy Has Hit Bottom - more
  • Inspired by Rod Serling - more
  • Four Bad Results - more

  Indicators point to improved metals economy ahead - The latest Index of Leading Indicators, which is suppose to project economic activity three to six months forward, was up 0.7% for June marking the third straight monthly increase. - more

  China's steely resolve - China's steel mills yesterday issued a veiled threat that Australian miners will be further punished for their intransigence in this year's iron ore contract negotiations. - more

  Putin pledges steps to support steel sector - Russia's Prime Minister Vladimir Putin pledged on Friday to help the country's steel sector by stimulating demand for metals and taking steps to offset protectionism in other countries. - more

  Workers at recession-hit steel giant Corus scoop £2.2million Lottery jackpot - A worker at recession-hit steel giant Corus today said a 'dark cloud' had lifted after he won more than £2.2million on the Lottery with five colleagues. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.10/lb higher, with indicator charts implying it may be peaking for the moment, with all other base metals trading solidly in the green. The US Dollar is faltering and boosting commodity sentiment, down 2/3 of 1% against the Euro. NYMEX crude futures are quiet and over $67/barrel. Gold is higher by 1/3 of 1% and silver is up nearly 1/2 of 1%. In overnight trading, Asian markets ended slightly higher. European markets are slightly higher this morning, and US futures imply Wall Street may open slightly higher. It's shaping up to be "slightly higher" day if things keep going the way the appear at the moment. Astronauts aboard the Space Station will be replacing two nickel-hydrogen battery's today, each weighing nearly 370 pounds and costing about $3.6 million. Stainless steel prices continue to rise in China and a stainless steel index we started following in May, has gone from 95.52 on May 26th, to 103.36 today. The UK reported a deeper than expected drop in their second quarter GDP, while a German business sentiment index came in better than expected. 
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "It’s been a strange two days in the metals markets. On Wednesday, prices pushed higher almost single-handedly, this despite the fact that both oil and US equity markets did not do very much. By contrast, on Thursday, we had a ferocious rally in the US equity markets, along with an impressive rise in energy prices, but metal prices were unable to sustain earlier gains and faded by the close to finish roughly unchanged. We will have to see what happens over the course of today’s session, but as of this writing, all three markets seem to be in synch and moving higher-- crude oil is up by about $.20 a barrel, metals are up across the board, (with a number of them hitting fresh 2009 highs), while equity futures are pointing to yet another higher open for the US stock market.  ... Despite the heady gains of the past several days in a number of markets, (which admittedly has taken us aback), we remain skeptical about the sustainability of the recent moves and would be wary about jumping in on the long side at this late stage. The stock market advance, in particular, looks overextended, (up about 9% in eight trading sessions), as prices are rallying on earnings numbers that have been juiced up by cost-cutting and easier quarter-to quarter-comparisons as opposed to top-line revenue growth. In fact, one research service pointed out that of the several major companies beating estimates before the opening on Thursday, only Hershey came in with a year-over-year gain in revenue.  .... Nickel is at $16,700, up $300, and has also pushed past resistance at $16,630. Two closes above this level would imply a technical breakout to the upside." (read Ed Meir's complete morning base metals report here)
  • (Yieh) Due to rising raw material costs, price of wire rod grade A offered by Taiwanese China Steel Corp. is expected to increase to NT$21,000/ton.
  • (Yieh) Although demand in Taiwan is not very strong, the stainless steel price will increase by NTD3000~NTD5000/ton for August in respond to current increase in raw material costs.
  • (AAGM) Liberia - Heads of two prominent foreign investments Arcelor Mittal Joseph Matthews and BHP Billiton Country Representative Bob Heinrich said the country lacks qualified and trained workforce needed in strategic areas of their investments due to the 14 years of the civil unrest.
  • (CM) Steels prices in China had kept climbing by 14 straight weeks till last week, according to statistics from the China Iron and Steel Association.
  • (JMB) Japanese steel export decreased by 31.5% to 13.584 million tonnes in January-June from same period of 2008, announced by Ministry of Finance on Thursday.
  • (CS) China's daily power generation in the second 10-day period rose 8.5 percent year on year, an big increase over the first ten days of the month, according to the latest figures from the power dispatch center of State Grid Corporation of China on Thursday.
  • (AAR) The Association of American Railroads today reported that rail traffic continues to reflect the sluggish economy with traffic remaining down year over year for the week ended July 18, 2009. U.S railroads reported originating 268,553 cars, down 17.9 percent compared with the same week in 2008. Regionally, carloadings were down 17.3 percent in the West and 18.9 percent in the East. Rail carloadings were at their highest level in 15 weeks.
  • Asia: Preliminary Nickel Exploration Results "Encouraging" - more
  • Chian Daily - Steelmakers forecast gloom - more
  • Rio exits Guinea iron ore blocs, rival in talks - more
  • Commodities Signal 12% Rally by End of Year: Technical Analysis  - more

  MacroAsia eyes nickel processing plant - Listed holding firm MacroAsia Corp. is looking to invest in a nickel processing plant in the Philippines once it completes exploration activities in Brooke's Point, Palawan. - more

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • Beijing resumes iron ore pricing campaign - The China Iron & Steel Association has continued its loud campaign for control of iron ore pricing, speaking for the first time since the detention of Rio Tinto executive Stern Hu and using a director of Fortescue Metals Group as its mouthpiece. - more
  • Eyes peeled on China iron ore deal as CISA convenes - When China's steel executives meet next week for their biannual meeting, issues such as first-half performance and oversupply may take a back seat as the industry body braces itself to be grilled about its protracted iron ore talks with global miners. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, July 23

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 52 to 3,355. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Japan, Taiwan Export Declines Ease Amid Signs Global Economy Is Picking Up // Wen Douses Speculation China May Tighten Policy After Record Loan Growth // Asian Stocks Gain on Weaker Yen, U.S. Housing Prices; Toyota, Funai Rise // Credit Suisse Net Rises 29% as Revenue From Trading Stocks, Bonds Doubles // U.K. Set to Sell 5 Billion Pounds of Inflation Bonds, Twice Planned Amount // Stocks in Europe Advance for Ninth Day; Roche, Credit Suisse Shares Rise // Existing Home Sales in U.S. Rise for Third Month on Lower Borrowing Costs  // Dow Average Exceeds 9,000 for First Time Since January on Earnings Reports
  • The US Dollar is trading 2/10 of 1% lower against the Euro, and NYMEX crude is 2-3/4% higher, and over $67/barrel. Gold is up 2/3 of 1%, while silver is less than 1% higher. Base metals ended the day quietly, and mostly higher, except for big gainers tin and nickel. Indicator charts show nickel started the session strong, weakened during the early afternoon, before rebounding late. Dow Jones reports three month nickel ended the day at $7.44/lb , its third highest close for the year. LME stored inventories of nickel grew moderately overnight, while the Baltic Dry Index slipped another 52 points. Dow Jones quoted an unnamed London trader this morning as saying the fair value for nickel has been placed at $14.51/lb ($32,000/ton). If anyone has further information on "who" established this fair value, we would be interested in the information. Wall Street is way up today on news that existing home sales rose again in June. Even the ultra bears had to grudgingly admit this was very good news. The US Cash for Clunkers program starts Friday, which will soon be adding a lot of metal scrap to the US market.  

  Reports

  Commodity/Economic Articles and Comments

  • (News Bites) Pioneer Nickel Ltd advised the final share holding of former director Peter Langworthy to be 1,250,000 shares held indirectly. He resigned on July 22, 2009.
  • (Reuters) Guinea has threatened to suspend Rio Tinto operations in the country if the miner does not remove its equipment this week from disputed iron ore concessions, according to a letter from the mining minister seen by Reuters. A letter, signed by an official on behalf of the minister and dated July 14, said: "If the equipment is not withdrawn within a maximum period of one week, your business will be suspended until the final implementation of the decision."
  • Mining stocks: world's 100 most demanded - more
  • Steelmaker Nucor posts second consecutive loss - more
  • Steel Dynamics says Q3 outlook could improve slightly - more
  • Nouriel Roubini - The global recession may end towards the end of 2009 rather than sooner and the global recovery in 2010 will be anemic and well below trend as leveraged and income/profit-challenged households, firms and financial institutions are constrained in their ability to borrow, lend and spend.
  • Jim Rogers: Commodities are 'the best place to be' - more
  • China orders internet purge - more
  • Financial Profits and Rising Debt Era - more
  • Americans Repaying Debt Most Since ‘52 Spurs Savings - more
  • Americans not making money, much less saving it - more
  • HuffPost's Real Misery Index: Recalculating The Hard Times - more
  • (Canada) Recession over, recovery ‘nascent,' central bank says - more
  • The commodities supercycle is alive and well - more

  One more sign Canada is losing its place on world nickel stage - In the 1940s, the International Nickel Company, commonly called Inco, launched an ambitious advertising campaign telling the world about an “Unseen Friend.” - more

  China says 33 percent iron ore cut "impossible," deal soon - A top China steel industry official restated on Thursday strong opposition to settling iron ore prices at the same 33 percent cut other Asian mills have agreed, but said a deal could still be reached by month's end. - more

  Barnett encourages Chinese investment in WA miners - Chinese steel-making giant Sinosteel Corporation has been encouraged by Western Australian Premier Colin Barnett to invest more in the state's mining companies. - more

  • Steel rebound, Slowly - As we are finding out with the Rio Tinto case in China, steel is now a very important and very political international business and not just some sideline as many business people once thought as they headed off to the tech and net sectors. - more

  We track numerous indexes, as do many others, and wanted to update you on a few. Listed below are the months where we are seeing the "bottom". We are not forecasting these are "the" bottom's, just advising what appears to be when the index bottomed out last. Is the Great Recession ending?

  • Robry Daily Gas Flows Industrial - May
  • Robry Daily Gas Flows Paperboard - April
  • Robry Daily Gas Flows Mining - possibly June
  • Robry Daily Gas Flows Metals - May
  • Robry Daily Gas Flows Bldg Materials - not yet
  • US Purchasing Managers Index - Dec 08
  • Aggregate Weekly Hours Index - still falling in June
  • Fed Reserve Industrial Production  - still falling in June
  • Cass Freight Index - April
  • 3 ports import TEU count - February
  • 3 ports export TEU count - January
  • Wall Street - March
  • Nickel - March

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.05/lb higher, but staggering and off session highs, with other base metals mixed. The US Dollar is trading flat against the Euro, but has been trading lower most of the morning. NYMEX crude futures are off 1/2 of 1% and at $65/barrel. Gold is up 1/4 of 1% and silver is only slightly higher. In overnight trading, Asian markets ended slightly higher, with European markets mush the same this morning. US futures show Wall Street could open in a bullish mood, although the Labor Department just reported initial jobless claims rose last week, with continuing claims falling to 6.22 million.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals roared ahead single-handedly yesterday, even though both the US equity and oil markets did not do much of anything on the day, closing mixed in rather listless trading. Neither was there any dramatic move in the US dollar, but metals nevertheless pushed higher on supply concerns from the copper side of the equation. ... Furthermore, the jury is still out as to what will happen in China in the months ahead with respect to its copper imports given that the government is now no longer actively seeking extra units. In addition, as LME prices continue to rise, some local demand retrenchment could take place as Chinese fabricators realize they do not have the luxury of easily tapping into the export market to move their higher-priced finished products. We are off to a rather mixed start as of this writing, with copper slightly weaker, while other metals are mixed. However, chart patterns left over from yesterday's sharp move higher suggest that the path of least resistance is higher still, this despite the uncertain fundamental backdrop. We, however, would not be jumping into the fray at this point, as some metals are now overbought and due for a pullback.... Nickel is at $16,360, up $110. Yesterday’s sharp move higher seems to have reversed the double top formation that seemed to be taking hold, and we are now on track to test next resistance at $16,630. " (read Ed Meir's complete morning base metals report here)
  • (Yieh) After Posco and Tisco have announced the price rise for stainless steel products, Taiwan’s Yusco and Tang Eng might follow the suit to increase. The expected raise is about NT$2,000~3000/ton, according to market participants. If the nickel price on LME exceeded US$16,000/ton lately, the increase will enlarge.
  • (Dow Jones) LME nickel is rising due to speculative buying, partly linked to investors in China, says a London-based trader. ... He says the fair value for nickel has been placed at $32,000/ton, should the economy recover.
  • (JMB) Sumitomo Metal Mining's Philippine nickel project, Coral Bay Nickel reaches full capacity operation. The project started the second smelting plant with 11,000 tonnes of annual output capacity in April. The firm increases the first plant to neat full capacity of 11,000 tonnes after around 30% production cut to focus on second phase commissioning.
  • (CM) China imported 16.07 million tons of coal in June, surging five-fold from the same period last year, according to statistics released Wednesday by the General Administration of Customs.
  • International Ferro Metals - In light of stronger demand for ferrochrome, the Board of IFL has decided to recommence production from its second furnace. It is anticipated that the restart of the furnace will begin in the middle of August 2009, and will be ramped up to 90 percent production by mid September 2009. - more
  • Australian BOM update - While El Niño indicators have fluctuated over the past few weeks, the overall picture remains one of a developing El Niño event. Pacific Ocean surface temperatures, which drive El Niño events, currently exceed El Niño thresholds and are around 1°C above average. Cloud patterns and rainfall along the equator are becoming consistent with a developing El Niño event.
  • (SG) It is reported that the International Trade Administration Commission of South Africa has decided to cancel the anti-dumping measures to the stainless steel welding tube from Taiwan, Malaysia and Korea since July 15th, 2009.
  • (Globe and Mail - One more sign Canada is losing its place on world nickel stage; The Nickel Institute is closing its Toronto office, 3 years after the sale of domestic giants
  • KWG completes Ring of Fire royalty purchase - more
  • Inside Dr. Bernanke’s E.R. - more   (pre-order book here)
  • NBS official refutes charges of unreliable GDP figure - more

  Excerpts from Allegheny Technologies earnings conference call courtesy Seeking Alpha - source

  • Pat Hassey, Chairman, President and Chief Executive Officer - "Stainless demand appears to be in an early stage of recovery. ATI Allegheny Ludlum successfully implemented two base price increases. Effective May 4th we increased prices by 69% and effective June 29 we increased prices by another 6%. While base prices remain low we are seeing improvement from this historic bottom of the first half of 2009. Industry data released last week indicates that service center inventory of stainless products remained near historical low levels in June at a seasonally adjusted rate of 2.5 months. Many of our service center customers tell us that they continue to keep their inventories at low levels in order to avoid raw material risk and to conserve cash."
  • Question Dave Martin – Deutsche Bank - I wanted to start with the stainless steel business. What operating rate were you running at in the second quarter and where would your utilization rate be today? Secondly, can you comment on any opportunities to export stainless steel that you are seeing? - (A) We are running in 50-60% of capacities. We are seeing more volume in the second half. We have a very receptive particular customer base in Europe for our stainless steel products and we are seeing better shipments in the second half of the year to export out of the country as that market in Europe recovers. So, we are somewhat cautious but encouraged a bit on the stainless steel side. Price increases certainly are helpful. I think there is certainly the ability to do more there. I think the market is stabilizing. The inventories, there just isn’t inventory sitting out there..."
  • Question Timna Tanners – UBS - I wanted to follow up and ask a similar question on the stainless demand and how much of that do you think is inventory replenishing and how much of that is underlying demand. In the write up you talk about still seeing weakness in auto and appliance so if you could also talk about if you are starting to see improvement there? - (A) Let me just mention it is a complete difference on the stainless side of the business we really don’t see distributors in a restocking mode. Most of our customers we see are customers who are actually pulling product for the demand levels that they have. We see some demand gradually improving and in some areas improving in a big way. On the automotive side we start to see improvements in our precision rolled strip business which goes into such things as turbo chargers for diesel engines, hose clamps and for other couplings and applications like that. That business recently has gotten some real life into it.  
  • Follow-up Question - Timna Tanners - UBS - So we have heard some comments from other producers about not restocking, maybe that was a poor way of explaining it, but trying to get ahead of nickel surcharges increasing. You don’t see much of that phenomenon? - (A) No. We see pretty level bookings and schedules even into the higher surcharge months.

  Guest column: Chinese nickel prices to continue uptrend in Q3 - Domestic nickel prices have surged from RMB 90,000 ($13,175.81) per ton at the beginning of April to almost RMB 126,000 ($18,446.13) per ton, representing an increase of 40 percent. - more

  Outokumpu swings to Q2 loss, outlook disappoints - Finnish stainless steel maker Outokumpu posted a smaller than expected second-quarter loss on cost cuts and higher prices and volumes but its outlook disappointed, knocking its shares on Thursday. - more

  No restrictions on certain iron ore exports: Sharma - There are 'quantitative and qualitative' restrictions on manganese and chrome ore exports but there were none regarding export of iron ore lumps and fines of below 64 per cent Fe content, the Rajya Sabha was informed today. - more

  EU Steelmakers Eye 2Q Loss; 3Q Looks Better - Taking the pulse: European steel producers are broadly set to post another consecutive quarter of losses for the quarter ending June 30 as the economic downturn continues to take a bite out of demand, but steelmakers say third quarter earnings will likely improve. - more

  Russian steel seen asking Putin for support - Russia's crisis-hit steel sector will ask Prime Minister Vladimir Putin for lower taxes, simplified debt financing and other privileges at this Friday's meeting in Magnitogorsk, analysts and industry sources say. - more

  Five countries accounted for 90% of China June iron ore imports - China imported 55.3 million mt of iron ore in June, 49.94 million mt of which came from Australia, Brazil, India, South Africa and Ukraine, according to data published Wednesday by China Customs. - more

  Gilbertson rewrites history of BHP sacking - January 4, 2003 is a day deep-etched in BHP Billiton's brief, spectacular history. It was the day The Don finally did in The Brian, delivering BHP Billiton with its very own version of The Dismissal. - more

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • China urges Australia to respect judicial sovereignty in Rio Tinto case - A senior Chinese official said Wednesday that espionage charges against staff of Anglo-Australian mining giant Rio Tinto would be handled quickly, but urged the Australian side to treat the case "properly" and to respect China's judicial sovereignty. - more
  • Row over 'Rio four' deepens on China claims - The row over the four Rio Tinto executives detained in China amid allegations of spying deepened today as it emerged that China told the Australian Government that it has "sufficient evidence" to support the accusations. - more
  • Australia min says told China wants action on Rio - Australian Foreign Minister Stephen Smith told his Chinese counterpart on Thursday he wanted the case of detained Rio Tinto employees in China dealt with quickly. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, July 22

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index -minus 48 to 3,407. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Chinese Rush to Open Stock Trading Accounts Following Lifting of IPO Ban // Malaysia's June Consumer Prices Post First Decline in More Than 22 Years // Most Asian Stocks Gain on Speculation Profits Will Rise; Shin-Etsu Climbs // BOE Unanimously Maintained Asset Plan as Economic Growth Risks Diminished // Fiat Posts Second Straight Loss as Truck-Sales Slump Counters Car Demand // U.K. Inflation-Bond Sale May Get Boost From Bank of England, Investec Says // Stocks Rise for Eighth Day; Stoxx 600 Has Longest Run of Gains Since 2006 // Morgan Stanley Sets Aside 72% of Second-Quarter Revenue for Employee Pay // Bernanke Says Consumer Protection Should Be Made Formal Policy Goal of Fed // Morgan Stanley Reports Loss Larger Than Estimates on Costs to Repay U.S.
  • The Euro is now trading higher against the US Dollar, up over 1/10 of 1%. NYMEX crude is down 1/3 of 1%, with and silver now higher, by 1/2 of 1% and over 1% respectively. Base metals were mostly in the red this morning, but all needed solidly in the green. Indicator charts show that upward trend we mentioned this morning did not give up all day, and looked to have more gas left at closing. Dow Jones reports three month nickel ended the day at $7.37/lb . LME stored inventories of nickel got whacked overnight and fell below the 107,500 level. Cancelled warrants slipped below 2%. The Baltic Dry Index fell again, down 48 points to 3,407, but this decline isn't showing the bearish plunge the last drop experienced. In our opinion, three things gave nickel a boost this morning. Japan’s largest nickel maker forecasting a "substantial recovery" in demand, reports that China imported yet another record amount of nickel in June, and inventories falling in the shadow of the Sudbury strike. Market optimism doesn't hurt either, and its possible some shorts had to recover after the analysts big forecasted correction never materialized. Sucden's day old chart shows nickel trading thru yesterday (here).

  Reports

  Commodity/Economic Articles and Comments

  • BHP: Production solid despite weak demand - more
  • (Dow Jones) Zambia's sole nickel producer, Munali Nickel Mine, currently under care and maintenance, is expected to re-open before the end of the year, the director of the Chamber of Mines of Zambia told Dow Jones Newswires Wednesday.
  • (Dow Jones) Dwyka Resources Limited, the Australian and London-listed mining company with interests in the Barberton style gold project in Swaziland and a nickel exploration project in Burundi, said Wednesday a work programme has started at the Ethiopian gold projects, with focus on the Tulu Kapi and Yubdo gold prospects alongside its existing assets.
  • Steel demand begins to revive in UAE - more
  • The 'Ore' Wars - more
  • Pee Power: Urine Isn't Just "Waste," it's Useful Energy and Possibly Car Fuel - more

  Stainless steel output in first quarter slumped to worst level since 2000 - Only 4,8-million tons of stainless steel was produced worldwide in the first quarter of 2009, the lowest quarterly output level since 2000, the International Stainless Steel Forum (ISSF) reported last month. - more

  Demand is deceiving - The trend for metals demand is being masked by restocking, resources giant BHP Billiton said on Wednesday in a production update. - more

  • BHP sees mixed commodities demand outlook - Restocking of commodities in China may have ended, coinciding with fresh inventory building in other markets and painting a mixed picture for global demand, said BHP Billiton, the world's largest miner. - more

  European steel demand, prices depressed in near term: Moody's - The outlook for the European steel industry is negative, reflecting weak demand that is not likely to improve until well into 2010, as well as depressed steel prices that are not likely to recover to levels required for appropriate long-term returns in the near term, Moody's Investors Service said Tuesday. - more

  Nippon Steel to likely keep furnace off in '09 - Nippon Steel Corp will likely keep a blast furnace near Tokyo shut down for the remainder of 2009 due to an unclear outlook for demand in Japan, the president of the world's second-biggest steelmaker said.  - more

  Russia Norilsk denies planning generous dividend - Russia's metals giant Norilsk Nickel on Wednesday said it had not yet decided on dividend payments, denying a report by UniCredit Securities brokerage of plans for a hefty first half payout. - more

  Nickel bonus good for city: prof - Industry Minister Tony Clement and the Conservative government of Stephen Harper have a vested interest -- as do all Canadians -- in United Steelworkers retaining their nickel price bonus, says a Sudbury economist. - more

  Steel Trap: How to Stop Chinese Steel from Selling State Secrets - The case of the four Rio Tinto employees suspected of stealing state secrets is far from over and the nature of the state secrets that they are accused of stealing is still not public knowledge. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.02/lb but on an upward trend at the moment, with most metals lower and quiet. The US Dollar is adding pressure to base metals this morning, up 1/4 of 1% against the Euro. NYMEX crude futures are down 1% and under $65/barrel. Gold is off nearly 2/10 of 1% and silver is lower by nearly 7/10 of 1%. In overnight trading, Asian markets ended slightly lower, with India dragging down the other gainers. European markets are slightly lower this morning, and futures show Wall Street could open much lower. China reports record levels of nickel imports last month, which means the statement by Chinese officials that the stocking of nickel was ending was either referring to the period after these imports arrived, or was a bluff to hopefully drive world pricing lower. We added a link overnight that follows the chain of events leading up to the arrest of the Rio staff in China on espionage charges from articles we had linked to from this site (here).
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metals finished mixed yesterday, but the advances we saw in the two bellwethers, copper and ali, were not that convincing, as gains faded sharply over the course of the day. Copper for example, was up by about $110 at one point, and officially closed $90 higher, but prices ended up flat by the end of the US session. Ali closed with a $5 gain, but the rest of the metals never really gained much upside traction, and finished the day with modest losses. We are modestly lower in Wednesday’s action, (except for ali) but conditions are very quiet, with trading ranges tight. Energy prices are lower on account of bearish API numbers released overnight, suggesting that the more important EIA numbers-- out later today --will follow in a similar vein. The dollar is slightly stronger, trading below the 1.42 mark against the Euro, while US stocks are called to open lower. If these patterns hold over the course of the day, we could see the selling pressure increase on metals.... Nickel is at $15,850, down $100. The complex had a weak session yesterday, and with prices off again today, the double-top formation seems to be filling in, suggesting that we could see further downside. (read Ed Meir's complete morning base metals report here)
  • (JMB) Japanese raw steel output decreased by 40.7% to 36.69 million tonnes in January-June from same period of 2008, which represented the largest drop as half year of calendar year and the lowest level as first half year since 1968, announced by Japan Iron and Steel Federation on Tuesday.
  • BHP Billiton says full-year was ‘very challenging’, but it achieved a solid performance - more
  • Allegheny Technologies Announces Second Quarter Results - more
  • China: 2 Trillion Dollars Looking for Commodities to Buy - more
  • Foundation of China's industrial recovery unsound: official - more

  (Reuters) China's refined nickel imports hit a record of 41,008 tonnes in June, up from May's record 25,032 tonnes.

  • China Posts Record June Metal Imports; Commodity Trade Surges - China's commodity imports surged in June, with copper and nickel posting monthly records, as signs of demand recovery, arbitrage flows and tight supply conditions drew metals and agricultural products. - more
  • Table - China June nickel, lead, zinc, tin trade - more

  Sumitomo Metal Mining Forecasts Rising Nickel Demand - Sumitomo Metal Mining Co., Japan’s largest nickel maker, forecast a “substantial recovery” in demand in the six months starting October as customers boost production and increase commodity purchases. - more

  • Market Tendency On Imports Of Ferro-Alloys At 15th July 2009 = As Prices Of Manganese Ores Have Bottomed Out, Prices Of Manganese Ferro-Alloys Have Turned To Rise - The market tendency by item on imports of ferro-alloys into Japan at the 15th July of 2009 is as follows: - more

  Moly producers predict prices of US$19 per pound, say demand will be led by China - Producers of molybdenum, a mineral used to strengthen certain types of high-end steel, say explosive Chinese growth over the next 15 years will bring tightness back to a market that's currently struggling with the global recession. - more

  • Colo. Molybdenum Mines Ready To Ramp Up If Needed - The head of an Arizona mining company says future production at two Colorado molybdenum mines depends on a recovery in demand. - more

  Ramu Nickel On Track, Frieda River Copper Proj May Go Bigger - The US$1.4 billion Ramu nickel project in Papua New Guinea is on schedule for completion and commissioning before the end of the this year, part-owner Highlands Pacific Ltd said in a quarterly report Wednesday. - more

  MEPS Reports A Slight Upturn in EU Steel Prices in July - Demand and prices are strengthening in the European strip market as the destocking phase is all but over and buyers need to fill the gaps in their inventories. - more

 Vale official lying, union director says - United Steelworkers are going to have someone on the "inside" challenge Vale SA president and chief executive officer Roger Agnelli to defend his comments that Vale Inco's Sudbury operations are not financially sustainable. - more

  $720,000,000 the cost of BHP's non-take-over of Rio Tinto - Nearly three-quarters of a billion dollars were spent on the aborted takeover of Rio Tinto by BHP. Just imagine what that would translate to in share dividends. Instead it was directed to Goldman Sachs and other Wall Street folk for services rendered. - more

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  • China Daily Special Coverage
  • SINA
  • Chain of Events
  • Australia minister says still hopes for China Rio talks - Australian Foreign Minister Stephen Smith said on Wednesday he still hoped to meet his Chinese counterpart to discuss Rio Tinto's detained employees after Beijing officials said no meeting was planned. - more
  • Spot ore rates key to steel lobby stance - The spot price of iron ore will climb in the second half of the year if the Japanese and South Korean economies recover, and this possibility may force China to accept the 33-percent discount in full-year ore rates now being offered by global miners, industry experts said. - more
  • China's Wuhan Steel inks iron ore pacts in Australia, Canada -  Chinese steelmaker Wuhan Steel has finalized a deal with Australia's Centrex Metals Ltd, or CXM, for the development of iron ore resources in southern Australia's Eyre Peninsula, Wuhan Steel said Tuesday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, July 21

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 56 to 3,455. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China's Bonds to Decline on Money Supply Curbs, Everbright Pramerica Says // Samsung SDI Posts Unexpected Profit Increase on Rechargeable Battery Sales // Asian Stocks Gain on Economic Recovery Speculation; Commodity Shares Rise // Volvo Predicts `Difficult' Quarter as Sales Drop, Customers Delay Payment // Credit Suisse Says Buy Equities, Trim Bonds in Reversal of Recommendation // European Stocks Gain for Seventh Day; Stoxx 600 Is Highest Since November // Bernanke Sees `Tentative Signs of Stabilization,' Says Rates Will Stay Low // CIT Expects $1.5 Billion Loss, May File for Bankruptcy If Debt Swap Fails // Most U.S. Stocks Fall as Concern Over CIT Group Offsets Caterpillar Rally
  • The US Dollar continues to trade higher against the Euro, by nearly 1/3 of 1% at the moment. NYMEX crude is only slightly higher, up 1/4 of 1% and a tad over $64/barrel. Gold is lower by 1/4 of 1% and silver is down over 1%. Base metals mostly lower, except for copper. Indicator charts show nickel staggered in the red most of the early part of the trading session, before succumbing to selling pressure late. Dow Jones reports three month nickel ended at $7.22/lb , erasing the gains from the last four trading sessions. Inventories of nickel stored in LME warehouses slipped overnight, but remain above the 108,000 tonne level. The Baltic Dry Index slipped for a second day, down 56 points to 3,455. No economic reports out of the US government today. Market is lower on renewed concerns CIT may be forced to file Chapter 11. Reuters reports the U.S. Senate voted to stop production of the F-22 fighter plane today, giving President Barack Obama a victory, and killing a project the US military said it didn't want. Relocated and added two permanent links to the news section for as long as they are relevant. One holds links for up-to-date Sudbury strike coverage, and another for coverage of the iron ore negotiations and spy scandal.

  Reports

  Commodity/Economic Articles and Comments

  • Barclays analyst Gayle Berry - "We had been expecting a slowdown in China's base metals imports, but incoming data suggest that the magnitude of that slowdown could be less than previously thought. Anecdotal reports suggest some strengthening in Chinese demand...With real demand expected to improve further through the second half, it looks as though the fall in imports may be modest.....In view of...the ongoing support from the processes of urbanization and industrialization, we expect Chinese nickel demand to rise by 6.3% in 2010, with likely similar positive figures for the proceeding years."
  • (Interfax) MMC Norilsk Nickel expects to post EBITDA of just over $3 billion in 2009 on condition that nickel, copper and PGM prices remain at current levels throughout the second half of the year, UniCredit bank said in a note to investors following a meeting with company executives.
  • Rusmet reports the Russian government is still interested in seeing Rusal and Norilsk Nickel merge, and effectively putting Norilsk under state control.
  • (CMJ) Strongbow Exploration of Vancouver says that locked cycle testing of material from its Nickel King project north of La Ronge successfully produced a concentrate that graded 16.5% Ni, 4.2% Cu and 0.74% Co. Recoveries were 78.4% for nickel, 89.1% for copper and 63.5% for cobalt.
  • (Lange)  The China Iron and Steel Association (CISA) denies saying it would terminate 20 or 30 traders' iron ore import licenses, as has been reported in the media, but is reviewing the qualification status of the current 112 licences.
  • Vale Confirms Iron Ore Price Agreement With ThyssenKrupp - more
  • (BN) Mining identity Andrew Forrest has donated around $10,000 worth of share to his charity, The Australian Children's Trust.
  • Emu Nickel Expanding JV With Windy Knob - more
  • Ros - For the first time since the 1998 crisis, the volume of housing construction in Russia fell by more than 10%.

  Investors start to take a liking to metals - The volatility of the base metal mining sector can be unnerving, but once there is a global recovery, share prices of the mining companies can climb a lot higher. - more

  • The 2009 Mid Year Commodities Review & Outlook - The first half of 2009 brought three critical events to the futures industry which sets up quite an unexpected second half of 2009- more

  W.Australia premier urges Rio case be handled quickly - Western Australia's premier said on Tuesday that he had urged the Chinese government to handle the issue of Rio Tinto's (RIO.L) staff detentions quickly to prevent hurting long-term ties between the two countries. - more

  No End In Sight For Vale Inco Strike In Canada - Estado - There are no signs of an end to the week-old strike at Canadian nickel mine Vale Inco, owned by Brazil's Vale SA. - more

  Platts News Feature - Tide turning after price famine in steel alloying agents - Looking at the roller-coaster fortunes of the steel industry over the last year, it comes as no surprise to those supplying steelmakers with raw materials that their own destinies have been turned upside down by the financial turmoil of the last eight months.  - more

  Molybdenum prices expected to double in 2010 - Molybdenum prices have averaged slightly more than $9/lb so far this year but an analysis by J.P. Morgan Securities warns "expect moly prices to close in on $15/lb over the next several months and to average $18/lb in 2010."  - more

  POSCO restarts mill in 5 months as demand recovers - South Korea's POSCO has restarted operations of a blast furnace in five months after boosting its output capacity by 60 percent, as the global steel industry recovers quickly from its worst downturn in decades. - more

  Taiwan's China Steel to restart furnace sooner - China Steel, Taiwan's top steel maker, plans to resume operations of a key blast furnace earlier than planned due to steady global prices as inventories were digested after demand picked up. - more

  AK Steel stays in red; offers better forecast - AK Steel Corp. registered a second-quarter loss that beat analysts’ expectations, and predicted an improvement for its third quarter. - more

  China Stainless Steel Index

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.06/lb lower, with base metals mixed and fairly quiet this morning. The US Dollar is trading .02% higher against the Euro at the moment, while NYMEX crude futures are 1% higher at $64.60/barrel. Gold is up slightly, while silver is down slightly. In overnight trading, Asian markets ended slightly higher, with China ending slightly lower. European markets are up this morning, and US futures show Wall Street should open on the bullish side after Caterpillar reported a drop in earnings of 66% during the second quarter but much better than analysts forecast. Reuters published an updated list of current average price of nickel forecasts for 2009 and 2010. We have posted some of the more popular analysts forecasts on our forecast page (here).
  • Bloomberg morning base metal news - more

  Reports

  • Daily Market Report - pdf here
  • Daily Resource Plus - here
  • Metals Fundamental Report - pdf here
  • Morning Montra - pdf here
  • Metals & Energy - pdf here
  • Market Drivers - pdf here
  • Global Mining News - pdf here
  • Weekly Forecast by SMM Specialist - more
  • Specialty Steel Industry of North America statistical data for April 2009 - pdf here

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals continued to push higher yesterday, as a weaker dollar (which hit six-week lows), firmer equity markets, and stronger oil prices, all coalesced to coax the complex forward. Macro news out of the US also helped boost sentiment after it was reported that the index of leading economic indicators rose .7% in June following a revised 1.3% gain in May. In addition, a survey of economists concluded that the recession’s grip here in the US appeared to be easing, although participants were careful to point out that they were not ready to declare an end to the recession just yet. The current bullish backdrop is eerily reminiscent of what we saw during the first half of June when markets were similarly pushing higher on the back of the weaker dollar, rising equity markets, and expectations that US recovery prospects were picking up steam. This time, better than expected earnings seems to have replaced hopes for a stronger recovery, but apart from that, the two periods seem very alike. That is why we are somewhat wary about chasing metal prices at current levels, as readers recall that the early June bounce ended up reversing significantly by the first week of July. We would therefore not be surprised to see a repeat this time around, perhaps once the earnings news is well behind us, and markets focus back on the macro readings. Here, the numbers-- while improving--are not beating estimates by wide enough margins to justify the big price rises we are seeing in metals. More importantly, we do not have the “tail-wind” of Chinese buying --so instrumental to the price advances made earlier in the year -- at work this time around..... Nickel is at $15,900, down $325; Double-top resistance at $16,630 is still giving nickel some trouble on the charts, and today’s fade could prove serious if it continues to fill out the second leg of the formation."  (read Ed Meir's complete morning base metals report here)
  • (Yieh) Due to the stainless steelmaker cutting down on their output, buyers with low stock, and the nickel price increasing substantially, the stainless steel price in Taiwan has improved rapidly from the conditions in April. However, while the domestic market is not so good, due to the steel price being too high for buyers to accept, the export market remains comparatively active.
  • South Korea's POSCO said it would raise domestic prices for hot-rolled stainless steel by 7.1% to $2,387 a ton. The price of cold-rolled stainless steel will go up by 6.5%. The company said it expects to remain profitable in the second half of the year as prices and demand recover.
  • Mincor Resources Surges on Nickel Production Gains, Cost Cuts - more
  • (Interfax) China's crude steel output up 1.23 pct year-on-year in H1
  • (Xinhua) China's Stainless Steel Output to Exceed 10 mt
  • (JMD) Sumikin & Nippon Steel stainless Steel Pipe/ To raise prices of welded stainless steel pipes
  • (MB) Chinese stainless steelmakers have lifted weekly prices by up to 300 yuan ($44)
  • Tata Steel raises $500 mln in GDRs, shares bounce - more
  • U.S. Steel's Canadian workforce shrunk to 23 per cent of promised amount - more
  • Vietnam - The largest steel plant enters into construction - more
  • (China Daily) China's power generation in the first 10-day period of July rose by 3 percent year-on-year, continuing the rebound in June, according to the power dispatch center of State Grid Corporation of China (SGCC). Power consumption and generation resumed growth in June, putting an end to eight consecutive months of decline since last October.
  • Ocean shipping: Port Tracker report says May volume is up slightly - more
  • (AF&PA) According to the American Forest & Paper Association’s June 2009 U.S. Containerboard Statistics Report released today, total containerboard paper production was flat in June compared to June 2008. However, total production rose 144,400 tons or 5.5% when compared to May 2009.
  • According to the American Forest & Paper Association’s June 2009 Paperboard Report released today, total paperboard production decreased by 9.2% in June, 2009 compared to last June, 2008. However, total production increased from May totals by 40,400 tons or 3.8%.
  • (SSY) In June monthly world crude steel production recovered to its highest level since September 2008, latest data from the World Steel Association indicate. However, at 99.8 Mt, this was still down 16% year-on-year. China’s steel mills were at the forefront of the growth, producing (a higher than previously reported) 49.4 Mt, almost half of global output, up 6% YoY. The other major annual gain was in India, where production climbed 5.7% to an estimated 4.6 Mt.
  • On the Economic Outlook and the Commitment to Price Stability by Dennis P. Lockhart President and Chief Executive Officer Federal Reserve Bank of Atlanta - speech here
  • NPD Group reports customer traffic at US restaurant's dropped 2.6% in the first quarter compared to the year before - the biggest decline since 1981. Fast-food saw a 2% decline in customer visits overall but fared better than pricier places, as casual dining and midscale restaurants recorded traffic declines of 4% and 6% respectively from the prior year. Average checks at restaurants rose 2% in the first quarter compared to the prior year, suggesting patrons are visiting less, but spending more when they do visit.
  • Chong Yoon Chou, Singapore-based investment director at Aberdeen Asset Management Asia Ltd. - "I think the recession is clearly over. Confidence is back."

  Japan June crude steel output down 33.6 pct vs yr ago - Japan's crude steel output dropped by a third in June from a year earlier to mark the ninth straight month of falls, but it picked up slightly from May in a sign the industry is gradually recovering. - more

  Courtesy AISI - In the week ending July 18, 2009, domestic raw steel production was 1,244,000 net tons while the capability utilization rate was 52.1 percent. Production was 2,120,000 tons in the week ending July 18, 2008, while the capability utilization then was 88.8 percent. The current week production represents a 41.3 percent decrease from the same period in the previous year. Production for the week ending July 18, 2009 is up 2.6 percent from the previous week ending July 11, 2009 when production was 1,213,000 tons and the rate of capability utilization was 50.9 percent.

  China's steel utilization rate falls to 73% in Q2, from 77% in Q1 - China's utilization rate of its steel refining capacity averaged 73.1% in the April-June quarter, down from 77% in January-March, latest data from the National Bureau of Statistics showed. - more

  Thousands unite in fight to save Corus steel jobs - Steely determination remained evident across Teesside today after a major jobs march through Redcar. - more

  Sudbury Nickel Strike Coverage

  Iron Ore Talks / Spy Scandal Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, July 20

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 31 to 3,511. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Dollar Falls to Six-Week Low as CIT Prospects Boost Higher-Yield Demand // China Insurers' Profit May Have Doubled on Premiums, Stock Market Rebound // Hong Kong Jobless Rate Rises to Highest Since 2005, Dragging on Recovery  //  Asian Stocks Rise on Commodity Prices, U.S. Housing; James Hardie Advances // U.K. Home Sellers' Asking Prices Rebounded in July as Buyer Demand Climbed // European Stocks Advance for Sixth Day; BHP Billiton, Boliden, Lloyds Climb // CIT May Get $3 Billion Rescue From Bondholders to Avoid Bankruptcy Filing // Leading Indicators Climb, Signaling U.S. Economy Nearing End of Recession // U.S. Financial Bailout Costs May Reach $23.7 Trillion, TARP Inspector Says // Stocks Rise, S&P 500 Index Adds to Best Weekly Gain Since March; CIT Jumps
  • The US Dollar continues to trade lower against the Euro, by 9/10 of 1%. NYMEX crude is higher, but only by 2/3 of 1% and under $64/barrel. Gold is up 1-1/2% and silver is higher by 1.8%. Base metals all ended the day higher on the weaker Dollar. Indicator charts show nickel spiked early, before spending the day in a gradual decline. Dow Jones reports three month nickel ended the day at $7.36/lb . LME stored inventories of nickel slumped overnight, but remain over the 108,000 tonne level, with cancelled warrants closing in on the 3% level. The Baltic Dry Index ended a four day spurt of energy, and lost 31 points to 3,511. Markets are bullish today, but news is on the weak side. The Conference Board's index of leading economic indicators posted a third straight gain, up 0.7% in June. The New Caledonian Kanak activist group Rheebu Nuu is threatening action against Vale's Goro project again. Jim Marbrook has been filming a documentary on the island exploring indigenous land rights and mining in Kanaky/New Caledonia for Pacific Media Centre.(more) His project is also funded by "Creative New Zealand’s Screen Innovation Fund has awarded a $24,900 grant to filmmaker and AUT television lecturer Jim Marbrook. This grant will allow him to complete his current documentary Eye of the Land, a film about indigenous land rights and mining in Kanaky/New Caledonia." The documentary was presented at an Australian Documentary Conference earlier this year, but we can find no further showings listed, and thus may be a work in progress.

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) LME base metals are up, with copper and aluminum at new 2009 highs, but the rise is spurred by increased risk appetite not an improvement in underlying demand, says Virtual metals in a report for BNP Paribas Fortis. Says base metals have moved in almost perfect lockstep with equities, suggesting that much of the 1H 2009 rally is confidence based.
  • (Dow Jones) Macquarie Bank says China's stainless steel production +20% on quarter in 2Q, European production +14% on quarter helping nickel prices rally. "Sharply rising orders for stainless steel in Germany, Japan, Korea and Taiwan have prompted producers to increase production sharply in those countries and further large rises are planned in the second half." Now tips stainless steel production fall of 10.6% for 2009 to 23.7 million tons, an improvement on expectations of 15% fall at start of year. Adds, funds taking long positions in LME nickel driving metal's recent gains.
  • (Reuters) Views on nickel, one of the most unpredictable of metals, were predictably divided, with a range of $12,125 to $27,500 in 2010. Median forecasts of $12,886 in 2009 and $14,881 in 2010 were higher than January's $11,023 and $13,228, respectively. Nickel is hostage to the stainless steel industry, where the additive helps improve the workability of the finished product, but a surge in three-month LME prices to a record $51,800 in May 2007 has permanently destroyed some demand as consumers tooled up to use substitute elements like molybdenum, analysts said.
  • (Dow Jones) Russia's primary nickel output fell by 7.3% in the first six months of 2009.
  • (Reuters) Brazilian miner Vale said on Monday it has closed an iron ore price agreement with Italy's major steelmaker Lucchini, cutting prices by 28.2 percent from 2008 levels.
  • Anglo's Parker Sees "Value Gap" In Xstrata - more
  • China Power generation may see growth in third quarter - more
  • We’re All Inflation Hawks Now - more
  • Consumer Spending - more
  • Unprecedented Global Aging Examined in New Census Bureau Report - more

  Positive Outlook for Northern European Strip Steel Prices? - There is a mood of cautious optimism in the northern European carbon steel community as business winds down for the summer holiday period. Most players believe that activity levels in September will give a good indication of the health of the market in the medium term. - more

  (courtesy reader from Australia)

  • Australian Weather - Indicators suggest an El Niño event is developing across the Pacific Basin. Conditions have reached a point that, should they persist at such levels through the remainder of the southern winter and into spring, 2009 will be considered an El Niño year.
  • About El Niño and La Niña - more
  • Detailed Australian Analysis on past El Niño's in Australia - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.10/lb higher, with all base metals trading higher this morning. Commodities are getting some help from the US Dollar this morning, which is trading 8/10 of 1% lower against the Euro. NYMEX crude futures are nearly 2% higher and nearing $65/barrel. Gold is up 1-1/2% and silver is higher by 1-3/4%. In overnight trading, Asian market ended solidly higher. European markets are higher this morning and Wall Street futures reflect a higher opening in New York on news lender CIT Group has reportedly received a private sector bailout.
  • Vale/Inco company / USW  Local 6500 / Sudbury Star / Sudbury TV / Union Strike Site

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Copper prices hit five-week highs on Friday, pulling many other metals in the group higher along with it, while oil prices had their first weekly gain in a month. Arguably helping the advance, were better than expected housing data, where both June housing starts and permits came in well ahead of estimates. Construction of new homes rose by 3.6% in June from the prior month for their third consecutive monthly increase. The gains were driven by a 14.4% jump in construction of single-family homes -- the biggest monthly gain in four years and the fourth consecutive improvement this year. Despite this impressive bounce, we should note that overall housing starts and permit issuance is still off by some 50% from year-ago levels. Moreover, the existing home sales category, which is the far more important reading of the housing sector, remains mired in a slump. Instead, we think the more persuasive reason behind last week’s rise in metal prices, was not so much the macro numbers, but the stronger tone evident in the US equity markets, where stocks hit a one-month high on Friday on account of better than expected corporate earnings. .... Metals are once again sharply higher this morning, with copper and ali hitting fresh 2009 highs. Energy prices are also up, as commodities continue respond to the better tone seen in equities. ... In other news, the LME has expressed interest to attract business from the freight derivatives market to its trading platform, having exploratory discussions” with market participants and claiming it is a “natural venue” for forward freight agreements (FFAs). Naturally, the Baltic Exchange is not happy about this move, saying, “We are not in discussion with the London Metal Exchange regarding the potential for screen trading in the FFA market, although we understand that they have held discussions with some of our members. We will not offer our support for changes in the marketplace which potentially threaten the existing and sometimes fragile FFA liquidity.” Currently, FFAs are conducted on a principal-to-principal basis, and are not traded on any exchange. In 2008, over 2.1bn tons of freight in FFA contracts worth $155bn was traded. Volumes are thought to have fallen by about half in 2009. ..... Nickel is at $16,448, up $323; we have still not taken out double-top resistance at $16,630, but seem to be getting there." (read Ed Meir's complete morning base metals report here)
  • (MP) India chrome ore export prices are set to rise in August backed by short supplies of material and rising international ore and ferro-chrome prices. The ferro-chrome traders are doing good business as demand and production cuts by South African producers have combined to push up the spot price of ferro-chrome. Sources say that the market is very strong right now and is expected to rise further.
  • (CCR) China’s power generation has consecutive maintained positive growing trend since June, and jumped 3 percent in the first ten days of July, Caijing website citing the data from State Grid.
  • (SM) According to the American Forest & Paper Association’s June 2009 Kraft Paper Sector Report released today, the total Kraft paper shipments were 122.4 thousand tons in June, and an increase of 7.6% from last month. Total Kraft paper inventory decreased 12.6%, 9,600 tons lower than May 2009.
  • Four more banks bite the dust - more   Failed Bank List - more
  • No-one saw this coming?” Balderdash! - more
  • NY Times - Class resentment has waxed and waned in this country, but it is not typically a widespread, default emotion of the American middle class. This is at least in part because it’s an article of faith here that through some combination of hard work and luck, you might get rich, too. And why abuse, soak or heap scorn upon a group you at least have a theoretical chance of joining? The recession — with its yawning gap between the bonus class on the one hand and the foreclosed upon and newly jobless on the other — is changing that. It’s not merely that Americans have, at least temporarily, abandoned the hope that they’ll earn scads of money. It’s the widespread sense that winners in this economy are produced by a game that’s rigged. Which is why the response to last week’s earnings bonanza has been a mix of, among other things, bafflement and anger. If these companies can return to the festivities so quickly, were they really having the near-death experience they and the government claimed? And if taxpayers risked their money when they backstopped Wall Street’s misadventures, why aren’t they sharing in the upside now that the party has started again? And did these companies have the time to rethink the risk culture that landed us in this jam in the first place? - source

  POSCO raises stainless steel prices by 7.1 pct - South Korea's POSCO said Monday it would raise domestic prices of stainless steel by up to 7.1 percent in its second price hike in just one month to reflect improving demand and rising raw material costs. - more

  Steel, Aluminum Shipments from Metals Centers Continue to Decline in the U.S. and Canada  – June shipments of steel and aluminum from metals service centers in the United States and Canada continued to decline, but generally at a slower rate than in previous months, the Metals Activity Report from the Metals Service Center Institute shows. - more

  June 2009 Crude Steel Production - World crude steel production for the 66 countries reporting to the World Steel Association (worldsteel) was 99.8 million metric tons (mmt) in June. This is 16% lower than in June 2008. - more

  New Caledonia’s Kanak activist group challenges nickel company to comply with agreement - New Caledonia’s Kanak activist group, Rheebu Nuu, has threatened to walk away from last year’s landmark deal with the Vale Inco nickel company, unless the company changes its attitude and complies with the terms it had agreed to. - more

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

  Steel industry on a consolidation mode - Contrary to expectations steel output in China will not see any slowdown and would continue its strong growth trajectory this year, according to industry experts. - more

  • Iron Ore Above $90 as China’s Growth Fuels Imports  - Cash prices for iron ore delivered to China, the world’s biggest buyer, climbed above $90 a ton for the first time this year as rebounding growth in the Asian nation drove imports. - more

  India Considering Duty on Cheap Steel Imports, Minister Says - The Indian government is considering imposing taxes on the import of steel after local manufacturers complained cheaper overseas products are reducing earnings, a junior trade minister said. - more

  Website is home to heated debate - Debate about the Vale Inco strike isn't just playing out at coffee shops and other community gathering places. The Sudbury Star's website is serving as a hotbed of discussion about the issue. - more

  Stern Hu case based on specific crime, Chinese say - The Chinese government has told Foreign Minister Stephen Smith that jailed Rio Tinto executive Stern Hu's case involves a specific criminal investigation and is not related to broader bilateral trade, commercial or national security concerns. - more

  • Chinese go hard on Hu coverage - They are calling it "spygate". So don't for one moment think the Chinese media hasn't learned a trick or two from the lurid tabloid excesses of the Western media. - more
  • Out of step over failed price deal - Australia is having to rethink its dealings with China following the bizarre jailing in Shanghai of an Australian businessman and a flurry of undercover diplomatic requests for explanations from Canberra to Beijing. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Saturday, July 18

  Commodity/Economic Articles and Comments
  • El Nino threat blows commodity prices higher - more

  Excellent observation from Na Liu with Scotia in this week's China Update - Many clients have asked our opinion on the spy probe on Rio Tinto’s employees. We offer three observations. First, we do believe that the case against Rio Tinto employees must be backed by strong evidence. Local Chinese media reported that the Rio Tinto employees obtained confidential minutes of the Chinese negotiation team’s strategy meetings. We do not know whether this is true, but we think it is highly unlikely that China would take such serious action against Rio employees without strong evidence. The Chinese government knows that if it really does not have evidence at this critical time, its image will be damaged. In recent years, China has been very conscious in terms of its image and has been improving its PR skills. It would not likely risk the prospect of future foreign resource acquisitions with baseless allegations against Rio. It should be noted that several executives from the Chinese steel industry are also being investigated and/or detained. Second, in our opinion, the negotiation strategy by Rio and other major suppliers is indeed debatable in the context of Chinese culture. China imported 50% of world sea-borne iron ore last year and 75% in the first few months of this year. Without strong Chinese demand, Rio Tinto would likely still be struggling with its debt. In fact, we believe it is fair to say that it was Chinese demand that saved all the major miners in the world in this deep recession. For iron ore, we think China does deserve a discount to other buyers given its scale of imports. Rio Tinto and other suppliers cornered the Chinese side by striking deals with Japanese and Korean buyers first and refusing to offer even a symbolic discount (say, 0.5%) to the Chinese. It forced the Chinese side, in particular the China Iron and Steel Association, to lose face. By doing this, Rio lost its moral ground in the eyes of the Chinese public and press. There is a Chinese saying that says “do not cross the river and then destroy the bridge”. But we believe that is exactly what Rio did in China’s eyes. And last, at the end of the day, business goes on. China needs Australian ore and Rio and BHP need to sell their ore to the Chinese market. That said, in our opinion, overseas suppliers should learn two lessons from this drama: First, be aware of the means by which market information is collected; and second, try to achieve a win-win solution rather than to corner its business partners. (source)

  Steelworkers president warns Vale Inco strike could be a long one - The international president of the United Steelworkers told striking Vale Inco miners in Sudbury, Ont., today they should expect a long fight. - more

Friday, July 17

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 41 to 3,542. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Debt Auction Demand Falls Short of Goal for Third Time in Two Weeks // China First-Half Steel Production Rises to a Record // Asian Stocks Post Biggest Weekly Gain Since May; Indonesia Index Declines // European Stocks Rise for Fifth Day; Sandvik, Novartis Gain as Accor Falls // Bank of America Earnings Drop as More Money Is Set Aside for Credit Losses // Georgia, Alabama Join States With Unemployment Above 10% as Slump Deepens // Most Stocks in U.S. Drop as GE, Google Results Offset Housing-Market Data
  • 11:45 The US Dollar continues to trade higher against the Euro, but by less than 1/5 of 1% at the moment. NYMEX crude is trading nearly 1-1/2% higher and nearing $63/barrel. Gold is up 1/10th of 1% while silver is 3/4 of 1% higher. Base metal ended mostly higher, while nickel squeezed out a flat day. Dow Jones reports three month nickel ended the day at $7.30/lb .
  • As we stated this morning, LME stored inventories of nickel grew overnight, which is not good for future price increases, which in turn, will not help the strike in Sudbury to come to a close any sooner. The U.S. Commerce Department reported Friday that housing starts rose 3.6% to a seasonally adjusted annual rate of 582,000, the highest figure November. Building permits also increased, rising 8.7% to 563,000, the strongest reading since December. With the surplus in available homes already out there, and the ones that yet to enter the market due to delayed foreclosures, this has a good news/bad news aspect to it. The American Chronicle, an Australian publication, reviewed the week "The Australian sharemarket had a great week with buyers falling over themselves to get into quality stocks in a surprise market bull run. It's been one of the best weekly advances this year. Never mind if it doesn't last, investors regained their confidence that the economic climate is turning, but by how much is still the sixty four dollar question." Wall Street is flat at press time.
  • We wish all of our readers a restful and safe weekend!

  Reports

  Commodity/Economic Articles and Comments

  • (Macquarie Research) Latest data from the International Nickel Study Group confirm a slow and steady recovery in global demand for nickel. So far, as in most commodities, China has led the way. However, there are more and more reports of non-Chinese demand recovery, and we think that the second half will be more a non-Chinese story for nickel than a Chinese story.  ... Our updated stainless steel production forecasts show that, while Q209 still showed a massive YoY decline in world production of 22.3%, production was actually up 16% QoQ. This rise was led by a 20% QoQ rise in China, but European production also rose strongly (14%).
  • (South Africa) Falling commodity prices and scarce funding had prompted BSC Resources to halt most of its project to focus on copper, nickel and coal projects in the Eastern Cape, Limpopo and KwaZulu-Natal, the junior mining house said yesterday.
  • Roubini Statement on the U.S. Economic Outlook - “It has been widely reported today that I have stated that the recession will be over 'this year' and that I have 'improved' my economic outlook. Despite those reports - however – my views expressed today are no different than the views I have expressed previously. If anything my views were taken out of context. - more
  • Understanding the Weekly Initial Unemployment Claims Number - more
  • (TMF) Nearly every major card company saw declining delinquency rates in June. And since delinquencies are a precursor to defaults, declines are often viewed as a sign that future charge-offs will start to subside.
  • Meltdown 101: What is CIT, and what if it fails? - more
  • Real estate forecast: Gloom, touch of doom - more
  • U.S. commercial real estate called 'ticking time bomb' - more
  • Suddenly Open to New Possibilities - more
  • World's cheapest car hits the tar - more
  • King Penguin Properties, LLC - During the latest quarter national unemployment rates surpassed those of New York City for the first time in a decade. New York City population grew by more than 53,000 residents for the latest 12-month period, the largest increase of any city in the country.
  • Administration Weighs More Foreclosure Aid - more
  • Keeping up with the Goldmans - more
  • What is Riskier The Stock Markets or Commodity Trading? - more

  Funds not main driver of commodity prices - Barclays  - The flows of fund money into commodity market instruments this year have not been the main driver of prices as those who would like stronger regulation believe, Barclays Capital said in a note this week.  "Fundamental factors have been far more important at dictating the course of commodity price movements than investment flows alone," Barclays said.- more

  STCL scrap metal scam indicates ‘collusion’ - The Enforcement Directorate, which is investigating the Rs. 1,250-crore scrap metal scam involving the public sector trading company, the Spices Trading Corporation Ltd. (STCL), and two Bangalore-based private trading firms, is focusing attention on violations of the Foreign Exchange Management Act (FEMA). - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.07/lb lower, with other metals mixed and quiet. The US Dollar is rebounding this morning, up nearly 6/10 of 1%, and while adding pressure to commodity trading, it has yet to produce its normal negative effect.  NYMEX crude futures are off 2/3 of 1%, and under $62/barrel. Gold is down 1/3 of 1% while silver is lower by 1-1/3%. In overnight trading, Asian markets ended higher, while European markets are quiet. Futures show Wall Street may open up slightly lower, with some traders taking profits before the weekend. LME stored inventories of nickel gained overnight, after receiving a huge shipment into an Asian warehouse.  The Baltic Dry Index is slowing again, only up 41 to 3,542.  
  • Vale/Inco company / USW  Local 6500 / Sudbury Star / Sudbury TV / Union Strike Site 
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals ended mixed yesterday in listless trading, except for aluminum, which shot up to key resistance at $1700. Despite the mixed close, this week’s price performance has been stellar, with good gains seen across the board. We are off to another mixed session as of this writing, with copper, zinc, and nickel all off slightly,... Out of China, a Bloomberg article we came across today says that the World Bank has calculated that Chinese government spending is driving a surprisingly large four- fifths of the current expansion. ....  Nickel is at $16,000, down $100; resistance is at $16,630, which marks a double-top on the charts. (read Ed Meir's complete morning base metals report here)
  • Chinese nickel production inched down 0.8% on the month to 17,419 tons after a rise of 24.5% in May. However, the rise in demand has lagged behind output growth, and there is also about 100,000 tons of metal estimated to be stored in Chinese public and private warehouses, this according to state research firm Antaike.
  • (Yieh) It was reported by National Statistics Bureau that China's crude steel daily production in June was 1.65 million tons and the total output in June reached to 49.42 million tons, hitting an all-time monthly peak. Bluescope to restart furnace, increase output - more
  • (MBiz) -Taiwan Yieh announced that despite a decline of US$1,000 / ton in nickel price, their steel products' prices for late July stay unchanged.
  • Russian mining industry showing some signs of recovery - more
  • Vedanta eyes steel manufacturing-report - more
  • Aurox in China Talks to Secure Funding for A$1 Billion Ore Mine - more
  • ArcelorMittal Gets ‘Positive Outcome’ in Lender Talks - more
  • (CD) Information released by the US Department of Treasury's official website yesterday showed that by the end of May, China's holdings of US Treasury bonds hit $801.5 billion. After slightly reducing US debt in April, China added $38 billion to its holdings of the Treasuries, reaching a historically new high.

  Intl Ferro Metals sees increase in demand - International Ferro Metals Ltd said ferrochrome demand and spot prices have increased noticeably over the four weeks to July 17 as a result of the Chinese stimulus programme and low ferrochrome inventories. - more

  Price Of Molybdenum Oxide Has Risen By 56% In Last 3 Months = Focus Is Put On Time, When Major Moly Mines Recover Their Production - The market price of molybdenum oxide has been rising steeply. Molybdenum oxide had fallen its price to US$7.70 per lb. of Mo at the end April of 2009 and, then, bottomed out but suddenly rebounded to a level of US$10 from the beginning of June. - more

  S.Korea's POSCO buys Vietnam stainless steel firm - South Korean steelmaker POSCO on Friday said it would buy a 90 percent stake in a Vietnamese stainless steel processing company as it seeks to secure a stable customer base for its stainless steel business. - more

  Rio Denies Bribery Allegations in China Spying Claim  - Rio Tinto Group, the world’s third- largest mining company, denied allegations that four executives detained this month bribed officials at the nation’s steelmakers. - more

  • China Calls Concerns on Rio Tinto ‘Noise’ - China dismissed Australian officials’ expressions of concern over the detentions of four employees of the mining giant Rio Tinto as “noise” on Thursday, in one of the government’s few public comments on the case. - more

  VALE INCO STRIKE: Day 4  - It's up to company, union to deal: expert - An expert with a conflict management firm can understand why Sudburians believe they have a vested interest in United Steelworkers Local 6500's strike against Vale Inco. - more

  AK Steel ordered to keep Ashland steel mill operating - An independent arbitrator has ordered AK Steel to abandon plans to shut its Ashland, Kentucky steel mill and lay off about 750 workers, according to a statement issued late Wednesday by the United Steelworkers union - more

  China to fight EU over screws, bolts at WTO-sources - China has decided to challenge at the World Trade Organisation anti-dumping duties on Chinese-made screws and bolts imposed by the European Union in January, sources with knowledge of the case said on Friday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, July 16

   Our afternoon update's for the rest of the week will not be posted until late in the evening or the following morning, as we will not have access to the internet during the day. We apologize for the inconvenience.  

  Daily Nickel/Stainless Steel Wrap-up

  • Headlines & leaders - (Bloomberg) - China Rebound Props Up World Economy as U.S. Struggles to Return to Growth // Japan, Australia Futures Rise on Roubini Recession Comment; Nomura Gains // Rio Tinto, `BHP on Steroids,' Shrugs Off China Spy Claims as Shares Gain // South Korea's Department-Store Sales Climb 3.6%, Fourth Monthly Increase // Stocks in Europe Gain on JPMorgan Earnings, China Growth; BNP, SocGen Rise // Stocks in U.S. Climb After Roubini Reiterates Recession Will End This Year
  • Three month nickel ended the trading day at $7.30/lb . US markets ended higher after 'Doctor Doom' Nouriel Roubini tells audience in Chile that the light at the end of the tunnel is not an oncoming train, but the end of the recession. Barron;s reported "The road to recovery in the manufacturing sector is bumpy and proving incremental at best. The Philadelphia Fed's business activity index fell back in July to minus 7.5 from minus 2.2 in June. But new orders improved, to minus 2.2 from minus 4.8 to point to narrowing rates of decline in other readings in the months ahead."

  Reports

  Commodity/Economic Articles and Comments

  • Most base metals on the London Metal Exchange swung to positive territory Thursday on a combination of better-than-expected U.S. economic data and rising equity markets. The LME base metals initially opened lower Thursday due to profit-taking from Wednesday's rises, but the U.S. government release of encouraging new jobless claims and strong earnings from U.S.-based JP Morgan Chase & Co. pushed base metal prices higher. London Metal Exchange was trading; official cash ask prices were: copper 5231.50 tonne, tin $13,210, lead $1600.50, zinc $1505.50, aluminium $1636 and nickel $15,850. (source)
  • Is the Recession Over? - more

 What the Future Holds For Base Metals - The second quarterof the year has turned out to be astonishing for base metals, but can they sustain their gains or will they slowly diminish away? - more

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

  • Indicators at 7:30 am CST show 3 month nickel trading around $.01/lb lower, but the chart shows nickel has established no clear direction this morning. Other metals are mixed, with trading light. The US Dollar has weakened against the Euro this morning, and is now trading nearly 2/10th's of 1% lower. If this continues, metals could find support. NYMEX crude futures are down nearly 1%, and just under $61/barrel. Gold is down only slightly, with silver off 1/4 of 1%. LME stored inventories of nickel have fallen by over 1000 tonnes in the last two days alone and now sit under 108,000 tonnes. And the Baltic Dry Index rose 177 points to 3,501 this morning. In overnight trading, Asian markets ended higher, with European markets slightly higher this morning. US future indicators have been jumping in and out of positive territory this morning, and it appears Wall Street is suffering from a hangover after yesterday's big party. The U.S. Labor Department just reported unemployment claims for last week fell, both new and ongoing, and may provide the bulls the 'hair of the dog' they need.
  • Vale/Inco company / USW  Local 6500 / Sudbury Star / Sudbury TV / Union Strike Site 
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Copper surged to a one-month high on Wednesday, pulling the other metals up along with it in impressive fashion. In fact, with practically all the markets moved upwards in lockstep yesterday, as traditional relationships fell into place. In this regard, better-than-expected corporate earnings fueled a rally in US stocks, which in turn ignited commodities. A late-day Federal Reserve survey also provided encouragement, concluding that while the US economy remained weak this past month, conditions were improving. Finally, the weaker dollar was the icing on the cake, as the greenback slipped to around 1.41 against the Euro, insuring that the commodity gains were sustained over the course of the session ... Metals are down slightly as of this writing, (except for aluminum), as some of yesterday’s heady gains are rolled back. Oil prices are also lower, while the dollar is slightly stronger against the Euro, accounting for some of the pullback in commodities. ... Despite the impressive spike in metal prices over the course of the week, we would be wary about buying the current dip, as the US macro backdrop leaves much to be desired. In this regard, we got June industrial production numbers out yesterday showing a decline of .4%, better than the -.6% expected. The smaller New York-based Empire Manufacturing Index similarly showed a smaller-than-expected contraction. However, the fact remains that output is still contracting, and in view of such uninspiring readings, we cannot get that excited about the upside run exhibited in metals. Even Chinese GDP numbers out earlier today seem to have been taken in stride, and did not lead to another burst higher. ... We suspect the current modest selling in metals could pick up steam over the course of the day if US equities give back some of their gains. A likely factor that will unnerve equity sentiment as the day progresses is the overnight news that the US government has backed away from lending any money to CIT, a key small-business lender. An executive at an industry group estimates that 10,000 small businesses would be choked off from funds if they do not find a suitable replacement the lender. In the meantime, the company will presumably file for bankruptcy imminently, and we suspect is demise will again remind investors that the US economy faces an uneven recovery path ... Nickel is at $15,900, down $40, and has had a spectacular run this week; we see key resistance at $16,630, which marks a double-top on the charts." (read Ed Meir's complete morning base metals report here)
  • Alex Heath, RBC Capital Markets - "Whilst for many observers the current surge in prices may appear unfounded and entirely speculative in nature, for others there is the smell of opportunity in the air."
  • (Dow Jones) Risk aversion is fading fast with commodities benefiting as fears of a "W"-shaped recovery recede, but market participants say the gains may be overdone.
  • (MNP) Iron ore hopeful IMX Resources has reported its first resource at the Ntaka Hill area of the Nachingwea nickel sulphide joint venture in Tanzania.
  • (AIP) Production began in France in the first half of 2009 compared to the same period in 2008 decreased by 40% to 5.855 million tons. The decrease is due to falling demand for steel products in key industries on the background of the current crisis. That was reported by French Steel  Federation.
  • (SG) According to the statistics from Eurofer, the crude steel output from EU 27 countries totaled 10.541 million tons in May, up by 10.45 percent than previous month and down by 44.16 percent compared to the same period of last year. Germany was the top producer at 2.168 million tons; following were Italy, Spain, France and England at 1.688 million tons, 1.161 million tons, 991,000 tons and 739,000 tons respectively.
  • (Reuters) China Molybdenum Co Ltd on Thursday said its first-half net profit is expected to fall significantly, hit by lower prices for its products because of the global financial crisis.
  • AK Steel’s Plan to Shut Down Kentucky Plant Blocked, Union Says - more
  • Mechel Announces H1 2009 Operations Results - more
  • Kalinganagar units seek raw material security - more
  • China’s Economic Growth Accelerates to 7.9% on Loans - more
  • China's June CPI falls 1.7%, PPI down 7.8% - more
  • ARC China Weekly News Summary - more
  • (CNW) The latest results from TNS Canadian Facts' Consumer Confidence Index show economic confidence holding steady in the mid-90 range for the third straight month. The overall Consumer Confidence Index now stands at 93.4 which puts it right between June's 92.0 and May's 94.1.
  • Commodity Hedge Is About Finding Right Tilt: Jane Bryant Quinn  - more
  • China: Global Saviour Or New Bubble? - China's annual real GDP growth rate peaked at 13% in 2007, hit 6.1% in the first quarter 2009 and has now bounced back to 7.9% in the second quarter. - more
  • Analyst View - Copper to lead complex, aluminium dim - more
  • Investec favours investment in bulk commodities for second half of year - more

  POSCO mulls takeover of Vietnamese steelmaker - POSCO, South Korea's leading steelmaker, said Thursday that it is seeking to take over a Vietnamese steelmaker as part of efforts to meet growing demand in the Southeast Asian region. "We are considering acquiring Asia Stainless Corp., but nothing has been decided yet," said a POSCO official. - source

  Nisshin Steel Surges on Report Nippon Steel to Invest - (excerpt) Nisshin Steel will in turn acquire a stake in a stainless steel subsidiary of Nippon Steel, Asahi also reported. - more

  Mirabela Nickel Limited advises that Vale subsidiary Inco Brasil Limitada has agreed to formally terminate the Farm-in Agreement covering potential underground nickel sulphides at the Company's Santa Rita and Palestina projects. - more

  Employees Pinpin forcing the mine entrance - A new episode was played yesterday in the conflict between the SMSP to a landowner. The riders, NMC employees and subcontractors have decided to go to work and take the path of all conflicts, despite the order of the Commercial Chamber of the Court of Appeal. - translated here (French here)

  Mining contractors feeling the pinch VALE INCO STRIKE: Day 3 - Sean Cartledge considers himself lucky despite the fact he is without a job during the Steelworkers' strike against Vale Inco Ltd. - more

  • Anger, fear pushing more workers to strike despite recession, say experts - The worst economic slowdown to hit the world since the Great Depression doesn't seem to have deterred workers from taking their grievances to the picket lines. - more

  China eyes Pakistan steel sector - China Metallurgical Construction Corporation (MCC), which already runs a copper mine in Pakistan's Balochistan province, is showing renewed interest in expanding and modernizing Pakistan Steel Mills (PSM), the country's only integrated steel-manufacturing plant, at a cost of US$2.2 billion - more

  Steel production goes up by 3.4 percent - Production of finished steel went up by 3.4 percent to 13.98 million tonnes during April-June 09 as compared to 13.53 million tonnes during the same period last year. - more

  Global steel mills crank up production - Global steel makers are raising output after slashing it early this year, encouraged by rebounding prices and demand as the world economy slowly recovers thanks to infrastructure-led stimulus plans. - more

  China steel assoc says ore talks not over-Caijing - Annual iron ore price negotiations are "definitely not over," a negotiator for the China Iron and Steel Association told the Caijing financial news organisation, but acknowledged that some mills had agreed to a 33 percent cut as reported earlier. - more

  • China spy laws leave Rio with no wriggle room  - The options for Australian miner Rio Tinto, or indeed anyone, to help four employees detained in a Chinese state secrets investigation are limited, lawyers say, as laws leave great latitude to investigators and prosecutors. - more
  • Reports: Rio Tinto steel analysts leave China after spying allegations - Mining giant Rio Tinto Ltd. has pulled researchers who follow China's steel industry out of the country after four employees were detained on spying allegations during iron ore price talks, news reports said Thursday. - more
  • China Warns Australia Not To Interfere In Rio Case - China Thursday hit back at Australia for attempting to interfere with its investigation into the alleged espionage case against four Rio Tinto PLC (RTP) employees, warning that such actions would not be in Australia's interest. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, July 15

   Our afternoon update's for the rest of the week will not be posted until late in the evening or the following morning, as we will not have access to the internet during the day. We apologize for the inconvenience.  

  Daily Nickel/Stainless Steel Wrap-up

  • Baltic Dry Index -  plus 227 to 3,324. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Shirakawa Signals Bank of Japan May End Credit Programs as Recession Eases // China's $2 Trillion Reserves Help Sustain Obama Borrowing, Shore Up Dollar // China Accepts 33% Iron Ore Price Cut, Annual Talks May Lapse, Umetal Says // Japan Should Provide Extra Stimulus If Growth Fails to Pick Up, IMF Says // Global Confidence Declines as Unemployment Surge Counters Fiscal Stimulus // U.K. Government to Demand Cuts in Carbon Emissions for Industry, Consumers // European Stocks Rise the Most in Three Weeks on Intel Outlook; ASML Climbs // CIT Says U.S. Bailout Unlikely as Talks End, Studies Options With Advisers  // U.S. Factory Gauges Top Estimates in Signal Manufacturing Is Stabilizing  // Dow Average Jumps Most in Three Months on Intel Forecast, Factory Reports
  • Dow Jones reports three month nickel ended the day at $7.23/lb , with all base metals ending notably higher. Marketwatch reported today "U.S. industrial production dropped 0.4% in June after a 1.2% decline in May. Production has now fallen for eight straight months and 17 of the last 18 months. Capacity utilization fell to a record low 68% in June from 68.2% in the previous month." ..... and  .... "U.S. consumer prices rose a seasonally adjusted 0.7% in June, matching analysts' expectations with the largest gain since July 2008, as gasoline prices jumped higher, the Labor Department reported Wednesday. However, the core CPI -- which excludes often-volatile food and energy prices -- rose a milder 0.2%, after seasonal adjustments. Economists surveyed by MarketWatch had expected the core to rise 0.1%." ..... and ..... "Positive results from a trio of high-profile market sector leaders -- Intel Corp., Goldman Sachs Group Inc. and Johnson & Johnson -- had investors Wednesday taking an optimistic view of the second-quarter earnings season." They also reported these three stocks fell on the day, but the market as a whole? Well the Dow had its best day in months, ending up over 3%, with the S & P just below 3%. Having been away from the news all day, and just reading it at face value, we don't see any good reasons why the bull made such a charge today, but then again, someday's the market just has a mind of its own.  

  Reports

  Commodity/Economic Articles and Comments

  • (Interfax) Kazakhstan reduced crude steel output 20.5% year-on-year in January-June 2009 to 1.878 million tons, the National Statistics Agency told Interfax-Kazakhstan.
  • (AMM) No real recovery for steel likely until end of 2010, Moody's says
  • Low inventories favour copper, zinc in H2 -Investec - more
  • Reasons Why China Will Continue To Gobble Up Natural Resources  - more
  • Freight TSI falls to lowest level in 12 years – again - more
  • The Great Decession? The Great Repression? - more

  Base Metals See Better Q2 - This round of earnings reports will likely show improvement, but it's probably temporary. - more

  London Metal Exchange mulls freight derivatives - The London Metal Exchange said on Wednesday it was considering entry into the freight forward agreements (FFA) market, drawing criticism from ship brokers - more

  Sudbury Video News / Persona 10 News / Day 2 of Vale-Inco Strike - video here

  • Canadian Perspective: Vale Inco, Steelworkers settle in for long strike in Sudbury - The history of labour negotiations in Sudbury is long and adversarial. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.17/lb higher and showing signs of potentially peaking, with all base metals solidly in the green this morning. The US Dollar is trading lower against the Euro, by nearly a full percent. NYMEX crude futures are up over 1-1/2% this morning, and nearing $60.50/barrel. Gold is up 1-1/3% and silver is over 3% higher. In overnight trading, Asian markets ended solidly stronger, with European markets following suit. US futures show Wall Street should open higher on higher commodities and news that Intel forecast sales that will beat analysts expectations. News from China media that China has temporarily accepted Rio Tinto's 33% decrease in iron ore prices. BHP reportedly wants a cool billion dollars for its Ravensthorpe mine. The strike in Sudbury enters day three with no talks between Vale/Inco and the union scheduled. Analysts are forecasting the strike will have no direct impact on worldwide surplus inventories of nickel unless the strike lasts into the 4th quarter, which traders are presumably betting will happen. The Sudbury Star, an excellent source for information out of Sudbury, reports the Google car was spotted in that town yesterday. If it makes its way down Vale/Inco way, the strikers there could soon find themselves on Google Earth street view. And we touched on this earlier this week, but thought it deserved a second look, especially by the Australians who have seen the Russians come in and buy some of their mines, only to shut them down - "Russia's Kemerovo region has told ArcelorMittal, the world's largest steel maker, to boost production at two local coalmines or give them up." (article) Maybe Australia has more on its mind with the China-Rio ordeal, but nationalization of a mine is something we are used to hearing from Chavez's Venezuela, not the former communist Russia. Since the afternoon update will be delayed, your BDI number for the day is up 227 points to 3,324, the second day of a large rebound. Nickel inventories of nickel stored in LME warehouses took another large hit overnight, and cancelled warrants fell under 2%.
  • Vale/Inco company / USW  Local 6500 / Sudbury Star / Sudbury TV / Union Strike Site
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  No report received at press time - this link from MF Global Europe usually posts the updated report when it is available, although it appears to have missed yesterday's update (here)
  • (Dow Jones) The global nickel market was in a 86,100 metric ton surplus between January and May 2009, the World Bureau of Metal Statistics said Wednesday. World nickel demand fell 18.6% on the year to 471,500 tons, WBMS data showed, while refined production fell 2.6% to 557,600 tons and mine production fell 4.8% to 584,200 tons.
  • Anthony Rizzuto, investment bank Dahlman Rose - "We believe that strikes such as these (Sudbury for one) will continue to be a supportive feature of metals and mineral prices over the intermediate to long-term, as they effectively remove supply from the market, and push the marginal cost of production higher."
  • BMO Capital Market analyst Bart Melek - "Traders don't see an immediate shortage given current demand expectations. However, if the strike continues into Q4 when demand is expected to accelerate, there is a strong probability that prices could move sharply higher."
  • (Reuters) "Global miner Rio Tinto is shipping iron ore to international customers as scheduled, including China, a company spokesman said on Wednesday when asked about a media report that trade was being disrupted. .... Earlier, the Steel Business Briefing was cited by the Financial Times as saying both Rio Tinto and BHP Billiton had stopped putting spot iron-ore shipments up for bid after the detention of four of Rio Tinto's China staff."
  • (MBiz) Nisshin Steel is intended to improve Q3 production capacity rate to 80% around of Shunan stainless steel mill in western Japan. It is understood that the average production capacity rate in Q1 is only 40%. .... The monthly stainless production of Shunan steel mill was about 50,000 tons, thereinto, austenitic and ferritic stainless steel production accounts for 50% respectively. It is learned that the two kinds of stainless steel output will reach 20,000tons correspondingly in July-September."
  • (JMB) Nippon Steel announced on Tuesday the firm restarts the operation of no.1 blast furnace in Oita iron works on 2 August.
  • (MNP) Vale subsidiary Inco Brasil and Mirabela Nickel have formally terminated a farm-in agreement covering two Mirabela projects in Brazil, after Inco was inactive on the tenements for over two years
  • (Interfax) Jinchuan Group raises ex-works nickel price to $18147 per ton
  • (Reuters) ArcelorMittal , the world's largest steelmaker, said on Wednesday it would restart a blast furnace in France, the third resumption announced for its European plants this month.
  • (Reuters) Russia's Evraz Q2 steel output down 28 pct yr/yr - more
  • Finn Nickel Initiates Voluntary Bankruptcy Proceedings - more
  • (MBiz) EU plans to stop anti-dumping duties on China's steel and cast iron pipe and the provisional anti-dumping tax rate, sustained for 6 months is at 15% -25%.
  • Former Queensland minister Gordon Nuttall found guilty of corruption - more
  • Glencore ponders stake sale to raise $1.5bn - more
  • Iron ore price rise hits China - more
  • India - The BJP and Congress continued to join hands to disrupt proceedings in the Assembly by persisting with their demand for a CBI probe into the alleged manganese and iron ore mining scam. - more
  • Commodities is the place to be, says Jim Rogers - more
  • Behavior of Industrial Commodities Is for Real - more
  • Balli Steel warns Russian steel market continuing to face challenging conditions - more
  • The Economy Is Even Worse Than You Think - more
  • Broad Unemployment Across the U.S. - more

  Nickel Interest at Highest Since 2005 as Factories Boost Output - Nickel open interest, or bets on movements in prices of the metal, climbed to the highest since at least 2005 as factories that make stainless steel, the biggest use for nickel, ramp up production. - more

  BHP Wants to Sell Ravensthorpe for A$1 Billion, Review Says - BHP Billiton Ltd. wants to sell its Ravensthorpe nickel mine in Western Australia for as much as A$1 billion ($794 million), the Australian Financial Review reported, without saying where it got the information. - more

  Base Metals Not Yet In Recovery - Chinese stockpiling actions, infrastructure-heavy stimulus plans and curtailed production have restored some glint to base metals, but the sector's sustained recovery is dependent on major economies returning to solid ground. So don't expect that to happen anytime soon. - more

  Strike's effects likely won't be felt until autumn - The impact of the strike at Vale Inco will likely not be felt until the end of summer when it comes to nickel prices, say market analysts. - more

  • Steelworkers digging in for long term - Roland Thibeault has walked a picket line four times and he's only worked at Vale Inco for 18 months. - more
  • Day 1: Mood on the picket line ebbs and flows  - From buoyant to sombre, the mood at each picket line set up outside Vale Inco's Sudbury operations varied depending on where you went. - more
  • Picket line video - here Day 1 video - here

  Fire scorches site of N.L. nickel processor - A wildfire burned more than a square kilometre of brush and forest near Long Harbour, N.L., on Monday, including an area where Vale Inco is preparing to build a nickel processing plant. - more

  Chinese Mills Accept Temporary Iron Ore Price Cut, Umetal Says - Major Chinese steelmakers have accepted a temporary 33 percent iron ore price cut from Rio Tinto Group, and may allow annual contract talks to lapse, Umetal Research Institute said. - more

  • Australian PM says world watching China spy case - Australian Prime Minister Kevin Rudd warned China on Wednesday it had significant economic interests at stake in detaining an Australian mining executive on spying charges and the world was watching how it handled the case. - more
  • 'Bribery is widespread' in Rio case - Executives from all 16 Chinese steel mills participating in iron ore price talks this year have been bribed by Rio Tinto employees, an industry insider claimed Tuesday, amid reports that the government is considering invalidating 20 iron ore import licenses to regulate the chaotic ore import business. - more
  • China accuses Rio Tinto of mass bribery - Rio Tinto bribed all 16 Chinese steel mills involved in negotiations over the price of iron ore, China's state media has claimed. - more
  • Mining Company Inquiry Puts Focus on a Black Market in China’s Steel Industry - Long before four employees of the Anglo-Australian mining giant Rio Tinto were detained here last week on suspicion of stealing state secrets, people working in China’s steel industry were complaining about bribery, deceit and a system turned rotten. - more

  Directive rules the use of nickel in stainless steel in toys is safe  - The Nickel Institute1, the body that represents 90 per cent of the world’s nickel producers, has welcomed the revised EU Toys Safety Directive2 that further restricts the use of some chemicals and metals in all toys manufactured and imported into Europe. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, July 14

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 122 to 3,097. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Singapore Raises GDP Forecast as Nation Emerges From Its Deepest Recession // China Reported to Expand Rio Tinto Iron Ore Probe to Baosteel, China Mills  // Asian Stocks Climb on Earnings Optimism, Singapore Growth; Komatsu Rises // German Investor Confidence Unexpectedly Falls, Misses Economist Estimates // British Airways Says Job, Pay Cuts Vital, Convertible-Bond Sale Possible // Rojo Says Spanish Provisions Won't Stop Banks From Doing `Crazy Things' // European Stocks Rise for Second Day; Deutsche Bank, Barclays Shares Gain // Goldman Sachs Profit Beats Estimates on Record Trading, Stock Underwriting // Producer Prices Climbed More-Than-Forecast 1.8% in June as Gasoline Surged // Geithner Says Global Economy Will Probably Suffer Setbacks During Recovery // Gasoline Costs Pushed Up U.S. Retail Sales, Wholesale Prices Last Month // U.S. Stocks Fluctuate as Dell Leads Tech Slump, Commodity Producers Climb
  • The Euro continues to trade lower against the US Dollar, but only by 15/100th's of 1%. NYMEX crude bounced earlier, but has settled back below $60/barrel, down 1/3 of 1%. Gold remains higher by 4/10 of 1% , while silver is higher by 1/2 of 1%. Base metals ended higher, with nickel taking the lead. Indicator charts show nickel shot up early, then slowed its pace of growth after US markets opened. Dow Jones reports three month nickel ended the day at $7.06/lb . Technically, nickel looks good on the charts, having broken thru initial resistance, and trading above its 20 day moving average (Sucden's day old chart here). Fundamentally, time will tell if the Sudbury strike offers anymore than a short term boost to the market. Nickel inventories stored in LME warehouses took a hit overnight, and rest barely over the 109,000 tonne level. Cancelled warrants slipped below 2-1/2%. The Baltic Dry Index not only stopped its slide today, it made a big bounce, up 122 points to 3,097. The Commerce Department reported business inventories decreased for their 9th straight month, down 1.0% in May. The Labor Department reported U.S. producer prices rose 1.8% in June, more than economists' expected and climbing by the most since November 2007. In reference to the much watched retail numbers this morning, Paul Ashworth from Capital Economics noted "The 0.6% month-to-month increase in retail sales in June is not half as good as it looks because it was entirely due to the combination of a 2.3% rebound in motor vehicle sales and a 5.0% price-related surge in sales at gasoline stations. The former is a classic dead cat bounce. The latter is actually bad news for spending in real terms. Ian Shepherdson of High Frequency Economics was equally negative, stating "Core sales are not falling anything like as fast as in the months after Lehman, but there is absolutely nothing here that could be called a green shoot." Two charts from Calculated Risk on today's retail sales releases (graph 1) (graph 2). Wall Street has yet to decide which way it will turn on today;s news, after yesterday's big gain. At the moment, US equity markets are about as flat as a pancake.   

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) India July MCX nickel futures jump 4.2% at INR754.50/kg after strike by workers in Canada's nickel mines.
  • (MK) The Bank of Korea said on July 14 that import prices in June increased 5.1 percent from the previous month, posting the biggest rise in 13 months since May last year when marked a 10.7 percent rise.
  • (Bloomberg) "BHP Billiton Ltd. has delayed development of the A$4 billion ($3.1 billion) Caval Ridge coal mine in Queensland state, the Australian newspaper reported, citing documents submitted to the Federal government. Production from the project will begin in 2013 instead of 2011, the newspaper said..."
  • CSX saw shipments of bulk materials and other merchandise drop 22% in the second quarter of 2009 compared to 2008.
  • As of yesterday, the World Health Organization reports 429 victims worldwide have died from contraction of the A(H1N1) virus, and that over 94,500 people are known to have been infected. Hundreds of thousands more are believed to have had the virus, but were never diagnosed.
  • (Business Line) Citigroup Inc raised its 2010 forecast for hot-rolled coil steel by 34 per cent to $540 a tonne. The bank also increased its 2011 estimate by 50 per cent to $544 a tonne in a report.
  • Commodity Trading & Trend Following Mechanical Systems - more
  • Banks Made ‘Bloody Fortune’ at Taxpayers Expense, Spitzer Says - more
  • Ship Breaking Has Turned To Be an Emerging Business in Recession - more
  • Fewer Capesize Ships Await Chinese Berths, SSY Says - more
  • U.S. Budget Gap Exceeds $1 Trillion for Fiscal Year - more

  Jinchuan to add 60,000 mt/year copper-nickel alloy plant end-2009 - China's Jinchuan Group expects to complete a new 60,000 mt/year copper-nickel alloy pipe, rod and extrusion plant by end-2009, the Gansu province-based producer said Tuesday. - more

  POSCO is set to speed up the development of overseas resources - South Korea's leading steelmaker, said Tuesday that it will jointly develop overseas minerals with the state-run Korea Resources Corp. as part of efforts to secure a stable supply of raw materials. The two companies will explore overseas deposits of coal, iron ore, nickel, and other minerals, POSCO said. - more

  Kevin Rudd toughens China stance after police seize Stern Hu's computer files - Kevin Rudd has chided China for using its political might to get its own way in business dealings as it emerged that Chinese police had seized sensitive files from the Rio Tinto computer of imprisoned Australian mining executive Stern Hu. - more

  • Secrets of Chinese steel mills found in Rio's computers - Detailed information of Chinese steel mills was found in computers of Rio Tinto's Shanghai office, local media reported Monday. - more
  • Rio detentions complicate China iron ore talks - Spying accusations against four Rio Tinto Ltd. employees have complicated contentious price talks between China and iron ore suppliers that without an agreement could disrupt the global industry. - more
  • More arrests in China steel state secrets case - The reported detention of several more steel executives in China has strengthened the view that Beijing is undertaking a wide investigation of bribery and theft of state secrets in the iron ore and steel sector. - more
  • BHP Unaware Of Any China Probe Into Its Iron - Foreign companies should abide by China's laws and regulations, a Chinese government spokesman said Tuesday even as Australia continued to press for details about the arrest of its citizen, an employee of Rio Tinto PLC, for the alleged theft of state secrets. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.35/lb higher, with all base metals higher this morning on higher equity market trading. The US Dollar is trading lower against the Euro, by less than 1/10 of 1% but falling. NYMEX crude futures are up over 2% and over $61/barrel. Gold is up 1/3 of 1% and silver nearly 1/2 of 1%. In overnight markets, Asian markets rebounded after Wall Street's solid gains yesterday. European markets are higher this morning, and US futures show Wall Street will continue yesterday's bull run early. MarketWatch advises the Commerce Department reported this morning, that retail sales rose 0.6% in June, better than expected. Excluding auto sales, sales rose 0.3%, much lower than expected. Excluding gas and auto sales, retail sales fell 0.2%, its 4th monthly decline. They also reported U.S. June producer price index rose 1.8%. Base metals appear to be getting a big push this morning because of the upward turn in equity markets, while nickel is being supported by the strike in Sudbury, news of a potential pending lay-off  in Indonesia, and increased stainless steel production in Japan.     
  • Vale/Inco company / USW  Local 6500 / Sudbury Star / Strike Site
  • Bloomberg morning base metal news - more

  Reports

  • Daily Market Report - pdf here
  • Commodities Report - pdf here
  • Daily Resource Plus - here
  • Metals Fundamental Report - pdf here
  • Morning Montra - pdf here
  • Metals & Energy - pdf here
  • Market Drivers - pdf here
  • Weekly Commodity Price Report - pdf here
  • Weekly Forecast by SMM Specialist - more
  • Global Mining News - pdf here
  • U.S. Exports of Steel Mill Products - more
  • US Imports of Steel Mill Products - more
  • World Bank Commodity Markets Review - pdf here
  • Recession and Recovery: the U.S. Economic Outlook - pdf here

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metals finished on a mixed note yesterday, as continued wariness about the global macro outlook dominated sentiment. A sluggish performance in oil did not help matters much either. Also failing to impress, was as a surging US equity market, where an upgrade on Goldman Sachs by long-time bank bear Meredith Whitney triggered a substantial rally. At least during yesterday’s session, it seemed that commodities were more concerned with the still very difficult demand outlook as opposed to the goings-on in the US equity markets. We are off to a much stronger session on Tuesday, as some good macro numbers out of Europe and a steady session in Shanghai are giving LME metals a lift. In addition, yesterday's US stock market rally has sparked good follow-through buying in other equity markets. Continued gains in stocks cannot be ignored for long, and should eventually spill over into commodities, as they seem to be doing today. ... Nickel is at $15,250, up $520, but more importantly, the size of its recent move higher has successfully taken out the short-term down channel in place; (See our chart in our attachment ). We now could move somewhat higher from here, with the backdrop of the Inco strike providing support." (read Ed Meir's complete morning base metals report here)
  • (Reuters) Russia’s Kemerovo region has notified ArcelorMittal (MT) that it will seize two of the world’s largest steel maker’s mines if production levels do not increase, the Siberian region’s government said in a statement, Reuters reported. “If your team is not able to stabilize production at these facilities, then we propose that you hand them over without compensation.”
  • (Bloomberg) Tenaris SA plans to shut down its main Italian plant for 13 weeks from next month after a 70 percent drop in production this year, daily MF reported, citing no one.
  • Baosteel raises prices on demand rally - more
  • (JMB) Japanese stainless steel makers' output is slightly recovering. Nippon Steel & Sumikin Stainless Steel (NSSC), Japanese largest stainless maker, is increasing the operation rate of cold rolled stainless sheet to about 70% from 50% in last month against the peak level. Yakin Kawasaki, a subsidiary of Nippon Yakin Kogyo, is increasing the operation rate to above 60%. Kinuura works of Nippon Metal Industry is reaching 70%. Stainless steel export is increasing to Asia due to anticipation of a rise of stainless goods by rising nickel price.
  • (Yieh) China exported 1.43 million tons of steel products in June, up by 80,000 tons compared with May and down by 72.6 percent compared with the same period last year. In the same month, China’s steel imports totaled 1.63 million tons, down by 20,000 tons compared with last month and up by 29.4 percent compared with the same period last year.
  • RathGibson Inc., a global manufacturer of stainless steel and high-alloy tubing products formerly based in Janesville, has announced that the company and its domestic affiliates have filed for Chapter 11 bankruptcy reorganization.
  • (JMB)  NSSC Raises Stainless Sheet and Plate by 15,000 Yen/t in July
  • China's light industry rebounds in May - more
  • (Xinhua) China's power consumption rose 3.79 percent year-on-year to 305.22 billion kWh in June, the China Securities News reported, citing sources from the China Electricity Council (CEC).
  • McCain to hold up Obama nominees over copper mine - more
  • Steel Tube Maker RathGibson Seeks Chapter 11 Protection - more
  • UAE, Saudi steel imports to fall this year - more

  Nippon Steel to restart mill as demand picks up  - Nippon Steel Corp, the world's second-biggest steelmaker, said on Tuesday it would restart operations at one of two blast furnaces that have been shut, as the worst of an industry slump appears over. - more

  Inco Indonesia May Lay Off 500 Workers to Cut Costs, Globe Says - PT International Nickel Indonesia, the nation’s biggest producer of the metal, may lay off 500 workers to cut costs, the Jakarta Globe reported, citing an unidentified person. - more

  Indian Producers Request To Raise Duty On Imports Of Ferro-Alloys = Asking To Raise The Duty From 5% At Present To 10% - While a recession of the world economy emerged from September of 2008 has caused the protective movements at each country, Indian Ferro-Alloys Producers Association (IFAPA) has recently requested the Government of India to raise the duty on imports of ferro-alloys from 5% at present to 10% but ferro-nickel, which is not produced in India, has excluded from the objective materials. - more

  Sudbury strike may drag on - With global nickel markets awash with supply, it could be a long and lean summer for Vale Inco and its striking Canadian workers. - more

  • Sudbury walkout could hurt strikers - As thousands of miners hit the picket lines at Vale Inco's nickel operations in Sudbury, Ont., Monday demanding a better labour contract, analysts said the strike might work in the company's favour, at least in the near term. - more
  • Vale Inco's Port Colborne nickel plant workforce to strike Monday - Some 120 workers at Vale Inco's nickel refinery in Port Colborne, Ontario, are set to go on strike Monday after voting Sunday to reject an offer for a new three-year pay deal, the union said Sunday. - more

  China Widens Rio Iron Ore Probe; Australia Pushes for Talks - China widened a probe into the alleged theft of state secrets by Rio Tinto Group’s employees to steelmakers, two Chinese newspapers reported, as Australia pressed for more information about the investigation. - more

  • Reports: China probes 5 steelmakers in Rio case - Executives of five Chinese steelmakers are being questioned in a widening espionage probe of four detained Rio Tinto Ltd. employees, news reports said Tuesday, as Australia pressed for details of the case. - more
  • Iron ore import licenses may be canceled for 20 companies - The Chinese government may cancel more than 20 companies’iron ore import licenses if it finds that they have conducted illegal speculative purchasing, sources reported Tuesday. - more

  Courtesy AISI - In the week ending July 11, 2009, domestic raw steel production was 1,213,000 net tons while the capability utilization rate was 50.9 percent. Production was 2,120,000 tons in the week ending July 11, 2008, while the capability utilization then was 88.8 percent. The current week production represents a 42.8 percent decrease from the same period in the previous year. Production for the week ending July 11, 2009 is up 3.9 percent from the previous week ending July 4, 2009 when production was 1,168,000 tons and the rate of capability utilization was 49.0 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, July 13

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 10 to 2,975. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Posco Raises Steel Output Target, Signaling Rebound After 71% Profit Drop // Korean Won, Stocks Decline on Report North's Kim Jong Il Is Terminally Ill // China Central Bank to Strengthen Monetary Management as `Challenges' Grow // Asian Stocks Fall on Growth, Political Concerns; Cathay Financial Declines // Emerging Markets Most Expensive Since '07 When Shares Subsequently Plunged // British Government May Sell Royal Bank of Scotland, Lloyds `Over Years' // Stocks in Europe Rise; Porsche, Friends Provident, Venture Production Gain // Bernanke May Explain Exit Strategy From Fed's Biggest Monetary Expansion // Dollar, Yen Favorites Over Real, Aussie as Economy Forces Risk Reversal // Obama's Stimulus Money Starts Flowing to Projects as Jobless Await Results // U.S. Stocks Advance, Led by Banks, After Goldman Sachs Upgraded by Whitney
  • The US Dollar continues to trade lower against the Euro, now 2/10 of 1%. NYMEX crude is down nearly 1-1/2% near $59/barrel. Gold is up over 1/3 of 1%, while silver is higher by nearly a full percent. Base metals ended the day mixed, with nickel and tin the winners. Indicator charts show nickel spent the entire session on a creep higher, and just off session highs. Dow Jones reports three month nickel ended the day at $6.68/lb . Inventories of nickel stored in LME warehouses fell slightly overnight, while cancelled warrants remains above 2-1/2%. The Baltic Dry Index could potentially see its slide halt tomorrow, only down 10 points to 2,975 today. In news about nickel supply and demand, the strike at Sudbury will bear watching. If the strike is short, the supply implications could be minimal. If it lasts awhile, and China stainless steel production continues to increase, we could see LME inventories start to fall, thus driving the price higher, which in turn would make it more profitable for Vale to settle. In our opinion, Vale has the edge in this situation - at least for now. In the same token, China had more to gain by deciding to arrest Rio's negotiation team on bribery charges than looking the other way, even though we would speculate nothing different was done this year, than has in the past. Bloomberg reports this morning that  "U.S. stocks capped a fourth straight week of declines on July 10, matching the longest losing streak in a year, as consumer sentiment dropped more than estimated and oil’s steepest retreat since January dragged down energy shares. Investors this week will be looking at reports on retail sales and factory production to gauge the strength of the economy after a $787 billion stimulus bill passed in February." We posted a comment this morning that we found over the weekend that we thinks bears another look. It was in a Time magazine article "Why There Should Be More Oil Speculation - Not Less". This was written in response to increased talk about more regulatory measures might be taken in the commodity trading sector. While the author makes his point, we noticed something interesting. We quote "Another common misconception is that speculators only buy and hold assets. More accurately, speculators try to benefit from fluctuations in prices. In other words, speculators cannot profit from sustained high prices, only from changing prices. So, yes, the recent volatility in the oil market can certainly be attributed to speculation, but speculation cannot support an extended price rally. Major players like banks, on the other hand, are more than just pure speculators, having the resources to drive prices up." This is something we have been claiming on this site for a very long time, and its nice to see someone from the "it's 100% supply and demand that drives the world markets" crowd finally admitting it's partially speculation. The remark about traders not making money unless the price moves up and down may be common sense, but something we bring up repeatedly to explain the unexplainable daily movements nickel sometimes takes.

  Reports

  Commodity/Economic Articles and Comments

  • (China media) According to the news on July 10, the state-owned research institutions - Antaike one analyst said Friday, China has increased during the first half of this year 88,000 tons of commercial nickel inventories, imports during this period is a record of the main factors. Fan Runze analysts said the stock is expected to total more than 100,000 tons, or about one-third of the annual consumption.
  • (Bloomberg) BHP Billiton will begin a study for the potential sale of its Ravensthorpe nickel operations in Australia after closing the $2.2 billion (R18.1bn) project in January. "BHP Billiton will commence formal evaluation of divestment as a potential future option," it said on Friday. The Ravensthorpe mine in Western Australia was closed after nickel prices fell. It sold the Yabulu nickel refinery in Queensland earlier this month.
  • (AP) South Korea's leading steelmaker, said Monday that its second-quarter profit tumbled 71 per cent from a year earlier due to weak demand and falling steel prices.
  • (LG) China Electricity Council reported that China's power consumption rose 3.79%YoY to 305.22 billion kilowatt hours in June. The country's power output reached 300.92 billion kilowatt hours in June up by 4.7% from a year earlier.
  • Kazakh ENRC mulls African Minerals bid, convertible - more
  • Crisis, opportunity and the new world order - more
  • Stock Index Trading, 1/3rd Bearish Position - more
  • Note by 'teenage scribbler' causes sensation - more
  • Trichet: Why the ECB Isn’t Acting Like the Fed - more
  • Boiling the Frog  - more

  Union says shrinking nickel stock should force quick end to Vale Inco strike - The United Steelworkers union says it hopes a strike at Vale Inco's nickel-mining operations in the northern Ontario city of Sudbury will be over quickly. - more

  Steel talks on despite arrest - Strained price negotiations between China's steel mills and iron ore producers are continuing, a Chinese official said on Monday, despite Rio Tinto's lead negotiator being arrested on spy charges. - more

  • Forrest says he feels for both sides in China row - Mining magnate Andrew "Twiggy" Forrest says China would not have taken the decision lightly to arrest Hu Stern and three Chinese employees of Rio for allegedly stealing state secrets and that he feels for both sides in the imbroglio. - more
  • Rio arrests no coincidence - The latest round of news on the detention of four Rio executives in China continues to suggest that Beijing's motivation is far from simple, and not confined to perceived slights, including Rio's decision to call off an alliance with state-owned Chinalco, or the Australian Government's attitude to China. - more

  World Steel Production to Slip by 12% This Year - MEPS is forecasting total world steel manufacturing in 2009 at 1165 million tonnes. This equates to a decrease of 12 percent on the previous year’s result. - more

  Of interest to fastener distributors - Fastenal reported today that daily sales in June were down 22.5%, after falling 20.79% in May, and 21% in April, reflecting the decline in demand for fasteners is not getting much better. In their report to shareholders, they stated "As we saw in the previous two quarters, the weakened economy continues to have a substantial impact on our business. These impacts continue to negatively affect our sales, particularly related to our industrial production business (business where we supply products that become part of the finished goods produced by others) and, more recently, our non-residential construction business. To place this in perspective - our manufacturing customers (historically approximately 45% to 50% of sales) contracted approximately 28% in the second quarter versus the prior year. This contraction is less severe in the maintenance portion of our manufacturing sales (business where we supply products that maintain the facility or the equipment of our customers engaged in manufacturing), but more severe in the production business. Our non-residential construction business (historically 20% to 25% of sales) contracted approximately 23% versus the prior year. The remaining business (sales to other resellers, government business, other industries, and in-store retail sales) is producing better results, but unfortunately, doesn't have enough impact to offset the manufacturing and construction impact. On a sequential basis, our manufacturing daily average sales improved in both May and June (versus the previous month). This was the first sequential improvement since September 2008. However, this improvement was offset by continued weakening in our non-residential construction business ........ As we indicated earlier in this release, our goal is to increase the sales of our average store to approximately $125,000 per month."

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.12/lb higher, with the rest of the base metals mixed and mostly higher. The US Dollar is trading lower against the Euro, by a little over 1/4 of 1%. NYMEX crude futures are unchanged, while gold is down 1/10 of 1% and silver is off by nearly 1%. In overnight trading, Asian markets were down sharply, while European markets are slightly higher this morning.  US futures show an uncertain opening, although they are leaning slightly higher at the moment. Not much has changed in the China- Rio bribery case, although China is now refusing to allow Australian authorities meet with the imprisoned Hu, and the political rhetoric is picking up. Vale Sudbury miners are officially on strike, with Voisey's Bay set to strike on the 1st.
  • Vale/Inco and USW sites - Vale/Inco company / USW  Local 6500 / Sudbury Star
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metal prices were off again on Friday, weighed down by lingering concerns about the economy, a stronger dollar, and sagging oil and US equity markets. A dip in US consumer confidence readings to its lowest level since March was the only US macro item released on Friday, and did not help matters much either. Tin fared worst among the various metals, falling more than 5% for a third day and tumbling to a ten-week low. The complex never really recovered after complaints were made about its spread structure last week, and although the LME has not taken any steps in this regard, players are obviously moving to the sidelines in anticipation of something happening.  ... We are off to a very quiet start this morning, but given the tight trading ranges noted, odds are high that sellers will return to the fold.  ... Nickel is at $14,500, up $10, and recovering somewhat over the course of the day after prices sank to $14,120 at one point earlier. Our chart shows that nickel has broken its short-term upchannel, and is now struggling to hold support above $14,300." (read Ed Meir's complete morning base metals report here)
  • Societe Generale - "Our contacts in China continue to paint a picture of a slight slowing in real underlying metals demand in June, and an expectation that July will also be slow."
  • (AM) An Indian trader reported to Asian Metal that at present Indian high carbon ferrochrome market keeps increasing, as they received offers of about INR55,000/t (USD1,134/t ~USD 0.89/lb) ex works for high carbon ferrochrome 60%, Si 4%max recently, up from INR52,000/t (USD1,072/t) ex works last week. According to the source, the supply in the spot market is a little bit tight now, as many steel mills are purchasing high carbon ferrochrome actively.
  • (Bloomberg) "The world’s biggest ferrochrome producer may offer a cash payment of as much as 5 billion pounds to convince investors in Anglo American Plc to consider its merger proposal, the Observer said, citing unidentified people in the City of London. The shares fell 12.8 pence, or 2.1 percent, to 597 pence."
  • (Bloomberg) "Outokumpu Oyj, the world’s fourth- biggest stainless-steel maker, was raised to “overweight” from “neutral” at JPMorgan Chase & Co., which cited an improving outlook for the industry."
  • (CM) China's crude steel output was estimated to reach 45.39 million tons in June, which could be translated into a daily output of 1.51 million tons, hitting a peak this year, according to the latest report by the China Iron and Steel Association (CISA).
  • (Bloomberg) "Cash prices for iron ore delivered to China, the world’s biggest buyer of iron ore, jumped to a nine-month high amid rising imports by the Asian nation. Ore for immediate delivery rose 5.5 percent to $87 a metric ton in the week ended July 10..."
  • (SX) China's total power consumption in the first quarter of this year fell 2.43 percent from the year earlier to 1641.1 billion kWh, data released from China Electricity Council. The power consumption has headed to rebound since May of this year, and finally presented a positive growth in June. China's power consumption in Jun was 305.2 billion kWh, up 3.79 percent year on year.
  • "Another common misconception is that speculators only buy and hold assets. More accurately, speculators try to benefit from fluctuations in prices. In other words, speculators cannot profit from sustained high prices, only from changing prices. So, yes, the recent volatility in the oil market can certainly be attributed to speculation, but speculation cannot support an extended price rally. Major players like banks, on the other hand, are more than just pure speculators, having the resources to drive prices up." - source
  • Treasuries Record Demand Damps Concern Supply to Grow - more

  Picket lines go up at Vale Inco operations - About 20 members of United Steelworkers Local 6500 lit fire barrels, hoisted picket signs and waved Canadian flags just before midnight Sunday, minutes before their contract with Vale Inco expired and they began striking against their employer. - more

  What's in a secret? Rio case frightens Chinese analysts - China's detention of steel executives suspected of leaking state secrets could reduce the flow of market information in China as analysts and researchers self-censor to avoid trouble. - more

  • China shuts door on access to Rio Tinto's Stern Hu - China has rebuffed the Rudd government and may force Australian officials to wait a further month for a second visit to detained Rio Tinto iron ore executive Stern Hu. - more

  JOGMEC / Japan Holds On 16th July Tender To Purchase Molybdenum Ore = To Purchase 300 Tons Of Moly In Crude Oxide For National Stockpiles - JOGMEC (Japan Oil, Gas and Metals National Corporation), which is an independent administration agency in Japan, is scheduled to hold an open tender on the 16th of July to purchase 300 tons of Mo in molybdenum ore (crude oxide) for national stockpiles of metals. - more

  High Costs Keep Minara Out Of Favour - In terms of production, nickel miner Minara (MRE) largely met market expectations, its quarterly output of 7,800 tonnes either in-line or only slightly below broker expectations on the nickel side and a little better than UBS had factored in on the cobalt side. - more

Project hunter Moly may stick with Ridge options - Back in March, Moly Mines placed its $1.1 billion molybdenum plans on the backburner, put $127 million on the table and went shopping - more

  Baosteel ups steel prices, may signal iron ore deal - China's Baosteel will raise prices of its major steel products by 9 to 13 percent next month, more than expected, a move that may suggest mills have effectively given up their battle for lower iron ore prices. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Saturday and Sunday, July 11 & 12

 Local 6500 rejects Vale Inco final offer by 85 per cent  - Members of United Steelworkers Local 6500 will almost certainly set up picket lines at 12:01 a.m. Monday after 85 per cent of 2,600 members who cast ballots in ratification votes rejected Vale Inco's final contract offer. - more
  • Union workers at Vale Inco's Sudbury mine to strike - Union workers at Vale Inco's Sudbury nickel mine in Canada rejected the company's final contract offer and will go on strike at midnight Sunday, the United Steelworkers union said on Saturday. - more

  Commodities are still luring the adventurous - Natural resources funds have certainly lived up to their reputation for volatility. After an extreme roller-coaster ride in 2008, when commodity prices skyrocketed over the summer, only to plummet in the fall, those prices climbed steadily in the first half of this year. - more

  Commodity/Economic Articles and Comments

  • Don Coxe Conference Call - audio file here
  • Dow Jones - U.S. nickel exports rose 126.6% in May from the previous month, but was down 34.1% from the previous year, the Commerce Department reported Friday.
  • Dow Jones - U.S. nickel imports fell 47.9% in May from last month, and was down 46.4% from the previous year, the Commerce Department reported Friday.
  • Fall in imports slows, points toward recovery - more
  • When Will The Recovery Begin? Never. - The so-called "green shoots" of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed. - more
  • WSJ - CIT Group Inc., a lender to almost a million mostly small and midsize businesses across the country, is preparing for a possible bankruptcy filing after so far failing to win a government guarantee to help it borrow, said people familiar with the matter.
  • Bank of Wyoming Seized; 53rd U.S. Failure This Year - more
  • Nouriel Roubini - "The United States is in the 20th month of a recession that has been by far the longest and most severe of the post-war period. While comparisons with the Great Depression are frequent and appropriate (especially if we look at the pace of contraction in industrial production), the aggressiveness of policy measures has significantly reduced the probability of a near-depression ...Improvements in real economic activity are present and visible in the reduction of the pace of job losses, in the improvement in indicators of manufacturing activity, in the stabilization of housing starts and in the improvement of financial conditions. However, RGE Monitor does not yet see signs of a strong and sustainable recovery."
  • Turning a Corner? - more

  Government contacts China over Rio spy case, urges haste - Australia's government is urging China to deal swiftly with the case of detained Rio Tinto executive Stern Hu, having made it first contact with Chinese authorities. - more

  • Detained Rio Tinto executive in good health: Australian FM - Australian Foreign Minister Stephen Smith said here Saturday that Australian Rio Tinto executive Stern Hu detained in China and accused of spying and stealing state secrets appears to be in good health. - more

Friday, July 10

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 33 to 2,985. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Exports Sink for Eighth Month as Economic Growth Relies on Stimulus  // China Fails to Attract Enough Buyers in Debt Sales for Second Time in Week // China Accuses Rio's Hu of Bribing Mill Officials, Australia's Smith Says // Yen Rises Versus Euro as Evidence of Stalled Recovery Boosts Refuge Demand // Asian Stocks Post Second Weekly Decline; Sapporo, Mining Companies Advance // U.K. Producer Prices Drop Most Since 2001 as Recession Defeats Inflation // Bank of England May Be at `Turning Point' on Emergency Bond-Purchase Plan // Stocks in Europe Decline; Stoxx 600 Heads for Fourth Straight Weekly Drop // U.S. Economy on `Cusp of Stabilization' as Growth Forecasts Are Increased // Trade Deficit in U.S. Unexpectedly Narrowed in May as Exports Increased // New GM Emerges From Remains of Bankrupt Automaker as Asset Sale Completed // U.S. Stocks Fall as Confidence Report Adds to Concern Recovery Faltering
  • The US Dollar is trading off session highs, but continues to trade higher against the Euro, by a little over 1/2 of 1%. NYMEX crude is down nearly 2% and at $59.30/barrel. Gold is down slightly, while silver is off by over 1-1/2%. Base metals traded in London all ended the session lower. Indicator charts show nickel started falling at the open, attempted a comeback in the late afternoon, which failed by the close. Dow Jones reports three month nickel ended the day and week at $6.57/lb . Nickel inventories grew overnight by a small amount, while the Baltic Dry Index slumped another 33 points, and fell under the 3,000 level  for the first time since May 26th. The University of Michigan and Reuters reported that U.S. consumer sentiment reversed course and fell to 64.6 from 70.8 last month, which took analysts and traders off guard, and made it difficult for anyone to find green shoots in the report. Considering both Vale and the USW are forecasting a strike by the weekend, we will probably come back to work to such news Monday morning. We wanted to write a long piece on the Rio China fiasco but decided there was plenty already in the press about it, so we will let it rest for now. There are plenty of links below for those who want to read more including media allegations being made against BHP. Our final statement for the week on the matter would be "don't take it out on the tadpoles, when you can't reel in the big fish".
  • Have a safe and relaxing weekend. Next week looks like it could be another interesting one.  

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) The London Metal Exchange is to go "full steam ahead" on its planned minor metals futures contracts from February, the exchange's chief executive said Friday.  ... The LME has identified cobalt and molybdenum as the first two contracts for minor metals, having conducted feasibility into their development since 2008.
  • Transparency International reported in 2006 that while Australia was listed in the top 5 countries "least" prepared to pay a bribe to do business in a foreign country, China ranked second to India in countries "most" prepared to pay a bribe to do business abroad.
  • Based on 2008 production figures of 85,300 tonnes, a strike at Vale-Inco's Sudbury operation should cost the world approximately1,640 tonnes a week of nickel. Based on 2008 production figures of 74,219 tonnes, a strike at Voisey's Bay nickel mine will cost the world approximately 1,427 tonnes of nickel ore a week, although shipments from this mine are seasonal.
  • Global Banking Economist Warned of Coming Crisis - more (6 parts)
  • China Blows a Double Bubble - more

  Sudbury workers vote on Vale Inco contract offer; union says strike 'imminent - The union representing employees at Vale Inco's nickel operations in the northern Ontario city of Sudbury says there is little doubt members will reject a final contract offer by the company and a strike is "imminent." - more

  AME expects higher copper, nickel prices in 2009 – Independent analysis firm AME Mineral Economics has upgraded its copper price outlook for 2009 and 2010, despite its forecast that overall copper demand was likely to decline by 7%. - more

  China exec probed for leaking price strategy to Rio - A Chinese steel executive detained along with four Rio Tinto employees is being investigated for leaking China's "bottom line" on iron ore prices, a source with knowledge of the probe said on Friday. - more

  • China cites 'conclusive evidence' in Rio Tinto case - China has "conclusive evidence" that four employees of the world's second-largest mining company were stealing Chinese state secrets, the country's foreign ministry said. - more
  • Rio crisis rooted in marketing strategy: John Kemp - China's detention of four Rio Tinto staff marks the final phase in the long downward spiral of relations with Rio and BHP Billiton, Australia's two major exporters of iron ore. - more
  • Chinese accuse Rio Tinto 'spy' of bribe - China has accused senior Australian mining executive Stern Hu of industrial espionage by bribing Chinese steel making officials during sensitive commercial talks. - more
  • Warning on doing business with China - Companies doing business with China are being warned the country presents uncertainties that shouldn't be taken lightly, as there's little separation between politics and business. - more
  • BHP Billiton accused of bribery in China steel prices: the invitation to communicate the feelings of female singers - "We should pay attention to ( 'with a ghost'), efforts should be big points." The industry said that if the extension can leverage out of events leads to more "with a ghost", then the loose-sand iron ore negotiations are expected to be improved. - Chinese article translated version here original Chinese here
  • "Who to Bribe in China and How Much" - here

  LME H1 volumes rise 1.8 pct to above 55 mln lots - The London Metal Exchange said on Friday the total number of lots traded on the exchange in the first half of this year rose 1.8 percent to more than 55.18 million lots from the same period a year ago. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.14/lb lower, with all London traded base metals lower this morning. The US Dollar is stronger against the Euro, by nearly a full percent already today, which is hurting commodity shares. NYMEX crude futures are down 1-3/4% and well under $60/barrel. Gold is off 1/2 of 1% and silver is down 2%. In overnight trading, Asian markets ended flat. This morning, European markets are trading lower and US futures imply a sharply lower opening for Wall Street. Chinese exports reportedly fell again in June for the 8th straight month, down 21.4% compared to a negative 26.4% fall in May. Antaike is reporting that they believe China has stockpiled at least 100,000 tonnes of nickel over the last few months, and with LME warehouses holding over 109,000, that is a lot of stockpiled nickel. The rumors are back that BHP may be selling Ravensthorpe after receiving "numerous" enquiries. Vale is said to be expecting a "short" strike in Sudbury, while accusations of bribery have now surfaced in the China versus Rio Tinto spy caper.
  • Vale/Inco and USW negotiation sites - Vale/Inco company / USW  Local 6500 / Sudbury Star
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals closed sharply higher yesterday, (except for nickel and tin), as a weaker dollar, along with steadier oil and US equity markets, coaxed some sidelined money back in to the long side. One bit of macro news out of the US helped the advance as well, and that was the weekly initial claims data, which came in with a drop of 52,000 to 565,000 claimants for the week, better than the consensus estimate of 603,000. However, while that number grabbed positive market attention, it is worth noting that the continuing claims component in the data spiked by 159,000 to 6.883 million, a record high for the series and a stark reminder that finding jobs remains a big problem ... Despite the sizable moves, we have been seeing in metals this week, it is worth noting that on a net basis, prices have hardly changed much. .. Metals are off to a weaker start as of this writing, but we do not think much will happen today, as there is very little in terms of data apart from US confidence readings out later.  .. Nickel is at $14,630, down $270, and along with tin, looking the weakest in the group today. Support at $15,200, was taken out yesterday on a two-day closing basis. Our next downside target is $14,300, with $13,750 below that."  (read Ed Meir's complete morning base metals report here)
  • (CS) A long-awaited regulation on steelmakers’ merger and acquisition is expected to be unveiled soon by the Ministry of Industry and Information Technology in a bid to further encourage consolidation among steelmakers from across the country. China will try to shape up several super large steel producers with a capacity of more than 50 million tons each such as Baosteel, Anben Group and Wisco by 2011, according to the adjustment and revitalization program on the steel industry. Data shows there are more than 500 crude steel producers in China with the top five mills accounting for just 28.5 percent of the country’s total steel output, well below the 60 to 70 percent of market shares dominated by the top four producers in the advances nations such as the United States, the EU and Japan.
  • (Bloomberg) BHP Billiton Ltd. is considering selling its mothballed Ravensthorpe nickel mine as part of the review of operations there, Perth Now cited the company as saying. BHP has received ``numerous'' expressions of interest in the mine and will test the market for bidders, the Web site cited the company as saying.
  • (Dow Jones) Russia exported in January-May 91,200 metric tons of nickel, a fall of 12.6% on the year, the federal customs service reported Friday.
  • (Bloomberg) Minara Resources Ltd. reported total nickel output from its Murrin Murrin operation of 7,842 tons in the June quarter and said it remains on track to meet its full- year forecast.
  • (Yieh) According to the trend of demand and supply, Korean domestic cold rolled stainless steel sales continued to go down in May, keeping a consecutive drop from March. According to the statistics from Korean Iron & Steel Association (KISA), the domestic stainless steel sales reached 18,380 tons in May, down by 9.3 percent on April.
  • Economic Policy Institute Rob Scott  - "..the U.S. manufacturing sector has been hard hit by the last two recessions, and lost 5.3 million jobs between January 2000 and May 2009, a decline of 31%."
  • (BS) Graynic Metals Ltd has secured access to an extensive portfolio of advanced nickel laterite exploration projects located in Guatemala, Central America, completing the joint venture agreement with the private Canadian company Nichromet Extraction Inc.
  • AK Steel said today that it will increase spot market prices for its carbon steel products, effective with all new orders for August and September shipments.
  • AAR - The Association American Railroads today reported that freight traffic on U.S. railroads continues to parallel the nation’s overall economic condition, as traffic remained down year over year for the week ended July 4, 2009. U.S railroads reported originating 241,240 cars, down 15.6 percent compared with the same week in 2008. Total volume on U.S. railroads for the week ending July 4 was estimated at 25.7 billion ton-miles, off 14.3 percent from the same week last year.
  • (RITA) The Freight Transportation Services Index (TSI) fell 0.6 percent in May from its April level, declining for the third consecutive month to the lowest level in 12 years, the U.S. Department of Transportation's Bureau of Transportation Statistics (BTS) reported today (Table 1). The May decline was the smallest of the three consecutive decreases.
  • CBO - The federal budget deficit was $1.1 trillion for the first nine months of fiscal year 2009, CBO estimates in today’s Monthly Budget Review, more than $800 billion greater than the deficit recorded through June 2008. Outlays are 21 percent higher than they were in the first three quarters of 2008, but revenues have fallen by 18 percent.

  Japanese Export Offers Of Ni-Based Stainless CR Sheets At $2,700 C&F -Japan's stainless steel producers are contemplating offering a price increase of US$100/ton to US$2,700/ton C&F for nickel-based CR sheets in their export negotiations to start this week for August-September shipments to Asian destinations such as China. - more

  China seen holding above 100,000 T nickel stocks -Antaike - China is estimated to have added 88,000 tonnes of nickel in stocks in the first half of this year, reducing orders for spot imports as surplus supplies weighed on the domestic market, an analyst at Antaike, a state-owned research group, said on Friday. - more

  • China's June imports, exports continue falling - China's imports and exports continued falling in June from a year earlier, but the pace of decline eased, the General Administration of Customs announced Friday. - more

  MP says Vale Inco CEO expects short strike - The president and chief executive officer of Vale Inco, Tito Martins, says there will be a strike at the company's Ontario operations, but it won't last long. - more

  BHP starts Ravensthorpe sale process - BHP Billiton has today confirmed that it will start the formal evaluation of divestment as a potential future option for the Ravensthorpe nickel mine. - more

  China accuses Rio's exec of bribery during iron ore talks -  China has accused Australian Rio Tinto executive Stern Hu of bribing staff from Chinese steel companies during iron ore negotiations this year, Foreign Minister Stephen Smith said. - more

  • Arrest of Rio Tinto China staff is a reality check - Letters Blog - more
  • How will Rio case impact foreign business in China? - The detentions of the four employees of global miner Rio Tinto, including its top iron ore salesman in China, has raised some major questions about the implications of this affair for doing business in China and the iron ore trade. - more

  Rally in raw materials prices not sustainable: EIU - The prices of most industrial raw materials, including oil, have rallied strongly since the beginning of 2009, and particularly in the second quarter of the year. However, the Economist Intelligence Unit believes that the rally will fizzle out as hopes of an early return to strong economic growth fade. - more

  • Base Metals Prices at Risk from Chinese Import Slowdowns - Although industrial metals posted strong gains during the second quarter of this year, Deutsche Bank strategists warned base metals are at risk from the slowdown in China's "seemingly insatiable appetite for imports is diminishing." - more

  Xstrata's plan for Anglo merger is dead - Xstrata's proposed £40 billion ($82.4bn) merger with Anglo American has effectively collapsed after Anglo's shareholders rejected the approach. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, July 9

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 89 to 3,018. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Car Sales Jump 48% on Government Support, Extending Lead Over U.S. // Alcoa Says China, U.S. Economic-Stimulus Plans May Help Revive Cash Flow // Most Asian Stocks Fall; Honda Motor Falls on Yen, Cnooc Advances on Oil  // Bank of England Maintains Bond Purchase Plan at $202 Billion; Rate at 0.5% // Leaders of G-8, G-5 Seek to Avoid `Competitive Devaluations' of Currencies // European Stocks Rebound From Five-Day Decline; Rio Tinto, Daimler Advance // Initial Unemployment Claims Fell More Than Estimated to 565,000 Last Week //Treasuries Fall as Government Prepares to Sell $11 Billion of 30-Year Debt // Home Loans Backed by U.S. Government Jump to 36% of Mortgage Applications
  • The US Dollar continues to trade lower against the Euro, down 1.1% but off session lows. NYMEX crude traders are in a bearish mood even with a slumping Dollar, and have only managed a 2/3 of 1% gain so far today. Gold is up 1%, while silver is 8/10 of 1% higher. Base metals ended mostly higher today, thanks primarily to the Dollar's tumble. Only tin took a beating. Indicator charts show nickel started the day in the green, before tumbling well below support in early afternoon trading. Then as the Euro got a boost of energy, nickel shrugged off the bears and retraced its path back up. Dow Jones reports three month nickel ended the day at $6.73/lb , but it also shows in after market trading, the price actually rose over yesterday's close. Nickel stored in LME warehouses rose overnight, and sit over the 109,500 tonne level. Cancelled warrants jumped to over 2% yesterday, and remained stalled there today. The Baltic Dry Index slumped again, down 89 points to a 6 week low of 3,018. The Commerce Department reported wholesale inventories for May decreased 0.8%, less than analysts expected. Wholesale inventories for April were revised slightly higher to reflect a 1.3% decrease. Inventories are down 7.6% for the year, and the inventory-to-sales ratio fell to 1.29. Business inventories will be reported next week and watched closely. Vale Inco announced 54 more lay-off's in Sudbury, on the eve of a union contract vote there. While we made light of the Rio-China supposed spy fiasco this morning with our movie titles, the matter is potentially damaging to future trade negotiations between China and its trading partners. We have a hunch this whole espionage claim has something to do with an article we linked to a few weeks back. Here it is again. "Shanxi steel mills forge ore deals, says report (link)" This move infuriated the Chinese government and was seen as an attempt to undermine the CISA negotiating on behalf of all Chinese steelmakers. Rio Tinto may not have been the lone culprit in this agreement, according to the media report, but considering the recent Chinalco snub and the Chinese reaction, it might explain why they got targeted in this investigation. This is, of course, nothing more than personal conjecture and should be taken as nothing more. It is our hope that this matter is resolved quickly, and that those concerned are home with their families in a few days. We wish our readers in the Eastern Hemisphere a safe and relaxing weekend.

  Reports

  • Commodities Daily - pdf here
  • Federal Reserve - Does Speculation Affect Spot Price Levels? The Case of Metals with and without Futures Markets - pdf here

  Commodity/Economic Articles and Comments

  • (Reuters) U.S. Steel's Serbian unit is to shed up to 250 administrative jobs as demand for its products has plummeted amidst the global economic downturn, the local company's spokesman said on Thursday.
  • (SSY) There are currently 71 Capesizes waiting to berth at China’s iron ore discharge ports, according to data from local sources received today. This marks a decline from the 77 Capes which were queueing at the weekend and represents a drop of 17 from the peak two and a half weeks ago.
  • Tax authorities have accused Japan Steel Works Ltd. of deliberately concealing 580 million yen in income, including money disguised as aid to a struggling Hokkaido waste disposal affiliate, sources said. - more
  • Baltic index hits fresh 6-week low, demand soft - more
  • RMB 1.5 trillion in new Chinese lending — can we turn this thing off? - more
  • Further job cuts planned for Corus - more
  • Unemployment, Not the Stock Market, Distinguishes a Recession From a Depression - more
  • A Dubious Foundation - more

  Vale Inco lays off 140 worldwide, 54 in Sudbury - Vale Inco announced today it is laying off 140 management employees worldwide — 54 of them in Sudbury — as part of the restructuring the company has been undergoing for the last 10 months.- more

  Japan Q3 ferrochrome price raised to 97 cents - The term price for ferrochrome to Japan for July-September has been raised by 26 percent from the second quarter of this year, an official at Nippon Steel & Sumikin Stainless Steel Corp said on Thursday, its first increase in a year. - more

  China Rio arrests pit country vs company: Alexander Smith - Country or company -- where does your loyalty lie? For Beijing, there is simply no question. If you are Chinese -- or a foreign passport holder of Chinese origin -- you work for China first, second and third. - more

  • China to let Australia see Rio Tinto manager - China agreed to let Australia's diplomats meet Friday with a detained Australian employee of miner Rio Tinto Ltd. after the government said it had proof he and three co-workers stole state secrets. - more
  • Australian Rio Tinto executive held in China - The iron ore chief of Shougang Corp has been arrested as part of a crackdown on raw materials trading in China, Bloomberg News reported, quoting the 21st Century Business Herald. - more
  • Shanghai Daily - Foreign Ministry Spokesman Qin Gang said the actions against Stern Hu, general manager of Rio's China iron ore operations, and his three colleagues, are based on competent evidence held by authorities. Chinese-born Hu is an Australian passport holder. Qin wouldn't elaborate on the state secrets but said they have hurt China's economic security. "This case shouldn't be politicized and used to harm the cooperation between China and Australia," Qin told a regular press briefing in Beijing. Hu, and other three employees, all Chinese nationals identified by domestic media as Liu Caikui, Wang Yong and Ge Minqiang, were detained by Shanghai State Security Bureau on Sunday.

  New wonder material, one-atom thick, has scientists abuzz - Imagine a carbon sheet that's only one atom thick but is stronger than diamond and conducts electricity 100 times faster than the silicon in computer chips. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.03/lb higher and off session highs, with tin the only loser at the moment. Considering base metals are higher this morning, one could safely assume the Dollar is lower against the Euro, which it is, by about 3/4 of 1%. NYMEX crude is getting a Dollar nudge, up 1-3/4% to over $61.00/barrel. Gold is up 1/2 of 1% while silver is flat. In overnight trading, Asian markets ended mixed on news China’s passenger-vehicle sales rose 48% in June. European markets are trading higher, with US futures showing Wall Street should open higher, after Alcoa posted a smaller-than-estimated loss for the second quarter. The union at Vale/Inco's Voisey's Bay mine, currently on furlough, announced they will strike August 1st, and Vale/Inco union members left a briefing last evening in Sudbury threatening a strike there. The report that China had agreed to an iron ore contract with the Big Three were apparently in error, thanks to an over zealous newspaper in China, but China did confirm that they are holding 4 members of the Rio negotiating team, and a senior executive from a Chinese steel producer, on espionage charges. Fears of a potential trade problem between Australia and China were heightened after a Chinese buyer cancelled a coal shipment from Australia, and the Aussie Dollar suffered its biggest one day drop in 2-1/2 months. Bloomberg reports "The market was already jittery over the whole Rio thing, the arrests and everything, and the coal headline just caught the Aussie at exactly the wrong time," said Sean Callow, a currency strategist at Westpac. "There was a rush of knee-jerk selling, which tripped stop-loss sales, and down she went." Back in the States, the US Labor Department reported first-time claims for state unemployment benefits fell last week to their lowest level since January.
  • Stay tuned to this site for made up news on Rio Tinto iron ore chief executive Stern Hu's unknown movie career including past hits, "The Spy Who Dissed Me", "Iron Ore's Are Forever", "In Her Dishonorable Woman's Secret Service", and of course his non-Academy nominated role in "Never Say Spot Market Again". Mr Hu is currently out of the media spotlight, doing research for his upcoming feature "From China With Love".
  • Vale/Inco and USW negotiation sites - Vale/Inco company / USW  Local 6500 / Sudbury Star
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals settled sharply lower yesterday, with tin and nickel hit particularly hard, with each falling by about 5%. ... Worries about the economic outlook prompted a sell-off in the oil markets as well, with crude plunging to $60 at one point. The stronger dollar also contributed to the weakness, as did the latest CFTC policy initiatives. Although these are still in a formulative stage, they are squarely aimed at reducing the influence of hedge fund activity and overall “speculation”. ... We are seeing an impressive recovery this morning in metals, as a weaker dollar and an oversold bounce in oil markets (after six days of declines), is lifting the group.  ... Nickel is at $14,930, down $20, and the only metal that is down today. Support is around $15,200, which lies along the short-term upchannel, taken out yesterday. Another close below this level later today will warrant a downward revision in our trading range." (read Ed Meir's complete morning base metals report here)
  • (SSY) There are currently 71 Capesizes waiting to berth at China’s iron ore discharge ports, according to data from local sources received today. This marks a decline from the 77 Capes which were queueing at the weekend and represents a drop of 17 from the peak two and a half weeks ago.
  • Xstrata - In response to a strengthening in demand for ferrochrome, the Xstrata-Merafe Chrome Venture has increased capacity utilisation for 2009 from 35% to 60%. For this purpose, several furnaces at the Venture’s five ferrochrome operations have been re-commissioned.
  • (Yieh) According to Taiwan Steel & Iron Industries Association (TISA) the stainless steel bar consumption is likely to increase by an average of 0.6 percent within 5 years.
  • (MNP) Independence Group has intersected high-grade nickel while drilling its newly-discovered Moran nickel deposit, part of its flagship Long nickel operations.
  • (India) No case for hike in import duty on steel products, says Virbhadra Singh - more
  • (BNA) Luxembourg-based steel giant ArcelorMittal has confirmed that the construction of a US$600mn steel mill in Mexico has been postponed but not suspended, ArcelorMittal representative Ricardo Guzmán said in an email.
  • Granite City steel workers happy to be back on the job - more
  • Asia Steel-China prices dip on subdued buying, output growth - more
  • (US) Steel-scrap prices lower than forecast - more
  • UAE steel imports decline 75% on lower demand - more
  • Analysis-Real winners of iron ore talks? Banks, not miners - more

  Vale's Voisey's Bay workers reject contract offer - Employees at nickel miner Vale Inco Ltd.'s Labrador operations have almost unanimously rejected a contract offer by the company and will strike beginning Aug. 1, according to the United Steelworkers union. - more

  • Union steels itself for strike  - A strike against Vale Inco is all but certain according to members of United Steelworkers Local 6500 who emerged angry, disgusted and resigned to the inevitable from two information meetings Wednesday at Garson Arena - more

  Japan Imported 7,600 Tons Of Stainless Steel Products In May / 09 With Decline From That In April = Decreased By 16% Compared To That In April, The Imports From South Korea And Taiwan Had Decreases - Japan Iron and Steel Federation compiled the data on imports of stainless steel products into Japan in May of 2009 on the basis of the statistics released by the Ministry of Finance, and the contents were as per the table shown below. - more

  • Japan's pure moly demand to rise on higher CIGS cell production - Japanese pure molybdenum powder demand will receive a boost from increased production of copper-indium-gallium-selenium photovoltaic solar cells, or CIGS cells, industrial sources said Wednesday. - more

  ThyssenKrupp says no change to plans for Calvert steel mill despite announcement - Local ThyssenKrupp stainless officials said this afternoon that ThyssenKrupp AG is not canceling or further delaying its plans for a stainless steel melt shop at the company's complex in Calvert - more

  China Ore Price Talks Are Still Continuing, Hebei Steel Says - Hebei Iron & Steel Group, China’s second-biggest mill, denied a China Business News report that the nation’s steelmakers agreed to a 33 percent cut in contract iron ore prices. - more

  • Rio employees 'held for espionage' - Four employees of global mining giant Rio Tinto in Shanghai have been detained, apparently on suspicion of espionage and stealing state secrets. - more
  • China Has Evidence Rio Staff Stole State Secrets - In its first official response to an unfolding case involving Rio Tinto PLC (RTP) employees, China Thursday said that Stern Hu, an Australian national, is being detained for stealing state secrets for a foreign country. - more
  • China says Rio Tinto staff hurt interests - China said on Thursday detained staff from Australian miner Rio Tinto had harmed China's economic interests in a case that has rattled currency markets and raised questions about China-Australia relations. - more
  • China says it has evidence against Hu - Beijing says it has evidence to back its claims that Australian Stern Hu and three Rio Tinto co-workers damaged China's economy and harmed its security. - more

  Metals industry may be regaining its lustre - Finnish metals companies are facing an unprecedented slowdown, but some signs of recovery are already on the horizon.- more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, July 8

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 109 to 3,107. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Detains Rio Executive Hu on Suspicion of Espionage, Australia Says // Yen Rises to Six-Week High Against Euro as Recession Spurs Safety Demand // Yuan Deposes Dollar on China's Border in Sign of Future for Global Trade // Asian Stocks Fall for Sixth Day on Growth Concern; Treasuries, Yen Gain // Darling to Give Regulators More Power Over U.K. Banks, Limit Executive Pay // U.K. Home Prices Unexpectedly Fall 0.5% as Joblessness Rises, Halifax Says // Teva, Servier Face EU Antitrust Investigation Over Delays in Generic Drugs // G-8 Leaders Disagree Over Economic Stimulus, Leave `Exit Strategies' Open // Europe Stocks Drop, Led by Holcim, Banesto; MSCI World Falls for Fifth Day //  IMF Predicts Stronger 2010 Global Rebound After 2009 Economic Contraction //
  • The US Dollar continues to trade higher against the Euro, now by 1/2 of 1%. NYMEX crude is getting whacked, down nearly 4% and about to slip under $60/barrel. Gold is down 1-3/4% and silver is off over 2%. And base metals fared little better. Metals traded on the London Metal Exchange all ended much lower as the trading session couldn't end fast enough for the bulls. Indicator charts once again look like a photo of a mountain, although this one was taken from the peak looking down a ski slope. Dow Jones reports three month nickel closed under $7/lb for the first time this month, at $6.78/lb . LME stored inventories of nickel reflected on change for the third time this month, and the Baltic Dry Index continues to slump, down 109 points. Commodities took a hit today, and even some positive news from the IMF made no difference. The Dollar's strength gave commodities initial inertia, but the degree of the dive reflected more gravity than just a change in the currency value. It appears that nickel fell thru support levels today, and much of the decline may have been technically inspired. As of the last 15 minutes, Rio Tinto is denying reports that it has reached a settlement with China over iron ore pricing for the next 6 to 12 months, although considering four of their negotiators are locked up in some Chinese jail on espionage charges, word may not have reached headquarters yet of any 'behind bars' agreement. People in jail will agree to just about anything to get out, and this could prove an effective tactic in international business negotiations. Of course we jest, but it will be curious to see in what country they hold the negotiations next time. Pretty sad when negotiations over the price of a rock start bringing up images of the tension between North and South Korea.  In other news, Vale can't afford to pay their union in Canada like they have been paid in the past. Apparently payroll was a section of the books someone overlooked when they bought the mine a few years back. Then again, nickel was selling in the double digits back then. The truth is, Vale answers to stockholders. Stockholders want profits ... period. They want the biggest piece of the pie they can get as a return on their cash investment. Miners in turn want as big a piece of the pie as they can get, a return on their sweat. In the middle is the company, who wants to appear compassionate to their employees', but tough money managers to their shareholders. When times are good, everyone can get a piece of the bigger pie and be content. When the pie shrinks, the fight is on to see who will have to swallow the smaller piece. Humble pie anyone?

  Reports

  Commodity/Economic Articles and Comments

  • (Reuters) Iron ore contract negotiations with China are still under way, mining group Rio Tinto said on Wednesday following a report in China about a settlement. "We've announced with Japan and other countries, but not with China, we haven't confirmed anything there," London spokesman Nick Cobban said. When asked if negotiations with China were still under way, he replied: "Yes, that's my understanding."
  • Simon Hunt - (reference commodity price manipulation) "Now it would appear that the foxes are back again, but this time it may well be the huntsmen (governments and central banks) who will catch their foxes and take speculation, or, at least some of it, out of the market. We will see over the summer!"
  • (CK) Hebei Iron and Steel Group Co Ltd produced 3.15 million tons of crude steel in May, up 14.94% from a month earlier, while the crude steel output of Baosteel Group, the parent of China's largest steel maker, Baoshan Iron and Steel Co, stood at 3.13 million tons, according to statistics released by China's Ministry of Industry and Information Technology.
  • (Deutsche Bank) Evidence of the increasing popularity of commodities can be seen via the flow of funds into commodity Exchange Traded Funds and Exchange Traded Notes. In fact assets under management of Powershares commodity ETF/ETNs products registered in the US has risen to a new all time high, surpassing the peak from 12 months ago when commodity prices were significantly higher. .. We believe the debate surrounding the role of speculators and their impact on commodity prices is therefore likely to intensify, particularly if the rise in commodity prices continues and the dangers this could pose to the economic recovery."
  • (Reuters) South African Mineral Resources Minister Susan Shabangu told Reuters on Wednesday the country would not nationalise mines despite calls from the ruling party's allies.
  • Mining milestones: China's growing investment in Australia - more
  • Commodities on longest decline this year - more
  • G8 sees economy still in peril, falters on climate - more
  • Hiring days are back at Chinese companies - more
  • Goldman Sachs: China GDP grows 7.8% in Q2 - more
  • China's economic recovery isn't firm, researcher says - more
  • The emerging V-shape recovery - more
  • Fatal collapse rings alarm bells for developers - more
  • S&P500 vs CDs (1994-2008) - more
  • Who Pays No Income Tax? - more
  • Cows & Politics Explained - more

  Copper and Nickel to Correct says Macquarie Research - Speculators lost their heads in the first half of the year when copper and nickel imports into China went through the roof. - more

  Unaware Of Evidence To Support China Allegations - Rio Tinto Ltd. is unaware of any evidence that would support allegations by China of espionage against an employee, a spokeswoman for the miner said Wednesday - more

  • China holds Rio exec as spy; iron ore deal in doubt  - Chinese authorities are detaining Rio Tinto Ltd's top iron ore negotiator on suspicion of espionage and stealing state secrets, Australia said on Wednesday, threatening to strain already fraying ties. - more
  • Beijing accuses Rio of spying as Australia is shocked at arrest of mining executives - Australia and China are on a diplomatic collision course after a senior Australian mining executive was arrested in Shanghai by secret police on charges of espionage and theft of state secrets. - more

  European Nickel cancels off-take agreement with BHP - European Nickel said Wednesday it will be released from all its obligation under the off-take agreement inked with BHP Billiton in relation to the Caldag project in Turkey, announced in June 2006. - more

  SLN: no unemployment - On the line has always been supported by Philippe Gomes, the proposed use of partial unemployment in the SLN was yesterday rejected by the government. - translated version here (original French here)

  Vale Inco says pensions and bonuses remain major issues in contract talks - The issues of pension benefits and bonuses remain major sticking points between nickel miner Vale Inco Ltd. and the union representing thousands of its Ontario workers, a spokesman for the Brazilian-owned company said Tuesday. - more

  • Steelworkers vow to protect contract - More than 3,000 production and maintenance workers with United Steelworkers Local 6500 will decide this week if an altered pension plan, a smaller nickel bonus and restrictions on how often they can apply for new jobs are reason enough to strike. - more
  • Vale Inco tactics troubling, union says - The president of United Steelworkers Local 6500 and a retired former local president are accusing Vale Inco Ltd. of bad-faith bargaining in contract talks that broke off Monday.  - more

  Munali financing deal near - Barclay's Bank Plc is soon expected to conclude talks with Jinchuan Group Limited of China for the possible financing of Albidon’s Munali Nickel Mine Project in Mazabuka. - more

  Chinese fastener companies take measures to seek for development - "There were 10% to 15% fasteners exporting to EU market before. To avoid the high anti-dumpling duties, some Chinese companies are considering setting up plants in the third countries, and then exporting to EU. " - more

  Update - A spokesman for Rio Tinto is denying reports from China that the two have agreed to any iron ore price contract.

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.09/lb lower with all base metals lower but quiet. The US Dollar is trading stronger against the Euro this morning, up nearly 1/4 of 1%. NYMEX crude futures are down nearly a percent and under $62.50/barrel. Gold is down nearly 1% and silver is off nearly 1-1/4%. In overnight trading, Asian markets ended lower with only Australia and New Zealand pulling off a gain. European markets are lower this morning, and US futures show Wall Street has yet to decide what mood it will trade in today. Lot of metals news today, least of which is the Chinese agreeing to an iron ore contract, albeit a 6 month one only. China also has arrested one of Rio Tinto's negotiators for espionage, a rather bizarre case. Wayne Fraser, the USW lead negotiator, is threatening a strike at Vale, which as we show below, has been par for the course over history. The comments under the Sudbury story below show the deep divide among the union membership over the contract offer by Vale. On the other hand, Vale's CEO says current union costs are unsustainable, which will not impress the union, or the Canadian government. And back in the States, ThyssenKrupp is considering backing off its plans to build stainless steel plants in the US, unwelcome news for Alabama if true. And in South Africa, Merafe announced it is producing more ferrochrome on more demand. 
  • Vale/Inco and USW negotiation sites - Vale/Inco company / USW  Local 6500

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metal prices staged a stunning reversal yesterday, giving up earlier gains, and closing lower, although off their worst levels of the day. The complex simply could not withstand the battering US equities and oil prices were taking, coupled with the bearish impact of the stronger dollar, which despite its own structural problems, is ironically becoming a regular safe-haven in times of market turmoil. ... We are off to a mixed start as we start the US trading session, with copper the lone metal that was higher earlier in the day, but which has now thrown its lot with the rest of the group and is down slightly. Energy prices are lower, while the dollar is steady, trading just above 1.39 against the Euro, and likely a further source of pressure on metals over the balance of the day. US stocks are called to open unchanged. .. Nickel is at $15,500, down $150, and like lead, also staging a significant reversal from yesterday's highs. We see support around $15,200, which lies along the short-term upchannel." (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) "The industry is already oversupplied, and with more production coming online, nickel prices will certainly come under pressure (in the near future)," said Xu Aidong, chief nickel analyst with Beijing Antaike, a state-owned metals consultancy.
  • Howe Street - "One of the features of lengthy post-bubble contractions is the bewilderment about so much hardship in a world of plenty. By plenty is meant lots of supply and little money with which to consume. It has puzzled the establishment for hundreds of years – and seems likely to continue to do so."
  • (Deutsche Bank) "For starters, the global nickel market surplus, which has been evident since March 2008, is falling rapidly as a result of the 18-month campaign from producers to cut output in response to the collapse in global demand. Furthermore, after six quarters of negative demand growth, we think the global stainless steel market has adequately destocked and is primed to enter a restocking period, in our view. We believe the producer response to the demand shock has been adequate and the global nickel market surplus is rapidly declining...Nevertheless throughout the rest of this quarter and into the summer, we expect nickel prices will ease in concert with the other industrial metals."
  • (ABN) Copper and zinc miner Kagara will add nickel to its base metals production portfolio with its Lounge Lizard project set to produce first nickel within the next couple of months.
  • (Xinhua) China's railway transportation has seen better performance in June, said an official with the Ministry of Railways. Statistics show the railway cargo transport volume, which dropped 4.6 percent during January to May, approached in June the level for the same period last year and registered 1.1 percent increase from May.
  • (JMB) Daido Steel to Hike Stainless Bar and Shape
  • (Bloomberg) Germany's largest steelmaker, ThyssenKrupp, will have to delay again the start-up of a coking plant in its new Brazilian steel plant, this time due to massive quality problems, a German newspaper reported on Wednesday, citing company sources.
  • The Great Lie of 2009 - more

  Western Areas selling Australia nickel to Jinchuan - Australian miner Western Areas will supply up to 25,000 tonnes of nickel concentrate over two years from its Forrestania project to China's Jinchuan Group, Western Areas said on Wednesday. - more

  Xstrata, Merafe Raise Ferrochrome Output on Demand  - Xstrata Plc, the world’s biggest ferrochrome producer, and Merafe Resources Ltd. raised output of the stainless steel ingredient at their South African joint venture to 60 percent of capacity after demand strengthened. - more

  ThyssenKrupp Mulls Dropping US Stainless Steel Plant Plans -- German steelmaker ThyssenKrupp AG is thinking about dropping plans for its stainless steel plant in the U.S., but it hasn't made a decision yet, a spokesman for the company's steel division told Dow Jones Newswires Wednesday. - more

  New Caledonian government opposed to SLN cuts - The New Caledonian government has rebuffed a bid by the SLN nickel company to cut the number of hours worked at its plant to cope with the economic downturn. - more

  World nickel stocks still high - Eramet - Global nickel inventories remain above "normal" levels, an executive from French mining group Eramet said on Wednesday, keeping up pressure on the metal's price. - more

  African Eagle to seek investor for Tanzania nickel project - African Eagle Resources Plc will seek a partner for its Dutwa nickel project in Tanzania in about a year, South Africa's Business Day reported, quoting the company's operations director, Mr Christopher Davies. - more

  Vale CEO calls Sudbury unit ‘not sustainable' - Less than three years after winning a $19-billion “dream” acquisition of Inco, the head of Brazil's Vale SA has made a shocking assessment of its Sudbury operations: They're unsustainable at current cost levels. - more

  Contract talks break off at Vale Inco in Sudbury - Contract talks between Vale Inco and its unionized workers in Sudbury, Ontario, broke off on Monday less than a week before a strike deadline. - more

  • (A little background comparison)
  • American Metal Market May 29, 2003 - The likelihood of a strike at Inco Ltd.'s operations in Sudbury, Ontario, heightened Wednesday after union representatives walked away from the bargaining table and urged workers to reject the company's latest offer. - (lead to an 11 week strike on 95% rejection vote) - price of nickel at $4.18/lb on news, fell below $4/lb as strike progressed
  • CBC May 28, 2006 - United Steelworkers union leaders have rejected the latest contract offer from Inco, urging 3,000 workers to vote in favour of a strike at facilities in two Ontario cities. - (received 11th hour contract they recommended to membership and 68% of union voted to accept) - price of nickel dropped to $9.80/lb on news
  • Sudbury Star July 7, 2009 - Wayne Fraser, director of Steelworkers' District 6, told reporters Monday afternoon his bargaining team will recommend members reject the company's offer at ratification meetings set for Friday and Saturday, just hours before a 12:01 a. m. strike or lockout deadline July 12. - (read numerous comments  at bottom of this story for some of Inco employee's thoughts on recent offer - here)

  Cartel hurdles complicate Thyssen stainless solution - ThyssenKrupp, Europe's largest stainless steel maker, will have to find creative ways to dodge anti-trust bullets as it seeks an ally to cut stainless steel overcapacity in the region. - more

  European Nickel ends Caldag off-take deal with BHP - European Nickel said on Wednesday it has ended a key off-take agreement with BHP Billiton as part of a switch which it says will facilitate getting financing from a Chinese partner. - more

  OMC / India Revises Part Of Prices For Domestic Sales Of Chrome Ores In Q3 / 09 = For Domestic Sales In India, Prices Generally Remain Unchanged, Prices Of Medium Grade Ores Have Risen - According to an information from India, OMC ( Orissa Mining Corporation ) announced recently the prices of chrome ores for domestic sales in July - September quarter of 2009. The prices of chrome ores classified by grades for domestic sales in July - September quarter are as per the table attached hereto. - more

  China Sees More Steel Capacity Growth - China's huge economic stimulus package has encouraged steel mills to step up expanding capacity, Xu Lejiang said, and noted that overcapacity is structural. - more

  • China reportedly inks iron ore deal - China backed down on iron ore prices, signing up to the same 33 percent price cut agreed by Asian rivals but only for a six-month period rather than a full year, the China Business News said on Wednesday, citing informed sources it did not name. - more
  • China holds Rio exec as spy; iron ore deal said done - Chinese authorities are detaining Rio Tinto Ltd's top iron ore negotiator on suspicion of espionage and stealing state secrets, Australia said on Wednesday, threatening to strain already fraying ties. - more
  • China Alleges Rio Tinto's Hu Is A Spy - Rio Tinto Ltd. employee Stern Hu has been held in China on suspicion of espionage and has been accused of stealing state secrets, Australian Foreign Minister Stephen Smith said Wednesday. - more
  • China June Steel Output Tops January-May, Umetal Says  - Crude steel production by China, the largest maker, rose to 45.4 million metric tons in June, the highest level this year, Umetal Research Institute said. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, July 7

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 159 to 3,216. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Australian Central Bank Keeps Benchmark Interest Rate at 3% a Third Month // Mukherjee Says Indian Deficit `Risk Worth Taking' to Spur Economic Growth // Asian Stocks Fall for Fifth Day; Commodity Shares Decline, Utilities Rise // German Manufacturing Orders Surged 4.4% in May, Most in Almost Two Years // Debt Burden Accelerates Global Power Shift as G-8 Countries Lose Influence // EU Finance Ministers Say It's Too Soon to Enact Stimulus Exit Strategies // Factory Production Unexpectedly Declines for First Time in Three Months // Oil, Gas Market Speculation May Face Restrictions From CFTC, Gensler Says // U.S. Should Consider a Second Stimulus Package, Obama Adviser Tyson Says // Goldman May Lose Millions From Software Theft, More Competition, U.S. Says // Goldman Sachs Says Morgan Stanley All Wrong About Fed's Quantitative Exit // Stocks in U.S. Retreat on Earnings Concern; Discover, Exxon, Chevron Drop //
  • The US Dollar continues to trade lower against the Euro, but only by 1/3 of 1% and off session highs. NYMEX crude is down nearly 2% and under $63/barrel. Gold is trading slightly lowe, while silver is lower by nearly 1%. Base metals started the day trading solidly in the green, but a wavering Euro, plus the negative trend in equity markets, and oil taking another hit, all teamed up to drive metals off their highs, and the complex ended mixed. Indicator charts of nickel today look like a photo of a complete mountain. Dow Jones reports three month nickel ended the day at $7.10/lb . Inventories of nickel stored in LME warehouses rose overnight, while the Baltic Dry Index continues to slump, by another 159 points. While US economic news is on the light side today, Wall Street is lower as traders nervously await the earnings season. Oh we nearly forgot. The American Bankers Association’s reported consumer delinquencies rose to a record rate in the first quarter of 2009, but you probably already guessed that was coming. The USW continues to rattle its saber in Sudbury against Vale, while Mirabela nears completion on its Santa Rita nickel mine in Brazil, while Vale's Goro mine in New Caledonia announced another delay in its completion last week.

  Reports

  • Commodities Daily - pdf here
  • The Commodity Tracker - pdf here
  • Statement by Chairman Gary Gensler on Speculative Position Limits and Enhanced Transparency Initiatives - pdf here

  Commodity/Economic Articles and Comments

  • Societe Generale - "Essentially over the next quarter we expect renewed funds versus fundamentals battle, with the prospect of extreme price volatility."
  • Toledo Mining says Ferrexpo CEO to take stake - more
  • Iron Ore Co. shutdown hits western Labrador retailers - more
  • Economist’s Free Exchange blog - "It’s worth wondering why only recently extended joblessness after a downturn has become the norm. Perhaps the pace of structural change has increased, or maybe change in demand and supply for low-skilled workers has reached a critical inflection point. If growth in demand for low-skilled workers has slowed considerably while supply growth has increased, then workers may stay in unemployment for longer and longer periods. This will lead to skill erosion, making workers harder to hire, and downward pressure on wages, reducing the benefits of joining the labor force in the first place. Each time through the business cycle, the labor market at the bottom end of the skill spectrum will worsen. Not a pretty picture. But with output variables moderating while employment variables continue to sink, there is every indication that recovery from this recession, when it arrives, will do little for many of the unemployed for years to come. Time to start thinking about why this is the case, and what can be done about it."
  • America's Fiscal Train Wreck - more
  • Economic recovery faces serious hurdles - more
  • Christina Romer's Faulty Depression History - more
  • UK - Worst of the recession 'is over' - more
  • UK - 7 July bombing stainless steel memorial unveiled - more
  • Get Ready for 14 Percent Unemployment - more
  • Glut of oil could push gasoline prices back down below $2 a gallon - more
  • The Wealthy World at its 'oil break point' - more
  • Retirement: Why Panama Is the New Florida - more

  Largest nickel sulphide mine since Voisey's Bay nearing production - a positive nickel story - Mirabela Nickel is bringing its Santa Rita mine in Brazil into production and MD, Nick Poll is extremely confident about the economics despite the current woes affecting the global nickel sector. - more

  UBS Predicts Metal Prices to Drop This Quarter on Re-Stocking - Metals prices, which have risen 39 percent this year in London, will decline this quarter as re- stocking in China nears completion, according to UBS AG. - more

  China's ferroalloy producers to shrink by 804 to 1,096 by 2010 - The total number of ferroalloy producers in mainland China is expected to decline by 804 to 1,096 by 2010, a source from the China Ferroalloy Industry Association, or CFIA, said Tuesday. - more

  • Vale says Chinese must choose benchmark or spot - Brazilian miner Vale said on Tuesday that China must choose between continuing to buy ore at an annually-revised benchmark price or switching to spot market purchases. - more

  ArcelorMittal Restarts EU Furnace But Demand Still Weak - In a sign that steel orders may be picking up in Europe, ArcelorMittal (MT), the world's largest steelmaker by volume, decided last week to restart a blast furnace in Belgium, although it warned that real demand still remains weak. - more

  Tata Steel India sales up 19 pct on year in June - Tata Steel Ltd, the world's sixth-largest steel maker, said on Tuesday that June steel sales from its Indian operations rose 19 percent from a year earlier to 497,000 tonnes. - more

  Base Metals Handbook - pdf here

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.08/lb higher, with all base metals trading in the green this morning. The US Dollar is  helping commodities, by trading 1/3 of 1% lower against the Euro. NYMEX crude futures are up 1% and approaching $65/barrel. Gold is higher by 2/3 of 1% and silver is up 1/3 of 1%. In overnight trading, Asian markets traded flat with China lower and Taiwan and South Korea ending higher. European markets are slightly higher this morning, while US futures are slightly lower at the moment. Factory production in the UK fell unexpectedly, while Germany factory orders climbed 4.4% in May.    
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals ended lower on Monday, but a retreat by the dollar from two-week highs against the Euro, coupled with an impressive reversal in US equity markets, reversed earlier losses. Macro readings out of the US on Monday did little to impact sentiment one way or the other. ISM services readings for June came in at 47, up from 44 in May, but the number was very much in line with estimates. More importantly, as long as the ISM remains below 50, underlying activity is considered to be in contractionary mode. We are seeing a decent-sized bounce set in over metals as of this writing, with the group recovering nicely after yesterdays’ losses. ... Nickel is at $16,175, up $225. Prices are now back over into breakout territory above $16,000. It remains to be seen whether the complex can now push to test next resistance at $17,700. Technically, at least, the chart patterns seem to suggest that we could." (read Ed Meir's complete morning base metals report here)
  • (Yieh) Taiwan’s Yieh United Steel Corp. (YUSCO) and Tang Eng have raised their stainless steel price by NT$2,000/ton for July, but domestic market activity remains relatively weak.
  • (Yieh) BNG Steel has lifted the 300 series stainless steel prices by around US$250/ton on the previous price. Hysco also declared to lift the stainless steel prices of 300 series and 200 series by US$210/ton and US$190/ton respectively.
  • (JMB) Ni Series Cold Stainless Sheet Price May Turn Upward, Tokyo
  • Wuhan Steel Raises Prices by 12% for August Delivery - more
  • (CS) China Securities Journal citing Mr Liu Shijin deputy director of the Development Research Center of the State Council as saying that "There is no overcapacity at all in China's steel industry in the long-run." According to Mr Liu, the overcapacity does not exist since the summit of Chinese steel production has yet to come which is likely to be 700m tonnes to 800m tonnes.
  • China's power generation was up 3.59% year on year and reached 309.33 billion kW in June, data released by the State Grid on July 3.
  • Commodities correction - more
  • Rio Says Four Employees From Shanghai Office Detained - more
  • The CBSA investigates the dumping of certain carbon steel plate and high-strength low-alloy steel plate - more
  • ThyssenKrupp scraps sale of services unit - more
  • Report: Rejig policies curbing exports of rare metals - more
  • Despite Economic Crisis, Brazil Car Sales Break Records - more
  • Strong sales in 2009 predicted - more

  Strike at Vale Inco looms - There is a one in a trillion chance Vale Inco will sweeten its final contract proposal containing unacceptable concessions before more than 3,000 United Steelworkers receive it at information meetings Wednesday and Thursday, says USW District 6 director Wayne Fraser. - more

  High Nickel Price Causes Anxiety For Issue Of 50,000 Tons Stocked In China By Speculation = Half Of 100,000 Tons Imported Into China Is Supposed To Be Not Digested Stocks - Following high copper price, LME nickel price for three-month futures at the afternoon market on the 29th June of 2009 had temporarily risen to US$16,000 per ton, which recorded the highest price in this year.  - more

  • Asian stainless steel prices suffer resistance, offer may continue to rise - The offer of East Asian 304 CR stainless steel plate delivered in the following 1-2 months on June 29 in this week maintains at US$2450-2500 / tonne CFR China interval, but the Chinese buyers are unwilling to accept the higher offer. Nevertheless, it was learned that stainless steel sheet prices still continue to rise. - more

  New structure for the Nickel Institute - The Nickel Institute1, the body that represents 90 per cent of the world’s nickel producers, has announced a change in focus that will result in a modification of its organisational structure. - more

  German iron, steel output falls 45 percent - German iron and steel output for June fell sharply as the world recession continued to cut into demand for the country's machinery and car exports, the Federal Statistical Office reported Tuesday. - more

  Courtesy AISI - In the week ending July 4, 2009, domestic raw steel production was 1,168,000 net tons while the capability utilization rate was 49.0 percent. Production was 2,135,000 tons in the week ending July 4, 2008, while the capability utilization then was 89.4 percent. The current week production represents a 45.3 percent decrease from the same period in the previous year. Production for the week ending July 4, 2009 is up 0.6 percent from the previous week ending June 27, 2009 when production was 1,161,000 tons and the rate of capability utilization was 48.7 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, July  6

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 145 to 3,375. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) India's Mukherjee Will Borrow Record to Fund Budget; Stocks, Rupee Tumble // Chinese Companies Reduce Reliance on Dollar With First Settlements in Yuan // Yen Advances Versus Euro on Concern Credit Losses May Increase in Europe // Asian Stocks Decline on Economic Growth Concern; BHP Billiton, Inpex Fall // Stocks in Europe, Asia Decline; U.S. Index Futures Retreat, BHP, Rio Drop // Russia, India Question Reliance on Dollar as G-8 Leaders Prepare to Meet // Bank of America Overtakes UBS to Become Biggest Private Bank, Scorpio Says // Earnings Dropped Worldwide in Second Quarter as Job Losses Hurt Consumers //European Stocks Fall, Led by Raw-Material Producers; ThyssenKrupp Declines // U.S. Service Economy Contracts at Slowest Pace in Nine Months in ISM Index // Treasuries' Summer Rally Not This Year as Traders See Borrowing Bottleneck // Bank of America's Bad Loans Top $7 Billion, Credit Suisse's Orenbuch Says // according to Scorpio Partnership // Jim Rogers Sells Dollars, Says He Plans to Short U.S. Treasuries `Someday' // Stocks in U.S. Drop, Extending Global Slide, as Commodity Producers Slump
  • The US Dollar continues to trade higher against the Euro, but at 1/3 of 1% it is off daily highs. NYMEX crude is down 3-1/3% and over $64/barrel. Gold is down 1% and silver is down about the same. Base metals looked like they were in serious trouble this morning, as the Euro fell hard against the Dollar. But soon after our morning briefing was posted, the Euro's slide ended and base metals responded quickly, ending the day mixed. Indicator charts show the Dollar's peak was its low point for the day and the afternoon saw the price gradually increase. For the day, Dow Jones reports three month nickel ended the day at $7.23/lb . Sucden's day old chart shows nickel trading thru last Friday (here). LME stored inventories of  nickel finally had a change overnight, down but remaining above the 109,000 tonne level. The Baltic Dry Index continues to slump, down 145 points to 3,375. The slump adds credibility to the reports that China's restocking of metals has been put on pause. The US Institute for Supply Management reported this morning that the ISM nonmanufacturing index rose to 47.0% from 44.0% in May. Noteworthy in the report was the listing of stainless steel under commodities higher in price, while hand sanitizers were shown as the only commodity in short supply. Wonder if the swine flu virus had anything to do with that.

  Reports

  • Commodities Daily - pdf here
  • Weekly Forecast by SMM Specialist - more
  • Weekly Commodity Price Report - pdf here
  • June 2009 Non-Manufacturing ISM Report On Business - more

  Commodity/Economic Articles and Comments

  • ArcelorMittal suspends Senegal iron ore project - more
  • Christopher Rupkey, the New York-based chief financial economist at Bank of Tokyo-Mitsubishi UFJ - “Consumers and businesses have postponed purchases for six months, the population is still growing about 1.2% per year, and if the unemployment rate is close to peaking, then growth may be firmer than expected in the second half of 2009.”
  • Harvard economist Jeff Frankel - “The bottom line for the economy: despite signs in other areas that the recession is leveling out – most importantly, production — the labor market indicators in themselves are not yet signaling a turning point.”
  • China Consolidates Influence as U.S. Frets - more
  • What Recovery? Consumers and Jobs - more

  When will the nickel killing let up? - BHP Billiton's financial year to 30 June 2009 already has a USD 3bn nickel headache, highlighting the agony of a metal in transition. - more

  Oil, metals pull back as China slows buying - Strategic stockpiling appears to have largely run its course - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around  $.34/lb lower this morning, with all London traded base metals trading lower. The US Dollar is trading higher against the Euro, by about 6/10 of 1%.  NYMEX crude futures are down nearly 5% and in the $63/barrel level. Gold is down over 1% and silver is off nearly 3%. Asian markets ended slightly higher overnight, thanks primarily to China. European markets are lower this morning, while US futures show US markets will open lower. Nothing much in the way of metals news happened over the weekend. The USW is talking tough about its negotiations with Vale Inco in Sudbury. After unloading its Yabulu nickel refinery and industry watchers speculating it may do the same with its closed Ravensthorpe mine, BHP is telling media it is not getting out of the nickel business. Markets are in a sour mood this morning after last weeks US unemployment numbers staggered many, and base metals have got caught up in the selling.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metal prices slipped on Friday, building on earlier opening losses, as the bearish reverberations from Thursday's nonfarm payrolls number continued to ripple through the markets. For much of last week, metals have been holding up well compared to the selloffs evident in the energy and US equity markets, but the complex is doing its share of catching up as we start the new week. We have been cautious on many markets for some time now, as we have noticed that prices were not pushing higher on better-than-expected macro numbers coming out. Instead, it seemed that we needed a substantial upside surprise in the data to generate a sharp rally, and since these surprises were few and far between, prices were clearly leveling off. This sideways suspension at high levels usually leads to leads to a subsequent price decline, as longs tend to bail out of their non-performing positions, needing only a trigger to persuade them -- this was undoubtedly provided by Thursday’s nonfarm payroll numbers. We expect metal prices to see more weakness at least for the early part of this week, as doubts about the strength of the global recovery emerge. In addition, the deterioration in the technical backdrop in at least some of the metals, should also contribute to the weaker tone. ... Nickel is at $15,460, down $745. Nickel’s breakout above $15,900 last week (see shaded area in our chart), set the stage for what we thought were further gains, but now that prices have now retraced and are back below $15,900, we have to reevaluate our view over the next few days. One positive is the fact that the short-term upchannel in place since late April (see red line) still seems to be intact." (read Ed Meir's complete morning base metals report here)
  • (SBB) Major Chinese stainless mills such as Taiyuan Iron & Steel, Baosteel Stainless and Lianzhong Stainless Steel Corp continue to raise production, with most hitting their full capacity.
  • BS- Sajjan Jindal-controlled JSW Steel plans to double the output from its plate and pipe mills in the US following a revival in demand. At present, the plant is utilizing 15 per cent of its 1.7 million tonnes (MT) annual production capacity. Within three months, the mills will be running at 30 per cent capacity as the market is recovering slowly, said JSW Group’s Chief Financial Officer MVS Seshagiri Rao.
  • (CM) Domestic daily crude steel output hit 1.52 million tons in mid-June, the highest level so far this year and equivalent to 556 million tons annually, much higher than the 470 million tons projected by the MIIT.
  • IANS - Steelmaker Arcelor-Mittal would re-open the second blast furnace at its plant in Ghent, Belgium, in August, EuAsiaNews reported Sunday.
  • Telegraph - The shocker last week was not just that the US lost 467,000 jobs in May, but also that time worked fell 6.9pc from a year earlier, dropping to 33 hours a week. "At no time in the 1990 or 2001 recessions did we ever come close to seeing such a detonating jobs figure," said David Rosenberg from Glukin Sheff. "We have lost a record nine million full-time jobs this cycle."
  • The Daily Reckoning - John William's Shadow Government Statistics reports that without these twists, the numbers tell the same story they've been telling all year - unemployment is still getting worse, at about the same pace as earlier in the year. "The unadjusted annual decline in May payrolls was the worst since May 1958," says Williams. And if they were allowed to speak freely - as they did in the '30s - the figures would show real unemployment at over 20% of the workforce...or about 30 million people. That approaches Great Depression levels...and we're still only in 1930, not 1932. As for those still working, an additional 1.5 million U.S. workers have been "forced into part time work" according to the Financial Times.
  • Another wave of foreclosures is poised to strike - more
  • India Joins Russia, China in Questioning U.S. Dollar Dominance  - more
  • F.D.I.C. Closes Seven More Banks  - more
  • Failed Bank List - more

  Strike imminent: union official - With no movement on the bargaining table during the weekend, it's looking like pickets will be going up at Vale Inco on July 12. - more

  DJ BHP Billiton Unbowed Over Nickel Projects - Report - BHP Billiton Ltd. (BHP) hasn't ruled out pursuing further nickel laterite developments, The Australian Financial Review reported on its Web site Monday, citing the president of stainless steel materials at BHP, Jimmy Wilson. - more

  Market Tendency On Imports Of Ferro-Alloys At 30th June 2009 = Chinese Government, Holding Back From Revision Of High Export Duties - The market tendency by item on imports of ferro-alloys into Japan at the 30th June of 2009 is as follows - more

  China Faces Higher Iron Ore Prices as Contract Talks Stall - China, the world’s biggest buyer of iron ore, faces the risk of higher cash prices as annual contract talks stall with producers. - more

  We are honored to introduce a new site sponsor this month. Here is a little about their company. "Founded in 1882 in Pawtucket, RI (the birthplace of the Industrial Revolution) Pawtucket Manufacturing Company began manufacturing nuts and bolts. Today, Vertex Distribution has evolved from those "horse and wagon" days to become the nation's premier Master Distributor of corrosion-resistant fasteners. Those in the fastener industry may know Vertex Distribution as "the old Bell Fasteners". But through the merger with West-Spec and the acquisitions of Zelenda Metric and All Metric Fasteners, Vertex has expanded their product line to include a full line of Stainless Steel Metric Fasteners, Alloy Steel Metric Fasteners, Blind Rivets and Hose Clamps. With 9 stocking locations nationwide, Vertex Distribution provides fastener distributors with quick and dependable service. And by combining their fastener purchase with rivets and hose clamps, Vertex saves their customers in transaction and freight costs. This coupled with their broad selection of fasteners at a competitive price, makes Vertex an invaluable resource for distributors in today's market."

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, July 3 and weekend updates

Weekend updates

  Rising demand for base metals key indicator of GCC growth - Though it's the energetic oil and the lustrous gold that hog media headlines as indicators of an upwardly or a downwardly mobile economy, economists affirm that the real indicator is consumption of base metals – particularly steel. - more

  China's metals ploy was quick to rust - If "China Inc" was a person then it would probably be Xiao Yaqing, the former president of Chinalco who is also an alternate member of the Communist Party's Central Committee. - more

  • China's steel demand in 2009 may surpass 2008 - Despite the protracted financial crisis, China's demand for steel this year is likely to be larger than that of 2008, which could help shore up the global demand, Roland Verstappen, vice president of global steel giant ArcelorMittal said on the sidelines of the Global Think Tank Summit on Saturday in Beijing. - more
  • Economist: China's imports decline not due to protectionism - The decline in China's imports has nothing to do with trade protectionism, but is a result of the country's falling exports due to shrinking overseas orders amid the global economic slowdown, a senior economist told the 2009 Global Think Tank Forum on Saturday. - more

  Global steel majors await India’s move on iron ore exports - Steel majors in Asia and elsewhere are anxious about developments in India in relation to iron ore. Steel industry stakeholders from across the world are closely watching any sign of restrictions on iron ore exports out of India. - more

  Commodities: Is it time to buy copper and nickel again? - The price of oil went below $40 a barrel, but is now around $70. Copper collapsed from $9,000 a tonne to below $3,000; now it is above $5,000. Nickel, zinc and tin are all up 50%-60% since their March lows. Is this the start of another bull run for small investors in commodity funds or time to cash in? - more

  Contract talks in final stages - The negotiating team for Vale Inco Ltd. presented United Steelworkers Locals 6500 and 6200 (Port Colborne) with the company's settlement proposal Friday as the July 12 deadline for an agreement, a strike or a lockout loomed one day closer.  - more

  Daily Nickel/Stainless Steel Wrap-up

  • Baltic Dry Index - minus 152 to 3,520. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Dow Jones reports three month nickel ended the day and week at $7.35/lb

  Commodity/Economic Articles and Comments

  • (Dow Jones) -India's stainless steel production in the financial year ending March 2010 is expected to remain around the same level as the previous year's output of 1.6 million metric tons, a senior industry official said Friday.
  • (Dow Jones) --JSW Steel Ltd., India's second-largest producer of the metal by local capacity, Friday said crude steel production rose 45% during the fiscal first quarter.
  • Macquarie Bank analyst Brendan Harris - "We see Yabulu as a challenged operation because of the increasing competition from Chinese nickel pig iron producers."
  • (FD) Rusina Mining NL announced that DMCI Mining has notified Rusina Mining that it will suspend its current operations at the Company's Acoje tenement on the island of Luzon in the Philippines due to low nickel prices. As noted in the last 3 Quarterly Reports, DSO shipments virtually stopped in June 2008. Since that time DMCI has sold a few sporadic shipments principally clearing stockpiles at port. The DSO market, under current nickel and iron prices has moved towards The supply of ore for the production of low nickel 'pig-iron' where prices paid for ore are virtually at cost with little to no profit. The continuation of mining the required high iron low nickel limonite ore is not economic to DMCI.
  • China steelmakers working on lower ore price - more
  • ArcelorMittal to restart Gent furnace as stocks fall - more
  • JSW Steel production up 45 p.c. in Q1 - more

  Kazakh ENRC launches $110 mln chrome pelletiser  - Kazakh miner ENRC, the world's largest ferrochrome producer, has launched a new facility to produce chrome pellets at its Donskoi GOK chrome ore mine complex, the company said on Friday. - more

  Expert: Miners to remain cautious on growth once economy rebounds - Once large miners revisit projects placed on hold due to the global recession they will likely adopt a more cautious stance towards them and approve gradual development, as opposed to aiming to reach production as soon as possible as was the case prior to the crisis, according to Colin Becker, mining expert and Santiago, Chile-based partner with PricewaterhouseCoopers (PwC). - more

  Nickel refiner admits to Ravensthorpe interest - Resources billionaire Clive Palmer says he does not need to buy BHP Billiton’s Ravensthorpe mine to make his newly acquired Yabulu nickel refinery viable, but would consider an offer for the mothballed WA project. - more

  • BHP Sells Yabulu Nickel Plant to Billionaire Palmer (Update4) - BHP Billiton Ltd., the world’s largest mining company, sold the Yabulu nickel refinery in Australia after writing down its value by $675 million, in a retreat from production of the metal. - more
  • Palmer plans Yabulu expansion - BHP will book heavy write-downs on the sale of its Yabulu nickel refinery at Townsville to iron ore billionaire Clive Palmer - who is eying the mining giant's other nickel assets including the mothballed Ravensthorpe mine. - more

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

  • Indicators at 7:50 am CST show 3 month nickel trading around $.07/lb lower, with all base metals lower but quiet. Dollar/Euro trading is also quiet, with the Euro only stronger ahead at the moment. NYMEX crude futures are coasting at $66.80/barrel, while gold is up 4/10 of 1% and silver is up more than 4/10 of 1%. In overnight trading, Asian markets ended lower, with China ending higher. European markets are slightly lower this morning, with US markets closed. The big news of the day is BHP's decision to sell their Yabulu Refinery, while Vale's Goro nickel mine announces yet another start up delay. Not sure when or if we will be able to update later, as we have a crowd coming over for the weekend, so here are a few other updates. The Baltic Dry Index dropped 152 points overnight to settle at 3520. And LME stored inventories of nickel saw a second day of no change.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals finished lower yesterday on the back of grim US nonfarm payroll numbers after it was reported that economy shed 467,000 jobs in June, 100,000 more than expected. This reversed the modest declines we were seeing of late, as layoff notices flooded across the manufacturing, construction, and service-sector industries; education and health care were the only sectors to add jobs. In the meantime, the unemployment rate pushed higher to 9.5%. ... Nickel is at $16,380, down $70; surprisingly, nickel looks very solid on the charts, and with two day of closes above $15,900 resistance, we could now push higher to the $17,700 mark." (read Ed Meir's complete morning base metals report here)
  • (MP) Mining major Eurasian Natural Resources Corporation PLC (ENRC) has commissioned the second chrome ore pelletiser and related facilities at Donskoy GOK chrome ore mine complex in Kazakhstan, which supplies Kazchrome company of its Ferroalloys Division.
  • ThyssenKrupp Technologies receives major submarine order from Turkey - Yesterday, a contract was signed by Howaldtswerke-Deutsche Werft GmbH (HDW), Kiel, a company of ThyssenKrupp Technologies, and MarineForce International LLP (MFI), London, for the delivery of six material packages for the construction of Class 214 submarines to Turkey.
  • Xstrata tells French media that construction at their New Caledonia Koniambo mega nickel mine is on schedule and is scheduled to being production of 60,000 tonnes of nickel annually in 2012.
  • (MB) China's Guangzhou Lianzhong Stainless Steel is the third major stainless mill to lift its July list prices by 300 yuan ($44) per tonne
  • BHP Billiton has been ordered to commission an independent engineering study at one of its West Australian nickel mines after two rockfalls in the past three weeks.
  • (Yieh) China Iron & Steel Association (CISA) said that China’s daily steel output reached 1.522 million tons in June 11-20, hitting the record high this year. Based on this rate of steel output, the annual steel output of 2009 is estimated to reach 555.5 million tons, 10 percent higher than output in 2008.
  • Aluminum Corporation of China (Chinalco) confirmed Thursday it had bought US$1.5 billion of Rio Tinto shares to cement its nine per cent shareholding in the miner.
  • Expert: Miners to remain cautious on growth once economy rebounds - more
  • Recession fallout to be long-lasting: report  - more
  • Steel industry points cautiously to rebound - more

  Sale Of Yabulu Nickel Refinery, Queensland, Australia - BHP Billiton is pleased to announce it has signed an agreement to sell the Yabulu nickel refinery to companies wholly owned by Professor Clive Palmer. It is expected that the sale will be finalised by 31 July 2009. - more

  New Caledonia’s Vale Inco plant launch delayed - The launch of the Vale Inco nickel plant in the Southern Province of New Caledonia has again been delayed after it was to be operational in the middle of this year. - more

  Under-mining: Plant in southern Armenia resumes amid worker concerns - A copper-molybdenum plant in southern Armenia that ground to a halt last year influenced by the unfavorable world market situation and the broader global economic slowdown has resumed operations this week - more

  Steel industry rekindles, hope for recovery - Steel order books in Europe and the United States have improved over the past month, prompting producers to restart some idled capacity, but full recovery is some months away because real demand remains depressed. - more

  US monthly steel import applications declined 21% in June - Permit applications to import 734,667 mt of steel products were filed in the month of June, the US Commerce Department reported Wednesday. - more

  EU steel demand fell 43% in H1 2009, market bottom close: Eurofer - European steelmakers' lobby Eurofer said Thursday that apparent steel consumption in Europe had fallen 43% year on year in the first half of 2009, but added that leading indicators suggested that the economic downturn could bottom out over coming months, reporting the findings in its Economic and Steel Market Outlook 2009-2010 report. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, July 2 (US markets closed tomorrow)

  Daily Nickel/Stainless Steel Wrap-up

  • Baltic Dry Index - minus 70 to 3,672. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Renews Call for `Stable' Dollar, Diversification of Monetary System // Toyota, Honda's Drop in U.S. Vehicle Sales Outpaces Overall Market Decline // Asian Shares Fall as U.S. Sales, India Fuel Hit Automakers; Newcrest Gains // Trichet Says ECB Rates Appropriate, Economy May Recover in Middle of 2010 // PVM Loses Almost $10 Million in Rogue Trades, May Have Caused Spike in Oil // European Stocks Drop as U.S. Unemployment Climbs; Volkswagen, Total Fall // Payrolls in U.S. Decline More Than Forecast; Unemployment Climbs to 9.5% // Morgan Stanley May Post Another Loss After Paying Back U.S. Bailout Funds // Boeing Lost Orders for 15 Dreamliners in Past Week as Airlines Scale Back // U.S. Stocks, Commodities Retreat After Unemployment Data; Treasuries Gain
  • The US Dollar continues to trade higher against the Euro, by nearly 9/10 of 1%. NYMEX crude is down over 3-1/2% and under $67/barrel. Gold is down 1% and silver is off nearly 2-1/2%. Base metals looked like they were in for a good old fashioned bushwhacking this morning, but by the end of the day had regained most of their earlier losses, and most ended slightly lower. Indicator charts show nickel trading was choppy today, and slowly sunk thru much of the day, until the end when it soared back to near its starting point. Dow Jones reports three month nickel ended the day at $7.46/lb , $.02/lb lower than yesterday's 2009 record close. The funds are still investing in commodities, and the Dollar's strength caused a pause, but was no hindrance for the day. Numerous reports that LME stored inventories of nickel were flat overnight, but we doubt this is true. The Baltic Dry Index lost 70 points to 3,672. While generally dismissed by the green shooters in past months, the unemployment numbers for the last two months have staggered the bulls, albeit momentarily. Today's release was no different. The U.S. economy lost 467,000 jobs in June, after a 322,000 decline in May, with the unemployment rate rising to 9.5% from 9.4% the month before. Calculated Risk has a comparison chart that is rather depressing (chart here). US markets will be closed tomorrow for Independence Day celebrations, so while we will post a morning briefing, it may be delayed. For our US readers, Happy Fourth and have a safe and relaxing weekend!

  Reports

  Nickel market surplus estimates revised down - Metals market analysts suggest that late second-half restocking of high-grade stainless steel mill products will boost nickel demand and prices, which have slipped to a midyear average of $5.30/lb. - more

  MacroAsia still pursuing nickel project - Listed holding company MacroAsia Corp. expects to complete exploration early next year to move forward its mining project in the nickel-rich southern Palawan. - more

  Eurofer sees EU steel market bottoming out - European steel industry body Eurofer sees the EU steel market bottoming out and moving to an equilibrium by the fourth quarter of the year as destocking runs its course, it said in a statement on Thursday. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.15/lb lower, with all base metals backtracking off yesterday's gains. The US Dollar is stronger today, and hurting commodity trading, up 2/3 of 1% against the Euro. NYMEX crude futures are down 2% and under $68/barrel. Gold is off nearly 1% and silver is down 2-1/4%. In overnight trading Asian markets ended lower, although China ended higher and is trading at a 13 month high. European markets are lower this morning, and US futures imply Wall Street could open lower. The Bureau of Labor Statistics of the US Department of Labor unemployment numbers just released show nonfarm payrolls shrank by 467,000 in June, with the overall unemployment rate climbing in June from 9.4% to 9.5%. A closely watched indicator that is used as a key indicator that the recession has ended is workweek hours - in June they fell to a record low of 33.0 hours. It is shaping up to be an ugly trading day,  although with US markets closed tomorrow, US trading could be light.
  • Guardian morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metal prices surged yesterday in something of an unusual performance given that energy prices relinquished earlier gains to finish lower, while US equities also gave up much of their advances for the day. Metal prices instead pushed higher on the back of a slightly weaker dollar and relatively decent macro readings that came in from both China and Europe, both noted in yesterday's report. .. Some second thoughts about Wednesday’s steep rally may be surfacing today, where this time, both energy and metals are off sharply, as are US equity futures. There is understandable nervousness ahead of the June US nonfarm payroll report out later (expected at -365,000), which in our view, could come in somewhat higher than expected given the unimpressive ADP reading out Wednesday. The unemployment rate is expected to inch up to 9.6%, up from last month 9.4%. We also will be getting the May factory orders reading later in the day, (expected at .9%).  .. Nickel is at $16,140, down $355; we alluded to a possible bearish double-top formation showing up on the nickel charts, but yesterday's sharp move higher dispelled such a notion. We now need to see prices close above $15,900 again today if this latest move is to amount to anything." (read Ed Meir's complete morning base metals report here)
  • (FT) Barclays Capital noted that nickel imports in China have risen, hitting a record high in May, while mine output has declined 21 per cent so far this year when compared with 2008. The bank cautioned, however, that prices were vulnerable. “Some of the drivers appear unsustainable and it will not be until end-demand conditions improve towards the end of the year, in our view, that there will be a concrete recovery in prices,” it said, forecasting nickel prices by late-2009 at $12,800 a tonne.
  • Panoramic Resources Ltd. Thursday said it produced a record 18,750 metric tons of nickel contained in concentrate during the 2008-09 financial year, a 26% rise on the previous year - more
  • (Dow Jones) The rise in LME nickel prices this week is overdone, says Commerzbank.
  • (Dow Jones) Aneka Tambang 1H Nickel Sales 7,100 Tons Vs 8,500 Tons
  • (Interfax) Jinchuan Group Ltd., China's largest nickel producer, increased its ex-works nickel price on July 2 by RMB 4,000 ($585.57) per ton to RMB 122,000 ($17,860.02) per ton, according to Jinchuan Group's Web site.
  • (Interfax) Baoshan Iron and Steel Co. Ltd. (Baosteel), a subsidiary of China's top steelmaker Baosteel Group, is likely to raise the August ex-works prices for some of its steel products by between RMB 150 ($21.96) per ton and RMB 200 ($29.28) per ton from July price levels, a source close to Baosteel told Interfax on July 1.
  • (MP) BHP Billiton has announced that it has no plans to sell its Kwinana refinery in Western Australia.
  • Barings: Russian Commodities key in China’s bid for global supremacy - more
  • China Iron Ore Demand to Boost Shipping, Morgan Stanley Says  - more
  • IFC invests $15 mln in Kiwara for Zambia exploration - more

  JSL to attain 0.8 mt stainless steel capacity by mid-2010... Ratan Jindal promoted JSL Ltd, setting up a 1.6 million tonne per annum integrated stainless steel project at Kalinganagar in Jajpur district, hopes to attain 0.8 million tonne stainless steel making capacity by mid-2010. - more

  AK Steel Announces August 2009 Surcharges for Electrical and Stainless Steels - AK Steel has advised its customers that a $75 per ton surcharge will be added to invoices for electrical steel products shipped in August 2009. - more

  • Flat-rolled carbon, stainless and electrical steel provider AK Steel declared on Wednesday that a USD75 per ton surcharge will be added to invoices for electrical and stainless steels products shipped in August 2009. - source

  Semirara halts nickel project on weak prices - Semirara Mining Corp. said on Thursday its 50-percent-held unit has suspended operations at a nickel project north of the capital due to low prices of the metal. - more

  Beijing buckles in iron ore price battle - Australia's iron ore miners have won their long-running price battle with China's government-owned steel producers. Signs of hasty compromise emerged yesterday as China battled to avoid the collapse of the 40-year-old benchmark price-setting system, which would pitch the world's largest steel producer into the uncharted waters of relying on spot-pricing and volumes to meet its iron ore needs. - more

  • Chinese steel mills offer compromise - Pricing talks between Chinese steelmakers and global iron-ore suppliers dragged on after they failed to reach agreement by a June 30 deadline. - more

  Crude steel output to mark its biggest jump in the July-September quarter  - Japan's crude steel output will mark its biggest quarter-to-quarter jump on record in the July-September quarter, helped by public spending and a rundown in stocks, but the longer term outlook is still cloudy, the government said. - more

  BHP Nickel West, Mithril Pull Out of Silver Swan JV With FerrAus - BHP Billiton Nickel West and Mithril Resources Ltd have withdrawn from the Silver Swan North nickel and gold joint venture, with full ownership of the project reverting to FerrAus Ltd. - more

  • BHP to undertake study of rockfall mine - BHP Billiton has been ordered to commission an independent engineering study at one of its West Australian nickel mines after two rockfalls in the past three weeks. - more
  • Kagara Confirms Nickel Intersection at Lounge Lizard - Kagara Ltd has received final analytical results for underground diamond drillhole FUG471 drilled by Western Areas NL and reported on June 24. - more

  FACTBOX-World's top steel producers in 2008 - China's insatiable appetite for steel has helped the country's steelmakers overtake most of their Japanese and Korean peers in the top five ranking producers of the world in 2008. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, July 1

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 15 to 3,742. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China's Manufacturing Expands for Fourth Month on Stimulus, Bank Lending // Japan Tankan Confidence Rises Less Than Expected, Signals Slower Recovery // Rio, China Steel Mills Should Make Concessions in Ore Talks, Official Says // Asian Stocks Drop on Share Sale Concern, Lower Commodities; Baoshan Climbs // British Banks Eliminate 55,000 Positions, Another 13,000 Jobs May Be Axed // Stocks in Europe Climb; Marks & Spencer, Commerzbank, Vedanta Shares Rise // U.S. Companies Cut June Payrolls by 473,000, More Than Estimated, ADP Says // Banks Falling 23% Since May Foreshadows S&P 500 Decline as Builders Weaken // Manufacturing in U.S. Shrinks at Slower Pace in Sign Recession Is Easing // Harvard's Feldstein Sees Renewed Economic Slump After `Temporary' Rebound // Gasoline Tumbles as U.S. Stockpiles Increase for Third Week, Demand Slides // Stocks in U.S. Rise After S&P 500's Best Quarter Since 1998; Yum! Advances
  • The Euro continues to beat up on the US Dollar today, now trading 1% higher. NYMEX crude did an about face on inventory numbers and is now 1/2 of 1% lower and under $70/barrel. Gold is up over 1-1/2% while silver is higher by 1-1/3%. Base metals all started the second half of 2009 on a positive note, helped by the US Dollar and China manufacturing index numbers. Indicator charts show nickel was solidly gaining nearly all day, before losing some upward momentum toward the closing. Dow Jones reports three month nickel closed at a new high for 2009, at $7.48/lb . Other fundamentals were not so positive for nickel. LME stored inventories increased overnight, now over 109,500 tonnes, and cancelled warrants continue to slip, and now well under the 1% level. The Baltic Dry Index dipped again, after only a one day gain, down 15 points to 3,742. Watch this number over the next few weeks as it could tell us whether China has truly put the kaboosh on stockpiling metals, or is hoping an otherwise 'little fib' might drive prices lower. So far, prices have failed to cooperate if the latter was the goal. The National Association of Realtors reported pending sales of existing homes rose for the fourth month in May, up 0.1%, after a 7.1% gain in April. The Commerce Department reported today that construction spending dropped 0.9 percent in May. And the Institute for Supply Management advised that the ISM index rose to 44.8% in June from 42.8% in May, its strongest performance, albeit still reflecting an industry in contraction mode, since September. So what happened to metals today? Three things. The Dollar took a dive and this generally helps base metals by making them less expensive overseas. Second, the China PMI grew from a 53.1 reading in May to 53.2 in June. Kind of exciting for those 'half full kind 'of people until you remember it was reading 53.5 in March. We track the PMI numbers on this site, since they seem to have a real psychological effect on the markets, here. And lastly, we started a new quarter today, so there is fresh fund money to be allocated. And why wouldn't a fund manager give nickel a second look. Not many equities out there offering the return nickel did last quarter. Now we will have to wait and see if their bet, with your money, pays off, or if they are betting on a horse that already won the race, and will be left to wondering why the house won't pay up. Who will know. The more you analyze this market and try to understand what is happening and why, the more frustrated you will become. Stainless steel producers have started to pick up the production pace, a little, but most of the press releases the producers have issued have come with a disclaimer that stated clearly that demand for their product remained grim. Inventories of available nickel remain high. Closed nickel mines are ready to be re-opened at the first hint that current prices will hold. Pig nickel producers are firing up in China. Mega mines are in the final stages of construction. There is nickel, nickel everywhere, but hey ....... the Chinese PMI went from 53.1 to 53.2 last month, so you 'half empty kind 'of folks just chill with that 'deer in the headlights' look!    

  Reports

  Commodity/Economic Articles and Comments

  • (Reuters) The U.S. manufacturing sector is improving but it will probably take another three months to get it back into growth territory, Norbert Ore, chairman of the Institute for Supply Management's manufacturing business survey committee, said on Wednesday.
  • Sinocast - Jinchuan Group Raises July Nickel Ex-work Prices
  • China steel association eases stance on iron ore price cut - more

  DMCI shuts down nickel mine - The mining unit of Consunji-led DMCI Holdings, Inc. has suspended its nickel operations in Zambales because of the steep drop in world prices. - more

  China Statistics released today

  • Laterite nickel ore imports - Imports of laterite ore into China fell 12% in May from April. A total of 939,708 tons was imported, of which 55% came from the Philippines, 42% came from Indonesia, and 2% came from Australia.
  • Ferronickel imports - Imports of ferronickel grew in May from April by over 19%. Of the 21,658.977 tons imported, 39.6% came from Colombia, 39.4% came from Japan, and 14.8% came from New Caledonia.  (either BHP's Cerro Matoso Colombia nickel operation has one heck of a stockpile or they have quietly resumed operations)

  Vale Workers May Strike Over Benefits in Canada, Valor Says - Vale SA workers in Canada may strike to protest the company’s plans to cut employment benefits, Valor Economico reported, citing Wayne Fraser, a United Steelworkers director. - more

  Steel Firms in the Limelight after Huge Ore Find in Liaoning - Two steel companies are in the stock market spotlight after reports of the discovery of a large iron ore deposit in Liaoning province. The two Liaoning companies, Angang Steel and Bengang Steel, had separately "clarified" their involvement in the fabled mine after their shares were suspended from trading earlier this week because of the "unusual" price surge. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.24/lb higher, with all base metals and equity markets higher on news out of China that manufacturing increased for a fourth month. The US DOllar is helping commodities, by trading 4/10 of 1% lower against the Euro. NYMEX crud eis up nearly 1-3/4 of 1% and over $71/barrel. Gold and silver are both up over  a little of 1% this morning. In overnight trading, Asian markets ended higher, with Australia lower. European markets are trading higher this morning, and US futures show Wall Street will open higher. The ADP employment report, released this morning, shows the US private sector lost 473,000 jobs in June, better than expected, and the report comes one day before the Labor Department reports on nonfarm payroll growth for June. The news that is driving markets and commodities so far today has been the news out of China that the official China Purchasing Managers’ Index rose to a seasonally adjusted 53.2 in June from 53.1 in May. Readings over 50 signify expansion, and thus this news reaffirms hopes that China will lead the world out of the recession. Alex Heath, the head of base metals trading at RBC Capital Markets warned, "The Chinese PMI has helped, everyone is looking to China to remain a positive factor but we are talking about a market slowing as we go into the summer period." 
  • Bloomberg morning base metal news - more

  Reports

  • Daily Market Report - pdf here
  • Commodities Report - pdf here
  • Daily Resource Plus - here
  • Metals Fundamental Report - pdf here
  • Morning Montra - pdf here
  • Metals & Energy - pdf here
  • Market Drivers - pdf here
  • PWC Review of global trends in the mining industry 2009 - more (free after registering)

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metals staged a reversal yesterday, selling off sharply from earlier highs, as weaker US equities, a decline in energy prices, and a stronger dollar, all combined to hit the complex. A set of soggy US macro numbers did not help either. In this regard, US June consumer confidence readings dipped sharply, falling to 49.3 from 54.8 in the month prior, and coming in well below the 55.3 expected. The disappointing reading was driven by a drop in both the “present situation index” (to 24.8% from 29.7%) and the “expectations index” (to 65.5% from 71.5%). In addition, although Chicago PMI came in slightly ahead of estimates, it barely squeaked by (at 39.9 vs. the 39 expected) and thus failed to have much impact. ... We are seeing impressive bounces in metals as of this writing, this despite a weaker close seen in the Shanghai markets. An increase in energy prices on account of bullish US inventory data, (out late yesterday) and some steadiness shown in Asian equity markets, are both leading to buying in metals. Also helping, was a report out of China showing that manufacturing there expanded for a fourth month, this after the official purchasing managers index rose to a seasonally adjusted 53.2 in June from 53.1 in May. A reading above 50 indicates expansion.  ... Nickel is at $15,630, up $255; a possible bearish double-top formation is showing up on the charts." (read Ed Meir's complete morning base metals report here)
  • (Reuters) Nickel, up about 60 per cent this quarter, is on track to close its strongest three months since the fourth quarter of 2003.
  • (Yieh) China’s Taiyuan Iron & Steel Co., Ltd (Tisco) has announced new ex-work price for the twenty seventh week of this year. The price of 304 hot rolled and cold rolled stainless steel as well as 430 cold rolled stainless steel increased by RMB300/ton. Tisco has withdrawn from offering prices for 304 stainless steel.
  • (Reuters) Mining company Rio Tinto is believed to have warned the China Iron and Steel Association (CISA) that it is prepared to use clauses in contracts that allow Rio to cancel contracted volumes and instead sell the ore on the spot market. The "drop-dead" clauses come into effect if benchmark prices have not been agreed to by June 30.
  • (Bloomberg) Chrometco Ltd.: The ferrochrome development and exploration company will buy a 90 percent stake in Lime-Chem Ltd., a limestone and dolomite producer, for 367 million new shares and 20 million rand ($2.6 million) in cash.
  • (CM) China's crude and stainless steel output is expected to reach or even exceed 10 million tons this year if no violent fluctuations occur in domestic and international markets, said Li Long, an official with the China Metals Association (CMA), Tuesday.
  • (Platts) Japan's domestic demand for ordinary and specialty steel in the third quarter of 2009 is forecast at 14.65 million mt, down 26.2% year on year, the Ministry of Economy, Trade and Industry said Monday. The Q3 demand is expected to be 9.4% higher than the second quarter, the ministry said.
  • (Interfax) Baoshan Iron and Steel Group (Baosteel Group), China's top steel mill, was the third-largest steel mill worldwide by output in 2008, producing 35.4 million tons of crude steel during the period, according to a report released by the World Steel Association (WSA) on June 30.
  • (AF&PA) According to the American Forest & Paper Association's May 2009 U. S. Containerboard Statistics Report released today, total containerboard paper production decreased 10.6% in May compared to May 2008. However, total containerboard paper production rose 216,700 tons or 9.0% when compared to April 2009.
  • ThyssenKrupp Loses Bid to Overturn EU Antitrust Fine - more
  • Gladstone Pacific Nickel loses Chinese backing - more
  • Barra Resources shares jump on nickel find - more
  • Whether and how much China is stockpiling commodities and raw materials - more
  • Exuberance in the Commodities Market: for how long will it last? - more

  Stainless Steel Prices Increase in June and More to Follow Soon - Stainless steel producers throughout the world are succeeding in securing higher prices, although there appears to be no increase in underlying demand in most markets. - more

  Nickel producers - With the dawning of a financial new year it's natural to ponder better times ahead. But has the nickel price overshot the mark already as speculators anticipate an uptick in demand which may not eventuate? - more

  Russia Norilsk adds second state rep to board - Russian metals giant Norilsk Nickel said on Tuesday VTB deputy chief executive Vasily Titov will join its board of directors, increasing the number of government-affiliated board representatives to two. - more

  World mining outlook grim, costs eat profit - Short-term prospects for global mining companies are bleak, as rising costs eat into profit margins already depressed by the recession, according to a report by PricewaterhouseCoopers (PwC).  - more

  Spot moly oxide trade picks up on South Korea on major tender - Spot molybdenum oxide trade was active in South Korea this week after one steelmaker issued a tender to buy 100-200 mt of molybdenum oxide, local market sources said Wednesday. - more

  Iron ore talks go into extra time - Though the annual iron ore pricing negotiations appears to be delayed as both sides are in no mood to back off from their respective stances, the country's steel industry does not seem to be too perturbed by the fact. - more

  • World's 3 largest iron ore mining giants bully China - As reported by the "Global Times" on July 1, June 30 is the traditional deadline for iron ore price negotiations. - more

  Mechel Announces Commissioning the Fourth Electric Furnace at Tikhvin Ferroalloy Smelting Plant - Mechel OAO, one of the leading Russian mining and metals companies, announces that electric furnace No. 1 at Tikhvin Ferroalloy Smelting Plant has been commissioned. - more

  Comparing today's news to July 1, 2008 news from archives of this site

  • (2008) In the week ending June 28, 2008, domestic raw steel production was 2,108,000 net tons while the capability utilization rate was 88.4 percent.
  • (2009) Monday - In the week ending June 27, 2009, domestic raw steel production was 1,161,000 net tons while the capability utilization rate was 48.7 percent.
  • (2008) Lakshmi Mittal, head of steel giant ArcelorMittal, is looking to enter the takeover battle for Rio, according to a report (unfounded rumor)
  • (2009) Yesterday - Chinalco likely to take up Rio Tinto rights
  • (2008) Nippon Steel Corp. and other leading Japanese steelmakers accepted a 96.5 percent increase in Australian iron ore prices from Rio Tinto mining group, the Nihon Keizai Shimbun reported from Tokyo in its Tuesday online edition.
  • (2009) June 25 - Iron ore prices are down in 2009 for the first time in seven years, with Nippon Steel Corp. and Rio Tinto Group agreeing to a 33 percent cut.
  • (2008) Steel prices in China will see some upside going forward due to an expected slowdown in growth of domestic capacity as well as quake-related rebuilding demand, Fitch Ratings said.
  • (2009) Yesterday - The MEPS World Steel Prices Rises in June for First Time in Eleven Months
  • (2008) Australian and London-listed Albidon Ltd. announced today that its nickel sulfide project in Zambia has commenced production and is expected to produce 10,000 tons to 10,500 tons of nickel concentrate by early 2009 for Jinchuan Group Ltd, its off-take partner and China's largest nickel producer.
  • (2009) June 12 - Zambia plans to re-open the Munali nickel mine within the next month after the operation was suspended in March due to low nickel prices, the mines minister of the southern African country said on Friday.
  • (2008) South Africa's Merafe Resources said on Tuesday that European benchmark ferrochrome price were settled at a record level of $2.05 per pound for the third quarter of 2008, up from $1.92 per pound in the second quarter of 2008.
  • (2009) June 26 - The European contract price of charge ferrochrome surged 29 percent to 89 cents per pound for the third quarter of 2009, producers said on Friday, but analysts said this was unlikely to be a big enough rise to restart shut operations.
  • (2008) "Barclays Capital analyst Amrita Sen said demand for the commodity has yet to peak -- which means this year's price increases will likely be followed by more such gains. "The recent surge in steel prices can in no sense be seen to have peaked, given the tightness in the scrap and raw material market," the analyst wrote.
  • (2009) June 18 - "The macroeconomic data is still very mixed -- we are still in a recession, even if the worst of it is well behind us now," said Amrita Sen, commodity markets analyst at Barclays Capital in London.
  • (2008) Ed Meir of MF Global Morning Comments - "We are at $21,867 on nickel, down $83, and quiet; for now, $21,500 support seems to have held yesterday."
  • (2009) Yesterday - Ed Meir of MF Global Morning Comments - Nickel is at $15,865, up $65. The market did mark a fresh 2009 high earlier today when it traded at $16,075.
  • (2008) Oleg Deripaska's United Company Rusal won a third of the seats on Norilsk Nickel's nine-man board at its annual meeting, strengthening the Russian millionaire's position in a battle
  • to lead a merger to create one of the world's biggest metals and mining groups.
  • (2009) Today - Russian metals giant Norilsk Nickel said on Tuesday VTB deputy chief executive Vasily Titov will join its board of directors, increasing the number of government-affiliated board representatives to two.
  • (2008) Nippon Steel Corp. and other leading Japanese steelmakers accepted a 96.5 percent increase in Australian iron ore prices from Rio Tinto mining group, the Nihon Keizai Shimbun reported from Tokyo in its Tuesday online edition.
  • (2009) Yesterday - Citing officials attending a closed meeting of the China Iron and Steel Association on Tuesday, the magazine said China was still expecting a better deal than the 33 percent reduction agreed by Rio Tinto with Japanese steel mills.
  • (2008) Baltic Dry Index - minus 210 to 9,379.
  • (2009) Yesterday - Baltic Dry Index - plus 23 to 3,757.
  • (2008) LME Inventory of nickel - 46,692 tonnes
  • (2009) Yesterday - LME Inventory of NIckel - 109,242 tonnes
  • (2008) Dow Jones reports three month nickel ended the day at $9.78/lb
  • (2009) Yesterday - Dow Jones reports three month nickel ended the day at $6.96/lb

  Morning Nickel Inventory and Price Statistics & Figures

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

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ASTM F593C, F593D, F593G, F593H,
304 and 316 Stainless Steel Hex Bolts
and ASTM F594 Stainless Hex Nuts
In stock - contact the author for current pricing and availability

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