Tuesday, June 30(last day of first half of 2009)

• Baltic Dry Index - plus 23 to 3,757. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan's Jobless Rate Rises to Five-Year High, Spending Jumps on Stimulus // Taiwan to Open 100 Industries to Chinese Investment as Relations Improve // HSBC's Chairman Green Says Economic and Financial Crisis `Far From Over' // Asian Stocks Extend Record Quarterly Gain on Commodity Rally; Nikon Climbs // U.K. Economy Fell 2.4% in First Quarter in Biggest Contraction Since 1958 // Lloyds Banking Plans to Cut 2,100 Jobs in Group Operations, Wholesale Unit // European Stocks Decline After U.S. Consumer Confidence Unexpectedly Drops // Home-Loan Delinquencies Double on Least-Risky Mortgages, U.S. Report Says // Yale's Shiller Sees `Striking Improvement' in Rate of Home-Price Decline // Stocks in U.S. Fall on Mortgage Delinquencies, Consumer Confidence Slump
• The Euro continues to trade higher against the US Dollar, by 1/3 of 1%. NYMEX crude is down over 2-1/2% and under $70/barrel. Gold is down nearly a full percentage point, while silver is lower by over 2%. Base metals ended the day in the red, after US consumer confidence unexpectedly fell, and cast a shadow over trading markets worldwide. Indicator charts show nickel was trading higher early, but after the aforementioned report was released, fell hard. Dow Jones reports three month nickel ended the day at $6.96/lb , its first close under $7/lb in the last 4 days. Inventories of nickel stored in LME warehouses fell overnight but remain above 109,000 tonnes. Cancelled warrants for nickel fell below 1% for the first time since mid-April. The Baltic Dry Index rose 23 points to 3,757. The morning started with the International Council of Shopping Centers and Goldman Sachs reporting chain-store sales for the week ending June 27 rose 0.6% from the year-earlier period. Then the national Case-Shiller home price index showed housing prices were down 18.1% for the year ending April 2009, but the rate of decline fell sharply over previous months. However, Case-Shiller stated "We continue to believe that it is unlikely that we are near a bottom in nationwide home prices." Then the Conference Board dropped a bomb on the markets morning hopes, when it reported Consumer Confidence fell to 49.3, down from its revised May level of 54.8. The CB reported, "Consumers' appraisal of present-day conditions was less favorable in June. Those claiming business conditions are "good" decreased to 8.0 percent from 8.8 percent, while those saying conditions are "bad" increased to 45.6 percent from 44.5 percent. Consumers’ assessment of the labor market was also less favorable. Those stating jobs are "hard to get" increased to 44.8 percent from 43.9 percent. Those saying jobs are "plentiful" decreased to 4.5 percent from 5.8 percent. Consumers' short-term outlook also waned in June. Consumers anticipating an improvement in business conditions over the next six months decreased to 21.2 percent from 22.5 percent, while those expecting conditions will worsen increased to 20.2 percent from 18.0 percent in May. The job outlook was also more pessimistic. Those anticipating more jobs in the months ahead decreased to 17.4 percent from 19.3 percent, while those anticipating fewer jobs increased to 27.3 percent from 25.6 percent. The proportion of consumers expecting an increase in their incomes declined to 9.8 percent from 10.8 percent." Later, it was reported the Chicago purchasing managers index rose to 39.9% in June from 34.9% in May, and the State Street's global investor confidence index rose a strong 7 points in June to 115.5. While today's reports contained the 'green shoots' that the market is feeding on, the confidence report was like finding a horn worm feasting on your tomato plants. Consumers that are not confident will continue to hold onto limited resources, and spend far more selectively than traders like. The next two days will see numerous report releases, so the market could be choppy. US markets are lower as we update, with the Dow down over 100 points. .  

  Reports

• Commodities Daily - pdf here
• Bank for International Settlements Annual Report 2008/09 - here

  Commodity/Economic Articles and Comments

• (Dow Jones) China's stance on term iron ore negotiations with global mining majors may be softening, after a steel company executive involved in the discussions indicated Tuesday that Chinese negotiators won't necessarily seek a 40% price cut they have so far insisted upon.
• China media reports China's output of 57,291,340.87 tons of finished steel in May 2009 was 7.38% higher than the same month last year, and that the accumulated output of 254,339,802.4 tons from January thru May of 2009, is 3.7% higher YOY. May's output was 22.55% higher than that of the prior month.  
• Schnitzer Steel posts surprise Q3 loss; sees better Q4 - more
• Xstrata’s Davis defends nil-premium bid - more
• The Oil Price Really Is A Speculative Bubble - pdf here
• Jim Welsh: June Letter - more
• China’s loan growth isn’t boosting my confidence in China’s “green shoots” - more
• Debt Facts - more

  ArcelorMittal world's largest crude steelmaker in 08: World Steel - ArcelorMittal maintained its position as the world's largest crude steel producer for the third year running last year, after World Steel data Tuesday showed production at the Luxembourg-listed company totaled 101.6 million mt in 2008, nearly three times as much as its closest rival Nippon Steel. - more

  10:00 am Update - Dollar strengthens on US Consumer Confidence slipping - base metals all trading in the red. Nickel down $.18/lb and falling.

  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 and climbing, with all base metals getting a positive boost from a weaker dollar. The US Dollar is trading 1/3 of 1% lower against the Euro, and sliding. NYMEX crude is 1/4 of 1% higher and over $71.50/barrel. Gold is up 1/3 of 1% and silver higher by 3/4 of 1%. In overnight trading,  Asian markets ended mixed, with China lower and Australia higher. European markets are slightly lower this morning, while futures hint Wall Street could open a little higher. BHP is denying Ravensthorpe is on the market, and their Perseverance nickel mine is shut down for a second time in as many weeks, after a seismic event caused another rock slide.  
• 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
• Global Mining News - pdf here
• Market Drivers - pdf here
• SMM Weekly Review and Forecast - more
• World Steel in Figures 2009 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices finished mixed on Monday, with copper managing to close up with a modest gain, although the rest of the group did not follow, finishing with slight losses. Much to our surprise, the markets took yesterday's Chinese announcement of a stop in buying metal for stockpiling purposes somewhat in stride, with prices displaying no discernible weakness. However, we are not sure that this is the final reading of the situation, and still maintain that this announcement should be considered a modest negative for metals going forward. We are off to a rather quiet start as of this writing, with gains seen in most metals, although prices are well off earlier highs. An unusual end-of-the-quarter spike in Brent oil prices in Asian trading lifted metals higher in sympathy earlier in the day, but that surge has now ended, and may explain why metals are also off earlier highs.... Nickel is at $15,865, up $65. The market did mark a fresh 2009 high earlier today when it traded at $16,075. We are looking for two successive closes above $15,900 to warrant another higher shift in the trading range."(read Ed Meir's complete morning base metals report here)
• (Yieh) After raising prices in the second half of June, Taiwan's Yieh United Steel Corp. (Yusco) and Tang Eng again raised their domestic price by NT$2,000~3,000/ton for July. Yusco also raised their export prices by US$80~150/ton.
• Gladstone Pacific Nickel Ltd today announces that China Metallurgical (Group) Corporation will not be renewing its Memorandum of Understanding ("MoU"), entered into on 30th January 2008, for development of the Gladstone Nickel Project. MCC has advised that it is slowing down its activity on the Project due to current nickel market conditions
• Sylvania in $466m merger with Ruukki - more
• American Iron and Steel Institute Says Climate Bill as Passed by House Puts Steel Industry at Competitive Disadvantage; Bill Must Have Important Modifications as it Heads to the Senate - more
• June 2009 Monthly Preliminary Performance Report Dow Jones-UBS Commodity Indexes - more
• The Science of Economic Bubbles and Busts - more
• Why China Hates the U.S. and What It Means for Your Portfolio - more
• Cash Best as Record Correlation Hints Herd Collapse - more
• Facts and Fantasies about Commodity Futures - pdf here
• The Fundamentals of Commodity Futures Returns - pdf here

  BHP Closes Parts of Perseverance Mine After Rock Fall  - BHP Billiton Ltd., the world’s biggest mining company, said parts of its Perseverance nickel mine in Western Australia are closed following a rock fall, the second such event to suspend operations this month.- more

• Minister hints at closing down BHP mine - The BHP Billiton nickel mine in Leinster could be shut down by the State Government as concerns rage over its safety. - more

  No near-term nickel asset sales: BHP - BHP Billiton has scotched speculation it will sell its Australian nickel assets in the near future but has not ruled out eventually doing so. - more

  China will drive commodities super-cycle: Scotiabank - Canada's key commodities have reversed their dramatic declines and are headed for years of renewed strength as the Chinese "dragon" rekindles an Asian-led super-cycle in basic materials, says Scotiabank commodities expert Patricia Mohr. - more

• Commodity Rally May Falter on Supply, Speculators  - Commodities, heading for the first quarterly advance in a year, may struggle to repeat their gains in the next three months as supply expands and speculators sell. - more
• Commodity bulls may need breather in second half - The commodities rally in the first half may meet resistance in the third quarter because the dollar may not weaken enough to inflate prices of raw materials as it did in recent months, analysts said on Monday. - more

  Metals products industry expecting 10-15% drop in 2009 sales volumes - Brazil's nonferrous metals association Sindicel and the country's copper products association ABC are expecting a 10-15% drop in sales volumes in 2009 compared to last year, the president of both organizations, Sérgio Aredes, told BNamericas. - more

  Chinese Burst Onto Botswana Mining Scene - Statistics from the Department of Geological Services (DGS) indicate that 111 Chinese private entities currently hold exploration licences in Botswana, up from nearly zero four years ago. - more

• Japan and China in Botswana follow French example in Niger? - One hundred and eleven Chinese enterprises now own exploration licenses to dig up Botswana for Uranium and other raw materials. - more

  (2 year old paper) Veneroso Frank-World Bank Presentation Commodity Bubble Metals Manipulation-6/14/2007 - more

  Courtesy AISI - "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. Production was 2,154,000 tons in the week ending June 27, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 46.1 percent decrease from the same period in the previous year. Production for the week ending June 27, 2009 is up 2.5 percent from the previous week ending June 20, 2009 when production was 1,133,000 tons and the rate of capability utilization was 47.5 percent."

  The MEPS World Steel Price Rises in June for the First Time in Eleven Months - US mills' utilisation rates have crept up steadily over the last month and now stand above 47.5 percent. - 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, June 29  (1 day left in first half of 2009)

• Baltic Dry Index - plus 31 to 3,734. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan Manufacturers Plan to Limit Production Increases as Demand Falters // Asian Stocks Drop for First Time in Four Days on Daiwa, Mizuho Share Sales // European Confidence Tops Forecast, Rises to Highest Level Since November  // Britain Records Lowest Net Mortgage Growth Since Records Began, BOE Says // Porsche Rejects Takeover Bid From Volkswagen as Pressure Mounts for Merger // European Stocks Rise; Deutsche Telekom, Lloyds Banking Group, Shell Climb // Madoff Sentenced to 150 Years for Masterminding Biggest U.S. Ponzi Scheme // Treasuries Climb After China Says Its Reserve-Currency Policy Is `Stable' // U.S. `May Be Seeing Bottoming' of Home Prices Amid Stimulus, Lockhart Says //
• The US Dollar got some strength early in the morning after the Dow Jones Newswires reported that the People's Bank of China Governor Zhou Xiaochuan said Sunday that "our forex reserve policy is always quite stable" and that "there are not any sudden changes.". But this didn't last and the Euro moved higher thru the day and at present, is trading 1/10th of 1% higher against the US Dollar. NYMEX crude is up nearly 3% and over $71/barrel. Gold is wavering, up only 1/10 of 1%, while silver is down over 1%. Base metals ended mixed, mostly unchanged from Friday. Indicator charts show nickel fell early, then gained thru much of the session, before surrendering the days advance in the late afternoon session. Dow Jones reports three month nickel ended the day at $7.16/lb , only $20 a tonne higher than Friday's close. Inventories took another bounce overnight, and are now well over the 109,000 level. Cancelled warrants slipped under the 1-1/2% level for the first time mid-April. The Baltic Dry Index gained 31 points. Wall Street is higher so far today, after an early morning dip, with all 10 of the major sectors trading in the green.  Analysts seem befuddled by nickel and its continuous price increase. Most have been calling for a major correction since nickel crawled back over $7/lb, but that has yet to unfold. Now with third quarter fund allocation due to start hitting the market in a few days, most suspect volatility, but seem less sure of any major directional shift. Summer is typically the slow season for stainless steel, the since biggest consumer of nickel, but this year has already proven it can break from historical precedence. Will China continue to carry nickel on its own, or will an end to worldwide destocking help widen the demand? Stay tuned. It shaping up to be an interesting summer. 
• Finally, in a Bloomberg story today, "Sears to Let Jobless Stop Payments, Still Keep Fridge" (here), we note the following paragraph."Customers who spend at least $399 on appliances and related merchandise between July 6 and Aug. 1 will have one-twelfth of the purchase price credited to their account for every month they are out of work, said Larry Costello, a company spokesman. Those who are jobless for more than a year will have the full debt forgiven, he said." This doesn't sound like a 'debt deferral' plan such as the auto companies are running, but a debt forgiveness plan. A huge gamble! 

  Reports

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

  Commodity/Economic Article and Comments

• (Macquarie) LME open interest has been rising over the past week and indeed over the past month, while prices have been rising, suggesting that the building of new long positions has been the main driver of prices. Only in aluminium, where open interest has been declining while prices have picked up slightly, does it appear that short covering has played a major part in recent price strength.
• (Dow Jones) South Korea's Posco said it raised stainless steel product prices by up to 10% from Monday due to a sharp rise in rates of key raw materials.
• (Dow Jones) South African ferrochrome producer Hernic Ferrochrome Ltd. may cut production due to the increased cost of electricity and a strengthening South African rand, operations director Jasper Pieters told Dow Jones Newswires Monday.
• (Asmerk) Sweden: Outokumpu restarts fifth shift in Avesta
• Outokumpu Oyj signed EUR 900 million revolving credit facility - more
• ArcelorMittal SAfrica to raise prices in August - more
• Flat to modest commodities lift in 2H - more
• Commodities markets won't shine this year - more
• Antwerpen container traffic down 16.3% to 1.74 mln TEU in Q1 09 - more
• China set to raise fuel prices to highest ever-report - more
• Chinese Banks: "An Accident Waiting to Happen" - more

  Commodity Rally May Falter on Supply, Speculators - Commodities, heading for the first quarterly advance in a year, may struggle to repeat their gains in the next three months as supply expands and speculators sell. - more

  Lunch Deals: Nickel boom? - The rumoured $1 sale of BHP Billiton's Ravensthorpe nickel project in Western Australia continues to be hotly discussed, with rumours that Andrew Forrest's Poseidon Nickel may be lining up to take up the mine and create a company to rival Minara Resources, or in the words of its marketing literature, to create "Poseidon Boom II". - more

  China "gravely concerned" about U.S. investigation of its steel products - China's Ministry of Commerce said in a statement Monday that the Chinese government is shocked and "gravely concerned" about the frequency and direction with which U.S. probe into Chinese steel products. - more

  Billions of dollars down the tubes - The world's most overpriced mining acquisitions, during the 2001 to 2009 "Xstrata era", and the sometime horrifying damage. - more

  China steelmill champion needs a neat trick, quick - With China's steelmaking pride at stake in annual iron ore price talks, the man championing the industry needs to pull a huge rabbit out of his hat or face being cast back into the obscurity from which he emerged. - more

• China hanging tough on iron ore prices - The benchmark pricing system that has governed the global iron ore trade for 40 years is likely to unravel at midnight tonight, with insiders saying Australian miners and Chinese steel makers are far from sealing a late deal. - more

  Anglo American Shares The Love - The miner seeks out joint ventures to defend itself from an Xstrata merger, and help fund expensive operations. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around $.05/lb higher, with the rest of the base metals trading mixed and quiet in London. The US Dollar is trading only slightly lower against the Euro, and quiet. NYMEX crude futures are up 1% this morning, and nearing $70/barrel. Gold is 1/3 of 1% higher, and silver is lower by nearly 1/2 of 1%. In overnight trading, Asian markets ended slightly lower, while China ended higher. European markets are trading higher this morning, while US futures imply a positive opening for Wall Street. Not much in the way of news to stir the market this morning. In metals, the big news is out of China with an official announcement that metals stockpiling has ended, although the market appears to be skeptical of the news. We posted a poorly translated blurb from Chinese media we found over the weekend, that if true, is disconcerting to stainless steel users. It will be a short week for American markets, with Friday a national holiday. Canadians will be off on Wednesday for Canada Day. Chian will be celebrating Communist Party Foundation on Wednesday as well.  
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Copper prices settled lower on Friday, giving up earlier gains as a round of selling set in to close out the week. There were substantial losses in the rest of the metals as well, with the selling in zinc and ali being particularly notable. Only nickel bucked the trend to close modestly higher on the day. We are starting the week on a mixed note, with most metals either unchanged or modestly higher. Looking ahead, we suspect it will be difficult for the complex to regroup and retest the old highs anytime soon, since outside of a weaker dollar, we see little else that could justify another upside sprint. Demand remains patchy, and will likely trend lower as the summer slowdowns, particularly in Europe, set in. More importantly, questions about the strength and duration of the Chinese metals buying program have been clarified somewhat overnight. A senior government official said China has stopped buying metal for stockpiling purposes for the time being, and also confirmed for the first time how much metal the State Reserves Bureau has actually amassed in recent months.  ... This announcement seems to have been shrugged off by the market, with Shanghai finishing modestly lower, while LME prices are up slightly at the time of this writing. T ... Nickel is at $15,830, up $30, but still hovering below key resistance of $15,900. A critical double top looks like it is forming on the charts, (see red triangles), but we have yet to see a downside break emanating from this formation. Instead, nickel prices will likely take their cue from the rest of the group." (read Ed Meir's complete morning base metals report here)
• (Yieh) Taiwan’s stainless steel mills, Tang Eng and Yieh United Steel Corp. (YUSCO), will release their new price list for July this week, and they are expected to hike the price again.
• The Chinese iron-ore deposit that grows with every headline - more
• Xstrata Bid May Spur Rush for Last ‘Chess Pieces’ - more
• (JMB) SUS304 Scrap Price Keeps Upward in Japan
• Vale Should Keep Hold of $12 Billion War Chest, Blackrock Says  - more
• China Iron Ore Import Price Climbs to Highest in Four Months - more
• Japan July-Sept steel output seen up 14% q/q-METI - more
• ATA Truck Tonnage Index Increased 3.2 Percent in May - more
• German Retail Sales Declined for 13th Straight Month in June  - more
• Five Banks Are Seized, Raising U.S. Failures This Year to 45 - more
• Japan’s Factory Output Rises 5.9%, Third Monthly Gain - more
• Italy Intercepts Billions in Fake Treasuries - more (update says they were fake)
• The Great American Bubble Machine - here

  China halts metals stockpiling - Beijing has suspended buying non-ferrous metals for state reserves after government stockpiling led to a surge in prices, Chinese media reported. - more

  ANALYSIS-Stainless steel restocking to buoy nickel near end-09 - Robust demand for good quality stainless steel should sustain nickel prices towards the end of the year as consumer stocks will need to be replenished even if the global recession limps on. - more

  (Quote) Zhang Feng, general manager of the second Stainless Steel Industry Chain China Summit Forum held in Wuxi (as quoted in numerous Chinese articles and poorly translated online) "Last year, nickel prices have reached the bottom of history, this year will not be diving, or even two years are likely to return to the highest level in history. Nickel has a natural advantage, with the value of gold reserves..." (opinion - 2 things that jump out of this, and if translated properly, are worth noting. First, the belief that nickel has inherit investment value, similar to gold reserves and his prediction that nickel prices could return to record levels in two years. If this is what some Chinese believe, then is it any wonder they are stockpiling nickel?)

  Nickel rises on signs of steel sector revival, weak dollar - Nickel prices were up by 5% this week and hit their highest level in nine months since October 2008, due to signs of revival of steel sector and a weak dollar. Prices on LME closed 5% up at $15,749 per tonne after a high of $16,098. - more

  China Reduces Export Duties On Molybdenum, Tungsten, And So On From July / 09 = Molybdenum Oxide Becomes Objective Item For Duty Reduction, As Countermeasure For Decline Of Exports - The Central Government of China announced on the 22nd of June to revise and reduce the duties on exports of 90 commodities in total from the 1st July of 2009. - more

• China's 2009 ferroalloy output seen lower at 14-15 million mt - China's total ferroalloy output is expected at 14-15 million mt in 2009, down from 18.25 million mt in 2008, Antaike, the state-owned metals information provider, said Thursday. - more

  Jindal Stainless losing sheen - The current economic downturn has taken its toll on many companies, especially those in commodities space. - more

  68 Percent of MEPS Steel Product Prices in Developing Markets Go Positive in June - Until mid-June, Turkish long product quotations exhibited some stability. Since then, domestic offers have risen due to supply-side issues and upward movements in semi-finished and scrap values. Local demand remains subdued though. - 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, June 26

• Baltic Dry Index - no change to 3,703. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Calls for World Reserve Currency, Says IMF Should Manage Some Funds // China Shipping to Almost Double Asia-Europe Rates Even as Demand Weakens // Citigroup Ordered by Regulator to Suspend Some of Its Operations in Japan // Asian Stocks Rise on Earnings, Growth Optimism; Nippon Electric Advances // Libor Declines Below 0.6% for First Time as Central Bank Aid Lowers Rates // European Stocks Fall, Extending Second Weekly Decline; Drug Shares Plunge // Consumer Spending Rises, Incomes Rise More Than Forecast on Obama Stimulus // U.S. Stocks, Dollar Slump After Savings Rate Spurs Concerns Over Spending
• The Dollar continues to falter against the Euro, now trading 3/4 of 1% lower. NYMEX crude is down over 1-1/2% and around $69/barrel. Gold is up 2/10 of 1% and silver is up near 9/10th's of 1%. Base metals which usually take a positive cue from a lower Dollar, bucked the trend, and ended lower - except for nickel. Indicator charts show nickel spent the first half of the day gaining, and the latter half staggering and gradually backing off session highs, which at one point, hit an annual high. Dow Jones reports three month nickel ended the day at $7.16/lb , $20 a tonne shy of its June 11th close. LME stored inventories of nickel were within a hair of slipping under 108,000 tonnes yesterday, and after a huge inbound shipment into Rotterdam overnight, they are now close to slipping over the 109,000 tonne level. The Baltic Dry Index registered no change overnight and rests at 3,703.  The University of Michigan and Reuters survey reported U.S. consumer sentiment rose in June to 70.8 in June from 68.7 in May. We reported this morning that personal spending and incomes had grown in May, but the market killer today seems to be the report that US citizens are saving more as well, which has risen to a 15 year high.  
• While it will give away our age, we leave you with one of our favorite posters, as it was too many a young lad of our day, as our way of saying goodbye to one of Charlie's Angels. Have a safe and relaxing weekend!

Farrah Fawcett
1947-2009

  Commodity/Economic Comments

• Dan Smith, an analyst at Standard Chartered Plc in London to Bloomberg - "There is no doubt we have seen the bottom in terms of the industrial cycle .... The investor inflows into the complex have been pretty strong. People continue to believe in the commodity story as a long-term investment play."
• (Scotia China Update) Export taxes for molybdenum oxide, hydroxide, molybdate, molybdenum powder, and unwrought molybdenum will be cut to 5% from 10%-15%. There is no mention of ferromolybdenum, so we assume its export tax will remain at 20%. We observe that the cut will lower the feasible level for China’s molybdenum exports. In our last report, we wrote that big Chinese molybdenum producers might be able to export some molybdenum at US$13/lb; now, this number has had to be lowered to US$12/lb. This is slightly negative for the molybdenum sector..... In May, China imported a record 25,032 tonnes of refined nickel, up 19% MOM and 126.8% YOY. In the same month, China imported 939,708 tonnes of low-grade nickel ore, down 12.45% MOM but still at a high level over recent months.
• (Bloomberg) Eskom Holdings Ltd., South Africa’s state-run power supplier, won an average 31.3 percent interim tariff increase from the regulator, pushing up electricity bills for miners and smelters, and adding to the country’s inflation.
• Vale agrees pellet price cut of 48 pct with Nu-Iron - more
• Fortescue rethink has price losing touch with reality - more
• Chinalco, Ivanhoe hold preliminary cooperation talks - more
• India Apr-May steel imports up 5 pct y/y -govt body - more
• Ore buyers protest Orissa rates - more
• The quiet Americans - more
• Big Oil’ s Answer to Carbon Law May Be Fuel Imports - more
• When Is It Cheaper to Ditch a Home Than Pay? - more
• The Dangers of Printing Money - here

  China Stainless Steel Index thru 6/19/09

  China may feel wronged, but Rio rebuff was the right call - The anger may have simmered slightly, but the emotions are still raw in Beijing after Rio Tinto's about-face on its proposed suitor, Chinalco. - more

  Lakshmi Mittal is 'bullish about India' - Emphasising that the worst is over for the global steel industry, ArcelorMittal chief L N Mittal said on Friday that he sees "pre-recession" demand to resurface in the next 2-3 years. - more

  May be interesting to some readers - Chinese electricity generation during first four months of 2009. During the first four months of 2009, China's electricity generating capacity fell 3.2% when compared to the same period in 2008. Electricity generated by water accounted for 18.9% of the total capacity, and rose 13% YOY. Nuclear generated accounted for 2% of capacity and fell 2.3%. Fire produced, primarily using coal as fuel, accounted for 84% of electricity generated during this period and was 6.3% lower YOY. Wind generated power accounted for 0.77% of capacity and rose 96.9% YOY.  (note Scotia reports - "According to State Grid Corporation of China (SGCC), daily average power generation increased 3.8% YOY in the second 10 days of June. This is the first 10-day period that has recorded positive power growth since early March.")

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

• Indicators at 7:35 am CST show 3 month nickel trading around $.14/lb higher, with the rest of the basemetals complex quiet and mixed. The Euro is trading 3/4 of 1% higher against the US Dollar, after China called for a new global currency overnight. NYMEX crude is trading even at a little over $70/barrel. Gold is trading higher by nearly 9/10 of 1% and silver is up by nearly 1-9/10%. In overnight trading, Asian markets ended higher, while this morning, European markets are slightly higher. US futures show a slight decline on Wall Street is possible, but the Department of Commerce has just released personal spending figures for May, showing a growth of 0.3%, slightly less than expected, and a 1.4% increase in personal income, higher than expected, and thanks in part to government stimulus checks. Reuters confirmed our report yesterday that third quarter ferrochrome prices increased to $.89/lb, a 29% increase. Lot of rumors floating around about what might happen to the Ravensthorpe nickel project in Australia.  
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices worked off earlier losses on Thursday to end up solidly in the plus column, with copper soaring to a two-week high. A robust rally in the US equity markets, coupled with a surge in energy prices, helped metals along, as did the fact that the dollar was slightly weaker against most currencies. There was not much constructive in terms of US macro numbers out yesterday, but that did not impede the advances we saw. In this respect, US weekly initial claims data rose over the prior week by an amount higher than forecast. This is a disappointment considering that this indicator has been trending lower for the past several weeks. As of this writing, we are modestly lower in most of the metals, but suspect we could push into positive territory over the course of the day. The dollar is somewhat weaker today, (just under 1.41 against the Euro), as sentiment was dented after China’s central bank reiterated a call for a “super sovereign currency”.... Nickel is at $15,870, up $195, and now close to our resistance level of $15,900. A critical double top looks like it is forming on the charts here, and we have to see what prices will do at this point. "  (read Ed Meir's complete morning base metals report here)
• (MW) BMO Capital Markets has increased its mid-term nickel price assumptions by 26% to US$5.80/lb and 36% for 2010 to US$7.50/lb. In analysis published Thursday, BMO Research upgraded the outlook for nickel for the second half of this year, 2010, 2011 and 2012. The long-term price forecast of US$8.50/lb has been maintained.
• Commodities ripe for pause, rally to slow-Barclays - more
• (Newswire) Repossessions and liquidations of construction equipment nearly tripled in the first quarter of 2009, as did machine tool repossessions, as compared to the same quarter of 2008, according to Nassau Asset Management's NasTrac Quarterly Index (NQI). The figures, culled from the company's activity reports for both repossessions and orderly liquidations, show the dramatic effect of the economy on the construction, manufacturing and transportation industries, even as signs surface of a possible economic turnaround.
• (Interfax) Russia`s gross domestic product plunged 11% in May compared to the same period last year, Deputy Economic Development Minister Andrei Klepach told Interfax.
• (CD) China's large industrial enterprises saw profits fall 22.9 percent in the first five months over the same period last year, the National Bureau of Statistics (NBS) said Friday.
• Freight traffic on U.S. railroads remained down for the week ended June 20 compared with the same period last year, the Association of American Railroads reported today. U.S railroads reported originating 261,717 cars, down 17.7 percent from the same week in 2008. Regionally, carloadings were down 11.9 percent in the West and 25.2 percent in the East.
• (JMB) Stainless Plate Price to Drop Gradually around Tokyo
• China steel body cracks down on ore exchange-Xinhua - more
• Don't Be Tempted by Illusory Steel Demand - more
• Rivals of Russian magnate apologize after threats on blog - more

  Ferrochrome Q3 contract price jumps 29 pct to 89cts - 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. - more

  As China hoards, concern grows about recovery - For weeks, the ships have been lining up 10 deep at China's booming Qingdao Port, waiting to unload their cargo into storage facilities that cannot keep pace with the thousands of tons of raw materials coming in. - more

  Ferro alloys body seeks help for survival - Faced with huge decline in orders from domestic as well as international markets due to the global financial meltdown, the Rs 8,500 crore ferro alloys industry has sought government intervention to protect the industry from cheap imports. - more

  BHP’s Yabulu Nickel Review May Be Completed Next Week  - BHP Billiton Ltd., the world’s largest mining company, will complete a review of its Yabulu nickel refinery in Australia’s Queensland state next week. - more

• Mines Minister wants nickel mine re-opened - The Mines Minister, Norman Moore, says he is not opposed to another company buying the Ravensthorpe nickel operation - but he wants it up and running again. The State Government says it would not interfere if BHP Billiton put its Ravensthorpe nickel mine up for sale. - 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, June 25

• Baltic Dry Index -  minus 48 to 3,703. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Buffett Says China Growth to Trump U.S.'s, Lauds Gates Charity at Lunch // Japan's Credit Quality Is Worsening After Koizumi, Standard & Poor's Says // Asian Stocks Rise on Metal Prices, U.S. Durable Goods Report; Rio Gains // Irish Banks Face $49 Billion in Losses as Economy, Housing Slump, IMF Says // European Stocks Fall; Bank of Ireland, Credit Agricole, Allied Irish Drop // Fed Trims Two Emergency-Lending Programs, Lets One Expire as Crisis Wanes // Wall Street Campaigns Against `Populist Overreaction,' Hires Paulson Aides // U.S. Stocks Advance as Energy Producers, Retail Shares Gain; Banks Decline
• The US Dollar and Euro have been trading places all morning, and at the moment, the Euro is slightly higher. NYMEX crude is up nearly 2-1/2% and back over $70/barrel on news 'Nigeria's main militant group shut down one of Royal Dutch Shell's pipeline junction points'. Gold is up nearly 1/2 of 1%, with silver up nearly 9/10 of 1%. Base metals ended the days trading higher, with some slightly. Indicator charts show nickel spent the session stair stepping slowly higher, only pausing toward the end of the days trading. Dow Jones reports three month nickel ended the day at $7.11/lb . If we have seen the best of the 'great correction' in nickel prices that the analysts are calling for, stainless steel users could be in trouble. Some of today's increase could be partially short covering, but the chart doesn't show that as a primary reason. Yesterday's durable goods report has still got many convinced the worst is behind us, but the analysts, in our opinion, re correct when they say the fundamentals still do not justify the degree of the increase. That said, a lot depends on China. China is buying record amounts of base metals this year, nickel included, and while there is speculation this may come to an end, the numbers do not yet show they have. Fearful of a fall in the value of the Dollar, which they are heavily invested in, metals offer China an avenue of investing in something tangible. Something of value, that if they can't trade at a profit later, they can surely use and protect their own limited resources. We now know at what level they will buy, even under bad economic conditions, but the question remains at what point will they quit buying? Or will they? Or have they? Inventories of nickel stored in LME warehouses showed a big drop overnight, and came within a whisker of falling below the 108,000 tonne level. While the Rotterdam warehouse saw another large inbound shipment arrive, the Singapore warehouse witnessed a much larger shipment leave outbound. Apparently somebody in Asia is still buying. The Baltic Dry Index fell 48 points today, its week long slide slowing.  We still haven't found a secondary source to verify the report that any ferrochrome contract has been decided for the third quarter, so we must take the earlier report as unverified. In US economic news, the market was greeted with news that weekly unemployment numbers unexpectedly jumped, and first quarter GDP numbers weren't quite as bad as previously reported. Wall Street is up solidly today on news that such as "(MarketWatch)The Federal Reserve will let one of its emergency programs expire and trim two others in a sign that improving financial markets allow a first step toward ending its unprecedented interventions." While directly affecting few, this announcement has given the market a hugely psychological boost.

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• Francisco Blanch from Merrill Lynch & Co - “China has been accumulating inventories of commodities for the last six months or so. This accumulation of inventories now needs to be cleared off. End-user demand in China has not really picked up... Inventories in relation to demand will probably prove, in my opinion, to be a bit overdone in the short run, which is why we expect commodity prices to come off."
• (Credit Suisse) "Today, we see Outokumpu increasing its production as its order intake for deliveries after the summer vacation period is showing signs of recovery while Baosteel commented that its stainless steel sales have improved every month this year on the preceding period. As we have mentioned in the past month, we need to see a sustained bid in galvanized & stainless steel to remain where we are/extend higher re: zinc and nickel pricing - from the western world in addition from the BRIC members. We have started to see the bid and this interests us dearly. Yesterday, we had a mix of short-covering and momentum length enter each market while today both zinc and nickel trading remains steady around $1600 and above $15.2k with nickel traders targeting the 12-Jun high of $15.9k."
• (Scotia China Update) "Similarly, in the past two weeks, when Korean stainless steel producers wanted to buy molybdenum, they found that many molybdenum producers were sold out because China sucked up all the material below US$10/lb, and the Koreans had to pay a premium.... or nickel, we note that Chinese nickel pig iron producers are ramping up production and China’s low-grade nickel ore imports surged in April to top 1 million tonnes, the first time since last June. Reflecting sufficient local supply, spot premiums for refined nickel have fallen by a half since mid-April to about US$300/tonne over the LME price. For molybdenum, after the oxide price topped US$10/lb, Chinese buying interest has dropped visibly and if the price continues to climb over US$13/lb, we believe some Chinese exports will become feasible, especially from large Chinese producers, even with 15% export tax. "
• (Dow Jones) The recently announced World Steel Exchange will seek market makers to bolster liquidity in its fledgling scrap futures contract once it has been launched, the president of the marketing arm of the exchange said Wednesday.
• (EIS) Total US containerized trade for April yoy was down 18%, following a 14% decline in March. Imports were down 20%, while exports were down 16%.
• India's Tata Steel says 2,045 Europe jobs at risk - more
• How to analyze insider selling in the junior mining sector - more
• China's Buying A New Currency...And It Sure AIN'T The Dollar - more
• China should buy gold to hedge dlr fall-researcher - more
• Credit Card Chargeoffs vs Exhaustion Rate - more

  Outokumpu lifts capacity as orders recovery (updated) - Finnish stainless steel maker Outokumpu said on Thursday it would increase its production capacity due to a stronger order intake, but warned that underlying demand for stainless steel remained weak. - more

  Europe, US buyers seeking moly oxide in Asia amid tight supply -  Moly oxide trade was active this week in Asia due to European and US traders seeking spot cargoes, as there seems to be limited spot cargoes available in the West, Japanese and Korean market sources said Thursday. - more

   Brazilian miner Vale says no rush in China talks - Brazilian mining group Vale is in no rush to finish iron ore price talks with Chinese steelmakers and sees little possibility they could buy ore on spot markets, the company's chief executive said 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 no change with London traded base metals mixed and very quiet. The US Dollar/Euro trading is quiet also with the Euro only slightly higher. NYMEX crude futures are 1% higher near $69.50/barrel. Gold is up 3/10 of 1% and silver is flat. In overnight trading, Asian markets ended higher, with Europena markets lower this morning. US futures have yet to decide a direction and are unchanged as we write this. A reader sent us a notice this morning from an unnamed source stating a major European mill had settled its third quarter charge chrome price for $,89/lb with Xstrata/Merafe. If true, this would be $.20/lb higher than the second quarter. We have yet to find a second source to confirm this info. A MarketWatch sub-header from yesterday proclaimed "Top U.S. monetary-policy makers at the Federal Reserve breathed a big sigh of relief: The second coming of the Great Depression has been averted." In regards to the Fed statement, Guy LeBas from Janney Montgomery Scott commented "Well, we got what we expected: nothing.". The US market apparently didn't agree, and the Dow fell from positive into negative territory, where it ended the day. The markets apparently wanted a more positive message and the news that the recession could last thru the end of the year, was not welcome news. The Labor Department has reported this morning, that first time jobless claims jumped again last week, up 15,00 to 627,000. Those receiving state jobless benefits rose 29,000 to 6.74 million in the week ending June 13. And the Commerce Department reported the GDP in the US fell a revised 5.5% during the first quarter, after falling 6.3% in the final quarter of 2008. Economists are forecasting the second quarter GDP drop will be 1.5%, a period that ends next Tuesday.
• 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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals rose sharply yesterday, with copper adding more than 5% on the day, while other metals achieved 6% gains. The complex opened higher to begin with, but really kicked into high gear when US durable goods orders for May were released, showing a sharp advance of 1.8% vs. the -.9% expected. Demand for non-defense capital goods excluding aircraft, jumped 4.8%, the most since September 2004; orders for computers and related products rose 9.4%, while machinery demand gained 7.7%, the most in more than a year. Oil and equity prices also pushed higher on the release, but it was only base metals complex that retained its gains over the course of the day. It was not until the dollar rallied late in the day yesterday in the wake of the Fed communiqué that we did see some retrenchment in metal prices. We wrote in our note yesterday that the dollar could strengthen depending on the Fed's language, and this seems to be what happened. Although the Fed pointed out that economic conditions remain weak despite some recent improvements, it also commented that it would be striving for "price stability" in the months ahead, its first reference to pricing in some time. This phrasing, in effect, has put the markets on notice that the Fed’s low-rate campaign might be drawing to a close, as both a pickup in growth and possible inflation are being anticipated. The impact of the stronger dollar made its way through the markets overnight, as we saw a sharp retreat in metal prices in early Asian trading. Since then, the dollar has given up most of its gains, allowing losses in metals to be rolled back. However, we are not sure the short-term dollar rally initially sparked by the Fed communiqué is over just yet, and therefore would be cautious about the upside on metals at this juncture, at least for the balance of the week.  ... Nickel is at $15,425, down $75, but we seem to be carving out a slightly higher trading range between the levels delineated by our support and resistance targets above." (read Ed Meir's complete morning base metals report here)
• A reader advises us that stainless welded pipe producers Brismet, Outokumpu, and Marcegaglia have all increased base price + 6-9% effective July 6th in the US.
• (Marchmont) Russia - Nickel-producing company Geotekhnologia restarts operations on July 1, the firm said today. Kamchatka’s largest mining company was closed for a few months following a sharp drop in global nickel prices.
• (JMB) Sumitomo Metals (Naoetsu)/ To start inventory sales/ Of high-strength heat-resistant stainless steel plate/ In cooperation with NS-Stainless
• Brazil Vale sees slow recovery in iron ore demand - more
• China Steel to Increase Export Prices by 10%, Times Reports - more
• Steelmaker Corus to cut 2,000 jobs in UK - union - more
• Warren Buffet to CNBC Wednesday - "Well, it's been pretty flat. I get figures on 70-odd businesses, a lot of them daily. Everything that I see about the economy is that we've had no bounce. The financial system was really where the crisis was last September and October, and that's been surmounted and that's enormously important. But in terms of the economy coming back, it takes a while. There were a lot of excesses to be wrung out and that process is still underway and it looks to me like it will be underway for quite a while. In the (Berkshire Hathaway) annual report I said the economy would be in a shambles this year and probably well beyond. I'm afraid that's true."
• Barney Frank, on Congress' attempt to preserve funding for the F-22, a stealth fighter the military doesn't want , and can not use in Iraq or Afghanistan - "These arguments will come from the very people who denied that the economic recovery plan created any jobs. We have a very odd economic philosophy in Washington: It’s called weaponized Keynesianism. It is the view that the government does not create jobs when it funds the building of bridges or important research or retrains workers, but when it builds airplanes that are never going to be used in combat, that is of course, economic salvation." (comment - while Barney is attacking the Republicans here, neither party has clean hands in this matter, with 25,000 workers in 44 tates involved in the production of this aircraft - facts)
• Not Paying the Mortgage, Yet Stuck With the Keys - more

  Baosteel Says Stainless-Steel Sales Gained Every Month in 2009 - Baosteel Group Corp., China’s largest steelmaker, said stainless steel sales improved every month this year on the preceding period because of rising demand from the petrochemical and power industries.  - more

  Ravensthorpe could go for little more than a nickel - BHP Billiton is preparing to formally put its mothballed Ravensthorpe nickel plant in Western Australia up for sale and at least one analysts says it may go for as little as $1. - more

• Selling nickel mine for scrap value not acceptable: Ripper - BHP Billiton will not say if it is planning to sell its mothballed nickel plant at Ravensthorpe. The Opposition Leader Eric Ripper has urged the Premier to become actively involved in any plans to sell off BHP Billiton's Ravensthorpe nickel mine. - more

  Outokumpu to adjust production capability due to higher order intake - Outokumpu will increase its production capability as the order intake for deliveries after the summer vacation period is showing some recovery. - more

  Prices Of Chrome Ores For Exports To China Are Indicating To Move = To Resume FeCr Production In China, Being Stimulated By Expansion Of Stainless Steel Production - The movements of spot prices for imports of chrome ores into China in an early part of June were as per the table attached hereto. - more

• China, clumsy commodities giant, making bigger waves - For China, the trade dispute raised this week with the West may in retrospect seem minor compared to the actions that await Beijing as its state firms start to punch their weight on global commodity markets. - more

  Column : Don’t compare nickel to aluminium- Financial regulators must take interest in how the incentives of bank managers are shaped by ownership, governance and compensation. - more

  New Caledonia Economy Doing Well - A report on New Caledonia’s economic performance last year says activity was sustained by domestic demand and a banking system that allowed the economy to grow. - more

  Jervois makes nickel/cobalt discovery at Summervale - Jervois Mining Ltd has identified a new zone of nickel and cobalt mineralisation at its Summervale prospect in New South Wales. - 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, June 24

• Baltic Dry Index - minus 123 to 3,751. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Sinopec Agrees to Buy Addax for $7.3 Billion to Tap Kurdish Oil Reserves // China Disputes U.S., EU Complaints to WTO on Raw-Material-Export Limits // Japan Exports Fell 40.9% in May, Extending Worst Slump Since World War II // Asian Stocks Advance, Led by Taiwanese Shares on China Relations Optimism // OECD Increases Outlook for the First Time in Two Years as U.S. Slump Eases // ECB to Lend Banks $621 Billion in First 12-Month Auction to Unlock Markets // BNP Paribas, Citigroup Have Biggest Exposure to $6.3 Billion Saudi Debt // Franc Drops on Speculation Swiss National Bank Sold Currency to Curb Gain // European Stocks Gain on Outlook for Economy; Rio Tinto, SAP Shares Advance // U.S. Durable-Goods Orders Unexpectedly Climb in Sign Recession Is Easing // Citigroup Discovers Flaws at Home Mortgage Unit, Suspends New Applications // Fed Seeks to Keep Rate at Record Low While Playing Down Inflation Dangers //  Buffett Says U.S. Economy Showing `No Bounce,' Recovery Will Take Time // Stocks in U.S. Advance as Durables Orders, Oracle's Earnings Top Estimates
• The US Dollar continues to trade higher against the Euro, currently by 3/4 of 1%. NYMEX crude is quiet at $69/barrel. Gold is higher by 3/4 of 1%, while silver is up 1/3 of 1%. Despite the Dollar's strength today, base metals took its early morning falter as a buy signal, and all ended the day higher. Indicator charts show nickel took off early, hesitated a little when the US home sales report came out, returned to growth with the durable goods report, and slipped late, as the Dollar strengthened. Dow Jones reports three month nickel ended the day at $7.03/lb , it's third close about $7 this month. Inventories of nickel stored in LME warehouses grew again overnight, and with the last two days of gains coming into Rotterdam, this could potentially signal arrivals of Norilsk shipments that just resumed after a month halt. The Baltic Dry Index fell again overnight, down 123 points. The Commerce Department reported sales of new homes in the United States were essentially unchanged near record-low levels in May. Sales dropped to a seasonally adjusted annual rate of 342,000 in May from a revised 344,000 in April. The OECD reported overnight that "The slowdown in OECD economies is reaching the bottom following the deepest decline for more than 60 years, says the OECD’s latest Economic Outlook. But recovery is likely to be weak and fragile, and the economic and social damage caused by the crisis will be long-lasting. The combined economy of the world’s most-industrialized countries will shrink 4.1 percent this year and grow 0.7 percent in 2010..." While not overly encouraging, the report was not nearly as gloomy as the World Bank report on Monday, and Wall Street is higher on the this and the surprising durable goods report. Xstrata has advised it will not take no for an answer from Anglo American and has gone direct to Anglo shareholders with their proposal.  The Fed will make its statement in a little while, and each word will be dissected by economists and traders.

  Reports

• Commodities Daily - pdf here
• Weak recovery in sight but damage from crisis likely to be long-lasting, says OECD - more

  Commodity/Economic Comments

• (Reuters) China's daily power output in the second 10-day period in June returned to positive territory, up 3.8 percent from a year earlier, growing for the first time since mid-March, the Shanghai Securities News reported on Wednesday, citing data from the State Power Distribution Center.... China's monthly power output had fallen for seven straight months since last October. The improvement in June's power production has been interpreted as a sign that the economy is on its way to recovery. But rising temperatures are also an important factor pushing up power consumption, the paper quoted an unnamed industry source as saying.
• (Reuters) Apparent consumption for nickel in China rose 17.6% in May, thanks to record imports and a 25% month-on-month growth in domestic output.
• (Reuters) Capacity usage at U.S. steelmaker Steel Dynamics Inc. has increased to above 70 percent from around 45 percent eight to nine weeks ago as orders have picked up, Chief Executive Keith Busse said on Tuesday.
• (HSN) Although latest reports from Hellenic shipbrokers indicate that the Baltic Dry Index should only be seen as a reference point for the industry and nothing more, the index's latest behavior could be regarded as erratic to say the least. Volatility is a major concern among ship owners who find themselves amid an environment where tomorrow could prove totally different from today and even more from yesterday.
• Russian steel demand to drop nearly 25 pct-RenCap - more
• Chinese claim is totally ore-some - more
• Chinese Stats Official Says Economic Growth Last Year Was Slower Than Many Thought - more

  European July stainless steel surcharges

• Outokumpu - pdf here
• ThyssenKrupp Nirosta - more
• ArcelorMittal - pdf here
• Ugitech - pdf here
• Deutsche-Edelstahlwerke - pdf here

  Strike At Xstrata Ferrochrome Operation Into Third Day -Union - A strike by more than 400 workers at Xstrata PLC's Lion ferrochrome operation in South Africa entered its third day Wednesday, the National Union of Mineworkers said. - more

  Bullion & Metals: China frightens Commodity Bulls - As Grant’s Interest Rate Observer has been known to say, “We wrote it. Did you read it?” My slim hope is that the Chinese really and truly know what they are doing, because, in fueling investor optimism with such flair, they are playing a high stakes game. - more

  Sherritt, partners arrange funding for Ambatovy - Sherritt International said on Wednesday it has finalized arrangements with its partners for the remaining funding for the Ambatovy nickel project in Madagascar. - more

  Greece's Mytilineos to bid for Larco- CEO - Greek metals group Mytilineos Holdings , a major Balkan producer of aluminium, plans to submit a bid for state-controlled nickel producer Larco, its chief executive said on Wednesday. - more

  Fitch: Steep Declines in Demand & Prices for Global Steel Continue to Weaken Credit Profiles - Weak steel demand will continue to weigh on steel production and pricing through the year with some improvement in the second half from destocking, according to a special global report issued today by Fitch Ratings. - more

  Shanghai Construction Steel Prices

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

• Indicators at 7:35 am CST show 3 month nickel trading around  $.30/lb higher, with all base metals getting another boost from an earlier slumping Dollar. The US Dollar has just started trading higher against the Euro, thanks to the durable goods report, and is up by over 1/10 of 1%. NYMEX crude futures are down over 1%, gold is higher by 4;/10 of 1%, and silver is higher by 6/10 of 1%. In overnight trading, ASian markets ended higher, China closing at a one year high.  European markets are trading higher this morning, and US futures show Wall Street could open more bullish this morning. The Commerce Department reported durable goods orders rose 1.8% in May, better than expected, but remain lower by 26.8% for the first five months of 2009 when compared to the same period last year. The Fed is expected to announce it will leave rates alone today, but its policy statement will be watched closely.  
• 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
• World Crude Steel Production as of April 2009 - pdf here
• May 2009 U.S. Imports for Consumption of Steel Products - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals bounced back yesterday, recovering a portion of Monday's steep losses as the sector stabilized in light of a weaker dollar and a steadier US stock market. Trading was quiet, with little in terms of news. The only macro reading we got out of the US was for May existing home sales, which showed an increase of 2.4% from April, slightly below the consensus estimate. Nevertheless, the uptick was the third monthly sales increase, but home prices continued to fall-- down some 17% from a year ago. The dollar should figure prominently in today's trading. ... Nickel is at $15,150 up $540, and having a good run higher today. "  (read Ed Meir's complete morning base metals report here)
• (Xinhua) Chinalco vice general manager Lu Youqing has refuted the hearsay that the company is talking with the Australian mining company Fortescue Metals Group (FMG) for acquisition of the latter, according to a report on China Business News.
• (Reuters) Brazilian iron ore miner MMX said it received a nonbinding offer from China's Wuhan Iron And Steel Inc for a minority stake in it and its subsidiary MMX Sudeste Mineracao.
• (Reuters) Nickel and gold explorer Dwyka Resources Ltd said it agreed to buy British mineral explorer Minerva Resources Plc in an all-share deal valued at about 1.8 million pounds ($2.9 million).
• (MF) The head of ArcelorMittal said overcapacity in the steel industry will continue through 2009 and that the recovery will be gradual. However, he said that he expects to see demand pick up because of the low level of stockpiles. "The destocking period has led inventories to historically low levels in Europe and the U.S. Inventories are at their lowest since 1983," he said.
• Time for China to put up or shut up on iron ore price - more
• Investors to decide Anglo's fate, not Xstrata - more
• Miners throw down antitrust gauntlet: John Kemp - more
• (Interfax) EC slaps 24 pct anti-dumping duty on Chinese steel wire, rod imports
• China finds Asia's biggest ore mine - more
• Mittal concerned at China's sops for steel shipment - more
• China's reliance on iron ore imports seen to rise -paper - more
• China defends export curbs after US, EU complaints - more
• AK Steel sees return to profitability this year - more
• Business Roundtable Releases Second Quarter 2009 CEO Economic Outlook Survey - more
• Grim Outlook for - Steelworld Research Team Global Steel Industry - pdf here
• Corporate social responsibility and Canada’s mineral exploration sector: Doing the right thing wherever we work - pdf here

  China's stainless steel capacity seen at 20 mil mt/year end 2010 - China's stainless steel capacity is expected to exceed 20 million mt/year by end 2010, up from 15 million mt/year currently, Beijing Antaike Development, the state-run metals information provider said Tuesday. "More than 10 million mt/year of stainless steel facilities under construction are expected to be completed late next year," an Antaike source said. - more

  Metals ‘to Suffer’ as China Ends Stockpiling Drive, Blanch Says - Metals prices may decline in the next three months as China, the world’s biggest user, begins to run down inventories that were built up earlier this year, according to Francisco Blanch at Merrill Lynch & Co. - more

• BHP voices doubts about global commodity rally - The head of BHP Billiton, the world's top miner, voiced doubts on Wednesday about the durability of recent strong Chinese demand for commodities and said the picture for global demand was unclear. - more

  Negotiations On Price Of FeCr For Shipments To Europe In Q3 / 09 Are Boiling Down = Negotiations With German Mills Are Anticipated To Be Settled On 90 US-Cents Per Lb. / Cr - The negotiations with stainless steel companies in Europe on price of South African charge chrome for shipments in July - September quarter of 2009 are supposed to be boiling down in this week. - more

  VEB Unlikely to Take Part in Nationalization of Norilsk Nickel - Vneshekonombank (VEB), the Russian state bank that manages Russia's bailout funds, has raised its stake in Norilsk Nickel, world's largest nickel producer. - more

  European Nickel making progress on Caldag project talks, BHP Billiton to release full off-take  - European Nickel PLC said it is continuing to make good progress towards finalising the conditions pre-requisite for completing the project funding for its flagship Caldag project in Turkey by the end of 2009 as it reported interim results. - more

  25,000 mining jobs lost in SAfrica: minister - Almost 25,000 South African miners have lost their jobs so far this year, about five per cent of the industry's workforce, but the losses have been smaller than feared, the mining minister says - more

  Steel producers confirm output beginning to rise - Global steel producers are cautiously increasing production -- albeit from extremely low levels -- as signs emerge of modestly improving demand and recovering investor confidence, industry leaders said Tuesday. - more

  China's export rebates hurt steel industry-US Steel - China's recent steps to give more tax rebates to steel exporters will increase Chinese steel exports at the expense of other steelmakers around the world, undermining the global industry, said John Surma, U.S. Steel Chairman and Chief Executive Officer - 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, June 23

• Baltic Dry Index - minus 155 to 3,874. (chart) (article)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan May Cancel $1.5 Billion Venezuela Oil Refinery Loans After Seizures // Asian Stocks Fall on Concern Economic Recovery Will Falter; BHP Declines // European Manufacturing, Service Industries Shrank at Slower Pace in June // German Recession Will Probably Continue Into 2010, Ifo Institute Forecasts // Maersk Says Container Market to Decline by 10% This Year, Not Grow in 2010 // Weber Says ECB Used Room to Cut Interest Rates, No More Stimulus Needed // European Stocks Drop After Weber's Comments; KBC, Swiss Life Shares Fall // Home-Price Decline Spurs Second Straight Monthly Increase in U.S. Resales // Bernanke Prepares to Defend Record as Debate Over His Reappointment Begins // U.S. Stocks Fluctuate as Boeing Leads Decline Among Industrial Companies
• The US Dollar is getting whacked today, down over 1-1/2% against the Euro. NYMEX crude is trading 3/4 of 1% higher at $68/barrel. Gold is 3/10th's of 1% higher, while silver is higher by over 1%. Base metals ended stronger thanks to the faltering Dollar, without which, we may have seen another day of declines. Indicator charts show nickel was heading up this morning, until the US housing report came out and took the price lower. Dow Jones reports three month nickel ended the day at $6.63/lb , with the negative sentiment drowned out by the Dollar's decline. Inventories of nickel stored in LME warehouses rose overnight, while the Baltic Dry Index slipped by 155 points, and fell under the 4000 level. The National Association of Realtors reported existing-home sales rose 2.4% to a seasonally adjusted annual rate of 4.77 million, lower than analysts had estimated. The median sales price fell 16.8% in the past year to $173,000, inventories of unsold homes fell 3.5% to 3.80 million, representing a 9.6-month supply, and first-time home buyers accounted for 29% of sales, down from nearly 50% in April. Anglo American has rejected a proposal of marriage from Xstrata, and now Chinalco is rumored to be shopping for a ring. We broke a story yesterday that some Chinese importers had secretly agreed to iron ore pricing, in violation of government regulations. Today the government hit back, by having the CISA cancel over 30 import licenses. The US filed a complaint with the World Trade Organization against Chinese exports of some minerals; none of those we follow closely on this site are included. Expect a strong reaction from the Chinese government. US markets have been in a bit of a flux since the NAR report this morning, but we are not seeing any evidence of a repeat of yesterday's sell-off. And finally, from the 'you're kidding, right?' file, take a moment to read this June 10th letter from the ACLU to the Under Secretary of Defense requesting the US military stop classifying peaceful protesters as 'low level terrorists'. (pdf here) 

  Reports

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

  Commodity/Economic Comments

• David Thurtell at Citigroup - "Sentiment is a little bit fragile. People want to be sure economic growth is on the rebound but the data has not been uniformly strong."
• MF Global commodities analyst Edward Meir  - "There are also justifiable questions about the sustainability of the Chinese buying programme, and whether it can single-handedly reignite the upward spiral in prices."
• Eddy Chen, a vice president of National Investment Trust Co. - "Another explanation for the decline is the overbooking of commodities in China. The overbooking would lead to a drop in commodities and affect the BDI index and commodity shares."
• Brazil steelmaker CSN hires 1,200 workers - more
• Commercial Metals Company Reports Loss of $13.1 Million or $0.12 EPS for Third Quarter - more
• A Tale of Two Depressions - more
• How should we make economic forecasts? - more

  US files WTO case against China over exports - The Obama administration has filed its first trade case against China with the World Trade Organization, accusing the Asian power of restricting exports of certain raw materials to give Chinese manufacturers "unfair advantages." - more

  CISA to Cancel 30 Iron Ore Import Licenses - China Iron & Steel Association, the industrial organization of Chinese steel makers, is very angry with the iron ore traders who secretly inked imports contracts with foreign iron ore suppliers and stored up iron ore to abnormally stir up the domestic prices. - more

  Inco Copper Cliff Nickel Smelter Complex Video, Sudbury Ontario - video here

  Xstrata’s Anglo Bid May Bring Vale Back From the Dead  - Xstrata Plc’s move to merge with Anglo American Plc may spur other offers and reignite interest from Vale SA, more than a year after the Brazilian company ended talks to create the world’s largest mining group. - more

  Anglo American up on Chinalco bid talk - Shares in Anglo American Plc, which rejected a $68 billion merger approach from rival Xstrata Plc , edged higher on Tuesday on market talk of a possible bid from Aluminum Corp of China (Chinalco), dealers said. - more

  World Steel launches Climate Action recognition program - The World Steel Association Tuesday launched its Climate Action recognition program, which acknowledges steel producers participating in its CO2 emissions data collection program. - more

  Nickel Isotope Could Be Methane Producing Microbe Biomarker - Nickel, an important trace nutrient for the single cell organisms that produce methane, may be a useful isotopic marker to pinpoint the past origins of these methanogenic microbes, according to Penn State and University of Bristol, UK, researchers. - 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 London traded base metals higher on a weaker Dollar. The US Dollar is trading lower against the Euro, by nearly a full percent. NYMEX crude futures are unchanged at $67.40/barrel. Gold is unchanged and silver is up 8/10th's of a percent. In overnight trading, Asian markets played catch-up to yesterday's sell off and ended much lower. Europena markets are slightly higher this morning, and US futures show Wall Street should open in a better mood today. Retail sales continued to be weak in June, according to ICSC-Goldman's same-store sales tally, that showed sales during the week of June 20th to be unchanged from the prior week, and 0.9% lower YOY. The National Association of Realtors will release existing home sales in a little over an hour. Germany's Manufacturing Purchasing Managers Index came in lower than expected today, while the Eurozone Manufacturing Purchasing Managers Index came in slightly higher than expected, both showing industries in contraction.
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Weekly Commodity Price Report - pdf here
• Global Mining News - pdf here
• Fortis Bank metals monthly - pdf here
• Best Practices and Efficient Use of Water in the Mining Industry - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals fell sharply on Monday, ushering in an inauspicious start to the week. Copper dropped by more than 5% to a three-week low, while aluminum lost 6.4% to hit a two-week low of $1,572, giving up more than half of this month's gains in the process. There were sharp declines in the rest of the metals as well, with lead and zinc each dropping by about 6%. No single trigger sparked Monday's massive decline, although a World Bank forecast trimming growth rates for both this year did not help matters much on the open. The stronger dollar, usually the main culprit when it comes to big selloffs, was up on Monday, but not by a lot, and thus did not stand out as a negative either. Rather, the fact that we had across-the-board declines in a number of markets yesterday, including US equities and energy, reinforced the notion we have been seeing over the last week, namely, that prices were perceived to have gotten ahead of themselves in all markets, and were therefore due for a substantial pullback. In the case of metals, investors have to deal with the additional tricky issue of trying to figure out how much of the recent Chinese buying will continue, how much of it will end, and when will buyers from other origins surface to complement the Chinese buying already taking place. As of this writing, we are slightly higher in metals as a mild snap-back sets in. However, given the more wobbly chart patterns seen in a number of complexes, we very well could reverse course and work lower over the next day or two. The dollar is mixed today-- it is weaker against the Euro, but up against the yen, while US equities are called to open slightly higher.... Nickel is at $14,600 up $100, and very quiet today with less than a $300 trading range in place. We still see a gradual drift lower, with an eventual test of $13,750 support."  (read Ed Meir's complete morning base metals report here)
• (SBB) Prices of East Asian-origin stainless 304 cold rolled sheets for delivery in one-to-two months increased $100/tonne to $2,400-2,500/t cfr China last week as producers continued to raise prices in line with firmer nickel prices and demand pick-up.
• (Reuters)  Potanin seeks to buy RUSAL's Norilsk stake -paper - more
• S&P sees weak near-term outlook for many miners - more
• Analysis: Commodity rally nears end as Chinese stockpiles overflow - more
• Exhausted Claims part II - more
• Lesson From the Depression: Different This Time? - more
• (thanks to a reader) United States Current Account chart - more
• (thanks to a reader) Four Kondratieff Waves in the US - more (according to this theory, we are in year 8 of an economic winter, with 12 more to come. More on this theory here)

  Posco Raises Stainless Steel Prices on Costs, Demand - Posco, Asia’s third-biggest steelmaker, will raise the prices of some stainless steel products on June 29 because of higher nickel costs and demand. - more

  Price Of High Carbon Ferro-Chrome Turns To Trend To Rise = Being Stimulated By Mood To Increase Stainless Steel Production In China And Effect Of Its Cutback - The international price of high carbon ferro-chrome (charge chrome) had experienced a long and dark tunnel but has at last turned to rise. In view of the fact that China has inclined to produce ferro-chrome by themselves, price of chrome ore as raw material is also anticipated to rebound, following this aspect of high carbon ferro-chrome. - more

  Vale Inco withdraws from Roe JV: Oroya - Oroya Mining Ltd says the Australian exploration arm of Vale Inco has withdrawn from its Roe Hills Nickel Project joint venture in Western Australia, leaving Oroya as the full owner. - more

• Commodities exports to fall short of forecast: ABARE - The value of farm and mineral exports will be lower than expected in the coming year, the nation's chief commodities forecaster has predicted. - more

  Japan's JFE Steel to upgrade idle furnace - Japan's JFE Steel Corp, a unit of JFE Holdings, will spend about 30 billion yen ($312.8 million) to upgrade an idled blast furnace in Kurashiki, western Japan. - more

  Anglo American rejects Xstrata merger offer - Mining company Anglo American has rejected a proposed merger with Xstrata.- more

• SAfrica says possible Anglo merger "unacceptable" - South Africa's mining minister said on Tuesday the government was opposed to a possible merger between Xstrata and rival Anglo American Plc, terming such a potential move as "unacceptable". - more
• Xstrata May Struggle to Fund Hostile Bid for Anglo American - Xstrata Plc may struggle to fund a hostile bid for Anglo American Plc after the rejection of its offer of a “merger of equals” by Africa’s largest mining company, analysts at Barclays Plc and Liberum Capital Ltd. said. - more
• Is Xstrata's Davis taking the Mick? Neil Collins - If you want excitement, then Mick Davis is your man. Xstrata , the company he runs, has been up like a rocket and down like the stick since it burst on an unsuspecting London stock market in 2002. - more
• Anglo American raises defences as Xstrata approaches - Anglo American is rehearsing its defence against a 41 billion pound ($83.6 billion) merger approach from Xstrata, its Anglo-Swiss rival. - more

  Courtesy AISI - In the week ending June 20, 2009, domestic raw steel production was 1,133,000 net tons while the capability utilization rate was 47.5 percent. Production was 2,154,000 tons in the week ending June 20, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 47.4 percent decrease from the same period in the previous year. Production for the week ending June 20, 2009 is down 0.5 percent from the previous week ending June 13, 2009 when production was 1,139,000 tons and the rate of capability utilization was 47.7 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, June 22

• Baltic Dry Index - minus 41 to 4,029. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan’s Business Confidence, Service Demand Rebound  // S&P Says India Budget Deficit May Reach 19-Year High // Asian Stocks Rise on Growth Optimism; Nissan Motor, ICBC Gain  // German Business Confidence Increased for Third Month  // Xstrata’s Davis Moves on Anglo to Compete With BHP // European Stocks Slide on World Bank Forecast; Shell, StatoilHydro Decline // Bernanke Must Reassure `Confused' Market His Strategy Will Keep Rates Low // Insiders Exit U.S. Stocks at Fastest Pace in Two Years as Market Rallies // Stocks, Commodities Fall as World Bank Sees 2.9% Contraction; Dollar Gains
• The US Dollar continues to trade higher against the Euro, up 6/10th's of 1% but off session highs. NYMEX crude is down over 4% and under $67/barrel. Gold is down nearly 1-1/2% and silver off over 2-1/2%. Base metals all ended lower on the day. Indicator charts show nickel opened much lower, staggered for much of the session before experiencing another sell off late. Dow Jones reports three month nickel ended the day at $6.58/lb . Inventories slipped a miniscule amount overnight, while the Baltic Dry Index slipped a second day, down 41 points. Sucden's chart shows nickel trading thru Friday, and reveals the sideways trading pattern over recent days (here), although today's trading will show an end to the afternoon bullishness streak of the last 4 trading days. RBS Global Banking and Markets commodity analyst Stephen Briggs estimates base metals may fall 10% or so in the coming week. Nickel imports into China are nearly 21% higher, with large gains over the past two months, but traders weren't buying today like they did last month. Even a respected Chinese metals analysts agrees much of the nickel is being bought by speculators and stockpiled. When analysts start throwing numbers around like 50,000 tonnes of refined nickel being stockpiled, traders sit up and take note. With LME warehouses holding over 108,000 tonnes, the possibility of another 50,000 tonnes stocked in China is disconcerting to those betting nickel prices will go higher. Dow Jones is reporting Anglo's board will reject Xstrata's merger offer, which was to be expected. Asian markets traded before the World Bank forecast the world recession would be deeper that originally forecast, and thus escaped the sell-off European and American markets are seeing today. Wall Street is lower, on lower than normal volumes, and the VIX is back up near 32. The S & P has turned negative again for the year, since going positive May 29th. Interesting to note, that while respected blogger Robry remains optimistic that the economy has turned the corner (see reports under morning briefing), the natural gas paperboard consumption index has returned to a downward trend (chart). The mining and minerals index, that he does not chart, remains in a slide, while the steel index shows tentative signs of bottoming out in May, with current readings back to April levels.
• (Observation) Over the weekend we got involved in a discussion amongst some fellow laymen (i.e. not economists, nor market analysts), and a question was asked that stumped all of us. "How would a normal American really know if America were ever in a depression, and what would it look like?" Some of the older participants in the conversation reminded the younger, that when the "great" depression struck, there were no such things as unemployment and FDIC bank insurance, so the circumstances are much different today than then. There is no doubt that many people are getting hurt, some terribly. And while people are losing their homes, most can still afford rent. People are losing their jobs at a record level, but unemployment insurance insures most do not go hungry and can pay many of their bills. Remember those long lines when IndyMac failed last year? Had it not been for the FDIC insurance on banks today, this could have easily caused a massive nationwide run on the banks. How else can one explain how 40 banks have failed already this year and no one seems to care. So the question was a good one. There were numerous good points made that make it literally impossible to compare what we might experience in today's times, to that of the 1930's. From the psychological effects of access to instant information 'in color', to the difference in distribution of middle class wealth, to the access to television, the internet and a refrigerator, to our economy becoming less dependent on manufacturing and more on service, to access to Wal-Mart. What would a depression really look like in the 21st century?

  Reports

• Commodities Daily - pdf here
• World Bank Prospects for the Global Economy - more

  Commodity/Economic Comments

• Jiang Xinfang, President of Shanghai Tsingshan Mineral Co - "We have pretty stable production since the beginning of the year because of Beijing's supportive measures, but we don't see sales going up at the same pace, and if the cost of raw material keeps going up, domestic stainless steel mills like us will have to cut production."
• (Angel Commodities) Nickel prices have risen 29% since the start of the year and are currently trading around $15,000 a tonne. But prices could come under pressure as weak fundamentals coupled with a premature price recovery could remove the fizz out of the base metals market. We expect prices to remain under pressure in the third quarter and this could be regarded as a healthy correction in a bull market. Prices were trading far ahead their actual fundamentals and in the coming days prices could come under pressure if the US Dollar resumes the rally. Overall, the base metals complex looks weak as the prices rally since the beginning of the year was backed by Chinese government stocking. But that has started to tail off with the narrowing LME/SHFE price arbitrage and a decline in LME cancelled warrants (the metal earmarked for removal). Another factor that could exert pressure on base metal prices is the production re-starts due to recent price surges. Hence, we expect Nickel prices to face pressure on the downside in the short-term.
• (India) The mining industry has sought removal of 5 per cent export duty on iron ore lumps, a key input in steel-making, saying the tax barrier along with high railway freight has “out-priced” the ore in the global market.
• Angel Gurria, the head of the Organisation for Economic Cooperation and Development to Reuters TV - "We see a very difficult 2009, with negative growth in the OECD area. Unemployment problems are going to continue to linger."
• (AF&PA) According to the American Forest & Paper Association’s May, 2009 Paperboard Report released today, total paperboard production decreased by 14.3% in May, 2009 compared to last May, 2008. Total production, however, increased from April totals by 15,100 tons or 1.5%.
• (AAR) Freight traffic on U.S. railroads during the week ended June 13 continued to show signs of gradual improvement, the Association of American Railroads reported today. Rail carloadings and intermodal were up from the previous week with carloads at their highest level in 10 weeks. While traffic showed signs of improvement from the previous week, compared year over year traffic remains down. U.S railroads reported originating 261,956 cars, up 0.6 percent from the previous week this year, but down 19 percent from the same week in 2008. Regionally, carloadings were down 14.7 percent in the West and 24.8 percent in the East.
• (China PRO) Exports of steel from China stood at 1.35 million tons in May. Imports of steel, during the same month, were 1.65 million tons.
• Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. “The rate of decline in industrial production is generally decelerating, but there just is not enough positive momentum at this point to offset the severe ongoing inventory liquidation."
• India plans iron ore royalties linked to price - more
• Three more banks were seized by the Federal Deposit Insurance Corp. this weekend, bringing the number of banks that have failed this year to 40. The bank failures cost the FDIC $363 million.
• Continuing Claims “Exhaustion Rate” - more
• Where Housing Will Be in 2012 - more

  (Analysis) Reuters reported this morning that "imports of refined nickel and alloy rose 19% on the month and 127 % on the year to a record 25,032 tonnes in May, hitting all-time high for the second consecutive month because of demand from investors who had bought the metal for stockpiling. But the high level of imports has increased supply in the domestic market, while demand from stainless steel mills, the top users of nickel in China, remained lukewarm, traders said. That is driving down prices and reducing new orders for imports. Around 50,000 tonnes of refined nickel, about two months' consumption in China, were stored in private storage places, traders said last week. Locations of the estimated stocks are hard to identify as China does not have an exchange to trade the nickel contract and store the metal." According to statistics found in China media, exports of refined nickel from China from January thru May are down 20.75% YOY, and fell 44.9% in May alone YOY. Chinese media also reports that for the first five months of 2009, imports of refined nickel into China are up a little over 37%. Where is the bulk of this refined nickel coming from? Russia leads the way with 29% of the market share for Jan-May imports, followed by Canada at 21%, and Australia at 15%. Of these three leading suppliers, Russia has seen the biggest gain of +27%. But the largest gainers for the year to date figures are not among the top three exporters. The largest gain has been seen by Norway, who has seen a whopping 671% gain in exports of refined nickel to China thru May, followed by Japan with a 195% gain, and South Africa with a 171% gain. The total imports shipped to China thru May from these three nations combined total 17,031 tons, slightly more than what #2 Canada has shipped to China thru May. Imports of nickel ore into China fell 45.5% in May YOY and is down over 51% Jan thru May YOY. The US, Canada, Indonesia, and the Philippines have seen the drops of exports of nickel ore to China in the first five months of 2009, when compared year on year, while Japan and Australia have seen gains.     

  FACTBOX-Revisions to base metal price forecasts - Despite the worst economic conditions in decades, analysts have mostly revised base metals prices forecasts higher, with Chinese stockpiling and expectations of an economic recovery later in the year seen supporting prices. - more

  China Steel Australia lowers expectations - China Steel Australia says it expects to report a loss for 2008/09 and a delay in production of merchant pig iron (MPI) from its new plant in China. - more

  China cuts, ends export tariffs on grain and other products to boost exports - China will abolish export duties on some grains and industrial products and cut the duties for chemical fertilizers and nonferrous metals from July 1 to promote exports, the Ministry of Finance said in a statement Monday.  - more

  Ministry plans to revive chrome export - The Ministry of Mines and Mining Development is engaged in consultations with chromite ore exporters to add value to the mineral so as to resume exports, a Cabinet minister has said. - more

  BHP ends dispute with Philippine partner-government - BHP Billiton and Philippine partner Asiaticus Management Corp have agreed to end a legal dispute, the Philippines environment secretary said at the weekend, clearing the way for development of a nickel mine. - more

  China Steel's MPI plant nears production - China Steel Australia Ltd expects to start producing merchant pig iron (MPI) from its newly converted plant in China six week later than scheduled. - more

  FACTBOX-Combined metals assets of Xstrata and Anglo - Swiss-based miner Xstrata Plc is seeking a merger of equals with rival Anglo American Plc, which would push the group to the top of the world's rankings in copper mining. - more

• Anglo American confirms Xstrata merger approach - Anglo American, the London-based mining giant, confirmed receiving a merger approach from Swiss rival Xstrata that could lead to the creation of one of the world's biggest miners. - more
• Let's dig together - Xstrata proposes a deal with Anglo American as big mining mergers swing back into fashion - 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 lower, with all base metals trading firmly in the red. The US Dollar is trading 2/3 of 1% higher against the Euro this morning, while NYMEX crude is down 1-1/2% and trading near $68.50/barrel. Gold is down 1-1/3% and silver is 2-3/4% lower. In overnight trading Asian markets ended higher, with China's markets trading at 11 month highs. European markets are lower this morning, and futures imply a lower opening in Wall Street. The big metals news over the weekend was Xstrata's approaching Anglo America about the possibility of a merger. Rumors are running rampant that the China Reserve Bureau may be ending some of its stockpiling of metals and may be selling some. Too early to tell if these rumors have any merits, but apparently some metals traders aren't taking any chances and taking profits while they can. Nickel opened much lower this morning, but has spent much of the session directionless since.    
• 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
• Metals & Mining Weekly - pdf here
• Weekly Scoreboard - pdf here
• Robry Sunday Night Economic Assessment - pdf here
• May 2009 Crude Steel Production - pdf here
• Weekly Forecast by SMM Specialist - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices could not hold on to gains seen early in Friday’s session, and finished mostly lower by the close of trading. A slightly weaker session in US equities, combined with losses seen in energy markets may have also contributed to the restrained tone. Ali was the notable exception, finishing higher on the day. As we start the new week, metal prices are off sharply across the board, with the dollar behind some of the downside action. More importantly, we think participants in a variety of markets are having trouble pushing prices higher despite a better tone to the global macroeconomic numbers seen in recent weeks. The feeling may be setting in that prices have already done enough on the upside, and that they have more than discounted the improved macro backdrop.... Nickel is at $14,700 down $500, but still holding onto its short-term upchannel, which will give way with a decline to between $13,750-$14,000." (read Ed Meir's complete morning base metals report here)
• Anglo says Xstrata makes merger approach - Mining group Xstrata has made an initial approach to rival Anglo American to propose a merger, Anglo said on Sunday.  - more
• Xstrata seeks $83bn Anglo American merger - more
• South Africa Seeks Meetings With Anglo, Xstrata CEOs - more
• (Rusmet) This seems to be quite an important point, because the price of nickel is growing under the laws other than those that operate in the markets of industrial products. Once again, we can say that under the influence of speculators, the exchange mechanism for determining prices puts manufacturers of stainless steel in a very awkward position, since the demand for their products is not recovered for many, to be arbitrary (albeit under the influence of the circumstances) to raise prices.
• (Russia UGMK) Domestic prices for stainless steel cold-coils 304 2B in China moves toward $ 2900 per ton from stock (subject to payment of all taxes). Japanese and Taiwanese companies offer this product at $ 2500-2580 per ton FOB. In doing so, according to Chinese experts, the shortage of stainless steel in the local market may worsen, raising the price up, as several major producers have planned repairs for the third quarter.
• (Reuters) China's nonferrous metal industry is showing signs of a pickup, said Jia Yinsong, an official with the Ministry of Industry and Information Technology. According to Jia, the output of ten nonferrous metals arrived at 9.48 million tons in the first five months of this year, down 5.7 percent over the same time last year. However, the output in May registered 3.6 percent increase over April, indicating a recovery.
• (Yieh) Taiwan mills’ cold rolled coil prices offered to Asian buyers were at CFR US$650/ton last week, compared with Taiwan’s domestic price of NT$21,000/ton, the prices being nearly equivalent.
• (MB Jun 16) The rally in London Metal Exchange nickel prices has been overdone and a return to around $13,000 per tonne is likely, nickel trader Keith Dunleavy warned. Three-month nickel peaked above $15,500 per tonne last week, a 60% increase to prices at the start of the second quarter. "Everyone was surprised by the amount and speed of fund money that flooded into commodity markets in general; aluminium, copper and nickel all made huge moves up,” Dunleavy, the md of Stratton Metal Resources, told MB. “It was too much, too early. I see nickel trading back to $13,000-13,500 [per tonne],” he added
• Stock & Commodities Markets Profit Taking After Strong 3 Month Advances  - more
• Commodities rally may be running out of steam, say analysts - more
• China-driven commodities rally nearing end - more
• Fear the Dark Side of China's Lending Surge - more

  China May refined copper, nickel imports hit record - China's imports of refined copper hit a record for a fourth straight month in May, but apparent consumption fell 3.5 percent on the month, reflecting increased stocks and signalling lower inflows in coming months. Apparent consumption for nickel rose 17.6 percent, thanks to record imports and a 25 percent month-on-month rise in domestic output last month. - more 

  Price Of Low Carbon FeCr For Shipments To Japan In Q3 / 09 Remains Unchanged = Fallen Prices For Successive 3 Quarters Are Being Stopped - The price of low carbon ferro-chrome to be imported from Russia and Kazakhstan into Japan for shipments in the third quarter (July - September) of 2009 has been stopped to fall after an interval of three quarters. - more

  Shanxi steel mills forge ore deals, says report - Steel mills in Shanxi province have reportedly signed long-term contracts with foreign miners for this year's iron ore supply despite the national steel association banning steelmakers from making individual contracts. - more

  POSCO to Ease Output Reduction - POSCO, the nation’s leading steelmaker, is expected to ease production cuts in the third quarter of the year as steel demand is on the rise and one of its furnaces halted for improvements is set to resume operation, industry sources said Sunday. - 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, June 19

• Baltic Dry Index - minus 198 to 4,093. (chart) (article)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) South Korea Not Ready to Let Banks Repay Recapitalization Funds, Rhee Says // Asian Stocks Rise on U.S. Growth Optimism, Japan Bank Upgrade; Canon Gains // EU Sees Signs of `Sustainable' Recovery, Rules Out More Stimulus Measures // Discount Lowest on Europe Stock Futures Since 2007 as Credit Freeze Fades // Stocks in Europe Rise for a Second Day, Paced by Taylor Wimpey, BSkyB, BHP // Billionaire Halabi's Companies Default on $1.9 Billion in Property Debt // Fed Seeks Feedback in Economic-Crisis Forums, Hears of Lost Homes, Credit // California's Credit Rating May Be Lowered by Moody's Amid Financial Crisis // U.S. Stocks Climb as Microsoft, Carnival Gain; S&P 500 Pares Gain With Oil
• The Euro is maintaining its strength over the US Dollar today, up 1/2 of 1%, but off session highs. NYMEX crude is down 1/2 of 1%, sliding and at $71/barrel. Gold is a little higher but slipping, up less than 2/10 of 1%, and silver has slipped into the negative, down 1/3 of 1%. Base metals ended mixed and fairly quiet, the winners losing steam in after market trading. Indicator charts show three month nickel started higher at the opening, slipped, rebounded, then slipped hard in after market trading. Dow Jones reports three month nickel ended the day at $6.87/lb , but slumped in after market trading hard, as the Euro slipped off earlier high's. LME stored inventories of nickel slipped slightly overnight, but maintains levels over 108,000 tonnes. The Baltic Dry Index was unable to maintain its positive momentum, and slipped 198 points. Wall Street is floundering at the moment, but has spent much of the morning in the green. All in all, it was a rather uneventful week.
• We leave you this weekend with a few links - Is the US a democracy or republic? (video here) And a site from one of our Aussie readers. We link to a few pages on the site but the site bears further investigation. (link) (link) (link) Have a safe and relaxing weekend!!

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Reuters) Crisis-hit Ufaleynickel, Russia's third-largest nickel producer, said on Friday it had signed a contract to supply 720-4,800 tonnes of nickel between June 2009 and June 2010 for up to $70.7 million.
• (MB) Buoyant nickel, limited supply push stainless scrap prices up
• Jim Rogers Shares His Thoughts on the Market - more
• Appetite for risk may have returned, but the crisis is not over - more
• Cash-for-Clunkers' Bill Passes in Bid To Revive Car Sales - more

  (thanks to a reader) On June 16th, North American Stainless sent a letter to customers advising it was raising prices on all cold roll and hot roll flat products by 6-90%, by reducing the functional discount on cold roll by 2 percentage points, and increasing hot roll base prices by $.02/lb, with automotive grades increasing $.02/lb net. On June 17th, Allegheny followed suit and sent a letter to its customers with a similar stainless steel price increase. On the 18th, AK Steel joined the crowd - article here

  China's recovery won't drive up commodity prices: Morgan Stanley economist - China's developing economic recovery would not raise overall commodity prices, Morgan Stanley's chief economist for Greater China said here Wednesday. - more

  Germany plans aid for non-ferrous metals - Germany plans a special aid programme of 40 million euros ($56 million) to help its non-ferrous metal industry survive the economic slowdown, a policy paper from the ruling coalition said. - more

  HudBay's future involves growth and acquisitions, CEO says - HudBay Minerals Inc. is staying the course. The company unveiled its long-awaited strategic plan at its annual meeting in Toronto Friday, and it offered no surprises for investors. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around  $.05/lb higher this morning, with base metals getting a nudge from the lower Dollar, The US Dollar is trading 1/4 of 1% lower against the Euro, at the moment. NYMEX crude futures are up 1% at $72/barrel. Gold is up 1/2 of 1% and silver is up 9/10 of 1%. In overnight trading, Asian markets ended slightly higher, with the China Daily reporting the benchmark Shanghai Composite Index"is trading at a 10 month high. The European markets are trading higher this morning, and after its first gain for the week yesterday, Wall Street futures imply the market could open higher again. Dow Jones is reporting metals analyst Adam Rowley confirmed Friday he will be leaving Macquarie in mid-August to pursue interests outside the metals industry.
• 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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices finished modestly higher on Thursday, as a steady dollar and relatively decent macro numbers out of the US allowed some buying to set in. In this regard, although weekly initial claims readings were up slightly this past week, they were in line with estimates. More importantly, continuing claims, a measure of how many people are moving on (or off) unemployment, fell for the first time in six months. In addition, the May index for leading economic indicators rose by 1.2%, slightly more than expected, while the June Philadelphia Fed regional manufacturing index fell by -2.2 versus the -17 expected. These readings all provide further evidence that the US recession seems to be winding down, but it is interesting to note that once again, and similar to Wednesday’s session, none of the better macro numbers generated the kind of sharp rallies that we would have seen only one or two months ago. Metals are modestly higher at the time of this writing (except for tin) despite a generally weaker Shanghai session. The slightly weaker dollar and firmer oil prices is helping the buying somewhat. Energy prices seem to be pushing higher on news that Iran’s Supreme Leader has rejected calls for a new vote, thus setting up the likelihood of further confrontations with the opposition. As a result, we could see a somewhat higher bias setting in for energy markets over the next few days, with spillover support emanating for metals.... Nickel is at $15,260 up $250, and very quiet, with another tight trading range in evidence today."  (read Ed Meir's complete morning base metals report here)
• China's imports of spot refined nickel are falling due to weak domestic prices and large stockpiles, according to traders consulted by Reuters. Spot premiums for smelting refined nickel for Shanghai delivery have already fallen by half since mid-April to about $300 per ton over LME. "The Chinese nickel market is oversupplied," one said. Antaike, the state-owned research group, estimates that China’s nickel consumption may fall 7.5% on the year this year to 296,000 tons, while primary nickel output is expected to grow 11% to 230,000 tons. It is estimated that about two months’ consumption is in private storage.
• Bloomberg reports that China has stepped up production of nickel pig iron after prices for refined nickel have moved higher from their lows, this according to research from CBI China.
• (Reuters) China's daily crude steel production stood at 1.498 million tonnes in the first 10 days of June, according to data from the China Iron and Steel Association obtained by Reuters on Friday.
• (SG) It is reported that the price of low grade ferronickel with Ni content below 2% picked up in China recently. Its quotation rallies to CNY 3300 per tonne to CNY 3500 per tonne in Shandong though some local plants are still fulfilling the previous orders at the price of CNY 3200 per tonne.
• (SG) It’s reported that high-carbon ferrochrome market is trending up after long dark period, encouraged by stainless steel production recovery started in China, Korea and Taiwan. The current high-carbon ferrochrome price in Indian spot market already climbed to US$0.69~0.72/lb from the lowest level of US$0.56~0.58/lb in Q1 and sold out all quantity to September, while price at overseas market stayed at even higher level of US$0.75/lb.
• (CM) Securities Times cited China Iron & Steel Association as saying in a report released, China steel demand would keep increasing amid the implementation of Beijing's economic rescue packages. However, the future trend remains gloomy in view of the dull global demand, excessive capacity and net crude steel imports. Statistics show China's composite steel price index posts at 98.14 by late May up by 2.58 from end April and the first gains in three months. Indices for most steel varieties step upward path in the month.
• China May Set Iron Ore Spot Prices If Rio Talks Fail  - more
• Fitch Sees ‘Prolonged Stand-Off’ in China Iron Talks - more
• Commodities giant Glencore considers flotation -FT - more
• China Commodities Undercut U.S. Dollar  - more

  Global steel output creeps up in May, down on year - Global crude steel production edged up in May from April largely thanks to output from China and India, although elsewhere it fell and stayed sharply down from last year, industry data showed on Friday. - more

  Market Tendency On Imports Of Ferro-Alloys At 15th June 2009 = Ferro-Alloys, Constitution To Rely On Supplies From China Is Blowing Up With Factors To Change The market tendency by item on imports of ferro-alloys into Japan at the 15th June of 2009 is as follows ; - more

  The MEPS Composite Nordic Average Steel Price Holds Firm in June - Flat Products values in the Nordic region were largely unchanged in June, suggesting that the bottom of the current price cycle has been reached. - more

  Natural Deep Earth Pump Fuels Earthquakes And Ore - For the first time scientists have discovered the presence of a natural deep earth pump that is a crucial element in the formation of ore deposits and earthquakes. - 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, June 18

• Baltic Dry Index -  plus 47 to 4,073. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) World Bank Raises China Growth Forecast to 7.2%, Says Stimulus Is Adequate // Asian Stocks Drop on Valuation Concern; Canon, Honda Motor, Rio Tinto Fall  // U.K. Retail Sales Fell in May; King Says Economic Recovery May Be Sluggish // Companies in Europe Face $3.9 Trillion Debt Bill Through 2012, S&P Reports // European Stocks Rise for First Time in Five Days; HeidelbergCement Gains // Initial Jobless Claims Increase; Drop in Benefit Rolls Signals Turnaround // Obama Financial Overhaul Gets Wary Reception From Bankers And Lawmakers // U.S. Leading Indicators, Factory Gauge Climb in Evidence Slump Is Easing // Treasuries Decline as Economic Reports Point to Growth, Debt Sales to Rise // Stocks in U.S. Climb on Signs Recession May Be Near Bottom; Alcoa Advances //
• The Euro returned to the top spot today, trading 2/10th's of 1% higher against the US Dollar. NYMEX crude is trading basically unchanged, at $71/barrel. Gold is down 1/2 of 1% and silver down just a little more than that. Base metals ended quietly for the most part, most slightly higher. Indicator charts show nickel was in trouble early on, but after US reports came out and the Dollar turned south, nickel headed higher, and ended with a positive sentiment. Dow Jones reports three month nickel ended the day at $6.81/lb , back to Tuesday's level, after yesterday's drop to Monday's level. Nickel, and base metals in general, appear to waiting from some news that will trigger a major move in either direction, and until that happens, the market is drifting in neutral, using the Dollar's move for short term guidance. Sucden finally updated their trading graph, and it shows the stalled pattern over the last few days (chart here). LME stored inventories of nickel slipped a tad overnight, but haven't changed much in the last two days. The Baltic Dry Index gained another 47 points overnight, its 6th straight days of gain. The BDI peaked at 4,291 during its last surge, so it will be interesting to see if that level can be breached this time. The Conference Board announced this morning that leading economic indicators rose 1.2% in May, beating economists expectations. They also forecast the economy should begin to show signs of recovery by the end of the year. The Philadelphia Federal Reserve Bank rose 2.2 points to 22.6 in May, which is its highest reading since September 2008, but its ninth month of contraction. Wall Street is higher as we publish this update, encouraged by the Conference Board report. The volatility index, which had crept up to nearly the 33 level yesterday, is back under 30 today as the market relaxes.

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Comtex) The Steel Ministry is believed to have recommended removal of 5 per cent import duty on stainless and alloy steel scraps, which are recycled by the domestic industry for steel-making. In a draft proposal that might have undergone changes for the ensuing Budget, the Ministry has favoured withdrawal of the duty on both types of scraps, saying it will be in line with the government's policy to encourage use of the recycled raw material for production of value-added steel.
• Industrial Production, Capacity Crash & Burn - more
• Posco project likely to be delayed: Orissa govt - more
• German Geologists Stumble Across Huge Precious Metal Deposit - more
• China Denies Protectionism Allegations - more

  Metals: Nickel's Shining Hour - If you are nervous about inflation, you want to buy gold, right? Actually, you might be better off with another, far less glamorous metal: nickel. - more

  Molybdenum price average of $11 seen for 2009 - New molybdenum price forecasts from producers are looking for $11/lb average price for 2009, down from $29 in 2008, but up from the first-half average of $9. - more

  Croesus a nickel miner following Apex deal - Apex Minerals and well-known prospector Mark Creasy will spin off their prospective nickel assets into Croesus Mining. - more

  Molybdenum Mining Application Denied by Dolores County Commissioners - In a packed Rico courtroom last week, the Dolores County Commissioners unanimously voted to deny a proposal from Outlook Resources asking for rights to mine a large molybdenum deposit near Silver Creek just one mile east of town. - more

  Ilafa: Crude steel output falls 35.8% Jan-May - Latin America's crude steel output in the first five months of 2009 declined 35.8% year-on-year to 18.4Mt, the Latin American Iron and Steel Institute (Ilafa) reported. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around no change , with base metals mostly lower but quiet this morning. The US Dollar is trading slightly higher against the Euro, by 1/10th of 1%, but was lower earlier. NYMEX crude futures are 3/4 of 1% lower and at $70.50/barrel. Gold is 2/10th's of 1% lower and silver is down 7/10th's of 1%.  In overnight trading, Asian markets ended lower. So far this morning, European markets are slightly lower, and US futures show Wall Street has yet to decide which way it will go, after three straight losing sessions this week. US Dept of Labor reported initial job claims rose by 3,000 to 608,000, while the all important continuing job claims fell by 148,00 to 6.68 million. This could give stocks an early morning boost. It appears that China is fighting back against the Rio Tinto snub, and may be secretly negotiating behind Rio and BHP's back with iron ore producers, Vale and Fortescue. This could get very ugly before its all over with, as China is threatening to block the union as monopolistic. China is also threatening to slow production of steel if the iron ore producers will not accept their 40% decline in price terms, but we feel this threat is based more on seasonal demand, than anything.  
• 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
• BMO Monthly - The Goods - pdf here
• Danske Commodities Monthly - pdf here
• AIIS June 2009 Steel Market Import Survey - doc here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals recovered with modest gains yesterday, as a steadier US stock market and a weaker dollar helped reverse earlier losses. We are seeing a very quiet session again today-- copper prices are showing modest losses after a weak Shanghai session, although the rest of the metals are up slightly. The dollar is not doing much, hovering at unchanged levels, and now just under 1.40 against the Euro. .... Nickel is at $14,800, down $50, and very quiet, with less than a $200 trading range in place.(read Ed Meir's complete morning base metals report here)
• (comment) - an update from Bloomberg) Suitcase With $134 Billion Puts Dollar on Edge: William Pesek - more
• (STPD) - United States Steel Corp. will take the first steps next week to restarting its Granite City Works, local union officials said late Friday, but it's unclear just when the idled steel mill will be back to full production. About 100 steelworkers will be called back to work next week, said Dan Simmons, president of United Steelworkers Local 1899, which represents most workers in the steel complex.
• (Reuters) China's spot nickel import orders fall on low prices
• World Bank Raises China 2009 Growth Forecast to 7.2% - more
• Asia Steel-China prices up, construction steel leads gains - more
• China's CISA says exchanged views with Vale, Fortescue - more

  Minmetals sees China commodity demand flat for 1-2 yrs - It will be one to two years before China sees growth in demand for industrial metals despite a recent surge in prices, Wang Lixin, president of China Minmetals Non-ferrous Metals Co. Ltd said on Thursday. - more

  General Moly expects molybdenum market rebound-CEO - U.S. miner General Moly Inc sees the molybdenum market poised for a rebound with a pick up in demand growth and limited new supply sending prices to a peak in 2012, said Chief Executive Officer Bruce Hansen. - more

  Mirabela May Double Output at Santa Rita in Brazil in 3 Years - Mirabela Nickel Ltd. said output at the Santa Rita mine in Brazil, the world’s third-largest open- pit nickel project, may double within three years. - more

  173 million tonne chromite reserve in Sukinda area - Though Orissa has 183 million tonnes of chrome ore, constituting 98 per cent of the total chrome deposits in the country, only 3.27 per cent of this, which comes to about 6 million tonne, has been fully explored till date. - more

  World steel demand finally rises - What a relief that the patient is out of intensive care. Early signs that the global economy is no longer contracting are apparent in world steel demand. - more

• Moody's sees negative outlook for steel industry - Moody's Investor Service on Wednesday offered a negative outlook for U.S. steel producers, saying they will continue to face challenging market conditions through the rest of the year. - more

  Japan May crude steel output up 13 pct from April - Japan's crude steel output in May rose 13 percent from April as demand from makers of cars and household electronics edged up, an industry body said on Thursday. - more

  MEPS - EU Average Flat products Price Stabilises in June - Ending Nine Consecutive Monthly Decreases - End-user demand for flat products remains weak and the traditionally slow summer season is approaching. However, buyers are coming back to the market, albeit only for relatively small quantities to replenish their dwindling stocks. - 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, June 17

• Baltic Dry Index -  plus 75 to 4,026. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Sovereign Wealth Fund Aims to Invest in Hedge Funds, Adviser Says // China Small Caps Spark `Bubble' Concern With Valuations at Pre-Crash High // Most Asian Stocks Fall on Growth Concern; Japan's Property Developers Rise // European Stocks Drop for Fourth Day; Iberdrola, Sainsbury, Sandvik Decline // U.S. Consumer Prices Rise Less Than Forecast; Annual Drop Most in 60 Years // Obama to Limit Fed Lending Power While Giving Authority Over Systemic Risk // Mortgage Applications Hit Seven-Month Low as Higher Rates Hurt Refinancing // Fed Considers Using FOMC Statement to Suppress Rate-Increase Speculation // Wells Fargo, Capital One, KeyCorp Are Among U.S. Banks Downgraded by S&P // Treasuries Post Longest Rally Since January as Inflation Concern Lessens // Obama Lays Out `Sweeping Overhaul' of Financial Oversight Following Crisis
• The US Dollar is trading over 1/10 of 1% lower against the Euro, but off session highs and lows. NYMEX crude futures have recouped much of the early morning losses and are nearly flat, thanks to a government report showing weekly crude inventories fell more than expected. Gold is slightly higher, while silver is up by 3/4 of 1%. Base metals ended the day mixed. Indicator charts show nickel fell thru much of the morning, stabilized thru mid afternoon, when it began to slowly creep higher. Dow Jones reports three month nickel ended the day at $6.72/lb , down from yesterday, but still $.02 higher than Monday's close. LME stored inventories of nickel were nearly unchanged overnight, while the Baltic Dry Index rose another 75 points, but showing signs of slowing again. The Mortgage Bankers Association reported mortgage applications filed last week fell a seasonally adjusted 15.8% compared with the previous week. The Labor Department reported the consumer price index rose 0.1% in May from April, which gave little evidence to inflation worries, but the debate continues anyhow. Millan L. B. Mulraine of TD Securities commented "This report provides further evidence to dispel the growing concerns in the markets about inflation as the broad-based nature of the moderation in consumer prices continue to point to the underlying weakness in the pricing power of workers and businesses alike, on account of the weakening domestic economy. On the other hand, we are equally skeptical that prices will enter a deflation spiral. As such, it does appear that U.S. consumer prices remains in a bit of a sweet spot; not too hot, and not too cold." Wall Street has yet to declare its intentions today, and while markets are slightly higher at the moment, with traders watching President Obama's announcement on new possible financial regulations, the S & P fell below its 200 day moving average earlier in the session. The bulls are fighting hard to turn the market positive after two losing sessions, and the bears are trying to decide if a correction is at hand.  Bloomberg reports "U.S. President Barack Obama, in an interview with Bloomberg News on the eve of the release of his plan to revamp financial- market regulation, voiced confidence the economy would recover soon, while warning that robust growth was needed if the U.S. is to rein in its budget deficit without raising taxes on most Americans. The jobless rate will continue to climb from its current 25-year high of 9.4 percent as employers are slow to take on new workers, the president said." Forgive us for bringing this up, but is there 'anyone' forecasting a robust U.S. recovery?

  Commodity/Economic Comments

• (Dow Jones) The global refined nickel market was in a 61,900 metric ton surplus in January to April, the World Bureau of Metal Statistics said Wednesday. Global production in the period was 3.8% lower on year at 437,300 tons. Global consumption declined 18% to 375,400 tons. Global mine output fell 5.4% to 464,600 tons.
• (Dennis Gartman) "The question before us is simply this: Is the current weakness the beginning of something truly disturbing that shall put the lows made in March to test, or is this simply a very normal, very pedestrian, correction in a bull market. We truly wish to believe it is the latter, and in the case of the “emerging” or “commodity exporting” markets we are convinced that that is so. But in the case of the commodity importers such as Europe, we are worried that the former is the more likely outcome. Indeed, the more we ponder this question, the more certain we are that being long of the commodity exporters and short of the commodity importers makes more and more technical, fundamental and demographic sense:"
• Metal that Doesn't Expand When Heated - more
• ThyssenKrupp Forging Operation Produces 500 Ton Ingot for a Power Plant - more
• Australia says Chinalco-Rio deal collapsed due to shareholders - more
• Gold Vending Machines... WUNDERBAR!!! - more

  The National Bureau of  Statistics reports that production of nickel increased 25% in May compared to April 2009, while production was 6% higher YOY. Production of pig nickel has resumed and according to an official of a company from Zhejiang "Most of the enterprises for the production of pig iron with a low content of nickel re-started work in May. According to my estimates, the rate of production is now at least 80%."

  An expert with the Moscow Stainless Board forecast Russian stainless steel producers will produce 70 thousand tons of stainless in 2009, down from 106.6 thousand tons last year.  

  Revisions to base metal price forecasts - 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 lower, with all base metals trading lower this morning. The US Dollar and Euro are fighting for supremacy today and are basically flat at press time. NYMEX crude futures are down nearly 1%, and under $70/barrel. Gold is down 1/2 of 1% while silver is off nearly 1-1/2%. In overnight trading, ASian markets ended slightly lower, while this morning, European markets are also down. US futures show Wall Street could open lower.
• Food for Thought - Thru the first half of June, which ended Monday, cash nickel had averaged $6.70/lb. Cash nickel averaged $5.74/lb in May, $5.06/lb in April and $4.40/lb in March. The last time nickel averaged over $6/lb was in September 2008, when it averaged $8.07/lb before dropping to $5.51/lb during last years October rout. It is a fair bet stainless steel surcharges are heading higher.     

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• SMM Weekly Review and Forecast - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals ended lower on the day yesterday as a mid-day bounce failed to hold despite a slightly weaker dollar. More generally, we are getting the impression investors are sensing many markets have done enough on the upside in recent months, and that the sharp rallies seen have more than discounted the better macro numbers. As a result, there seems to be little in the way of further gains once decent macro numbers come out. This was best illustrated yesterday when US stocks (and metals) lost ground despite better-than-expected housing starts, building permits, and producer price inflation readings. In addition, although industrial production fell slightly more than forecast, (down by 1.1%), it was roughly in line with estimates, and did not surprise negatively. The price reaction of the markets was a departure from the immediate upside moves we were seeing during much of April and May ... Metal prices are lower as of this writing despite the dollar trading mixed against a number of currencies. ... Nickel is at $14,750, down $350, and continuing to look fairly weak on the charts."  (read Ed Meir's complete morning base metals report here)
• (Interfax) China's stainless steel production may slide in Q3 - China's output of stainless steel this year may have peaked in the second quarter, and is set to decline in the third quarter, a senior employee with a Chinese stainless steel mill told Interfax on June 17.
• (JMB) Japan Stainless Steel Export Drops by 5.3% in April
• OECD Steel Committee Meeting 8-9 June 2009 - more
• SSAB Falls Most Since December on Forecast for Loss - more
• Sandvik warns of 2.2-2.5 bln SEK Q2 operating loss - more
• OZ Minerals completes assets sale to Minmetals - more
• China says Rio-BHP ore JV smacks of monopoly - more
• Danske - Russian industrial output dropped 17.1% y/y in May
• Statement of Thomas A. Danjczek President, the Steel Manufacturers Association - more
• Governor Kevin Warsh Speech to At the Institute of International Bankers Annual Meeting, New York Tuesday - here

  Nickel Price Has Risen To High Level After Interval Of 8 Months, Encouraging The Market = Risen To Higher Price Than US$15,000 / Ton, In Anticipation Of Improvement Of Demand - Nickel price has risen to the high level of US$15,755 per ton (US$7.14 per lb.) as recorded on the end September of 2008. - more

  Ferrochrome prices likely to go up 30% - SA is the world’s biggest producer of ferrochrome, which is used to make stainless steel. For most of this year, SA’s ferrochrome companies, which include the Xstrata-Merafe joint venture, Hernic Ferrochrome, Samancor Chrome and International Ferro Metals, have mothballed substantial amounts of their production capacity because of low prices. - more

• Commodities rebound seen overdone - The rebound in oil prices from recession lows looks overdone based on economic fundamentals, and the risk of deflation could burst the bubble, according to high-profile economists speaking at the Reuters Investment Outlook Summit this week. - more
• BHP voices doubts about global commodity rally - The head of BHP Billiton, the world's top miner, voiced doubts on Wednesday about the durability of recent strong Chinese demand for commodities and said the picture for global demand was unclear. - more

  China’s steel export rebate strengthens case for import duty - China has recently decided to impose a 9% rebate on steel exports which is likely to increase the flow of cheaper grades of steel into the country. The dragon’s move has raised hopes among domestic steel companies seeking a 20% import duty on all grades steel in the forthcoming budget. The industry is also hopeful of a substantial hike in export tax on iron ore and chrome ore. - more

  Metal Center Steel, Aluminum Inventories Continue To Decline in May; Shipments Weak - Inventories of steel and aluminum products at metals service centers in the United States and Canada continued to decline in May, and shipments remained weak, the Metals Activity Report from the Metals Service Center Institute shows. - more

• Steel Inventories at Lowest Level in 22 Years - U.S. steel inventories at metal service centers continued to decline in May as shipments remained weak, according to data from the U.S.-based Metal Service Center Institute showed 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, June 16

• Baltic Dry Index - plus 188 to 3,951. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) BRIC Nations May Buy Each Other's Bonds to Reduce Reliance on U.S. Dollar // Yen Gains as Decline in Stocks Reduces Demand for Higher-Yield Currencies // Shirakawa `Cautious' About Japan Recovery; May Be Too Soon for Exit Plan // Asian Stocks Slump the Most in a Month on Resource Prices, Growth Concerns // German Investor Confidence Surges More Than Forecast as Recession Eases // U.K. Inflation Slows Less Than Forecast as Weak Pound Raises Import Costs // Producer Prices in U.S. Climbed Less Than Forecast in May as Food Declined // U.S. Housing Starts Climb, Industrial Output Sinks in Sign Recovery Mixed // Stocks in U.S. Drop, Led by Phone Companies, Retailers; Best Buy Retreats
• The US Dollar continues to trade lower against the Euro, but well off session lows, and only 1/3 of 1% lower after after Russian remarks made at the BRIC summit, drew attention once again to Russia's apparent daily on again, off again, support for the US currency. NYMEX crude is trading nearly 2% higher, but under $27/barrel. Gold is trading less than 1/3 of 1% higher, while silver is 1/2 of 1% higher. London traded base metals ended mostly lower for the day. Indicator charts show nickel gained early, fell in the afternoon, and bounced again late. Dow Jones reports three month nickel ended the day at $6.83/lb . Inventories of nickel stored in LME warehouses slipped again overnight, and are threatening to slip below the 108,000 tonne level. The Baltic Dry Index continues to gain, up 188 points. Without positive economic news, and words of concern from top officials in China, investors may be starting to wonder if now is the time to take profits. Metals analyst tend to agree nickel prices have over-reached, but they disagree on whether it still has wings to go higher. Economic advisers with the ABA predicted the US will move out of recession in the third quarter of this year. The Federal Reserve reported this morning that industrial capacity utilization had fallen to its lowest point since records started being kept in 1948, and that industrial output fell 1.1% in May and that April was adjusted to minus %0.7% from an earlier reported 0.5%. Depending on whom you decide to listen to, the news that housing starts were up, was either good news, or not so good news. It appears the market has decided to listen to those who wonder if the report contained as much bad news as good news, and that new housing could farther complicate an already over supply of housing. In Russia, the first ever summit is being held between the heads of the so-called BRIC nations, including Brazil, Russia, India and China, and is being watched closely by traders. US markets are lower as we update.

  Commodity/Economic Comments

• (China) According to industrial insiders, stainless steel scraps market may continue the weak trend in the short-term on sagging demand, high inventories and relatively low buying sentiment
• (Reuters) India's steel minister said on Tuesday he favoured duties on cheap imports of the alloy to protect the domestic industry. 'We will like to see our steel industry flourishing and is not faced with unfair competition,' Virbhadra Singh told reporters.
• (Caijing) The International Energy Agency has claimed that China's first-quarter economic growth rate of 6.1 percent may be inaccurate because it was inconsistent with a 3.5 percent decline in the demand for oil and weaker power consumption statistics. China's National Bureau of Statistics has dismissed this analysis as "groundless" and "lacking in seriousness" because the IEA did not consider the whole energy consumption picture.
• (CV) Chinese President Hu Jintao said on Tuesday that China will provide a 10-billion-U.S. dollar credit loan to member states of the Shanghai Cooperation Organization to shore up their economies amid the global financial crisis.
• (Dow Jones) A three-year downturn in housing is ending and the U.S. economic recession will end in the third quarter, according to a forecast issued Tuesday by economic advisers to the American Bankers Association.
• (Reuters) "Li Yang, a former adviser to the People's Bank of China, the central bank, said he expected the world economy would need at least five years to fully get over the current recession. ... Li said he expected China's recovery to be W-shaped -- meaning that growth would falter once current fiscal and monetary stimulus wears off before regaining momentum."
• US Tells World's 8th Largest Economy To Get Its House In Order Before Asking for Aid - more
• St Louis Fed M1 Money Multiplier - graph here
• IMF Upgrades Its View of U.S. Economy - more

  Now a China-led metals recovery - Years after all that paranoia about reds under the bed and domino theories, the Chinese are coming after all. It's just that it's in the guise of well-targeted raids on our base metal juniors. - more

  Warning that scrap steel demand could outstrip supply - Metals recyclers have warned that demand for scrap steel could outstrip supply if increased levels of steel production in countries including China continue. - more

  Steelmaker Nucor sees narrower loss, sector soars - Steelmaker Nucor Corp said on Tuesday it expects a narrower second-quarter loss because orders appear to be picking up, sending its shares up. - more

  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 all base metals getting an upwards nudge from the falling US Dollar. After having a big day yesterday, the US Dollar is trading about 3/4 of 1% lower against the Euro. NYMEX crude futures are 2% higher and over $72/barrel. GOld is trading higher by nearly a full percent and silver is up 2-1/3%. Asian markets lead the world equity markets lower yesterday, and traded lower again overnight. European markets are bucking the trend and trading higher this morning, while US futures show Wall Street might open higher. IN reports this morning, MarketWatch reports "U.S. housing starts bounced back with a vengeance in May, rising 17.2% to a seasonally adjusted annual rate of 532,000 after plunging 12.9% in April to a postwar low, the Commerce Department estimated Tuesday." And "Producer prices rose 0.2% in May, after seasonal adjustments, with higher energy prices offsetting a drop in food prices, the Labor Department reported Tuesday. The core producer price index, which excludes food and energy prices, fell 0.1%." And later, the Board of Governors of the Federal Reserve will release industrial production numbers for May.   
• Reuters morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Global Mining News - pdf here
• Market Drivers - pdf here
• Weekly Forecast by SMM Specialist - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices fell sharply on Monday, as a stronger dollar and a weakening US stock market both combined to take their toll. In fact, US equities saw their largest percentage decline in some two months, while oil prices also finished weaker. The only macro release of the day-- the New York Empire manufacturing index-- did not help matters much either, falling by -9.4, almost double the expected decline. ... Nickel is at $14,960, up $185, but still looking fairly week on the charts after yesterday's drubbing."(read Ed Meir's complete morning base metals report here)
• Chief economist Shen Minggao - In sum, we believe the recent rally of commodity prices is partly a correction of overshooting, helped partially by updated economic data, but most importantly, a result from excess liquidity that has weighed on the dollar and brewed expectation for inflation. Whether or not the rally will persist depends on whether central banks will continue the monetary largess or tighten the tap.
• (Caijing) China will continue to import iron ore at a higher rate than last year despite a 6.2 percent month-on-month fall in May, when China imported 53.46 million tons of the raw material, analysts said June 12. Iron ore imports will not fall significantly because imports are still competitive compared to domestic iron ore prices, Hu Kai, an analyst with Umetal, told Caijing.
• BHP Sees Spot Ore Market Aiding Rio Deal, Morgan Says - more
• Union: US Steel to Recall 800 Workers in Canada - more
• (Reuters) 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.
• (AP) Gas prices rose Monday for the 48th straight day, matching a record going back to at least the 1970s, with prices now up nearly two-thirds since the beginning of the year even as demand from motorists remains weak.
• Port of Long Beach reported loaded inbound containers fell 22.8% in May compared to May 2008, while outbound containers fell 26.7%. (here) Year to date figures show May was the ports busiest month yet this year (here)
• Port Tracker Gives Retail Insight - more
• Andy Xie: Tight Spot for Fed, Blind Spot for Investors - more
• U.S. credit card defaults rise to record in May - more

  Output Of Nickel In Ferro-Nickel In Japan For Q1 / 09 Decreased By 27% = Emergent Exports Of FeNi For China Caused To Maintain Its Production Scale - Japan produced 11,303 tons of nickel in ferro-nickel in the first quarter (January - March) of 2009, having decreased by 27.6% compared with that (15,619 tons) in the same quarter of 2008. Incidentally, a boom to export ferro-nickel from Japan to mainly China contributed to this production and enabled Japan to maintain ferro-nickel production on a certain scale. - more

  Mirabela Nickel Santa Rita project update - Mirabela Nickel Limited is pleased to announce that substantial progress has been made on the Santa Rita project since the receipt of funds from the senior debt facility in May. - more

  Rio Says Outlook for Rest of 2009 Is ‘Uncertain’ - Rio Tinto Group, the world’s third- largest mining company, said the outlook for its businesses and product prices this year is “uncertain.”  - more

  Assmang May Cut 220 Jobs at Manganese, Chrome Units  - Assmang Ltd., South Africa’s second- largest manganese producer, will cut 180 jobs at its Cato Ridge operations and as many as 40 jobs at its Machadodorp unit because of falling demand and prices for the metal.  - more

  Severstal agrees to sell Allenport steel plant to North American Trading - Severstal North America Inc. said Monday it has signed a letter of intent to sell its Allenport, Washington County, plant to a California-based company that wants to reopen the plant this fall with about 75 workers. - more

  US court denies motion to dismiss steel antitrust case - A US federal court has denied a motion by nine steelmakers to dismiss a class-action antitrust lawsuit filed by Standard Iron Works and other steel buyers in the US Northern District of Illinois. The decision was announced Friday, June 12. - more

  Courtesy AISI - In the week ending June 13, 2009, domestic raw steel production was 1,139,000 net tons while the capability utilization rate was 47.7 percent. Production was 2,154,000 tons in the week ending June 13, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 47.2 percent decrease from the same period in the previous year. Production for the week ending June 13, 2009 is up 1.4 percent from the previous week ending June 6, 2009 when production was 1,124,000 tons and the rate of capability utilization was 47.1 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, June 15

• Baltic Dry Index - plus 180 to 3,763. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg)  Porsche Says China to Pass Germany as Second-Biggest Market in Three Years // BRIC Should Be BRIIC as Indonesia Economy Accelerates, Morgan Stanley Says // Asian Stocks Retreat on Valuation Concerns; BHP, Malaysian Airlines Drop // Kudrin Shows Dollar Has No Rival as World Currency While BRIC Leaders Meet // European Payrolls Contract by Most on Record as Recession Forces Job Cuts // Britain May Sell as Much as $8.2 Billion of Debt Through Banks This Week //  ECB Says Euro-Region Banks May Lose a Further $283 Billion by End of 2010 // Stocks in Europe Drop; BHP Billiton, Rio Tinto, Shell, TomTom Shares Fall // Kudrin Shows Dollar Has No Rival as World Currency While BRIC Leaders Meet // VIX Rises Most in Eight Weeks as Oil Drops, New York Manufacturing Shrinks // U.S. Stocks Extend Global Slide; MSCI World Index Falls Most in Two Months  
• Today was an ugly day unless you were invested in the US Dollar. After Russian Finance Minister Alexi Kudrin was quoted as saying Russia had full confidence in the US Dollar, the US Dollar soared in today's trading. At present, it is trading 1-3/4% higher against the Euro. This had a devastating effect on commodities. NYMEX crude is trading 3% lower, and under $70/barrel. Gold is down over 1% and silver is lower by nearly 5%. Base metals were hammered today. Indicator charts show nickel opened much lower, and spent the afternoon in a further decrease. Dow Jones reports three month nickel ended the day at $6.70/lb . Inventories of nickel stored in LME approved warehouses, fell slightly overnight, while cancelled warrants are close to falling under the 2% level. The Baltic Dry Index had a big day, up 180 points. This morning started bleakly in the US, with news that equity markets worldwide had, or were, on the slide. The first report out didn't help matters, when the Federal Reserve Bank of New York's June general economic index fell to minus 9.4, less than forecast, from minus 4.6 the prior month. Readings below zero for the Empire State index signal manufacturing is shrinking. The National Association of Home Builders monthly sentiment index fell a point to 15, its first drop since bottoming in January. In our opinion, the stage for a down day was set, when China's government website quoted remarks made by Premiere Wen Jiabao, that the "the world economic outlook remains unclear" and that "China has yet to establish solid foundations for a recovery". With China expected to lead the world in economic recovery, these remarks were seen as a reality check that the hopes of a quick recovery, are questionable at best. And while business may be looking to China to lead the recovery, they apparently aren't doing so with their money. Chinese media reported that direct foreign investment in China fell by 17.8% in May YOY, making May the 8th consecutive month of FDI declines. The French Steel Federation reported today that French steel production fell 41.3% in May YOY, dismal but better than the prior months drop of 50.5%. The CISA reporting the Chinese government has suspended approval for a few steel projects in Shandong, due to environmental reasons. These projects include a hot rolled sheet/strip technical reform belonging to Rizhao Iron and Steel ,and a five million t/y steel plant at Weifang Iron and Steel. Blogs broke a story a few weeks back out of Italy about the supposed arrest of two Japanese nationals caught smuggling $134 billion, yes billion with a "B", thru Italy into Switzerland. Mainstream media originally dismissed the story as absurd, but now the story is being covered in European press. Information is very limited, and either this story will turn out to be a huge hoax, or a major embarrassment for the governments involved. - here At the moment, the Dow is off by nearly 200 points.

  Reports

• Weekly Commodity Price Report - pdf here
• IMnI 2009 Annual Conference Presentations - more

  Commodity/Economic Comments

• IMF says worst not over - more

  Fund managers press Xstrata for Anglo merger - Xstrata boss Mick Davis is coming under pressure from Black Rock and Capital Group, the two US fund managers that are among his biggest shareholders, to engineer a merger with rival mining giant Anglo American. - more

  Fundamentals Imply A Correction In Metal Prices - According to Standard Chartered metal prices have rallied over the past couple of months because of a combination of a bottoming of global growth expectations, a weaker US dollar and a subsequent improvement in investor sentiment, with Chinese imports adding extra momentum to the trend. - more

  Power costs, demand to propel ferrochrome market - Ferrochrome prices could rise sharply this year because of higher electricity costs in top producer South Africa and increased buying by stainless steel mills as demand recovers. - more

  Japan's government to stockpile rare metals - Japan's government is planning to bolster its stockpiles of rare metals used in the production of liquid-crystal displays, solar panels other high-tech goods, taking advantage of the fall back in prices, according to a report by the state broadcaster NHK. - more

  Metals bull feels vindicated - David Thurtell is a metals analyst who left the Commonwealth Bank for BNP Paribas' London office and then moved on to his present slot in the British capital with Citigroup. - more

  China defends export restrictions - China on Monday defended moves to restrict exports of some raw materials, saying it was acting to protect the environment, as it reacted to a report the US and European Union will launch a WTO action. - 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 lower, with all base metals trading lower this morning. The US Dollar is trading much higher against the Euro this morning, up over 1-1/10%. NYMEX crude futures are down 1-1/3% and around $71/barrel. Gold is down 1/3 of 1% and silver is down 2-1/4%. In overnight trading, Asian market ended lower . This morning European markets are trading lower, and futures imply a lower opening on Wall Street. Bloomberg reports "Premier Wen Jiabao cautioned during a tour of Hunan province on June 12 and 13 that the world economic outlook remains unclear, the government said in a statement on its Web site yesterday. China has yet to establish solid foundations for a recovery, he added."  
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices fell sharply on Friday, as a stronger dollar dented some of the recent upside sentiment, while an overdue round of profit-taking also contributed to the selling. The dollar rose against the Euro after data showed Eurozone industrial production shrinking in April. We are starting the new week on a sharply lower note as well, as further dollar strengthening (with the Euro now at 1.3850) is weighing on both metals and energy. The greenback is moving higher on comments by the Russian Finance Minister saying that his nation has full confidence in the dollar, and that it was too early to speak about an alternative. The Euro also extended losses after Britain’s Telegraph newspaper cited the head of Germany’s Chamber of Commerce and Industry as saying credit conditions are worsening. We think the current correction in metals will likely run its course for a little while longer, as many metals are still overextended on the upside, and have more than compensated for the modest improvement seen in the macro numbers. We are particularly concerned that the rebound in Chinese demand has yet to show up in the rest of the world, meaning that China’s critical export sector will continue to struggle. ... Nickel is at $15,000, down $690, but despite the selloff, nickel’s upchannel seems to be intact, and will not be threatened until we get a close below $13,750." (read Ed Meir's complete morning base metals report here)
• (Yieh) Taiwan's Yieh United Steel Corp. (Yusco) and Tang Eng are planning to adjust their stainless steel price today for the second half of June. With the nickel price rising to over US$15,000/ton, the stainless price is poised to be hiked by NT$5,000~6,000/ton from the previously estimated NT$4,000/ton. Therefore, the total price hike will reach NT$7,000~8,000/ton for June.
• (Interfax) China's crude steel output edges up 0.4 pct year-on-year in first five months of 2009
• (JMD) Japan - Orders for stainless steel plates/ In April, 50% month-on-month increase
• (Yieh) Market participants indicated that short supply in spot market pushed the Molybdenum price going up, especially in Asian market where buyers can get material only at price above US$10.2/lb CIF.
• How China’s Shopping Spree Helps Commodity ETFs - more
• Largest US Bankruptcies in History - graph here
• Fed's conundrum on Treasury purchases - more

  Sumitomo Metal Mining / Japan Copes With Active Demand For FeNi From Overseas Countries = SMM Exported 1,000 Tons Of Ni In FeNi For Q1 / 09, Nickel Metal As Well - Since the demand to purchase nickel, mainly ferro-nickel, from such overseas countries as China and South Korea has come to be active, ferro-nickel producers in Japan have been increasing their exports to cope with this expansion of requirements. - more

  NYT: China's Commodity Buying Spree, Endless? - We've spoken countless times of the influence of China on the commodity space the past few months; when China buys, prices tend to fly upward. - more

  Miner set to explore Surigao nickel site - Canadian Mindoro Resources, Ltd. will start exploring its gold, copper and nickel mine in northern Mindanao in the third quarter, a company official said in a report to officials of the Mines and Geosciences Bureau late last week.  - more

  Gold tracks dollar, to range-bound; crude to remain firm - There has been a smart rise in commodity prices virtually across the board in recent weeks. - more

  Mining sector shed over 4 000 jobs - The mining industry has registered a 36-percent decline in labour complement on a year-to-date basis as companies felt the pinch of the global economic crisis.  - more

  Steel ministry for higher duty on iron ore, steel products - The Steel Ministry is understood to be pushing for 15 per cent export duty on iron ore, besides a similar percentage of import duty on vital steel items to protect the interests of the domestic steel industry. - 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, June 12

• Baltic Dry Index - plus 100 to 3,583. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's New Lending Doubles, Industrial Output Quickens, Fueling Recovery // Asian Stocks Gain, Extend 4th Weekly Climb on Retail Sales, China Lending // Dollar Strengthens, Paring Weekly Decline, Before Group of Eight Meeting // European Industrial Production Plunges by Record 21.6%, More Than Forecast // G-8 Pressed to Reduce Record Deficits as Economies Show Signs of Recovery // German Lawmakers Vote to Cap Government Borrowing Once Recession Is Over // European Stocks Drop, Paced by Vedanta Resources; Total, BHP Billiton Fall // Consumer Confidence in U.S. Climbs a Fourth Month as Job Losses Moderate // Stocks in U.S. Retreat as Declines in Oil, Metals Drag Down Exxon, Alcoa
• The US Dollar continues to trade higher against the Euro, up 2/3 of 1% and off session highs. NYMEX crude is only 1% lower and just under $72/barrel. Gold is down over 1-1/2% and silver is off 3-1/4%. Base metals all ended the session lower, taking their cue from the higher Dollar. Indicator charts show nickel slumped early, and then stayed rangebound for the rest of the day. Dow Jones reports three month nickel ended the day at $7.11/lb , down for the day, but nearly 7/12% higher for the week. Nickel inventories stored in LME warehouses gained overnight and sit just under the 109,000 tonne level. The Baltic Dry Index solidified yesterday's turnaround, by adding another 100 points. The University of Michigan and Reuters consumer sentiment index rose to 69 in mid-June from 68.7 in May. Analysts were looking for a higher number. US equity markets are quiet today, with the Dow down a mere 5 points as we update. On Monday, we quoted a discussion about the triple witching of next Friday and its possible effect on metals trading. The thought from a few analysts was we could see metals trade quietly until this took place. And while equity markets have quieted down dramatically from last month, metals have not. What will happen next week? Who knows. But for those who have been fighting the trend over the past few months, it has so far proven to be an expensive lesson in futility. We leave you with Regina Brett's 45 life lessons and 5 to grow on - more
• Have a safe and relaxing weekend!

  Commodity/Economic Comments

• (SG) China Steel reported that domestic steel prices continued to rise entering June marking a 7th week of the upward trend in a row. The prices of construction steel saw the biggest rise last week; medium and heavy pate, large and medium sections rose slightly and hot rolled sheet remained almost unchanged.
• (CP) PT Aneka Tambang has predicted it would be able operate again its nickel processing plant (FeNi-3) next August, the company's secretary said. FeNi-3 is expected to operate again next August after it underwent a repair and modification process since last May, PT ANTAM Corporate secretary Bimo Budi Satriyo said here on Thursday.
• (MNP) Pepinnini Minerals and Rio Tinto Exploration have teamed up in a farm-in and joint venture agreement to explore three tenement areas in the Musgrave Province, South Australia, in the hunt for nickel-copper-sulfide mineralisation.
• (CMW) Bindura Nickel Corporation (BNC) has recalled its over 2 000 workers – who had been laid off – after reportedly failing to raise money for retrenchment packages. The company, which placed its operations under care and maintenance in November last year, owing to viability problems, successfully applied to the Ministry of Labour and Social Services to retrench 2 229 workers, including workers at its Trojan Shangani mines and the Bindura smelting and refining plant.
• Stuart Burns, CEO of Marine & Corrosion Alloys Ltd and MCA UK Ltd - "There are some apparently contradictory numbers coming out of China at the moment. Take those car sales as an example. Our man on the ground tells us BYD, a noted Chinese car maker, reported 30,000 car sales of one model by end of last year, but the number plate agency recorded only 10,000 new cars of that model registered for use on the road. What happened to the other 20,000 are they running around without number plates? In a police state, I don’t think so. Our understanding is auto sales are recorded in China when they leave the factory, not when they are registered on the road, so dealers can build up inventory while car “sales” are rising." (source)

  No need for mine safety inquiry: Moore - Mines and Petroleum Minister Norman Moore has rejected calls for a federal inquiry into the state's mining industry following an incident at BHP Billiton's Leinster mine site this week. - more

  China And The Iron Maiden - This week Beijing is fuming over Rio Tinto's rejection of a planned $19.5 billion investment by Chinalco, one of China's state-owned enterprises. The official Chinese Xinhua News Agency likened rio Tinto to "a dishonorable woman." - more

• China May Base Metals Output Table Of Data - more
• China May steel output up as prices rise - China's crude steel production climbed 7 percent from a month earlier to 46.46 million tonnes in May, reflecting rising domestic steel prices and undermining the country's tough stance on price negotiations for iron ore. - more

  Commodity Investment Surge Yet to Peak, Barclays’ Norrish Says - Hedge funds and other large investors are leading a surge of commodities investment that may continue to grow as optimism increases that the worst global recession since World War II is easing, Barclays Plc said. - 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, with all base metals trading lower on a higher Dollar. The US Dollar is trading nearly a full percentage point higher against the Euro this morning. NYMEX crude is down nearly 2%, while gold is off 1-1/2% and silver down 3-1/2%. In overnight trading, Asian markets ended higher,  after new lending in China doubled, retail sales grew more than expected, and China's industrial output grew 8.9 %YOY in May. European markets are slightly lower this morning after reports that European industrial production declined by a record 21.6%. Futures imply US markets may open slightly lower. The Labor Department reported prices paid for goods and services imported into the United States jumped 1.3% in May, the largest gain since last July. Asian industrial growth figures released today were impressive. We wonder how long it will be before someone starts making the comparison to last years slump caused by China shutting down industries to slow pollution for the fall Olympics. Both Citigroup and MF Global warned off a potential correction in nickel this morning.
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "There was another spectacular surge in metals yesterday, with copper rising 4% to an 8-month high, while aluminum also pushed sharply higher, flirting with six-month highs in the process ,and closing above key congestion resistance at $1650. The weaker dollar, constructive metals trade data out of China, and decent macro economic readings out of the US all helped fuel the advance.  ... Both metals and energy are off sharply as of this writing, although in the case of metals, most of the group has not given up most of yesterday’s gains completely. Nevertheless, we suspect that there is more to go on the downside, perhaps as we start the new week. In our view, commodity markets are still quite overbought, with the steep run-up in prices arguably over-compensating for the modest brightening we are seeing in the US macro picture. In addition, we are still somewhat nervous about the US stock market here, with Thursday’s late-day fade not being that reassuring, particularly given the robust Treasury auction.  ... Nickel is at $15,480, down $320. We are still on track to move higher from here, with $17,800 being the next resistance target, as charts look much better than they have in some time."  (read Ed Meir's complete morning base metals report here)
• (Dow Jones)  - Stainless steel demand should return to "normal " by the end of 2010, a senior OAO Norilsk Nickel executive said Thursday. "By the end of the year we should see more improvement and by the end of 2010 we should see normal conditions," Anton Berlin, head of market analysis and development at Norilsk told Dow Jones Newswires.
• (JOC) Exports of U.S.-made steel fell 42.7 percent in April, compared with a year earlier. Total steel exports in April were 617 thousand tons. Compared to 702 thousand tons in March, exports were down 12 percent. For the January to April period, exports decreased 36.6 percent to 2.6 million tons.
• (Reuters) China's crude steel production rose 7 percent to near record highs seen in June last year, undermining efforts of the world's largest steelmaker to win a deeper iron ore price cut and rein in rampant output growth. Data showed on Friday China's crude steel output climbed 7 percent in May from the previous month to 46.46 million tonnes, just shy of a record 46.9 million tonnes it produced in June last year before cutting back output sharply because of a spreading global financial crisis.
• (Citi Commodity Heap) We believe speculators are returning to the complex in rapid fashion. CFTC commodity positions are increasing. LME open interest positions are at high levels. Nickel is the smallest base metal market and easily distorted by fund flow and speculative positions.
• (SMM) Manganese prices rose in Shanghai this week following a rally in nickel, both of which are used in the production of stainless steel, traders and analysts said on Friday. However, they did not expect further price increases as demand has not improved in the Chinese market.
• (Alibaba) China's production of refined copper fell 2 percent on the month in May, while primary aluminium output rose 14 percent due to smelters' restarting of idled and new capacity. Output of nickel surged 24.5 percent during the month as stronger prices encouraged producers to resume production.
• (Reuters) It could take up to two weeks before BHP Billiton Ltd/Plc's Perseverance nickel mine in Australia resumes full production rates after mining was halted due to a rock fall, a company spokeswoman said on Friday.
• (CSC) In a survey of major Chinese economists, more than two-thirds are reportedly bearish on the prospect of China increasing its holdings of US government bonds, and believe instead the nation should putting more of its hard-earned into gold. According to a China Business News survey of 70 Chinese economists (including one foreign economist), the exact figure is 71.4% anti-bonds and pro-gold.
• Commodity Investment Surge Yet to Peak, Barclays’ Norrish Says - more
• Goldman Forecasts 10% Gain for 2010 Iron Ore Price - more
• Europe Industrial Production Declines by Record 21.6% - more
• Rail Traffic Mixed as June Begins - more

  China New Lending Doubles, Industrial Output Quickens - China’s new lending doubled in May and industrial output and retail sales climbed more than economists estimated as government stimulus spending revived the world’s third-biggest economy. - more

• China's industrial output up 8.9% in May - China's industrial output expanded 8.9 percent in May from a year earlier, faster than the 7.3 percent rate in April, the National Bureau of Statistics (NBS) said Friday. - more

  Supply And Demand Of FeCr In Japan For Q1 / 09 Had Worst Record In Its History = Output Of Stainless Steel In Q1 / 09 Shrunk To Scale In 1981 And Its Demand Cooled Down - Let us trace the realities on supply and demand of ferro-chrome in Japan for the first quarter (January - March) of 2009. In consequence of that the production of stainless steel in Japan for January - March quarter of 2009 had shrunken to the scales in 1981 - 1982, the matters, which consumption of ferro-chrome in Japan had a considerable decrease and stocks of ferro-chrome at consumers had a sudden increase, came up to the surface. - more

• Japan's stainless steel production rises on robust Chinese demand - Japan's stainless steelmakers have raised production in June due to increased demand from China, local market sources said Thursday.  - more

  Zambia to re-open nickel mine soon: minister - Zambia mines minister Maxwell Mwale said on Friday the southern African country plans to re-open the Munali nickel mine within the next month after the operation was suspended in March due to low nickel prices. - more

  India’s Steel Demand May Climb 10% on Infrastructure - India’s steel demand may gain as much as 10 percent this fiscal year, almost double the pace previously estimated, as the government spends more on infrastructure, Steel Secretary Pramod Rastogi said. - more

  Kobe Steel to Restore Capacity Usage Rate to 70% From September - Kobe Steel Ltd., Japan’s fourth- largest steelmaker, plans to increase usage of its capacity by about 10 percentage points as customers including carmakers reduce inventories. - more

  Krakatau Steel to Produce at Capacity in July as Demand Gains - PT Krakatau Steel, Indonesia’s largest producer, plans to resume output at capacity next month as demand recovers. - more

  Customs service probes codes - (excerpt) For instance, the Korean government did not classify stainless steel according to the amount of nickel and chrome contained as other countries do. As a result, low-quality stainless steel from overseas, which incurs higher duties, was once distributed in great quantities. To try to solve the problem, the government is now classifying stainless steel into 56 categories. In the past, there were 18. - 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, June 11

• Baltic Dry Index - plus 31 to 3,483. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Fixed-Asset Investment Surges 32.9%, Countering Record Export Slump // Japan's Economy Shrank 14.2% in First Quarter, Less Than Initial Estimate // Dollar Declines as Optimism Over Global Recovery Increases Yield Demand  // Asian Stocks Advance as China Fixed-Asset Investment Fuels Growth Optimism // Barclays' Sale of `Family Silver' May Weaken Bank as It Bolsters Capital // BOE's Sentance Says U.K. Economy May Be `Bottoming Out,' Recover in 2009 // Russian Economy Shrank 9.8% in First Quarter as Industrial Output Plunged // European Stocks Climb as IEA Raises Oil Demand Forecast; Electrolux Gains // Household Wealth in U.S. Fell by $1.3 Trillion in First Quarter, Fed Says // Treasury Notes Advance as Highest Yields in Seven Months Lure Investors //
• The US Dollar continues to trade lower against the Euro, down over 3/4 of 1% and slightly off session highs. NYMEX crude oil is at $72.50/barrel and up over 1.6%. Gold is now trading up over 1/3 of 1%, while silver is up nearly 2%. London traded base metals all ended solidly in the green again today. Indicator charts show nickel took off at the opening and never looked back, closing strong. Dow Jones reports that for the first time since October 1st of last year, three month nickel ended above $7/lb at $7.16/lb .  For those wondering what is going on, one metals trader told a Dow Jones reporter "I'm not sure where fair value is for any of these markets. It's just one whole glut of short covering, or longs re-entering the market." Obviously funds still find nickel attractive, although the chorus from analysts forecasting that nickel is setting itself up for a serious correction is getting louder. Nickel inventories stocked in LME warehouses slipped overnight, while the Baltic Dry Index halted its recent loss, and gained 31 points. The World Bank forecast the global economy would contract by 3% this year. In US economic news, The Federal Reserve reported that American households net worth fell by another $1.3 trillion dollars in the first quarter of 2009. After seven straight quarterly declines, American households have lost nearly 22% of their wealth, and for the first time since the Fed's began keeping records, total private sector debt fell at a 0.4% annual pace. In response to an earlier reports that retail sales had risen last month, Naroff Economic Advisors commented "This report is good on its surface and the details are not that bad either. I don’t think anyone expects people to start spending lots of money on everything. But they have started dipping their toes back into the shopping waters and that is a positive development." Paul Dales, from Capital Economics, was not so positive. "Over half of the 0.5% increase increase in U.S. retail sales in May was due to a 3.6% price-related jump in gasoline station sales…. Overall, real consumption is unlikely to repeat the increase in the first quarter in either the second or third. A meaningful consumer recovery remains some way off." Steven Ricchiuto, Mizuho Securities was also bearish on the report. "Given the big infusion of disposable income in April and May from the Obama stimulus plan it is surprising that more was not spent by the consumer. This shows that a lot of the tax cut and the one time payment to Social Security recipients was saved." And finally, the World Health Organization declared the so called "swine flu" has now reached a pandemic stage, its first such declaration in 41 years.  The last pandemic, the 1968 outbreak of Hong Kong flu, killed over 1 million people, while ordinary flu kills between 1/4 and 1/2 a million people annually. US markets are higher as the time of this writing.   

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Dow Jones) The European Union and the U.S. are preparing a joint case at the World Trade Organization, challenging China's policy of taxing raw material exports, people familiar with the issue said Thursday.
• Stephen Pope discusses mining sector movements - more
• Andrew 'Twiggy' Forrest's fortune jumps $1.5bn in a week - more
• Girls in gold-mining: 'I don’t want my children to be like me' - more
• BHP seals Japan deal - more

  China’s Commodity Buying Spree - Strong buying by China has helped lift commodity prices around the world this spring, but growing evidence suggests that a sizable portion of this buying has been to build stockpiles in China, and may not be sustainable. - more

  Asia Steel-China prices rise to 3-mth top as demand revives - Chinese spot steel prices rose almost 1 percent this week to a three-month high, supported by a sustained pick-up in demand and traders' restocking amid growing expectations of further price rises. - more

• China ready to cut steel output if ore talks fail - China reduced iron ore imports in May and threatened it was ready to cut steel output and drop annual iron ore talks, toughening its position to reject a benchmark deal accepted by Asian rivals.  - more

  Samancor's approach to jobs lauded - Trade union Solidarity has praised ferrochrome producer Samancor Chrome for reducing the number of retrenchments at its operations. - more

  Port admits pollution but refuses to say sorry -  The Esperance Port Authority has admitted responsibility for a series of pollution incidents, the most serious of which showered the town in toxic lead carbonate dust in December 2006. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around  $.33/lb higher, with all base metals trading in the green this morning. The US Dollar is trading 1/10 of 1% lower against the Euro, while NYMEX crude oil futures show a 1% gain and the price of barrel of oil is now over $72. Gold is 3/4 of 1% lower, while silver is off over 1% this morning. IN overnight trading, Asian markets ended slightly lower after China reported its exports fell in May. European markets are slightly higher this morning, and US futures are quiet, and slightly positive. In today's first US report, the Labor Department reported first time jobless claims fell to 601,000 last week, while ongoing claims rose to a record 6.82 million. The Commerce Department reported U.S. retail stores sales increased 0.5% in May, but the CD acknowledged much of the seasonally adjusted increase reflected higher gasoline prices. Business inventories report will be released later, with consumer confidence numbers out tomorrow. All eyes are on an auction of government debt today and the effect it might have on long term bond prices. In Australia, a trapped miner has been safely rescued from the Perseverance Nickel Mine and Norilsk announces the floods are clearing and it will resume shipping from the port at Dudinka shortly.  

  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 - Commodities - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals were sharply higher for most of the day yesterday before staging a modest retreat by the close. A slight recovery in the dollar, bringing it back below the 1.40 level against the Euro, coupled with a noticeable wobble in US stocks, both helped trim the earlier gains. ... Although we have been bullish on most metals for some time now, (with aluminum being the exception) we are getting somewhat more wary about prices at these levels. For one thing, many complexes are now approaching overbought territory technically, but more importantly, we think the US stock market is due for a rather substantial pullback given that interest rates are starting to march steadily higher. In this regard, the 10-year Treasury bond yield is now close to 4%, and could likely weigh on equities going forward. A moderate sell-off in the stock market (i.e., in the 200-400 point range on the Dow) could undoubtedly hit metal prices hard, as the various markets have all been marching higher in lockstep in recent weeks. Prices could therefore easily reverse course if one of these markets falter, and in our view, it is the US stock market that is most vulnerable. We would therefore start to lighten up on some length on metals here, although from the current looks of things we could push somewhat higher, at least for the balance of the week. ... Nickel is at $15,425, up $500, and basically where we were at this time yesterday. It seems that we are still on track to move higher from here, with $17,800 being the next resistance target." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Sources at Brazilian miner Vale S.A. said the company was prepared for Chinese steel mills definitively moving to the ore spot market, the Estado news agency reported Wednesday.
• BaseMetals  analyst Will Adams. "We are not surprised confidence and sentiment are bullish given the rebounds seen in equities and commodities, but for these better readings to then spark further gains in equities and commodities seems somewhat self-fueling and they may be creating dangerous positive feedback loops."
• (Yieh) Taiwan’s China Steel Corp, announced to increase domestic steel prices by an average of US$38.76/ton in July-August because of global improving demand.
• The EEI Weekly Power Consumption report shows weekly consumption for the week ending June 6 dropped a staggering 12.9% from the same week last year. The two prior weeks showed negative readings of -4.4% and -6.4%.
• Minmetals acquisition deal wins OZ shareholders approval - more
• (CD) China customs figures released Thursday showed exports fell 26.4 percent in May year on year, compared with a decline of 22.6 percent in April.
• Coke prices may stagnate as Chinese steel market could see corrections in July - more
• Urban fixed-asset investment up 32.9% in first five months - more
• There's Good Money in Metals - more
• Metals price surge to prompt premature restarts - more

  BHP Says Perseverance Nickel Mine Suspended After Rock Fall - BHP Billiton Ltd., the world’s biggest mining company, suspended operations at the Perseverance underground nickel mine in Australia after a rock fall at the mine. - more

• Relief over successful rescue - Mine workers have expressed relief over the rescue of a colleague trapped one kilometre underground in the West Australian Goldfields. - more

  Vargön Alloys AB announces today that due to the current low demand from the European steel industry it stopped all its production of ferrochrome from May 31st of 2009 until November 2009. The production stop will give a reduction of about 100,000 MT Ferrochrome from VAAB's annual capacity of 230,000 MT. The company will also reduce the manning for the future operations in Vargön and negotiations have started with the labor union. This temporary closure will not affect VAAB's regular customers who will be supplied from existing stocks until it restarts the operation. Vargön Alloys AB, a part of the Yildirim Group of Companies, is one of Europe 's largest producers of ferrochrome. Ferrochrome is an alloy that gives steel its hardness and corrosion resistance. Yildirim Group's total annual FeCr production is around 400,000 MT, which comes from its Turkish operation (ETI KROM) with about 170,000 MT and Swedish operation (VAAB) with about 230,000 MT.

  Some Correction In Nickel Expected - It has been a good run for the nickel price over the past two months, Barclays Capital notes the 3-month contract has gained almost 50% over this period and so far outperformed the 27% rise in copper and 13% gain in aluminium over the same time frame. - more

  Norilsk to restart loading ships after a halt - Russian metals giant Norilsk Nickel said on Thursday it expects to restart shortly loading first cargo ships after a seasonal halt of its main export outlet, the Arctic port of Dudinka, caused by flooding. - more

  J.P. Morgan boosts molybdenum price forecast - Molybdenum prices have been moving higher over the last month and last week passed $10/lb in the U.S. spot market, but they still are 27% below the peak of mid-2008 as demand from steelmakers remains soft. - more

• Moody's outlook negative on Asian base metals, steel sectors - Moody's Investors Service has assigned a negative outlook to the base metals, mining, and steel industries in Asia Pacific over the next 12-18 months despite the recent rebound in metal prices, the ratings agency said Wednesday. - more

  China Increased Molybdenum Imports And Recorded High Level Even In April = Moly Price Index Is Being Risen By Increased Production Of Stainless Steel In China - The imports of molybdenum into China in April of 2009 were known and still indicated the high level. - more

• Minmetals victory goes by the rules - It has been a harsh lesson, but China's regimented foreign corporate raiders are beginning to appreciate what it means to work within the rules of an equity led market system - more

  Industry needs moly price well above $10/lb to fund new supply – Thompson Creek CEO - The molybdenum price will need to rise significantly from the current $10/lb if the industry is to invest in bringing new production online that will be needed to meet future demand, Thompson Creek Metals CEO Kevin Loughrey said on Wednesday. - more

  Job and pay cuts feared in mining joint venture - Unions fear thousands of job losses and pay cuts under a joint venture of Rio Tinto and BHP Billiton’s Pilbara iron ore operations.- more (comment - Chinese, Japanese and European customers are upset, their own unions are upset, even the Australian government is upset because of the potential loss of tax revenue. Vale can't be happy about it as this strengthens major competitors. Is there anyone besides stockholders happy with this union?)

• Barnett to pursue merger stamp duty - West Australian Premier Colin Barnett has accused BHP and Rio Tinto of being "too cute by half" in their audacious plan to merge their Pilbara iron ore operations, hinting that the state may take the matter to the High Court. - 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, June 10

  Daily Nickel/Stainless Wrap-up

• Baltic Dry Index - minus 66 to 3,452. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Dollar, Yen Weaken as Recovery Optimism Increases Demand for Higher Yields // China's Consumer Prices Decline for Fourth Month, Aiding Recovery Efforts // Japanese Machinery Orders, Producer Prices Slide as Companies Slash Costs // Global Oil Reserves Dropped in 2008, Led by Russia, Norway, China, BP Says // Asian Stocks Climb on Commodities Rally, Australian Consumer Confidence // Russia May Switch Out of U.S. Treasuries, Into IMF Debt, Central Bank Says // Global Economic Confidence Improves for Third Month on Signs Worst Is Over // Fiat Forms Sixth-Largest Automaker as High Court Allows Chrysler Takeover // European Stocks Climb for Second Day; BHP Billiton, Total, Inditex Advance // Treasuries Decline as Russia Says It May Reduce Reserves Held in U.S. Debt // Fed Unveils Details on $1 Trillion in Lending, Doesn't Identify Borrowers // Bank of America Chief Lewis Says Fed Pushed for Merrill Deal Amid Losses
• The US Dollar and Euro did a major flip flop today, with the US Dollar now trading higher against the Euro by over 1/2 of 1%. NYMEX crude oil is trading nearly 2% higher, over the $71/barrel level, after US inventories of crude fell harder than expected. Gold succumbed to the rising Dollar, and is down over 1/10th of 1%, while as of this writing, silver is holding onto a small gain over over 1/10th of 1%. After a big start this morning, the rising Dollar tamed base metals trading in London, and the complex ended the day mixed. Indicator charts show nickel started the day much higher, then gradually fell as the Dollar strengthened, before rising a little at the end of the day. After a day that saw trading of nearly $650/tonne, from the high to low point, Dow Jones reports three month nickel ended the day at $6.76/lb , only $.04/lb lower than yesterday, and still the second highest closing of the year. Nickel inventories fell back below the 109,000 tonne level overnight, and the Baltic Dry Index saw another decline of 66 points. Interesting story going around about what is giving overseas markets an extra boost. Apparently two Chinese newspapers published their economic forecasts for the weeks government reports, and after today's PPI and CPI numbers came in identical to the predictions, and much different than what other "analysts" had forecast, many assume the newspapers have an inside source. Thus the markets are now anticipating their forecasts for China's industrial production report due out Friday to meet the 8.9%  forecast the newspapers published. We will see. In the mean time, the China Electricity Council  reported power consumption in May slid 2.58% YOY, but slightly higher than last month. German exports fell 28.7% in April compared with April 2008, according to the Federal Statistics Office, the biggest one month fall since the recession began. The European Central Bank warned the eurozone economy could shrink by more than 5% in 2009, worse than previously forecast. Here in the States, the Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending June 5, 2009. The Market Composite Index, a measure of mortgage loan application volume, was 611.0, a decrease of 7.2 percent on a seasonally adjusted basis from 658.7 one week earlier. ... The four week moving average is up 0.5 percent for the Purchase Index, while this average is down 12.2 percent for the Refinance Index. The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that April exports were $2.8 billion less than March exports of $123.9 billion and that April imports were $2.2 billion less than March imports of $152.5 billion. The 10 year Treasury note rose after Russia threatened to reduce its holdings of US debt (graph) Rising yields threaten to slow potential economic growth since higher borrowing costs could discourage investment, and make purchasing homes less attractive. And "The Freight Transportation Services Index (TSI) fell 1.2 percent in April from its March level, declining for the second consecutive month to the lowest level in seven years, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today.... The 1.2 percent decline in the first four months of 2009 was the second largest in the last decade, exceeded only by a 6.7 percent decline for the first four months of 2000." As of this writing, the Dow is slightly lower after a week, so far, of trading in neutral. The green shoot gardeners were picking thru a rash of weeds today, and the market is even starting to wonder if they identified their seeds properly. Until recently, higher oil prices have been seen as a sign of economic recovery. But as they have continued to rise on speculative buying, the market is starting to fear the increase in fuel will add another strain to any economic recovery. One thing is for sure. It will definitely take a bite out of any disposable income people might be left with. That is, for those fortunate enough to still have some.   

  Commodity/Economic Comments

• Michael Khosrowpour, an analyst at Triland Metals - "There is definitely a lot of funds behind the recent push...it's an added propeller when you see a weaker dollar..... People seem to be acting a lot on short-term (economic) sentiment, yes there is good news out there (but) there still is a lot of bad news."
• Gayle Berry, analyst at Barclays Capital - "People are getting more and more positive on the economic outlook. But my concern is that this strength in prices is above where the fundamentals are. If we start seeing some disappointing economic numbers then this strength could very quickly be reversed."
• (Reuters) Labor negotiations at Vale's Voisey's Bay nickel and copper mine in Eastern Canada appear to be making little progress, despite three months having passed since the contract expired, officials on both sides agreed on Tuesday.
• (Dow Jones) U.S. nickel exports fell 71.9% in April from the previous month, and was down 78.4% from the previous year, the Commerce Department reported Wednesday.
• (Dow Jones) U.S. nickel imports fell 8.6% in April from last month, and was down 3.9% from the previous year, the Commerce Department reported Wednesday.
• (Dow Jones) Analysts say steel stocks will experience at least a short-term bounce as manufacturers restock their steel inventories from depressed levels. Prices will rise on this increased demand because there's less available steel due to sharp production cuts in recent months. The price of steel made in the U.S. is also more attractive, having fallen below that of Chinese- and European-made steel, helped by the declining value of the U.S. dollar. Still, a longer-term appreciation of steel stocks depends upon a real improvement in demand beyond just inventory restocking, the analysts said.
• China Car Sales Jump ‘Beyond Imagination,’ Bring Wait - more
• Chart of the Day - Household Equity - more

  Baosteel burns its fingers on costly nickel hedges - The sharp fall in commodity prices in the recent months has caught many domestic enterprises off guard. - more

  ENRC says pressure on prices to remain - Miner Eurasian Natural Resources anticipates that pressure on prices for most of its commodities will remain into the second half of 2009, particularly as a supply surplus remains in most markets. - more

  Esperance Port Authority pleads guilty to poisonous pollution - The Esperance Port Authority has pleaded guilty to causing lead pollution in two incidents that led to children being poisoned and thousands of birds "falling out of the sky". - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around $.21/lb higher, but showing signs of potentially losing steam. Only tin is lower this morning. The US Dollar continues to lose ground against the Euro, down 1/4 of 1%. Oil closed above $70/barrel yesterday for the first time since Nov 4, 2008, and NYMEX crude futures show a 1-3/4% increase this morning, and over $71/barrel. Gold is up a full percentage point, and silver is higher by the same. In overnight trading, Asian markets ended much higher, with Europe and US futures following suit. All eyes are on China for positive news, who reported consumer prices fell 1.4% last month, while producer prices fell 7.2%.     

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Renewed dollar weakness and growing hopes for recovery in the global economy helped trigger a spectacular rally in metals yesterday, .... We are seeing additional gains in the metals complex as of this writing, with prices pushing higher on account of the weaker dollar. The greenback is now trading at just under 1.41 against the Euro, and has given up almost all the gains it made over the last few days in the wake of the stronger-than-expected US nonfarm payroll report.  .... The stronger tone we are seeing is also being helped by reports out of China showing industrial production rising by 8.9% in May from a year earlier, well ahead of forecasts, and the fastest rate of growth since September of last year. ... Nickel is at $15,425, up $425. Prices finally built some upside momentum yesterday, and prices have broken through the congestion area that was in evidence for the past week. It looks like we could move higher from here, with $17,800 being the next resistance target." (read Ed Meir's complete morning base metals report here)
• BarCap report - "While nickel market conditions have undoubtedly tightened in the second quarter versus the first quarter, some of the drivers appear unsustainable, and it will not be until end-demand conditions improve toward the end of the year, in our view, that current price levels will possess clear fundamental support."
• BaseMetals analyst Will Adams - "Although we are uncomfortable with the ongoing rallies in the metals from a growth point of view, the market seems to believe a 'V' shaped recovery is on
• the way and until something comes along to change this belief, prices may stampede higher.... If quantitative easing is going to have to last for a good few years then the value of fiat money may well decline, meaning intrinsic assets appear to rise in value when priced in fiat currencies. We are bullish for gold basis this argument, so maybe we should be bullish for other commodities too." "
• (Yieh) According to the Japanese Department of Finance, Japan imported 3,436 tons of stainless steel scrap in April, down by 22.8 percent compared with last month.
• (Dow Jones) Nearly 40% of Chinese nickel pig iron producers have restarted operations and expect a pickup in output by July, Barclays Capital said in a note late Tuesday. The revival in production is a problem for nickel prices, with end-user demand still slack, Barclays said.
• Mechel announces commissioning of the Shaft Furnace No. 8 after repair at its Southern Urals Nickel Plant subsidiary. Shaft Furnace No. 8 has been restarted at Mechel’s Southern Urals Nickel Plant subsidiary on May 26, 2009.
• (CCR) China’s power consumption in May slid 2.58 percent year on year, but representing a growth from the previous month, according to China Electricity Council (CEC).
• Moody's negative outlook for Asia-Pacific metals, mining, steel - more
• (CD) China's PPI down 7.2% in May
• On borrowed time: Consumer-led recovery - more
• China's auto sales may reach 11 million units in 2009 - more

  Miner trapped underground - One BHP Billiton employee is trapped in an underground refuge chamber at WA's north-eastern goldfields after a rock fall. - more

  Japanese Offers At $2,500 FOB Level In Ni-Based Stainless Exports - Chances are Japan's stainless steel producers will offer price increases of US$150-200/ton to around US$2,500/ton FOB in their export deals of nickel-based CR sheets for Asian destinations, mainly for China, market sources believe. - more

  Vale sets up to 48 pct price cut with Japan, Korea - Brazilian mining giant Vale agreed Wednesday to cut 2009 iron prices by as much as 48.3 percent with Japanese and South Korean steelmakers. - more

  Baosteel hikes July steel prices as pressure mounts - China's top steelmaker, Baosteel, has raised July prices for major steel product prices by more than 10 percent, industry sources said on Wednesday, as it faces the threat of higher-than-expected iron ore costs. - more

  Taiwan's China Steel to lift prices 1st time this yr - China Steel, Taiwan's top steel maker, will lift domestic steel product prices by an average of 7 percent in July and August from June, marking its first price rise this year, due to a supply squeeze. - more

  Canada won't take action over Vale's Sudbury cuts - Canada will not take any action against Brazilian miner Vale over cutbacks at its Sudbury mining operations, Industry Minister Tony Clement said on Tuesday. - more

  Courtesy AISI - In the week ending June 6, 2009, domestic raw steel production was 1,124,000 net tons while the capability utilization rate was 47.1 percent. Production was 2,173,000 tons in the week ending June 6, 2008, while the capability utilization then was 91.1 percent. The current week production represents a 48.3 percent decrease from the same period in the previous year. Production for the week ending June 6, 2009 is up 1.9 percent from the previous week ending May 30, 2009 when production was 1,103,000 tons and the rate of capability utilization was 46.2 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

Tuesday, June 9

• Baltic Dry Index - minus 163 to 3,646. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Yen Gains Most in Two Weeks Versus Euro as Stock Losses Spur Safety Demand // Japan's Recession Is Abating, Government's Broadest Economic Gauge Shows // China Seeks Debate on Global Currencies, Says No One Wants to Dump Dollar // Asian Stocks Fall on Valuation Concern; BHP, Hutchison Whampoa Lead Slump // Porsche Says It's in Exclusive Talks With Qatar Over Potential Investment // Arcandor Ends 128-Year History in Insolvency After Scrapping State-Aid Bid  // BlackRock Said to Offer $13 Billion Cash, Stock for Barclays Global Unit // European Stocks Rise; Nokia, Infineon Gain on Texas Instruments Forecast // Inventories at U.S. Wholesalers Fall for Eighth Month as Supplies Are Cut
• The US Dollar continues to trade lower against the Euro, by nearly 910 of 1% at the moment. NYMEX crude is higher by 2% and has yet to best the $70/barrel level. Gold is higher by 6/10 of 1% and silver is up by 2%. Base metals all ended solidly in the green, helped by the Dollar's fall, but mostly by news out of China that vehicle sales in that country jumped 34% in May. Indicator charts show nickel spent the day in a climb, and ended the session with positive momentum. Dow Jones reports three month nickel ended the day at $6.80/lb , its highest close since October 3, 2008. While analysts can argue all day about what is causing this increase, they all agree that the fundamentals do not support the increase, and we would have to agree. LME stored nickel inventories rose over the 109,000 tonne level overnight. Cancelled warrants dipped below 4% today. China was caught quietly stockpiling nickel, but as the price has risen, there is evidence that may have cooled. Pig nickel production in China is reportedly revamping. Stainless steel demand, the primary recipient of nickel, is timid at best, and sketchy at worst. So where is this increase coming from? In our opinion, it is primarily funds generated, and their pursuit of hard assets in uncertain times, and speculative buying on hopes of a quick economic revival. The Dollar/Euro ratio may help give a morale boost for the trading day, but it can not explain this bull charge. The recent run started on April 1st when nickel closed at $4.58/lb, after spending the latter half of February and all of March in the tank. By April the 9th, three month nickel closed above $5, and above $6/lb on May the 7th. After spending the middle of May languishing, the bull run fired back up the last week of May and has yet to let up thru today. Even the most bearish of analysts say technical's could easily take nickel into the $7/lb range, with the more bullish saying the $8/lb level is possible. Whatever is happening, it now appears 2009 will buck the historical precedence we have been talking about, and May is unlikely to be the high point for 2009. Sucden's day old nickel chart shows nickel trading since the first of the month (here) but does not include today's spike. Good news for nickel producers and investors, bad news for stainless steel producers and consumers. If we were to offer unsolicited advise - investors should give up fighting the trend, and stainless steel users should get ready to bend ...... over. The good news is for those distributors of stainless steel sitting on overpriced inventory. It isn't quite as overpriced today as it was last month. The Baltic Dry Index continues to slump, down another 163 points, with all three sub-indexes in the red. Steel producers from China, Japan, and Europe are not happy with the Rio-BHP agreement, and have asked for their regulatory agencies to look closely into the situation. The Commerce Department reported today that wholesale inventories fell 1.4% in April, more than economists expected. Wall Street has been quiet so far today, and is slightly lower as we write. Jeff Frankel, who sits on the National Bureau of Economic Research Business Cycle Dating Committee, wrote in his blog yesterday under the title "The labor market has NOT yet signaled a turning point.... Speaking entirely for myself, I like to look at the rate of change of total hours worked in the economy. Total hours worked is equal to the total number of workers employed multiplied by the average length of the workweek for the average worker. The length of the workweek tends to respond at turning points faster than does the number of jobs." (more) Here is a graph showing hours worked published by the New York Fed (pdf here).

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Dow Jones) China will likely produce between 35,000 metric tons and 60,000 tons of nickel pig iron in 2009, a senior executive at U.K.-listed Xstrata PLC said Tuesday.
• (AIF) POSCO, Hyundai Steel Co and other South Korean steelmakers plan to spend more than 10 trillion won (US$7.97 billion) this year to improve and expand their facilities amid the economic downturn, a survey showed Tuesday. According to the poll conducted by the Korea Iron & Steel Association, 33 local steel mills said they will invest a combined 10.12 trillion won this year for facility expansion, up 41.6 per cent from last year.
• (AP) Brazil's government statistics agency says Brazil's economy contracted 0.8% in the first 3 months of 2009 compared to the fourth quarter of 2008, putting the nation in a technical recession.
• BHP mining contractors facing the axe - more
• Green Shoots or Yellow Weeds? - more
• Guards accused of assaulting workers - more
• Stagflation Scenario Stalks U.S. as Commodities Jump - more
• 600,000 Seniors About To Lose Their Homes - more
• Major Battle Rages in Gold Market - more
• Russia could seize steel firm's assets- more

  POSCO sees H2 recovery, 33 pct price cut with BHP - South Korea's POSCO, the world's No.4 steelmaker, warned on Tuesday that the current quarter will be most challenging and it was seeking to cut iron ore prices by 33 percent, along with BHP Billiton. - more

• Posco CEO: 2Q Will Be Most Difficult Period For This Year - The second quarter will likely be the most difficult period this year for Posco (PKX), the world's fourth-largest steelmaker by output, the company's chief executive said Tuesday. - more

  Russia MAIR says scrap market corrupt, inefficient - MAIR Group President Viktor Makushin on Tuesday blamed corrupt and inefficient collection practices as well as artificial demand for keeping Russian steel scrap prices at $170 per tonne, 31 percent above Polish levels. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around  $.22/lb , with all LME traded base metals higher this morning. The Euro si trading higher against the US Dollar, which is adding a boost to base metals trading, and is currently trading about 1/2 of 1% higher. NYMEX crude futures are up 2% and around $69.50/barrel. Will we see $70 today? Gold is trading nearly 9/10 of 1% higher, and silver is higher by nearly 3%. In overnight trading, Asian markets ended lower for a second day, while in Europe, markets are generally quiet and slightly higher. US futures show Wall Street could open quietly, after a surprise bounce late yesterday, brought the market back to an even ending. In US reports this morning, the ICSC-Goldman readings for the June 6 week where year-on-year same-store sales were down 0.8% for the lowest reading since early May. German industrial production fell harder than expected, down 1.9% MOM and down 21.6% YOY.    
• Bloomberg morning base metal news - more

  China Stainless Steel Production Boosts Nickel, Macquarie Says - China’s increased nickel imports, boosted by expanding stainless steel output and a price gap between the domestic and overseas markets, have driven a rally in London prices, Macquarie Group Ltd. said. - 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
• Global Mining News - pdf here
• Market Drivers - Commodities - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals ended mixed yesterday, as early losses were rolled back when the dollar failed to hold on to earlier gains. Aluminum stood out as one of the winners, but significantly, failed to break above key $1650 resistance, the top end of a congestion band that stretches back to January. It was a very quiet day otherwise, with the little in terms of news and not much else seen in other markets. ... We are off to a generally higher start as of this writing, with copper leading the charge higher.  .... Nickel is at $14,600, up $300. Prices are still in breakout territory, but are having trouble building any momentum. We thought that a downside test of support at $13,750 was in the cards yesterday, but prices never got there. We would remain neutral on the complex for the moment, pending clearer definition on the charts" (read Ed Meir's complete morning base metals report here)
• (Reuters) Spanish stainless steel maker Acerinox said on Monday it was increasing the base price of its long products by 100 euros a tonne. The world's biggest stainless steel maker led the European market by announcing steel price rises of 100 euros a tonne in April and then another rise by the same amount in May.
• (AM) Employment in Australia's mining and construction sector is down 31% from the same time last year, according to the Manpower Employment Outlook Survey released today.
• (JMB) NSSC Raises Price of Ni Stainless Sheet Price, Lowers Cr Sheet
• Apex Minerals and Croesus Mining to forge new WA nickel exploration company - more
• (Interfax) The Chinese government is considering preferential tax policies, including lower value-added tax (VAT) and resource tax, in order to give domestic iron ore producers a leg up, an official with the China Iron and Steel Association (CISA) told Interfax on June 9.
• China Steel Group ‘Firmly Objects’ to Rio-BHP Venture - more
• China fears iron ore 'monopoly' in Rio-BHP venture - more
• Japan steel body joins anti-Rio/BHP chorus - more
• EU steel makers seek probe into BHP-Rio deal - more
• World Average Carbon Steel Prices - Latest Forecast from MEPS - more
• A bubble in the making - more
• Jim Rogers: Commodities, ETFs Are the Solution - more

  Stainless steel ind seeks withdrawal of cap to raise exports - The domestic stainless steel industry, dominated by JSL Ltd, has sought removal of value cap on shipments of the alloy with an aim to increase exports which were hit hard amid the global economic slowdown.- more

  Highlands Pacific: Ramu Nickel On Track For Late 2009 Start - Highlands Pacific Ltd. Tuesday said that its minority-owned US$1.37 billion Ramu nickel project in Papua New Guinea is on track for commissioning later this year. - more

  BHP Billiton, Asiaticus nearing deal to push through with nickel project — Atienza - Australian mining giant BHP Billiton is finalizing talks with its local partner to move forward with the exploration of a nickel mine in southern Mindanao, the head of the Environment department said yesterday. - more

  Gerdau Ameristeel Announces Suspension of Production and Mill Closure  - Gerdau Ameristeel Corporation announced today that it is suspending production at its Sayreville, New Jersey steel mill and closing its rolling mill in neighboring Perth Amboy, New Jersey due to lower demand for its products resulting from the downturn in the economy. The company said these actions are expected to occur gradually over the next several months. The company indicated that it would restart operations at the Sayreville facility when business conditions warrant. The company is also entering into discussions with the United Steel Workers regarding the potential closure of the Company's steel mill located in Sand Springs, Oklahoma. - 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, June 8

• Baltic Dry Index - minus 163 to 3,646. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Eastern, Shanghai Airlines to Combine After Losses Lead to Bailouts // Japan Corporate Bankruptcies Fall for First Time in Year; Sentiment Rises // Asian Currencies Fall Led by Won, Rupiah on Signs U.S. Slowdown Is Easing // Asian Stocks Drop on Valuation Concern; Feng Hsin Iron Falls, Canon Rises // Ireland's Credit Rating Cut for Second Time by S&P on Cost of Bank Rescue // BRICs Add $60 Billion to Reserves in May as Medvedev, Zhou Protect Exports  // European Stocks Decline; Anglo American, Lloyds, Air France-KLM Lead Drop // Obama Aid Signals Deal With `Devil' for Banks as Industries Get New Rules // Stocks Decline on Speculation Interest Rates to Rise; Freeport, AT&T Fall 
• The US Dollar is maintaining its winning streak against the Euro, and up nearly 6/10 of 1%. NYMEX crude is riding an investor bubble and is fighting the higher Dollar, down 3/10 of 1% and over $68/barrel. Gold is down 1/2 of 1% and silver is lower by 2-1/4%. Base metals ended mixed, most quietly lower. Indicator charts show nickel opened much lower this morning, spent the day in a gradual climb, then buckled again late. Dow Jones reports three month nickel ended the day at $6.49/lb . Nickel inventories held in LME warehouse gained slightly overnight, while the Baltic Dry Index had its third straight day of losses, down 163 points. The International Stainless Steel Forum  is reporting worldwide stainless steel production is at its lowest levels since the year 2000. Markets are lower today, with the volatility index up nearly 7%, but the bears seem to be enjoying the day and not anticipating any major shift in the recent bull run. Some talk about what the market calls a "triple witching" happening next week. This happens on the third Friday of March, June, September and December, when stock-index futures, stock-index options and stock options expire simultaneously. The speculation seems to be that metals sometimes pull back a little before this event takes place, but there are those who doubt this. Inflation and higher interest rates seem to be primary topics of interest among traders today. Our favorite line of the day was this one by Chinese Xinhua in reference to Rio Tinto's decision to join forces with BHP - "Rio Tinto is like a dishonourable woman: once she loved the money in Chinalco's pocket but she actually did not love the man himself. Now she is breaking faith and kicking down the ladder." The Chinese are actually being very gracious. The English word is much shorter and more blunt, placing emphasis on the 'screwed' part of the deal. And our favorite story comes from England. In a strange twist of environmental irony, the 'Carbon Neutral Expedition', consisting of three guys from England, apparently set off on April 19th  in a 40 foot sailboat, with the goal of sailing to Greenland's polar ice cap and making the first carbon-neutral crossing of that country. After a hurricane-force storm capsized their boat three times last week, the crew was rescued by the Overseas Yellowstone, a 113,000-tonne oil tanker. - more Until tomorrow.

  Reports

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

  Commodity/Economic Comments

• Barry Ritholtz - The Big Picture - "The Bond sell off, which has been sending rates appreciably higher, is being caused by two distinctly different camps. The first are those who believe that the recession has crested and is coming to an end, that global growth will soon resume, and the Fed will therefore be raising rates.This is the Green Shoot crowd. The other camp sneers at the Green shooters, but does not disagree with their conclusion that the Fed will soon be tightening. This is the inflation camp, and includes the gold bugs, commodity bulls, dollar bears, and hyper-inflationistas. With Oil up 100% for the year, and the Dollar down nearly 10% from its recent peak, I find this group harder to disagree with. The irony is that each sees the Fed tightening and rates going higher. This is the conundrum the Fed finds itself in."
• (CO) The nickel price has overshot after tracking the rise in the copper price. There is no fundamental reason for this besides the misleading rise in Chinese refined nickel imports, which in our view do no more than highlight the premium between Chinese nickel prices and the LME price, and also perhaps some restocking. We are therefore sticking with the view that the price must come down. This is even more likely given that we are heading into the traditionally quiet summer months. Short-term LME three-month price: $11,250/t-$14,500/t.
• (Dow Jones) LME base metals are likely to fall over the next quarter, particularly as "Chinese import demand is expected to fall in line with reduced levels of restocking and SRB stockpiling as well as being the seasonally lower period for consumption," Barclays Capital says.
• Chinese media is reporting Turkish manufacturer of low-carbon ferrochrome Eti Elektrometalurji  will reopen two of its furnaces on June 15th, which have been shut down since October 15, 2008
• (MB) Chilean molybdenum converter Molymet is more confident about the state of the global molybdenum market, ceo John Graell told MB in an interview, predicting an average molybdic oxide price of $11 per lb this year.
• RBC Capital Markets - Scarcity of fundamental news to keep broader base metals complex looking to external factors to determine short term price direction
• Moody`s downgrades Tata Steel to Ba3; outlook stable - more
• RusSpetsStal eyes defence orders to survive crisis - more
• Exporters Face Container Shortage - more
• Commodity bubble feared as gains ignore fundamentals - more

  First Quarter Stainless Production Lowest Since 2000 - The International Stainless Steel Forum (ISSF) has released preliminary stainless steel production figures which show that 4.8 million metric tons (mmt) of stainless was produced worldwide in the first quarter of 2009. This is the lowest level of first quarter production since 2000. - more

  Xstrata announces "indefinite" shutdown of Montcalm Mine in Timmins - Xstrata Nickel has announced the indefinite shutdown of the Montcalm nickel mine in Timmins that suffered significant structural damage as the result of a large blasting operation in March.  - more

  European moly oxide prices edge higher, consumer business slow - The molybdenum oxide market in Europe was steady last week with higher prices talked but little consumer business concluded. - more

  China offers tax rebate to boost steel exports - China on Monday said it is offering a 9 percent tax rebate on exports of hot-rolled steel products, aiming to revive tumbling exports as the world's top steel producer struggles with steady output growth - more

• China's metal firms to file for anti-dumping investigation into sulphuric acid - China's nine major nonferrous metal companies are planning to submit an application to the Ministry of Commerce (MOC) for anti-dumping investigation into sulphuric acid imported from Japan and the Republic of Korea. - more
• Chinese Steel Group Opposes BHP-Rio Deal - The leading steel industry group in China has come out against a joint venture consolidating iron ore assets of BHP Billiton and Rio Tinto in Australia, the influential Caijing Magazine reported. - more
• Snubbed by Rio, what will Chinalco do next? - China's state-owned metals conglomerate Chinalco suffered a major setback last week when Rio Tinto spurned its planned $19.5 billion investment in favour of a tie-up with BHP Billiton - more
• Jilted China says Rio 'dishonourable' - Rio Tinto has behaved like "a dishonourable woman" in spurning China's white knight, Chinalco, according to the country's official news agency, Xinhua, in the latest response to the failure of the pair's $US19 billion ($24 billion) tie-up. - more

  Stainless steel 'on the mend' - The South African stainless steel industry believes the sector may have reached a turning point, but analysts remain skeptical.  - more

  RFC Corporate Finance and RBC Capital Markets emerge as counter bidder for Minmetals - Last Thursday the once third biggest Australian mining house said that contrary to media speculation it had not received a counter bid, then on Friday is said it had been advised it should expect to receive refinancing proposals from one or more parties that day, but it didn't happen. - more

• OZ Minerals rejects RFC Group plan: media report - OZ Minerals Ltd rejected a US$1.2 billion recapitalization proposal by about 20 institutions led by RFC Group and Royal Bank of Canada, the Sydney Morning Herald reported on its Web site. - more

  German steel output posts sharpest rise since 2006 - German crude steel output rose by five percent in May month-on-month, adjusted for seasonal swings, the biggest monthly increase since February 2006. - more

  Barnett threatens heat on BHP, Rio - West Australian premier Colin Barnett has warned Rio Tinto and BHP Billiton they need to remember that the WA Government - on behalf of the people - owns the Pilbara iron riches that the mining titans plan to throw together in a $US115 billion ($A145 billion) 50:50 joint venture. - more

  Mines and plants hit by low prices, high costs - The global financial crisis and sharp falls in metals prices have forced several companies to abandon or put on hold their plans to bring new mines onstream. - more

  Russia's richest man prefers Siberian township to plush Aegean hotel - Russia's richest citizen, billionaire Mikhail Prokhorov who owns ONEXIM Group keeps the journalists writing for tabloids really busy. - 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 aluminum the only gainer among base metals this morning.  The US Dollar continues to strengthen against the Euro, up by 2/3 of 1% this morning. NYMEX crude oil  futures are down nearly 1-1/2%. Gold is lower by 3/4 of 1% and silver is down 2%. In overnight trading, Asian markets ended lower as traders worried the three month rally has taken shares prices too high. European markets are lower this morning, as mining stocks take a hit, and US futures show Wall Street may follow the rest of the world lower.    

  China Stainless Steel Production Boosts Nickel, Macquarie Says - China’s increased nickel imports, boosted by expanding stainless steel output and a price gap between the domestic and overseas markets, have driven a rally in London prices, Macquarie Group Ltd. said. - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals settled mixed on Friday, as a round of profit taking and a surge in the dollar hit commodities. The greenback strengthened by its largest daily amount in five months on reports showing that US nonfarm payrolls fell by 345,000, substantially less than the 520,000 expected. Although we did see an initial pop in all the markets after the number came out, the gains fizzled quickly. Although the dollar is again higher as of this writing, leading to another round of weakness in commodities, we suspect that that it will be difficult for the greenback to maintain its gains going into this week. ... Nickel is at $14,250, down $350 flat on the day. Prices could be heading slightly lower to test the breakout lines evident in our charts. Depending on whether we bounce off these level or not, will tell us whether nickel’s recent breakout is for real. We would be neutral on nickel for the time being, as we watch to see what prices do as they approach the breakout line.(read Ed Meir's complete morning base metals report here)
• (Dow Jones)  - "LCH.Clearnet, which clears trades for the London Metal Exchange, will lower initial margins on contracts of steel, nickel and tin, the group said Friday. ... Primary nickel initial margins will be cut to $1,900/ton from $2,100/ton, ..."
• China set to buckle on iron ore price - more
• OZ rejects $1.5bn, sticks with Minmetals - more
• Baltic Dry Index Rise Indicates Good Economic Tidings - more
• Base metals: Where are they headed? - more
• The Most Important Economic Indicator You've Never Heard Of - more
• China and the Fed will tame Obama spending - more
• Chinese economy bottoming out, but to stage U-turn recovery - more
• Higher commodity prices may not be good news - more

  FNX decides to carry on despite mill closure - FNX Mining of Toronto has announced plans to continue mining with its full complement of employees despite the eight-week shutdown of Vale Inco's Clarabelle mill. - more

• Most worried about mining's future - More than half the respondents to an online Sudbury Star poll question say they were worried about the short-term future of mining in Greater Sudbury. - more

  China May Revive To Produce Ni-Contained Pig Iron, Because Of Reducing Ni-Ore Stocks = Tsingshan Stainless Steel Company Is Scheduled To Complete Ferro-Nickel Plant In October / 09 - In view of the rebounded nickel price, it is marked to see how does the production of nickel-contained pig iron in China move. - more

• Chinese spot molybdenum oxide imports fall on high offer prices - Chinese spot molybdenum oxide imports were almost at a standstill this week as offer prices to China remained high at above $10/lb on a CIF basis, according to trade sources. - more
• China daily steel output 1.5 mln T late May - China's daily crude steel production in late May reached 1.49 million tonnes, industry consultancy website Mysteel said on Monday, citing official statistics. - more

  Base Metals Go Back To Basics - (excerpt) "Aluminum imports quadrupled in April to a record high. But with China becoming increasingly well supplied, we expect imports to fall," said Barclays Capital analyst Gayle Berry who said aluminum and nickel have the biggest downside risks because of a ramp-up in Chinese production and high inventory levels.- more

  WA Premier talks tough on BHP-Rio over merger - WA Premier Colin Barnett has threatened to block attempts by BHP Billiton and Rio Tinto to reap $US10 billion ($A12.4 billion) in cost savings from combining their Pilbara iron ore operations if they do not pay $1 billion in stamp duty and at least $300 million a year in additional royalties. - more

  Crisis hits stainless steel industry - Last year proved to be a tough one for the stainless steel industry, the Southern Africa Stainless Steel Development Association (Sassda) said on Friday, after figures for 2008 were released. - more

• Nickel price ‘could prop up stainless steel’ - SA’s stainless steel industry has taken a knock from a drop in the steel market, with last year’s apparent consumption almost 6% below the previous year’s levels. - more

  Shanghai Steel Index thru Friday

  Commodities to see huge inflow of cash by year-end  - Hedge funds, pension funds and family offices are expected to add exposure to commodities, especially precious metals by the end of 2009, even as insurance companies and private banks reduce it, said analysts. - 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, June 5

• Baltic Dry Index - minus 284 to 3,809. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Rio Tinto Scraps Chinalco Deal for $21 Billion Offering, BHP Iron Venture // Asian Stocks Head for Third Weekly Gain; BHP, Rio Tinto Surge on Venture // GM British Workers Jeopardized as Germans Bankroll Opel, Magna Plans Cuts // European Stocks Rise, Paced by Rio Tinto, BHP Billiton; Lafarge, Remy Gain // Job Losses in U.S. Slow More Than Estimated in Sign Recession Is Abating // Dollar Rises Most Versus Euro Since April as Fewer Jobs Cut Than Forecast // Emerging-Market Stocks Head for Third Weekly Gain on Higher Oil, Metals
• The US Dollar is having a big day against the Euro, thanks to the employment numbers released this morning. Presently it is trading about 1.2% higher, but stalling. With this hard of a one day charge, one would think the rest of commodities would be doomed for the day, and while many were, not all took a beating. NYMEX crude oil is trading even, and just under $69/barrel. Gold is lower by 1-3/4% and silver is down 2-1/2%. Base metals ended mixed, and considering the Dollar's move, did very well. Indicator charts show nickel spent much of the day heading lower, until late, when much of the days loss was recovered. Dow Jones reports three month nickel ended the day at $6.62/lb , where it closed on Tuesday. LME stored inventories of nickel slumped only slightly overnight, and for a second day, the Baltic Dry Index fell by 284 points. We have been reporting on nickel's price trend lately, and comparing it to historical precedence. Based on this research, nickel stood a good chance of seeing its high point for 2009 come last month. Based on the first week of June results, nickel would have to average $5.50/lb for the remainder of the month to see June's average fall below May's average of $5.73/lb. Possible? Yes. Likely? No. As long as traders believe the end of the worst is behind us, and things will get better from here, then traders will continue to bet on demand picking up. Worth noting that the American media has been gradually shifting its attention from those claiming that equity markets are in a bear run rally, to those now proclaiming we are firmly in a new bull run. We will let the so called experts make the proclamations, but it is beginning to look like it would take something awfully serious to take place to cause the market to fall back to its March lows. Let's hope for those who need to get back to work, that the only serious news in the future, is seriously good news.
• Have a safe and enjoyable weekend!

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Dow Jones) "Ferrochrome demand is expected to be down 24% in '09, compared with a 3.5% decline in '08, due to the economic downturn, says Roskill Information Services. Cites the sudden disintegration of end-user demand, but says recovery could materialize from 4Q '09 "as the global economic situation begins to ease". Says ferrochrome prices likely to average between $0.70/lb and $0.80/lb this year..."
• (Comtex) The ongoing iron ore price negotiation between China Iron and Steel Association (CISA) and Rio Tinto is scheduled for conclusion this month, according to Luo Bingsheng, vice chairman of CISA.
• China on acquisition spree using recession to advantage - more
• Pensions help drive hedge fund flows to $50bn - more

  A CEO for Noront, finally! - After spending the better part of a year looking for a new chief executive, junior miner Noront Resources Ltd. has finally found one. - more

  World Steel slams Rio Tinto, BHP iron ore joint venture - The World Steel Association, or worldsteel, Friday slammed the joint venture of Rio Tinto and BHP Billiton's Western Australia iron ore interests, saying it should be blocked due to concerns over competition. - more

• Steel industry renews call for review - The World Steel Association (worldsteel) has repeated its concerns issued in February 2008 following today’s announcement of a possible Rio Tinto/BHP Billiton joint venture (JV) of their Western Australia iron ore interests. This is matched with a formal request that all relevant competition authorities should very carefully review this proposed alliance. - more
• BHP Billiton may launch takeover bid for Rio - BHP Billiton Ltd may eventually launch a full-blown takeover bid for Rio Tinto Ltd, further to the mining giants' iron ore joint venture announced today. - more

  Russia's Norilsk Nickel returns to profit in H1 -CEO - Russian mining giant Norilsk Nickel returned to profit in the first half of 2009 after posting its first ever loss in 2008 due to writeoffs, Chief Executive Vladimir Strzhalkovsky said on Friday. - more

• Russian Billionaire Prokhorov Seeks Norilsk, Rusal Merger - Russian billionaire Mikhail Prokhorov said he wants OAO GMK Norilsk Nickel and United Co. Rusal to merge to create a Russian rival to BHP Billiton Ltd., the world’s biggest mining company. - more

  The curious case of the reclusive, resource-hungry Russian - In the spring of 2008, the head of Neo Material Technologies Inc. was on a European business trip when he took a detour to Switzerland in search of a mysterious Russian billionaire. - more

  Bacteria From The Deep Can Clean Up Heavy Metals A species of bacteria, isolated from sediments deep under the Pacific Ocean, could provide a powerful clean-up tool for heavy metal pollution. - 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 lower and off earlier highs. Other base metals are mixed, most quiet. The US Dollar is just slightly higher against the Euro at the moment, by less than 1/10 of 1%. NYMEX crude oil is higher by 2/3 of 1% and over $69/barrel. Gold is lower by nearly 1/2 of 1% and silver is down nearly 2%. In overnight trading, Asian markets ended higher, and in morning trading, European markets are higher. US futures show Wall Street should open higher, but we might see some profit taking later. The Labor Department just released employment figures for May. The official US jobless rate jumped from 8.9% to 9.4% after another 787,000 jobs were lost in May, bringing the total to 14.5 million, its highest number since August 1983.  From the 'less bad is better' department, fewer jobs were lost in May than in the prior seven months.  It is official. The deal between Rio Tinto and Chinalco is out. And Dow Jones is reporting Standard & Poors cut ThyssenKrupp L-T rating To 'BBB-' today. Ed Meir of MF Global says nickel may still have room to climb, while we posted an  interesting opinion below on what may be driving fund money into commodities all of a sudden - See "Underperformance Angst & Panic to the Upside: Fear Drives Wall Street"- more
• 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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "In an impressive reversal, metals finished sharply higher yesterday, more than making up for Wednesday's selloff. The buying was brought on by a US macro reading that typically does not cause much of a stir, although this time it clearly did. We refer to the release of the latest US weekly initial claims readings, which measures new unemployment filings, while also tallying up how many unemployed workers are still receiving compensation (known as continuing claims).  ... Metals are modestly mixed as of this writing, having come off earlier highs.  ... On a broader note, investor money clearly is piling into commodities. Buyers are hoping that an imminent global economic recovery, coupled with continued weakness in the dollar, should trump the currently weak fundamentals. How long this disconnect will last is anyone's guess, but for now, it is inadvisable to stand in its way.  ... Nickel is at $14,700, and flat on the day. We suspect nickel will work slightly higher from here, as it too, is in breakout territory." (read Ed Meir's complete morning base metals report here)
• (RN) Turkey’s Eti Elektrometalurji will restart two low-carbon ferrochrome furnaces on June 15.
• (MW) Engineering company Metix reports that it is nearing completion on Project Sunrise, at ASA Metals’ ferrochrome plant near Burgersfort, in Limpopo, entailing the engineering and construction of a 600 000-t/y pelletising and sinter plant.
• (Yieh) According to the Japanese Department of Finance, Japan's stainless steel scrap exports in April hit 21,050 tons, down by 31 percent compared with last month.
• Sherritt's work poses challenge - more
• (Reuters) Russia should return to the idea of a mega merger of its metals companies, including Norilsk Nickel after the end of the economic crisis, metals billionaire Alisher Usmanov said on Friday.
• Freight railroad traffic was down sharply in May in comparison with the same month last year, the Association of American Railroads reported today. U.S. rail carload traffic in May 2009 fell 24.7 percent (325,267 carloads) compared to May 2008 to 989,306 carloads. U.S. rail intermodal traffic (which is not included in carloads) fell 19.7 percent (177,482 trailers and containers) to 723,898 units in May 2009.
• Deutsche Bank’s Ackermann Says Conditions Haven’t Normalized  - more
• Underperformance Angst & Panic to the Upside: Fear Drives Wall Street - more
• CFOs Hoping for the Best, Planning for the Worst - more

  Stainless steel sector 'took a knock' - Last year proved to be a tough one for the stainless steel industry, the Southern Africa Stainless Steel Development Association (Sassda) said on Friday, after figures for 2008 were released. - more

  Salzgitter To Up Flat Steel Prices By EUR20/Ton July 1 - German steelmaker Salzgitter AG will raise prices for flat steel products from July 2009, saying that orders and prices in this segment of the steel market appear to have bottomed out. - more

  JSW Steel clocks 33 pc growth in crude steel production in May - JSW Steel has clocked a 33 per cent growth in crude steel production for May 2009 as compared to the year-ago period. - more

  Rio dumps Chinalco for iron ore tie-up with BHP - Miner Rio Tinto spurned $19.5 billion of funding from China on Friday in favor of a cost-saving iron ore joint venture with rival BHP Billiton and a share sale to slash its debts. - more

• BHP, Rio tie-up 'to free up rail access' - Plans by BHP Billiton Ltd and Rio Tinto Ltd to set up an iron ore joint venture in Western Australia should force open up their infrastructure to third party access, Fortescue Metals Group Ltd says. - more
• Chinalco confirms deal breakup with Rio Tinto - Aluminum Corp of China, or Chinalco, confirmed Friday that Australian mining firm Rio Tinto has scrapped the proposed $19.5 billion of investment by Chinalco, and Rio Tinto would pay a break fee of $195 million to the Chinese aluminum maker. - more
• China's iron ore stockpile will reach 120m tonnes - CHina's swelling iron ore stockpile is expected to soar as high as 120 million tonnes this month, with as much as 60 million tonnes entering the country's ports in May alone and more ships already lining up in Tianjin harbour in the country's north. - more
• Expert: China has an edge in iron ore price talks - A global iron ore oversupply, lower spot prices, and huge stockpiles in China's domestic iron ore market will improve the odds of Chinese steel mills in securing more cuts in its iron ore price negotiation with overseas suppliers, Du Wei, an Umetal analyst told Xinhua Thursday. - more

  Xstrata workers see red over clawback - Industry Ministry Tony Clement says he will look into why the federal government is planning to dock $175 from the first two Employment Insurance cheques laid off Xstrata Nickel workers are supposed to get. - more

  Battle lost to miners but farmers dig in on land use war - Hundreds of farmers last night vowed to continue their campaign to prevent mining operations on the state's prime agricultural land despite losing a key political battle yesterday in the NSW Parliament. - 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)
• 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, June 4

• Baltic Dry Index - minus 198 to 4,093. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Australia's Unexpected Expansion May Mask Weakness as Investment Slumps // Japanese Companies Slash Spending 25% as Exports Collapse, Profits Plunge // Chinese Banks' Debt Financing Costs to Rise After Bond Spree, Merrill Says // Asian Stocks Fall for First Day in Five on Commodity Prices, U.S. Services // Russia Central Bank Cuts Rate for Third Time in Six Weeks to Boost Lending // U.K. House Prices Unexpectedly Climbed in May, Adding 2.6%, Halifax Says // European Stocks Decline for Third Straight Day; Rio Tinto, Genmab Decline // Initial Unemployment Claims in U.S. Decrease, Signal Worst of Slump Ending // Fixed 30-Year Mortgage Climbs to Highest Level of Year, Freddie Mac Says
• The US Dollar and Euro are flip flopping today, with the Euro just barely higher at the moment and off earlier highs. NYMEX crude is up over 3-1/2% and around $68.50/barrel. Gold is up 1.4% and silver is up 2-3/4%. Base metals were all red this morning, but all ended solidly in the green after afternoon trading saw a marked reversal. Indicator charts show nickel started the session lower, floundered for much of the session, then went ballistic about 3 pm London time. Media is quoting traders as crediting a fresh inflow of fund money, technical buying and buy stops the reason for the sudden rush. Dow Jones reports three month nickel ended the day at $6.67/lb , a new high closing for 2009. After only four days of trading, it is starting to appear that nickel price historical precedence will not guide traders this month. LME stored inventories of nickel fell below 109,000 tonnes overnight, while the Baltic Dry Index ended its 23 consecutive days of gains, and fell 198 points. The jobless figures we reported this morning are overshadowing weak retail results and helping keep Wall Street in a positive mood today. The fact that ongoing claims fell for the first time in a very long time, while small, could be seen as a major psychological confirmation to those bullish on future recovery hopes. Is it a blip? Very possible. The retail numbers released today confirm earlier reports that Americans are saving more and spending more cautiously. All in all, an interesting day for base metals. It tells us that Ed Meir of MF Global may be right, when he stated this morning ,while the market was still down, that metals could see one more big spurt before they headed into a corrective mode. On the 5th of May, we saw that session end at $5.44/lb. So there is room for some correction, if the funds will allow it.  

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• BHP offers iron ore indices to China steelmakers - more
• (Dow Jones) Russian coal and steel group OAO Mechel's (MTL) nickel output in the first quarter of 2009 was up 45% from the previous quarter and output at its Southern Urals Nickel Plant was back to "pre-crisis" output levels in June, the company said Thursday. In the first quarter of 2009, the company raised output to 2,900 metric tons from 2,000 tons in the fourth quarter of 2008. However, production was still down 33% from the first quarter of 2008.
• Standard Bank analyst Leon Westgate - "People don't expect a dramatic, swift recovery, but they do expect a recovery. People are now brave enough to look a bit further forward now that things appear to have bottomed. China's economy is growing and the economic data is not great but it's not getting worse."
• Canada - Economy has reached a turning point: Scotiabank  - more
• Atlantic Canada Needs 20,000 Skilled Trades' Workers - more
• Rio-Chinalco split rumour - more  /  Rio Tinto fuels fears over Chinalco investment - more
• Platts iron ore index breaks $70/dmt barrier on higher offers - more

  AK Steel Announces July 2009 Surcharges for Electrical and Stainless Steels - AK Steel has advised its customers that a $70 per ton surcharge will be added to invoices for electrical steel products shipped in July 2009. - more  July stainless steel surcharges - pdf here

• Allegheny Ludlum July surcharges - here
• North American Stainless July surcharge - here
• Universal Stainless July surcharges - pdf here

  Inuit Communities Receive $6.8 Million in Profit-Sharing from Xstrata Nickel's Raglan Mine - Xstrata Nickel is pleased to announce that it has presented a cheque in the amount of Cdn$6.8 million to the Makivik Corporation, representing its share of the profits generated in 2008 by the Raglan nickel mine operation, located in the Nunavik Territory of Northern Quebec. - more

  EU worries about access to key raw materials  - European Union ministers supported plans last week to ensure industries get better access to raw materials, as competition for access to commodities such as rare metals becomes fiercer with globalisation. - more

  'China is furiously stockpiling base metals' - China's export-based economy, once dependent on American greed, is now but a fading memory.  - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around $.12/lb lower and currently bouncing off session lows. All other base metals are trading lower as well. The US Dollar is trading stronger against the Euro for a second day, up nearly 1/3 of 1% and off session highs. NYMEX crude is trading nearly 1-1/2% higher and over $67/barrel. Gold is up 1/3 of 1% and silver is down an equivalent amount. In overnight trading, Asian markets ended lower and European markets are a tad lower this morning. US futures show Wall Street may have an uncertain opening, futures up only 4 points at the moment. Market may get a boost from employment numbers out this morning. While initial claims dipped 4,000 to 621,000, ongoing claims fell 15,000 to 6.74 million. The Labor Department also reported US productivity rose 1.6% in the first quarter, while output fell 7.6%. AK Steel published their stainless steel surcharges for July yesterday and showed the average price of nickel was $5.731/lb in May, chrome averaged $.7388/lb in May, while molybdenum averaged $9.513/lb. And MarketWatch is reporting this morning that the Chinalco - Rio Tinto deal may be off.

  Nickel Falls Third Day in London, Weighed on by Demand Outlook - Nickel declined for a third day in London on expectations demand from stainless-steel makers will continue to slide, weighing on prices. - 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
• Fortis Bank Asian Metals Monthly - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals got crushed yesterday, (with the exception of ali), as participants were taken aback by a sharp upside reversal in the dollar. Weakness in energy and US stocks also reinforced the selling, but the metals complex remained the weakest of the three, as it did not even partake in the slight afternoon bounce seen in the other two markets. Apart from the dollar, we did not see anything else to trigger yesterday's selling. Granted, ISM services readings for May, April factory orders, and ADP payroll reports all came in slightly below estimates, but these were not huge downside misses and, in our view, did not alter the underlying notion that we still seem to be on a recovery track, slow as it seems to be. ... Currently, metals are all trading lower, with the negative tone contrasting with the fact that crude oil prices have recouped a portion of their losses, with oil now up by about a dollar a barrel. In addition, the dollar is unchanged against the Euro, although it was substantially weaker earlier in the day. ... Nickel is at $13,900, down $305. Despite the recent softening, nickel is still trading above breakout support at $13,570, which is the key level to watch over the short-term" (read Ed Meir's complete morning base metals report here)
• (Yieh) Even though there is no obvious sign for an upturn demand in European stainless steel market; however, both the UK and Germany business professionals held an optimistic view from some improving indices, such as growing delivery lead time and increasing alloy surcharges, according to market source. This situation is similar in the U.S. The discounts on the mills' list prices have been reduced but customers are still cautious and unwilling to buy for stock until a dramatic upturn can be demonstrated. \
• India's largest producer of steel and electricity company, Jindal Steel wants to boost production capacity of its Indonesian affiliate PT Maspion Stainless Steel up to 150 tons per year from a current 70 thousand tons capacity. However, due to weak demand, Maspion Stainless is running at only 50% of its capacity.
• BIR: Ferrous Division Still Concerned over Contract Problems - more
• (JMB) NSSC/ To raise price of Ni wire rod by 10 thousand yen
• Chinalco reportedly set to quit Rio Tinto deal - more
• Asia's steel sector hints at market recovery - more
• Commodities Downtrend Is Over, BarCap Says: Technical Analysis - more
• Odd Couple: Commodities, Fundamentals - more

  Nickel price to drop 47% in 2009, analysts says - With stainless steel production crashing worldwide this year, demand for key alloy nickel is sliding and its world price will average $5.10/lb, a 47% drop from $9.57 in 2008. - more

  Nippon Steel & Sumikin To Lift stainless Wire Prices - Nippon Steel & Sumikin Stainless Steel Corp. will raise prices on nickel-based stainless wire for the first time in a year on June-August contracts, with the price of benchmark SUS304 going up by 10,000 yen (US$104.33) per ton, or 3%. - more

• Market Tendency On Imports Of Ferro-Alloys At 29th May 2009 - = Structure To Have Two Prices For One Commodity / Silico-Manganese Is Moving To Be Rectified The market tendency by item on imports of ferro-alloys into Japan at the 29th May of 2009 is as follows; - more

  Press release - Effective with new orders beginning today, Wednesday, June 3, ATI Allegheny Ludlum is increasing the price of cold-rolled sheet and continuous-mill plate Redi-Coil. The price of cold rolled products will increase by reducing the functional discount by 2 percentage points. Continuous mill plate prices will increase by $0.06 per pound on T-304 and 304L and by $0.10 per pound on T-316 and 316L.

  Ore to China not driven by demand - The record iron ore exports to China that helped Australia dodge a recession have been driven by speculation and anticipation of demand by steelmakers that has not yet eventuated - and volumes, as well as prices, are likely to fall in the second half of the year. - more

  ArcelorMittal to Limit Spanish Work-Hour Cuts to 40%  - ArcelorMittal, the world’s largest steelmaker, may cut the working hours at its Spanish unit by as much as 40 percent to reduce costs as demand slumps. - more

  Ramu Nickel Mine Builds Pipeline Too Close Too Highway - The Ramu nickel slurry pipeline’s proximity to the Madang Highway poses a threat to the environment in the event of a vehicle accident or natural disaster, says a leading Papua New Guinean ecologist. - more

  Armenia's First Lady Opposes President on Mining Project - Armenia’s ongoing debate over the Teghut mining project became a domestic dispute for the country’s first couple after First Lady Rita Sargsyan reportedly signed a petition against plans to develop the copper and molybdenum site in northern Armenia. - more

  ReportLinker Forecast - US demand for industrial fasteners will advance 1.2 percent per year to $12.5 billion in 2013. Sales will be bolstered by the expected recovery in motor vehicle production from the low levels of 2008. Market expansion will also be supported by accelerating growth in construction spending, particularly a strong rebound in residential building expenditures. In addition, gains will be driven by fastener manufacturers offering innovative products with performance enhancing features, which can be sold at a premium. However, the pace of increase will be restrained by competition from alternative joining technologies such as adhesives, clinching and welding. Furthermore, output in several important OEM industries is expected to moderate, and in some cases even decline, which will limit fastener advances. Perhaps the most significant factor restricting advances will be a forecast decline in fastener prices. Due primarily to falling raw material costs, average industrial fastener prices will decrease through 2013, in stark contrast to the robust price increases posted during the 2003 to 2008 period. After adjusting for inflation, growth through 2013 will be stronger than that of the 2003 to 2008 period. (source)

  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)
• 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, June 3

• Baltic Dry Index - plus 185 to 4,291. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Australia's Economy Unexpectedly Expanded 0.4%, Defying Global Recession  // Asian Stocks Gain for Fourth Day on Growth Optimism; Harvey Norman Climbs // European Consumer Spending, Exports Drop Most in 14 Years as GDP Shrinks // U.K. Service Industries Unexpectedly Grew in May for First Time in a Year // Corporate Bonds in Euros Climb to Highest Level Since Collapse of Lehman // Europe Stocks Fall Most in Three Weeks; Bouygues, STMicroelectronics Drop // Bernanke Warns Long-Term U.S. Budget Deficits Threaten Financial Stability // Service Industries Index in U.S. Climbs; ADP Reports Mounting Job Losses // Stocks in U.S. Drop on Concern Over Job Losses, Valuations; Aetna Tumbles
• The US Dollar continues to trade higher against the Euro, now by nearly 1.2%. NYMEX crude is lower over 3% and falling near the $66/barrel level, as US inventories rise, Dollar rises, and equity markets fall. Gold is down nearly 1.7% and silver down 4%. Base metals had little going for them today, and all ended lower. Indicator charts show nickel fell early, steadied thru much of the early afternoon, then crumbled again late. Dow Jones reports three month nickel ended the day at $6.44/lb . LME stored inventories of nickel slipped overnight, but just a tad, while the Baltic Dry index numbers increased by 185 points. Considering the summer is typically the slow season for the stainless steel market, it will be interesting to see how long metals speculators will continue to back their bets that demand is picking up. Much hinges on exactly how de-stocked the industry really is. The Institute for Supply Management reported this morning its services index registered 44 in May, slightly up from 43.7 in April. The Commerce Department reported factory orders rose 0.7% in April, the second increase in three months but below analysts' expectations. The department also marked down the March figure to a 1.9 per cent drop, compared with the 0.9 per cent decline it had previously reported. Fed Chairman Ben Bernanke, bruised from an unusual attack by German Chancellor Angela Merkel on the Fed and European Central Bank, testified before Congress this morning, and while generally upbeat, we can not help but notice he continues his incredibly guarded way of wording things. Here are a few quotes "... However, the recent data also suggest that the pace of economic contraction may be slowing. ... We continue to expect overall economic activity to bottom out, and then to turn up later this year.... Even after a recovery gets under way, the rate of growth of real economic activity is likely to remain below its longer-run potential for a while, implying that the current slack in resource utilization will increase further." In other words, the skydiver has successfully deployed his parachute and has slowed his rate of decline dramatically, but, he or she is still falling. In science this is called the theory of gravity, in economics, at least to some these days, it is referred to as "things are getting worse less fast". More victims from the metals and mining industry were announced from the Air France flight that crashed off Brazil Monday morning. China's Benxi Iron & Steel (Group) Co. Ltd lost six of its associates in the crash, and Vale just announced it lost the director of its manganese division. Our condolences to their family's, friends and co-workers.

  Commodity/Economic Comments

• China Macquarie Daily - "Nickel ... a breakthrough of the $13,750 / $13,550 resistance ....  indicating that over the next few weeks the price will continue to rise. Relatively high range of the support allows us to maintain the focus on a $18,897 / $18,047 resistance region."
• MAN Financial has support for nickel at $13,750/tonne ($6.24/lb) and resistance at $17,800/tonne ($8.07/lb).
• Barclays Capital analyst Gayle Berry - Antaike has reported that by mid-May there had been a significant level of nickel pig iron restarts, with 43% of arc furnace and 39% of blast furnace NPI producers now back in operation."
• (SSW) Sumitomo Metal Mining has announced that its 12,000tpa high-pressure acid leaching nickel processing plant at Coral Bay, Philippines, is working at full commercial capacity. The unit joins Sumitomo Metal's other, 10,000tpa HPAL plant at the Coral Bay complex, taking total processing capacity 22,000tpa. But output in the current fiscal year will probably only be around 17,000 tons.
• China company confirms identities of staff on board missing Air France plane - more "Benxi Iron & Steel (Group) Co. Ltd, in northeastern Liaoning Province, said the six were the group's deputy general manager Li Mingwen, assistant manager and manufacturing department head Zhang Qingbo, steel melting plant head Sun Lianyou, former material section chief Shen Zuobing and two female managers of a trade company under the group."
• (Dow Jones) Marco Antonio Camargos Mendonca, director for manganese and alloys at Brazilian mining giant Vale SA, was on board the Air France plane which went missing Monday, the company said in a statement Wednesday.
• Gordon B. Fowler Jr., chief investment officer at Glenmede Trust Co. in Philadelphia - "The market is perhaps ahead of itself in that we're still looking at an extended period of debt reduction and slow growth throughout the U.S. economy."
• Chromex Mining delivers maiden profit despite commodity turmoil - more
• China Sees ‘Grim’ Job Market, Deeper Impact From Global Crisis - more
• Rand May Defy Analysts by Surging 17% More: Technical Analysis - more
• Bernanke: start work now to curb budget deficit - more
• Germany Blasts 'Powers of the Fed' - more
• Consumer Credit: The Next Crisis - more
• The worst downturn since the Great Depression - more

  Green Shoots or Red Herring? - Chinese raw-material imports surged in the first quarter. In contrast to bombed-out demand conditions in North America and Europe, the numbers are staggering: Chinese iron ore imports rose 19%, copper imports jumped 33%, and nickel imports were up 33%. - more

  PGMC secures Palawan nickel sites - The Supreme Court has upheld the claim of Platinum Group Metals Corp. over nickel-rich sites in Palawan. - more

  Gold, base metals to carry on rising - but beware the Kondratieff Wave! - The opening keynote addresses at the World Mining Investment Congress were mostly bullish on metals commodity prices, but the party was spoilt by a presenter who felt general stock markets still had a huge way to fall. - more

  AK Steel, Allegheny Technologies Inc. face dumping charges - Chinese trade authorities are investigating two companies with plants in Western Pennsylvania on charges they violated trade laws by selling steel at less than it costs to produce — the first such case against U.S. steel companies, experts say. - more

  European Nickel clears another hurdle on the path to nickel production - European Nickel took another step towards full commercial production at the Caldag Nickel-Cobalt Laterite Project in Turkey today. - more

  Victory Nickel to build road to Lac Rocher site - Victory Nickel Inc said on Wednesday it has signed a letter of intent with Manchetau Construction to build a road to its Lac Rocher nickel project in northern Quebec. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around $.12/lb lower but showing signs of leveling off, with other base metals mixed and mostly lower. The US Dollar is higher against the Euro this morning, by 3/4 of 1% and adding pressure to commodities trading. NYMEX crude is down 9/10 of 1%, and just under the $68/barrel level.  Gold is down 1/2 of 1% and silver is down over 1%. In overnight trading Asian markets ended slightly higher, while European markets are lower this morning. US futures show Wall Street may open slightly lower. Bloomberg reports the reason for the Euro's sudden about face today "The euro fell 0.6 percent against the dollar as reports showed European consumer spending and exports contracted the most in at least 14 years in the first quarter and investment slumped. Gross domestic product shrank 2.5 percent from the fourth quarter, matching an initial estimate and the most since the data were first compiled in 1995, the European Union’s statistics office in Luxembourg said today." The ADP reports the the U.S. private sector eliminated 532,000 net jobs in May, the fewest jobs lost since November. Other things that will be watched today include Fed Chairman Bernanke is scheduled to testify about the U.S. economy before the House Budget Committee at 10:00 AM ET and former Fed Chairman Greenspan is speaking at the American Enterprise Institute at 12:00 PM ET.   
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "There were modest declines in the rest of the metals, except for lead, which managed to eke out a slight gain. The rather limited losses we saw yesterday after several days of strong gains were attributable to a weaker dollar, which once again plunged to fresh 2009 lows, as well as to a number of constructive US macroeconomic announcements. ... Metals are trading mixed as of this writing, with ali and tin holding up fairly well, but the rest of the group all down. Oil prices are also off by about $.70 a barrel, while the Dow Jones futures are indicated to open lower by 45 points down. The weaker tone we are seeing comes despite a weaker dollar, which hit a fresh 2009 high against the Euro, getting to 1.4340 earlier in the day.  ... We are seeing red-hot markets in freight, with the Baltic Dry Index, making its largest point move in the past 21 sessions yesterday, rallying by some 11.5%. The index is up approximately 40% week-over-week. Underpinning the climb was a near 18% gain in the Capesize Index, which is now up more than 60% week-over-week.  ... Nickel is at $14,382, down $238. We still like nickel here, as prices have broken out of the trading range and are not showing signs of backing down. Expect more upside based on charts alone."  (read Ed Meir's complete morning base metals report here)
• (Metals trader to Dow Jones) "A few people are concerned about a correction. Overall most metals will probably consolidate gains and some could see a correction with fundamentals not supporting the rise."  
• (Reuters) Spain's Acerinox has raised cold roll and hot roll flat prices for its North American Stainless (NAS) unit by 5-6 percent, a spokesman for the company said on Wednesday. - more
• (Yieh) China’s Taiyuan Iron & Steel (Tisco) has announced to increase product prices in order to cover the rising raw material costs for the 23rd week. The price of 304 hot rolled and cold rolled steel increased by RMB1,350/ton, while that for 430 cold rolled steel was up by RMB300/ton.
• (MNP) A drilling program at Panoramic Resources’ Savannah project in Western Australia’s Kimberley region has boosted the deposit’s mineral resource to more than 98,500 tonnes contained nickel.
• (Press release) European Nickel PLC is pleased to announce payment of the forestry permit fee for its Caldag nickel laterite project in Turkey. The payment of US$3.7 million covers the proposed mining area, plant site and location of the heap pads and includes the annual forestry fee, a one-off payment, VAT and stamp duty for the life of the mine. This will now enable European Nickel to commence preparing the site for earthworks and development once the project funding has been completed, which continues to be anticipated during the second half of 2009.
• India - Steel: Expansions, import curbs on agenda - more
• (JMB) Japan Stainless Scrap Export Turns to Minus in April
• (ISI) Nickel production in Zimbabwe fell by 25% in 2008 to 6354t with platinum miners taking the lead and accounting for the bulk of nickel output in Zimbabwe.
• China hints at price revolution for iron ore contracts - more
• Chinese and Indian buyers fill Xstrata's pockets - more

  Double-Digit Falls in Ferrochrome and Chromite Demand in 2009 - Demand for chromite increased by an annual average rate of 4% for the period 2000 to 2008, with ferrochrome consumption increasing by the same amount. However, the onset of the economic downturn from mid 2008 has seen demand for chromium plummet, with prices following a similar path. - more

  PNG mine faces new environment questions - Papua New Guinea's beleaguered Chinese-run Ramu nickel mine has come under fire again for potential environmental problems because the slurry waste pipeline is built too close to a major highway. - more

  Taiwan China Steel Mulls Price Hikes For Jul, Aug - China Steel Corp., Taiwan's largest steel producer by revenue, is considering raising the price of domestic products for July and August, Executive Vice President L.M. Chung said Wednesday. - more

  Mining boom not over, PwC - Despite the world’s 40 largest mining companies seeing their combined net profits plunge US$9 billion in 2008, the mining boom is far from over, PricewaterhouseCoopers (PwC) Australian mining leader Tim Goldsmith said. - more

  Local 6500 Steelworkers union members angry - Local 6500 union members are angry with current negotiation offers, according to Wayne Fraser, a negotiator with the Local 6500 bargaining committee. - 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)
• 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, June 2

• Baltic Dry Index - plus 425 to 4,106. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Australia Keeps Benchmark Interest Rate at 49-Year Low 3% for Second Month  // Emerging Markets Most Expensive Since 2007 as Funds Flooded by $12 Billion // Most Asian Stocks Drop on North Korea Missile Concern; Banks Lead Declines // European Stocks Are Little Changed; Barclays Declines, Volkswagen Advances // Pending U.S. Home Resales Jump Most Since 2001 as Lower Prices Lure Buyers // Ford Motor, Nissan Report U.S. Sales Drops That Are Smaller Than Estimated // U.S. Stocks Fluctuate as Decline of Banks Offsets Optimism on Housing Data
• The US Dollar continues its slide against the Euro, presently trading nearly a full percentage point lower. NYMEX crude is trading 6/10 of 1% lower, looking to equities trading over the falling Dollar for guidance. Gold is trading 6/10 of 1% higher and only $20 per ounce away from the $1000/ounce threshold. Silver is up by 1-3/10%. Base metals ended today's trading lower, taking a breather after yesterdays' large gains, and the declining Dollar keeping any backward movement in check. Indicator chars show nickel traded within a $350/tonne range in very choppy trading, actually going green late in the afternoon, before succumbing towards the end. Dow Jones reports three month nickel ended the day at $6.62/lb , although official prices that suppliers and buyers use, were up on the day. LME stored inventory slipped slightly overnight, while the Baltic Dry Index numbers jumped, with an eye opening gain of 425 points. Allegheny Ludlum has announced stainless steel surcharge numbers for the month of July, with the surcharge on 304 stainless steel rising from June's $.3766/lb to $.4696/lb and 316 stainless steel seeing an increase from $.5624/lb in June to $.7053/lb in July. The National Association of Realtors reported pending home sales increased for the third month in a row, and thanks to record low mortgage interest rates, falling home prices, and a government first time home buyer incentive, the index jumped a much better than expected 6.7%. Wall Street is listless so far today, with financials and ten year treasuries drawing negative attention again. We would like to join with the steel producing industry and express our condolences to the families of the ThyssenKrupp associates who lost their life in yesterday's plane disappearance, and to the friends and co-workers of these two men. And finally, we found this Reuters article to be somewhat concerning. Read the last paragraph and see what you think (here).

  Commodity/Economic Comments

• (Interfax) Shanghai Stock Exchange-listed Ningbo Shanshan Co. Ltd., a Chinese clothing manufacturer, plans to set up a joint venture with Australian Securities Exchange-listed Heron Resources Ltd. to explore the Yerilla laterite deposit in Western Australia, the company announced on June 2.
• (Dow Jones) Barclays Capital advises there is a danger for some metals that recent gains could spark "aggressive short-covering" which could take prices much higher. Says however that the price rise isn't supported by metal-specific fundamentals.
• (Comtex) While the 2008 revenues of the top 40 mining companies in the world is 3.7 times that of 2002, their reported robust net profit for 2008 of $57 billion is the first decrease since the start of the annual PricewaterhouseCoopers survey Mine: review of global trends in the mining industry. This 28% reduction returns net profit to the levels recorded in 2005/6 but net profit remains well above the 2002-2007 average of $42 billion.
• Your State in 2008: GDP and Jobs Don’t Always Go Hand in Hand - more
• China has "proposal" in iron ore talks, not on price - more

  (Thanks to a reader) "North American Stainless announces price increase - Effective with new orders, NAS will increase angle prices by $.05/lb on 304 and $.07/lb on 316/L grade.... All surcharges will remain in effect as outlined on our website. " 

  5,000 attend rally vs Mindoro nickel project - More than 5,000 people from different parts of Occidental Mindoro opposing the proposed Mindoro nickel project of Intex Resources Philippines Inc. held a rally during a public hearing on the issue at the municipal hall compound of Mamburao on Wednesday. - more

  ThyssenKrupp Press Release - Erich Walter Heine, member of the Executive Board of ThyssenKrupp Steel AG and responsible for the major projects in Brazil and the USA, and Claus-Peter Hellhammer, an employee of ThyssenKrupp Steel in Duisburg, lost their lives on Monday when an Air France aircraft crashed over the Atlantic. We mourn the loss of our employees and extend our deepest sympathies to their families. Erich Heine, born in South Africa in 1967, studied engineering and business administration. He began his professional career in 1991 at the South African steel company Iscor Ltd. In 1999 he spent a year with BHP Billiton as marketing manager before being appointed General Manager of Iscor's Newcastle plant. After Iscor became Mittal Steel South Africa, he was appointed General Manager of the Vanderbijlpark plant. On February 1, 2006 Erich Heine joined the Executive Board of ThyssenKrupp Steel AG with responsibility for the Steelmaking business unit. From 2007 he was also responsible for the construction of the two steel plants in Rio de Janeiro and in Alabama, a task he handled with great success. "In Erich Heine we are losing an esteemed colleague who did outstanding work for the ThyssenKrupp Group. Our thoughts are with his family at this time of great sadness," said Dr. Ekkehard Schulz, Chairman of the Executive Board of ThyssenKrupp AG. Erich Heine leaves a wife and three small children. Claus-Peter Hellhammer, 28, completed a technical trainee program with ThyssenKrupp Steel and worked at ThyssenKrupp CSA Siderúrgica do Atlântico from mid-2007 to early 2009. Most recently he had taken on special duties in the area of health and safety/fire protection in Duisburg. He was returning from a private trip to Brazil.

  Vale Inco awards major contract - It's a contract that has the business community buzzing and top executives at work early. - more

  China daily steel output 1.48 mln T in mid-May - China's daily crude steel output hit an average of 1.478 million tonnes in May 11-20, the highest level since the end of February, according to data from the China Iron & Steel Association obtained by Reuters on Tuesday. - more

  Atlas Customers Stop Cancellations as Metal Prices Lift Mining - Atlas Copco AB, the world’s largest maker of rock drills, said customers have stopped cancelling orders and a rebound in metal prices is helping buoy demand for parts and services at its mining-equipment division.  - more

  May a 'marvelous' month for metals and mining: Desjardins - It appears the May advance in the stock markets has extended to the metal and mining industry, as Desjardins declares a "marvelous" month for commodities prices in the sector. - more

  US steel output increases for fifth consecutive week - Raw steel production in the US increased again last week, although US steel mills operated at only 46% of capacity, the Washington, DC-based American Iron and Steel Institute reported Monday. - more

  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 in choppy morning trading, with all base metals lower. The US Dollar is trading lower against the Euro, by nearly 1/2 of 1%. This would normally support base metals trading, but market is seriously overbought. NYMEX crude is trading lower by 8/10 of 1% but still above $68/barrel. Gold is trading 6/10 of 1% higher, while silver is 1% higher. In overnight trading, Asian markets ended lower, while European markets are only slightly lower this morning. US futures show Wall Street has yet to decide a starting direction. ICSC-Goldman issued its same store sales this morning, showing a -.6% sales for the week ending May 30th. Later we get pending home sales numbers. AK Steel announced it will raise the spot market price of carbon steel products by $20 per ton, effective yesterday. We should have stainless steel surcharges for most US producers July later today.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Weekly Commodity Price Report - pdf here
• The Commodity Tracker - pdf here
• China Commodities Weekly - more
• Global Mining News - pdf here
• PricewaterhouseCoopers' Mining Report. - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Markets were on fire yesterday, reminiscent of the heady days we were seeing at this time last year. At this point, everyone is wondering whether prices have already over-discounted the modest signs of recovery we see cropping up. For the moment, we think there is still too much buy-side momentum to call a top in any of the markets, be it energy, US equities, or base metals. ... Although we are trading at down in most of the base metals at the time of this writing, the declines do not seem to suggest that an imminent correction is about to take place, as the move lower is relatively modest, and has taken place from a higher opening left over after a strong Shanghai session. As a result, we could see another upside reversal, especially if macro numbers again provide the boost. This is what happened on Monday, when markets lifted on strong manufacturing readings out of China, and better than expected ISM numbers out of the US.  ... Nickel is at $14,600, down $50, and looking very solid now that it has shown definitive signs of a breakout." (read Ed Meir's complete morning base metals report here)
• (Reuters) Nickel and gold explorer Dwyka Resources Ltd said it was in advanced talks for a possible all-share offer, valued at not less than 1 pence a share, for British mineral explorer Minerva Resources Plc.
• (Interfax) Jinchuan Group Ltd., China's largest nickel producer, lifted its ex-works nickel price on June 2 by RMB 5,000 ($731.97) per ton to RMB 115,000 ($16,835.26) per ton, according to Jinchuan Group's Web site.
• (CM) China's daily crude steel output hit an average of 1.478 million tonnes in May 11-20, the highest level since the end of February, according to data from the China Iron & Steel Association obtained by Reuters on Tuesday.
• The list of top 50 unsecured creditors affected by the GM bankruptcy included: US Steel, $9,587,431; ArcelorMittal, $9,549,212; AK Steel, $9,116,371; Severstal, $6,687.993.
• Euro’s Rally Against Dollar May Be in ‘Last Stage,’ UBS Says - more
• Supply House Times - “Don’t confuse me with the facts; my mind is made up!” - more (for distributors)

  EU Average Stainless Steel Prices - Latest Forecast from MEPS - Transaction values for all products are forecast to climb further in the short term as market sentiment continues to improve. - more

  Norilsk halts Dudinka shipments  - Norilsk Nickel, the world's top nickel miner, will suspend on Tuesday shipments from its Arctic port of Dudinka due to seasonal flooding, the company said on Tuesday. - more

  Imports And Exports Of FeCr By China In March / 09 With Increased Imports Of 180,000 Tons = Substantial Quantities Were Imported From South Africa And Kazakhstan, Exports Recovered To 26,000 Tons - According to the customs-statistics released in China, the quantities (on material base) of ferro-chrome imported and exported by China in March of 2009 were as per the tables attached hereto. - more

  Stainless Steel & Special Alloys Committee: Potential supply/demand imbalance - Stainless steel scrap availability remains low and a significant increase in demand could bring a supply/demand imbalance, according to Michael Wright of UK-based ELG Haniel Metals Ltd. - more

  Thyssenkrupp Executive On Board Air France Flight 447 - A Thyssenkrupp executive was one of the 216 passengers on board Air France Flight 447 that disappeared over the Atlantic ocean - more

  Good news from FNX: company plans to keep mining - FNX Mining said Monday it is continuing mining at its Sudbury operations, and will stockpile ore until Vale Inco, which processes FNX's ore, restarts its mill next month. - more

  Talvivaara to sell stock to fund nickel boost - Talvivaara Mining, the Finnish-based, U.K.-listed miner, said it's selling 22.28 million shares to existing and new institutional investors, which represents about 10% of its shareholder capital. - more

  The Chinese are coming! The Chinese are coming! - Readers are advised to get out their chopsticks and start practising because the Chinese are coming to Canada. - more

  Courtesy AISI - In the week ending May 30, 2009, domestic raw steel production was 1,103,000 net tons while the capability utilization rate was 46.2 percent. Production was 2,173,000 tons in the week ending May 30, 2008, while the capability utilization then was 91.1 percent. The current week production represents a 49.3 percent decrease from the same period in the previous year. Production for the week ending May 30, 2009 is up 1.0 percent from the previous week ending May 23, 2009 when production was 1,093,000 tons and the rate of capability utilization was 45.8 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)
• 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, June 1

• Baltic Dry Index -  plus 187 to 3,681. (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 Third Month, Adding to Signs of Recovery // Asian Stocks Rise on China Manufacturing, Commodity Prices; Cnooc Climbs // GM Files for Bankruptcy Protection After 77-Year Reign, $88 Billion Losses // European Stocks Gain, Paced by BHP; Stoxx 600 Climbs to Seven-Month High  // GM Files for Bankruptcy in Bid to Regain Profits With $50 Billion U.S. Aid // European Government Finances `as Bad as Argentina' in 2002, Ferguson Says // U.S. Manufacturing Shrinks Less Than Estimated; Household Savings Increase // Stocks in U.S. Rally, Sending S&P 500 to Five-Month High as Bonds Decline
• The US Dollar continues to trade lower against the Euro, but off session highs and at 1/4 of 1%. NYMEX crude is up 2.4% and hovering just below $68/barrel. Gold is down 2/10 of 1% and silver is down 9/10 of 1%. Base metals ended higher, across the board, on a lower Dollar, and fund investments. Indicator charts show nickel opened higher this morning, rose early, settled back in early afternoon, then show up late. Dow Jones reports three month nickel ended the first day of June at $6.65/lb , a new high for 2009, and its best close since October 3, 2008. Fresh fund money is obviously rushing in, and now we will see if they are successful in driving the market higher, or come in a day late and a dollar short, as has happened numerous times in the past. Inventories of nickel stored in authorized LME warehouses fell over 1000 tonnes over the weekend, with 3 large withdrawals coming from Asia and European warehouses. Cancelled warrants fell below 5%. The Baltic Dry index continues to gain, up another 187 points. The Institute for Supply Management's manufacturing index rose to 42.8 from 40.1 last month, still reflecting the manufacturing industry is in contraction. You can see how US, China, Japan, and EU PMI's did here. We find it curious that the market is so enthusiastic about China's numbers, and while still positive, they fell from last month. Except for China, the rest showed continued contraction, but gave better readings than last month. Once again, the numbers show things are still bad, but not as bad as before. Institute for Supply Management chair Norbert Orr stated “I believe we’re in the recovery stage right now. We’ve seen a dramatic improvement in new orders that comes as a result of the major inventory correction.”. But he added, "“I expect that we we’ll continue to see declines in employment but not at as fast a rate.” The Commerce Department report this morning showed personal income unexpectedly rose in May, but people were putting any extra they were getting into savings instead of spending it. Consumer spending was down 1-1/2% YOY, and -.1% MOM. And the Commerce Department reported construction spending rose in April for its second monthly gain. All of these numbers, however dismal, came in better than economists had expected, and the markets have reacted accordingly.  The International Monetary Fund’s John Lipsky told a reporter "Economic data may indicate that GDP has stopped contracting and started increasing, but the ‘man on the street’ will not be completely convinced things have turned around until they can stop worrying about losing their jobs.” China is playing a little tit for tat, starting its own anti-dumping investigation into electrical steel from Russia and the United States.
• Need a little "inspiration" today? 17 minute talk by Coach John Wooden on how he defines success. Video here  (well worth viewing)

  Reports

• Commodities Daily - pdf here
• Weekly Forecast by SMM Specialist - more

  Commodity/Economic Comments

• BMO Capital Markets' Bart Melek - ""The prospect of an economic recovery, record-low interest rates and the possibility that the U.S. monetizes at least a part of its debt problem are making commodities an attractive place to be - despite the fact that current fundamentals look poor ... Rising long-term yields on U.S. government paper should continue to generate downward pressure on the dollar, helping commodity prices broadly."
• Alex Heath, RBC Capital Markets - "With (the weaker dollar) looking likely to continue, the rise in metals value does not appear so pronounced in terms of the euro and other currencies, and from an investment standpoint being long metals becomes a more attractive proposition, especially if you happen to be Chinese."
• Macquarie report - "There are also reports that Taiwanese stainless mills have ramped up production to meet rising Chinese demand, but Korea and Japan remain depressed."
• Societe Generale report - "There is clear evidence that there has been a pick-up in Chinese stainless steel production. State owned producers in particular, such as BaoSteel and TISCO amongst others, have benefited from the governments fiscal stimulus packages, upping capacity utilisation rates in April to around 90% compared from a reported 75-80% in March. State owned stainless producers account for roughly 80% of Chinese stainless steel capacity. However, it is not clear if all state owned producers or for that matter private producers are operating at higher rates."
• MF Global analyst Edward Meir - ""It is interesting to note that what all these surging markets have in common, is that their advances are occurring in spite of either bearish or neutral fundamentals."
• (MW) Toronto-based FNX Mining will stockpile ore at its Sudbury operations until Vale Inco, which processes FNX's ore, restarts its mill.
• Anti-Chinalco activists evoke Tiananmen in ad - more

  Mine Mill Local 598/CAW elects new president , vice-president - The former unit chair of Xstrata Nickel has won the top executive position with Mine Mill Local 598/CAW. - more

  Govt to ban raw chrome exports - The Government will soon impose a ban on the export of raw chrome without value addition as the country is losing a lot of revenue, a Cabinet Minister said. - more

  Mechel Announces Electric Arc Furnace No. 2 Commissioning At Its Tikhvin Ferroalloy Smelting Plant Subsidiary - Mechel OAO, one of the leading Russian mining and metals companies, announces that Electric Arc Furnace No. 2 at its Tikhvin Ferroalloy Smelting Plant was started up after its repair. - more

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

• Indicators at 7:30 am CST show 3 month nickel trading around $.19/lb higher, with all base metals higher on a lower Dollar. The US Dollar is trading 4/10 of 1% lower against the Euro, but off earlier highs. NYMEX crude is trading 2% higher and closing in on $68/barrel. Gold and silver are both up, but less than 1/4 of 1%. In overnight trading, Asian markets ended higher and in morning trading, European markets are following suit. Futures reflect a very positive opening for Wall Street. The Commerce Department  reported this morning that consumer spending dipped .1% in April, while core inflation rose .3%. It also reported personal savings rates for Americans jumped to a 14 year high, to 5.7%. General Motors is expected to file for bankruptcy today, the third largest in US history, with the US taxpayers taking on a 60% stake in the company's future.
• Bloomberg morning base metal news - more
• Reuters -  more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Weekly Scoreboard - pdf here
• Metals & Mining Weekly - pdf here
• Robry Sunday Night Comments - here
• Stainless India (March) - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Far from being a month where the adage “Sell in May and go away” had a chance of prevailing, the more appropriate expression perhaps should have been “Buy in May and stay”. A number of markets closed sharply higher during the month, with the US stock market closing up another 96.53 points on Friday to achieve its best three-month percentage gain since November 1998. Crude oil prices also chalked up their best monthly gain in more than a decade, as did gold, which hit three-month highs. Base metals did not set any notable records, as prices had started to rally earlier in the year, but nevertheless, of the six base metals we follow, five finished higher during May, with ali being the notable laggard ... It is interesting to note that what all these surging markets have in common, is that their advances are occurring in spite of either bearish or neutral fundamentals. In the case of metals, the main price driver has been the Chinese stockpiling and stimulus program, and secondarily, some measure of demand improvement from other Pacific-Rim countries, such as Japan. However, the US demand side of the equation remains conspicuously restrained, while world growth as a whole still has a long ways to go to get back on track. Despite this, metal investors are pushing values higher on solid technicals and bullish exogenous variables, such as the weaker dollar, firmer equity markets, and improving macro data. The latter variable, in particular, is being interpreted as laying the underpinnings for an expected “V”-shaped bounce, and the possibility that we could just as easily be entering a deceptive “W” formation is dismissed for now. Therefore, until the economic data proves otherwise by pulling in the other direction, metals will likely trade higher for the time being, with the weaker dollar providing a critical lift.  ... Not surprisingly, we are sharply higher in a number of commodity complexes as we start the new week, with the dollar continuing to crumble and now trading at close to 1.4250 against the Euro.  ... Nickel is at $14,195, up $250, and could be the one to watch over the days ahead, as prices have taken out the upside of a congestion band that stretches back to late last year. Should fund money and technical systems get behind the nickel rally, we could conceivably work to the $18,000 mark. A close above $13,570 today (likely) will confirm the breakout." (read Ed Meir's complete morning base metals report here)
• (SBB) Asian stainless prices continued to rise in the 25 May week after buyers accepted rising offer prices from Taiwanese, Korean and Japanese suppliers who factored increasing nickel prices into their prices.
• (Yieh) Considering the increasing cost of nickel, Taiwan’s Yieh United Steel Corp. (Yusco) decided to raise its list price as of June. The domestic price increased by NT$5,000/ton for 300 series HR and CR, while the domestic price for billet rose by NT$6,000/ton.
• (MB) Jinchuan raises nickel prices by $586
• (MNP) Nickel hopeful Heron Resources has signed a binding framework agreement with private Chinese company Ningbo Shanshan Co on the development of the Yerilla nickel-cobalt project near Kalgoorlie.
• (TN) Work at the giant Ramu nickel project in Madang province is surging ahead, with all previous issues between Chinese and PNG workers being resolved.
• (CD) China's power demand shrank by 4.03 % in the first four months from the same period last year under the impact of the global economic downturn, said the National Energy Administration in Beijing on Monday.
• Commodities Rise Most in 24 Years; Goldman Sees Gain - more
• Zoellick Warns Stimulus ‘Sugar High’ Won’t Stem Unemployment  - more
• China hits back at U.S. steel with dumping complaint - more
• Commodities survey: Can we call it a comeback? - more

  Strike may be looming at Voisey's Bay, union warns - An impasse over a lucrative benefit paid to workers at northern Labrador's Voisey's Bay nickel mine is at the fore as negotiations resume Monday between Vale Inco and union representatives. - more

  Stainless Steel Market Sentiment is Slightly More Positive - An air of optimism has been apparent in European stainless markets in may 2009, especially for coil products, despite there being no sign of an upturn in underlying demand.

  Sumitomo’s Palawan nickel plant starts full-scale operation - Japan's Sumitomo Metal Mining Co. Ltd. has completed the $500-million upgrade of its nickel processing plant in Palawan, finally starting full commercial operation, a company official said late last week. - more

  Sector steels itself for capacity cuts - With the removal of four furnaces, one of which had been operational for over 50 years, Hebei Iron and Steel Group took its first steps toward meeting its goal of closing 1.7 million tons of outdated capacity this year. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• 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

Previous day / May Archives

Translate this page to French | German | Spanish | Italian | Portuguese | Chinese | Japanese | Korean | Russian

All prices shown on this page are indications only. "A Guide To LME Trading"...pdf here "The ABCs of a Metals Exchange" ...pdf here (Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless) (all ton listings are metric tons = 2204.622 pounds ) Updated daily before 8 am CST and before 1 pm CST weekdays - Disclaimer Candlestick Pattern Dictionary here / Intro to Candlesticks here Original content and opinions copyright www.estainlesssteel.com. Note - For real time and official LME prices, LME requires a user subscribe to an authorized LME vendor.