Thursday, June 30

• Baltic Dry Index - minus 7 to 1,413. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Rice Supplies Tightening in China May Increase Imports, Bolster Inflation // Mining Boom Makes Truck Tires Pricier Than Porsches, Condominiums in Miami // Asian Stocks Advance for Third Day as Greek Vote Eases Concern of Default // German Banks Said to Agree With Government on Plan to Roll Over Greek Debt // Lloyds to Cut 15,000 Jobs, Refocus on U.K. // Trichet Signals July Interest Rate Rise As Greece Tries to Avoid Default // German Unemployment Fell for 24th Month in June, Jobless Rate Held Steady // Papandreou Wins Vote on Second Greek Austerity Bill in Bid for More EU Aid // Most European Stocks Climb; London Stock Exchange, Lloyds Rise, BMW Slips // BofA, Goldman Among Banks Cutting Jobs as Trading Slows // U.S. Auto Sales Slowed by Missing Inventory // S&P Would Cut U.S. to D Rating on Default // Texas Cotton Farmers May Abandon Record Acres Because of Drought // Consumer Confidence in U.S. at 10-Week High on Fuel, Bloomberg Index Shows // Senate to Cancel July 4 Recess for Debt Talks  // Corn Tumbles Most Since November, Wheat Falls as U.S. Reports Acreage Gain // Business Expands, Consumer Confidence Grows
• The Euro is now trading nearly 6/10 of 1%higher against the US Dollar. NYMEX crude is down 1/3% and trading at $94.42/barrel. Gold is down nearly 1/2 of 1% and silver is down nearly 1/4%. Base metals ended the session mostly higher, with nickel gaining the most for a third consecutive day. Indicator charts show nickel jumped early, stalled, and then jumped again late. For the day, Dow Jones reports three month nickel ended the day at $10.63/lb . Stockpiles of nickel stored in LME approved warehouses now stands just under the 107,150 tonne level. The month started at 114,102 tonnes and recorded only 5 gaining days, after starting with the first four out of six in the positive. Nickel still looks strong but maybe be stretching its run a little too quickly.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) OFT: New Complaints About LME Warehouses Lack Substance
• (Dow Jones) OFT: Will Not Investigate LME Warehouse Ownership
• How Easy Is It to Forecast Commodity Prices? - more
• Most Cities Post Annual Drop in Unemployment - more
• Full Text: Geithner Letter Responding to Republicans on Debt Limit - more
• IMF Forecasts Slow U.S. Growth, Warns on Debt - more
• Underemployment Tougher on Highly Educated Americans - more
• How much will our wars cost? Report says $4 trillion - more

  UK watchdog to look again at metals warehouses - The UK anti-competition watchdog said on Wednesday it will take another look at activity by large traders on the London Metal Exchange that also own warehouses, after lawmakers again raised concerns. - more

• UK's OFT Reconsidering LME Warehousing After New Evidence - As more and more companies active in metals trading develop ownership links to warehousing firms, the U.K.'s Office of Fair Trading is reconsidering complaints that the London Metal Exchange is losing its integrity due to conflicts of interest on a number of levels, an allegation strongly denied by the world's largest base metals exchange. - more
• (UPDATE) OFT: Will Not Investigate Trader Ownership Of LME Warehouses - The U.K.'s competition watchdog has confirmed it will not investigate the ownership of metals storage companies by trading houses and banks, despite a rising tide of criticism that tie-ups between the two are anti-competitive. - more

  Is Futures Trading the Key to Calming the Chaos? - The global steel market is chaotic, facing a never-ending stream of unpredictable events. To survive, steel companies must find ways to harness the chaos—such as steel futures trading, said Peter Marcus and Karlis Kirsis, managing partners for World Steel Dynamics, in their opening remarks at the Steel Success Strategies conference in New York June 21. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.06/lb higher, with all London traded base metals higher at the moment. The Euro is up nearly 2/10 of 1% higher against the US Dollar. NYMEX crude is down just over 1/3 of 1% and trading at $94.42/barrel. Gold is off 2/10 of 1% and silver is down nearly 2/10%. In overnight trading, Asian markets ended higher, with China up nearly 1-1/2%. European markets are trading higher this morning and US futures show Wall Street plans another bullish trading day. Nickel inventories continued to fall yesterday.    
• Bloomberg morning - Copper Reaches Eight-Week High on Reduced Concern About Greek Debt Default - more
• LME Morning - Base metals rise as eurozone worries ease - more
• Reuters - Copper rallies on relief over Greece, end of H1 - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Life Cycle Costing & Stainless Steel - more
• World Steel in Figures - free pdf or buy the book

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  Copper hit its highest level in nearly two months yesterday, pulling the rest of the metals up along with it, although none of the other metals gained as much ground as copper did. We did not see anything dramatic behind the advance, apart from more “feel-good” buying emanating from the Greek vote, which weakened the dollar in the process and led to Wednesday’s across-the-board surge in commodities. In fact, the dollar could dip even more later today if the ECB goes through with yet another rate hike; its decision will be out shortly. We also suspect that most markets teed off the better macro statistics coming out of Japan. As we reported this week, both retail sales and manufacturing came in higher than expected this week, with the May bounce in Japanese industrial output being especially noteworthy. Metals are mostly up as of this writing, but the group was lower earlier in the day, so the overall tone is more skittish than what was the case yesterday. Oil prices are lower after having a stellar day yesterday, while the Euro is hovering just under $1.45 as we wait for the ECB rate decision. In addition, Greece's government will take a vote on the implementation measures of the austerity package later in the day, but after Wednesday's yes vote on the actual bill itself, passage seems imminent and likely will not have much of a market impact. As Greece fades, markets will likely focus on the US budget talks coming out of Washington. We thought President’s Obama was rather testy at his news conference yesterday when he addressed the issue, likely a signal that the talks are not going well, and that investors should expect a down-to-the wire type of resolution. Should the talks fail, the debt ceiling will likely be extended temporarily, as the threat of a default is a risk that no one is prepared to take at this stage, no matter how defiant the rhetoric gets. In this regard, both S&P and Moody’s said they will slash US credit ratings if the debt ceiling is not raised, with S&P saying it would cut all the way down to “D”, its lowest rating. Having said that, an official at the agency said “We think the government will raise the debt ceiling. They’ve raised it 78 times more or less since 1960, often at the last moment, and we think that will be the case this time.” Let’s hope so. We remain cautious about both the breath and depth of the commodity rally this week, as we do not see any underlying change in our basic theme that world economic growth seems to be decelerating, making an upward spike in commodity prices for the second half of the year harder to justify. In addition, the resurgence in energy prices over the past two days will likely keep inflationary pressures still very much in place, meaning that central banks are not going to ease off on the rate front anytime soon. ..... Nickel is at $23,250, up $175, and nearing intermediate resistance at $23,500.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) Taiwan’s Yieh United Steel Corp. (Yusco) announced latest price policy for July delivery today. Yusco decided to decrease the stainless steel prices by NT$1,000~NT$3,500/ton for domestic market.
• (SBB) China stainless mills July FeCr purchase prices dip 4-6%
• SEASI forecast on steel consumption and position of emerging economies - more

  Minara cuts nickel output due to equipment failure - Australia's Minara Resources was forced to reduce production at its Murrin Murrin nickel ore processing facility due to an equipment failure but analysts said the incident's impact on global supply and prices would be minor.  - more

  Vale ready to weather storm - Falling nickel prices are being caused by the production of nickel pig iron in China, a mining industry expert says - more

  Vale restarts Sudbury furnace and ramps up output after furnace rebuild - Nickel miner Vale Ltd. has successfully restarted its No. 2 furnace and is ramping up production at its Copper Cliff smelter in Sudbury, Ont. - more

  Nickel output resumed at BHP Australia refinery - BHP Billiton said on Wednesday that production at its Kwinana nickel refinery in Western Australia had restarted as planned in early June. - more

  BNC Engages Creditors in Bid to Resume Operations - Bindura Nickel Corporation has engaged creditors and workers on a restructuring proposal to aid its bid for funding to resume operations. - more

  Service Centers Start Year Strong  - In their first-quarter conference calls with analysts and investors, executives from three leading service centers report improved profitability. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 29

• Baltic Dry Index - minus 18 to 1,420. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Brazil and China Battle Over Copper in Africa // Japan Industrial Output Rises at Fastest Pace Since 1953 on Quake Rebound // European June Economic Confidence Drops to Lowest in 8 Months // European Stocks Rally Most in Three Months as Greece Passes Austerity Plan // Crude Oil Extends Gain After Larger-Than-Expected Decline in Inventories // Euro Advances Versus Dollar as Greece Passes Austerity, ECB Meeting Nears // BofA Agrees to $8.5 Billion Settlement on Soured Mortgages // Leonard Green to Buy BJ’s Wholesale Club for $2.8 Billion // Pending Sales of U.S. Existing Homes Rise 8.2% //
• The Euro is up 4/10 of 1% against the US Dollar. NYMEX crude is up 2.8% and trading at $95.47/barrel. Gold is up nearly 1/2% and silver is up 2-1/4%. Base metals ended the day higher as well, as risk taking comes back into play on the back of a stronger Euro and Greece. Indicator charts show nickel jumped early, and then stabilized for most of the rest fo the session. Dow Jones reports three month nickel ended the day at $10.46/lb. Stockpiles of nickel stored in LME warehouses continue to slump, and while concerns may persist of a potential oversupply later this year, there is no evidence that that has begun to materialize yet. Stockpiles now sit just under the 107,800 tonne level. Have we seen the bottom for nickel this year? If we are repeating last year, then we may have with the bottom coming a month earlier - in June instead of July. We will have to wait and see, but the last week has seen technical strength that can not be dismissed as a dead cat bounce.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Consumers Weighed Down by Concerns About Jobs, Income - more
• How Easy Is It to Forecast Commodity Prices? - more
• Can Greece Survive? - more

   Nickel output resumed at BHP Australia refinery  - BHP Billiton said on Wednesday that production at its Kwinana nickel refinery in Western Australia had restarted as planned in early June.  - more

  Tata Steel Plans to Acquire Chrome Ore Mine in South Africa - Tata Steel Ltd., India’s biggest producer, plans to acquire a chrome ore mine in South Africa to secure local supplies for its ferrochrome plant and reduce raw material costs, Managing Director H.M. Nerurkar said. - more

  Courtesy AISI - In the week ending June 25, 2011, domestic raw steel production was 1,871,000 net tons while the capability utilization rate was 76.5 percent. Production was 1,816,000 tons in the week ending June 25, 2010, while the capability utilization then was 75.4 percent. The current week production represents a 3.0 percent increase from the same period in the previous year. Production for the week ending June 25, 2011 is up 0.7 percent from the previous week ending June 18, 2011 when production was 1,858,000 tons and the rate of capability utilization was 76.0 percent.

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

• Indicators at 7:10 am CST show 3 month nickel trading around  $.10/lb higher, with all London traded base metals higher this morning.  The Euro is currently up 1/3 of 1% against the US Dollar.  NYMEX crude is up 1% and trading at $93.83/barrel. Gold is up nearly 4/10 of 1% while silver is up over 9/10 of 1%. In overnight trading, Asian markets ended higher, while China fell 1-1/3%. European markets are trading higher this morning, while US futures show Wall Street should open higher. Nickel inventories fell yet again yesterday. Very slow news day for nickel.  
• LME Morning - Base metals edge higher on uptick in risk appetite - more
• Reuters - Copper gains, eyes on Greece - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper rose slightly yesterday, as did the rest of the metals, all of which tacked on modest gains. Other commodity markets pushed higher as well, with the 19-commodity Reuters-Jefferies CRB index putting in its biggest advance in six weeks, as a combination of the weaker dollar and revived enthusiasm surrounding the passage of the Greek austerity measures led to broad-based buying. In the energy markets, both crude contracts had roughly equivalent advances of more than $2/brl, while the Euro pushed over the $.144 mark. We are seeing a similarly strong advance today, where enthusiasm about the Greek vote is again propelling markets higher, as is the weaker dollar, which sank to a low of $1.4480 against the euro at one point earlier in the day. Oil markets are up by another $1/brl, and US equity markets are expected to open higher as well, with the Dow futures pointing to a 54-point opening gain. The Chinese stock market, however, finished lower, snapping a six-day winning streak on revived talk of another interest rate hike. Despite the stronger tone in the commodity markets, we remain cautious about the recent advance going forward, as much of it is built on the “feel-good” factor emanating from Greece. This is something of a bull-trap in our view, as we should not lose sight of the fact that the Greek "resolution" is really just a financial band-aid designed to postpone the strong likelihood of default. It does little, if anything, to address the root cause of the problem, namely, that Greece cannot be expected to grow its way out of its massive debt load. A point we raised in last week's commentary bears repeating: the $40 billion in tax increases and spending cuts that the Greeks want to push through by 2015 is equivalent to 12% of Greece’s GDP; a similar package in the US would amount to $1.75 trillion over the next four years, considerably higher than anything being considered here in the US. (To this point, Bloomberg reported Tuesday that the latest US negotiations have various parties struggling to agree on just $1 trillion worth of cuts over a number of years). The markets are also being sold the story that simply by stretching out Greek bond maturities, the repayment process will somehow be made easier. This, in effect, is the logic behind the "voluntary rollover" proposal endorsed by the French banks and which the German banks have also signed onto as well. All this does not add up to what it seems in our view, and although markets apparently feel otherwise, we continue to advocate caution as sentiment may turn once again. In terms of timing, we don't know exactly when the Greek debt crisis will next manifest itself more negatively, as much depends on how the second, much larger aid package fares, and also as to how Greek paper will trade going forward. However, buying commodities on the back of a short-term "success story" for Greece is a dicey proposition at best, particularly when the more important macroeconomic backdrop is painting a more bearish picture. .... Nickel is at $22,997, up $304, and nearing intermediate resistance at $23,500.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (SMM) Jinchuan Group raised ex-works nickel prices by RMB 1,000/mt to RMB 165,000/mt on June 29.
• (SMM) The Ministry of Commerce (MOC) announced that base metal prices fell by 0.5% during the week from June 20 to 26, with #1 nickel prices falling the largest by 3.3%.

  Effective with shipments beginning September 4, 2011, ATI Allegheny Ludlum is changing the raw material reference period used to calculate the surcharge. This change applies to stainless steels, including but not limited to austenitic, duplex, ferritic, martensitic, precipitation hardening, and super ferritic stainless steels in cold-rolled and hot-rolled sheet and strip, tubular quality sheet and strip, continuous-mill-plate, plate-mill-plate and Precision Rolled Strip® product forms. - pdf announcement here

  Price Of Low Carbon FeCr For Shipments To Japan In Q3 / 2011 Is Reduced = Reduced To 228 US-Cents Per Lb. / Cr CIF For Carbon 0.1% Max. Material - The price of low carbon ferro-chrome to be imported by regular consumers of Japan for shipments in July - September quarter of 2011 has been reduced. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 28

• Baltic Dry Index - minus 4 to 1,438. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) IG May Have $500 Million in Disaster Losses, JPMorgan Says // Shilling: China Heading for a Hard Landing // Standard Chartered Sees Double-Digit Growth in First Half Helped by China // Asian Beef Binge Boosts Shipments 17% Doubling U.S. Share: Freight Markets // Trichet's `Strong Vigilance' Comment Signals ECB Rate Increase Next Week // Greek Unions Strike as Papandreou Seeks Support // Italian 10-Year Bonds Erase Advance, Leave Yield Little Changed at 4.99% // Greek Rollover Plan Needs No-Default Rating // Stanley Black & Decker Hedges on U.S. Housing // Blagojevich May Face More Prison Time Than the Last Illinois Governor Ryan // State, Local Tax Revenue Climbs for 6th Quarter // U.S. Consumer Confidence Hits Seven-Month Low // Home Prices in 20 U.S. Cities Fell 4% in April  //Stocks, Euro Climb as Treasuries Fall on Optimism Greece to Avoid Default
• The Euro is currently trading nearly 1/2 of 1% higher against the US Dollar. NYMEX crude is up nearly 1.2% and trading at $91.66/barrel. Gold is up 1/3% and silver is up 3/4%. Base metals ended the session solidly higher. Indicator charts show nickel began a charge from the bell and never lost its momentum. For the day, Dow Jones reports three month nickel gained 2.4% and ended the day at $10.29/lb . Stockpiles of nickel stored in LME warehouses took another large hit yesterday, and now sit just over the 108,600 tonne level. Today's move in nickel breaks a four day funk traders were in, with nickel ending the last four sessions within a two cent spread. The strength of the bounce begs the question if we have seen the bottom for nickel pricing for awhile. With LME warehouse inventory numbers still heading south, it is hard to see nickel heading much lower, unless the world's economic activity slows even more. Stay tuned.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Damstahl Stainless Steel Report June 2011 - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) The price of nickel jumped 2.4% Tuesday to trade at its highest level in a fortnight as stockpiles continued to dwindle and the market's technical picture showed signs of stabilizing.
• EU’s Rehn: ‘No Plan B to Avoid Greek Default’ - more
• Why Nobody Understands the Income Tax: The Case of the Homebuyer Credit - more
• Is the welfare state growing or declining? - more
• Five economic lessons from Sweden, the rock star of the recovery - more
• THe Human Face of Economics - more
• BBC Radio 4 unveils 60 years of Reith Lectures archive - more

 FM to shut down second furnace for roof rebuild in early July - Ferrochrome producer International Ferro Metals (IFM) will shut down its second furnace for roof upgrades at the beginning of next month, to complete part of the work on its two furnaces concurrently, rather than sequentially, the London-listed company said on Tuesday. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.17/lb higher, with all London traded base metals higher at the moment. The Euro is now trading over 1/10 of 1% lower against the US Dollar and off earlier highs. NYMEX crude is up over 8/10 of 1% and trading at $91.38/barrel. Gold is up 1/3 of 1% and silver is higher by 1.2%. In overnight trading, Asian markets ended slightly lower with China up nearly 2/10 of 1%. European markets are slightly higher this morning , while US futures have yet to decide which way Wall Street will open. Nickel inventories continued to fall yesterday.  
• Bloomberg morning - Copper, Nickel Advance on Optimism Greece Set to Avoid Sovereign Default - more
• LME Morning - Metals hold modest gains, mark time in run-up to key Greek vote - more
• Reuters - Copper gains, eyes on Greece - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper fell yesterday in very quiet trading, although most of the other metals eked out modest gains. Oil markets finished mixed in quiet trading, but gold was down for a third straight day, breaking the $1500 mark. US equities had a good day, recouping practically all of Friday's losses. A slightly weaker dollar helped the upbeat tone, as did a more optimistic assessment of the Greek situation. In this regard, and as we noted in Monday's note, the Greek parliament will vote on its austerity package by tomorrow, but despite nervous anticipation, markets have likely discounted a yes vote. Because investors are prepared for such an outcome, we don't expect to see much of a relief rally when the measure actually passes, and may even see a bit of a pullback after the initial euphoria fades. However, should the measure fail, the consequences will be quite serious, as no one is quite sure what will happen next. The "Troika" apparently has a “Plan B” in place, which includes, among other things, flooding the system with liquidity in order to prevent a bank run in peripheral countries and perhaps offering the Greeks a bridge loan, as well as the opportunity for a revote if the financial mayhem get too intense. For now, markets do not seem to be particularly stressed, and we think the vote will likely prove to be a non-event. That is not necessarily the case in Greece itself, where workers across the country walked off their jobs today, kicking off a 48-hour general strike. About 20,000 protesters marched on Parliament in two separate demonstrations. Hundreds of flights were cancelled as air traffic controllers walked off their jobs, as did public transport and port workers. In the meantime, the macro numbers we are getting continue to come in on the soft side. Out of the US, May personal spending figures came in flat yesterday, breaking a 10-month string of gains. However, when taking into account inflation, real spending growth actually was in negative territory. Personal income increased 0.3% in May, the same rate as in April, but came in slightly below the 0.4% expected. In addition, the American Trucking Association's "For-Hire Truck Tonnage Index" fell 2.3% in May, marking its third consecutive monthly decline. "We don't think the drop in the last few months indicates a recession but we've definitely hit a soft patch this spring," ATA Chief Economist Bob Costello told Reuters. We had better news out of Japan, where retail fell less-than-forecast in May, down 1.3% vs. a year ago, but up 2.4% vs. April. Elsewhere, markets will be waiting for the ECB meeting on Thursday where another rate hike may be in the cards. Latest data showed headline inflation in five German states being unchanged in June, and this, along with the recent decline in energy, may persuade the ECB to stand pat. However, given the strong anti-inflation bent the bank has, we suspect they will put through one more rate hike as a precaution. We continue to believe that the short-term bias in most commodity complexes will be lower still, although the rate of decline may start to flatten out as prices start approaching more reasonable valuations, particularly in energy. Although we are working towards an equilibrium point in energy, we have a little more work to do on the still-elevated Brent contract before prices get low enough to translate into meaningfully cheaper prices at the pump, lower inflation readings, and a welcome pause in the upward interest rate spiral coming out from most countries outside the US..... Nickel is at $22,602, up $402, and starting to show signs of stabilizing. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) According to statistics of Korea Iron & Steel Association (KISA), South Korea exported 46,296 tons of hot rolled (HR) stainless steel this year with the average prices of US$2,692/ton. Most of products were exported to Southeast Asia, accounting 55.1% and Europe and North Asia take 26% and 17.4% respectively.
• (JMB) NSSC Lowers Ni Series Wire Rod Price while Raises Cr Series for June-August
• China and India’s energy, steel, and commodities consumption to accelerate - more
• Jinchuan Said to Be Considering Making Offer for Vale Target Metorex - more
• (SN) Sumitomo Metal Industries, Ltd. and Sumitomo Corp. have agreed to acquire Steel Wheel Acquisition Corp., the parent company of Standard Steel, Inc. in the United States, for approximately US$340 million.
• (SN) Carpenter announced the acquisition of Singapore-based Oilfield Alloys Pte. Ltd., a manufacturer and distributor of directional drilling equipment in the Asia-Pacific region.
• (ATA) The American Trucking Associations' advance seasonally adjusted (SA) For-Hire Truck Tonnage Index decreased 2.3% in May after decreasing a revised 0.6% in April 2011. April's drop was slightly less than the 0.7% ATA reported on May 25, 2011. The latest drop put the SA index at 112.3 (2000=100) in May, down from the April level of 114.9.

  Price Of FeCr For Q3 / 2011 Is Inevitable To Fall, Creating A Turbulent Age = Suppliers In India, Zimbabwe And Russia Are Moving To Take Offensive For Sales To Japan - There is a strong view in the market that the benchmark price of charge chrome (high carbon ferro-chrome) for shipments in July - September quarter of 2011 is anticipated to be reduced by 10 - 15 US-Cents per lb. of Cr. - more

  Monday Market Monitor - China - WEEK 25 - Dragon still on knees - Chinese steel market was reeling under virulent shivers as the prices collapsed last week. Although the fissures had appeared about a fortnight ago but there was uneasy silence ever since with minor corrections - more

  China daily crude steel output down 0.67 pct in mid-June - Custeel - Daily output of crude steel in China between June 11 and 20 fell 0.67 percent from the previous 10 days, industry website Custeel.com said on Tuesday, citing data from the China Iron & Steel Association (CISA).  - more

  Exec: RUSAL does not support Norilsk Nickel’s foreign expansion - Russian aluminum giant UC RUSAL does not support the foreign expansion of metals giant Norilsk Nickel, in which it owns 25%, Maxim Sokov, RUSAL’s director for corporate strategy, told reporters Tuesday. - more

• Russia’s Norilsk Plans to Invest $370 Million to Double Arctic Shipments - OAO GMK Norilsk Nickel, the largest Russian mining company, plans to spend $370 million to double its shipments across the Arctic Ocean by 2016 as global warming allows the route to rival the journey through the Suez Canal. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 27

• Baltic Dry Index - plus 18 to 1,442. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Auditor Finds Irregularities in $1.7 Trillion Local Government Debt // China Stocks Priced for Hard Landing Signal 2nd-Half Rally by Top Brokers // Wen Says China Is Long-Term Investor in Europe Bond Markets Amid Crisis // China Money Rate Slumps Most in a Month After Central Bank Injects Funds // China’s Top Priority Is to Tackle Inflation, Vice Premier Li Keqiang Says // Longest Losing Streak Since 2008 Ending for Commodities as Futures Surge // Asian Stocks Fall Ahead of U.S. Consumer Spending Data, Greece Budget Vote // European Banks Closer to 70% Greek Rollover Deal // Euro Strength Sustained in Widest Libor Gap Since 2009 as Greek Vote Looms // BIS Says Central Banks Need to Start Increasing Rates to Contain Inflation // Papandreou Faces Parliament on Second Austerity Call as EU Deadline Looms // European Stocks Close Little Changed as Greece Debates Austerity Program // Fed May Buy $300 Billion in Treasuries After QE2 // Analysts Double S&P 500 Sales Forecast // Consumer Spending in U.S. Stagnated in May // Mortgage-Bond Slump in U.S. Deepening as Jumbo, Alt-A Loans Extend Losses // U.S. Stocks Advance, Reversing Global Slump
• The Euro is trading nearly 6/10 of 1% higher against the US Dollar at the moment. NYMEX crude is down nearly 9/10 of 1% and trading at $90.36/barrel. Gold is down 2/3 of 1% and silver is off 2.6%. Base metals ended quietly, with some losers and gainers, but none of them making any noticeable noise. Indicator charts show nickel opened in a hole, nearly climbed out and then fell back, only to start gaining as US markets opened and the Euro strengthened.  For the day, Dow Jones reports three month nickel closed at $10.06/lb , up a penny for the day. Stockpiles of nickel stored in LME warehouses ended the week by declining, and totals now reflect just over 109,550 tonnes on hand. While commodities are taking a wait and see attitude over the Greece bail-out, US markets are in what MarketWatch calls, a relief rally.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Robry Weekly Economic Assessment - more

  Commodity/Economic Articles and Comments

• World's wealthiest people now richer than before the credit crunch - more
• Where the Rich Are Keeping Their Money - more
• Taylor: A Balance Sheet Recession - more
• Bernanke Public Approval Falls - more
• Tighter Lending Crimps Housing - more
• Ten Things That Can Get You Fired - more

  Antam to build 4 factories, upgrade 1 - State miner PT Aneka Tambang (Antam) is planning to build four factories and upgrade another in a move to comply with the 2009 Law on Mineral and Coal Mining, which mandates that national mining firms export processed products. - more

  Is Nickel a Bellwether for Copper? - Is this year’s worst-performing LME metal a canary in the coal mine for copper? And is there any hope in sight for nickel prices? - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.09/lb lower, and well off earlier highs, with other London traded base metals mixed and mostly lower. The Euro is trading over 1/10 of 1% higher against the US Dollar. NYMEX crude is off 1/2 of 1% and trading at $90.72/barrel. Gold is off more than 1/10 fo 1% while silver is down nearly 1.2%. In overnight trading, Asian markets ended lower, with China up 3/10 of 1%.  European markets are trading slightly higher this morning and US futures show the bulls want to try to erase Friday's losses on Wall Street. Nickel inventories fell on Friday.   
• LME Morning - Base metals cut losses on hopes of Greek debt rescue - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• SMM Nickel Price Forecast - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper rose to a one-week high on Friday after better-than-expected economic data from the US steadied the complex, but the rest of the metals closed roughly unchanged on the day. Things were not any more upbeat in the other markets either; US equity markets struggled, with the Dow Jones industrial average losing 115 points on the day, as investors remain worried about upcoming earnings reports and deadlocked budget negotiations in Washington. Precious metals were also lower, with gold sinking to a one-month low, while Brent energy prices also finished down, as did many of the grains. The new week is starting on a lackluster note, with metals quietly mixed. Copper is again hovering around the $9000 mark, with most of the other metals trading on either side of unchanged. Energy prices are lower again, as is the dollar (now trading at over $1.42 against the euro). However, US stock futures are showing a higher opening after a decent session in the Asian stock markets. .... Nickel is at $21,980, down $170; charts continue to look quite poor, but the brunt of the selling seems to be behind us. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Reuters) Posco said Monday it will keep stainless steel prices unchanged for July after the company already cut prices to stabilize the market last month.
• (Yieh) It’s reported that the Chinese stainless steel mills were increasing the production of the nickel-bearing 200 series stainless steel production to meet the strong demand..... A medium sized stainless steel mill in China pointed out that the company raised the 200 series stainless steel production in May and June due to weak 300 series market.
• Reuters - International Nickel Indonesia (Inco) will invest $500 million over the next three or four years to develop a nickel project in Central Sulawesi, the miner's chief executive said. Inco plans to start work next month at its Bahodopi nickel project, which will include an 80 km road, and processing and refinery works.
• (FAN) The Japanese LC ferrochrome (FeCr) users and the Russian producers have agreed to reduce import prices of LC FeCr from Q2's US$2.35/lb Cr CIF to US$2.28/lb Cr CIF for Q3 orders.
• (FAN) According to Customs statistics, in May 2011, China's ferrochrome imports are about 178,500 tons, an increase of 17.52% yoy, a decline of 12.91% mom
• (SMM) China Refined Nickel Imports in May up by 74.78% YoY
• (CIDN) Jilin Jien Nickel 's shareholders approve nickel project in Canada
• China backing nations' battle against debt crisis - more

  DJ Chinese Stainless Steel Maintenance Weighs On Nickel; 2H Rebound To Be Capped - Summer maintenance at Chinese stainless steel makers may put nickel prices under pressure in the coming weeks, but prices are likely to recover in the second half of the year as rising domestic stainless steel capacity will boost demand for the raw material, industry participants said. - more

  China's raw material imports tell their own story - China's full trade report for May sprung few surprises in terms of headline imports of base metals. - more

  Nickel and Stainless Steel Prices Both on a Slide - Stainless buyers are rightly holding off doing anything more than buying hand-to-mouth this quarter. - more

  Molybdenum Production By Peru In Jan. - Apr. 2011 = Produced 5,565 Tons On Mo Content Base As Increased By 17% From That In Same Period 2010 - According to the statistics released by the Ministry of Energy and Mining of Peru, this country produced 5,565 tons of Mo in molybdenum concentrates in the first 4 months (January - April) of 2011, which had a substantial increase of 17.45% compared with that (4,739 tons) in the same period of 2010. - more

  Lang Hancock daughter set to overtake Carlos Slim, Bill Gates as world's richest: Citigroup - Nearly 20 years ago, a young Australian widow inherited a debt-ridden mining company from her father. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 24

• Baltic Dry Index - plus 10 to 1,424. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Wen Says China Succeeding in Inflation Battle With Price Gains Set to Slow // Australia Bond Sales Surge to Record as Spreads Shrink to 2008 Low: Australia Credit // Asian Stocks Rise, Treasuries Drop on EU Support for Greece; Oil Rebounds // Italian Banks Plunge on Ratings Review // EU Vows to Rescue Greece in Exchange for Cuts // German Business Confidence Rose in June // European Stocks Drop, Completing Longest Weekly Losing Streak Since 1998 // Buffett Closes ‘Backdoor’ to Berkshire // Hotel Buyers Inflate Property Prices as Values Outpace U.S. Lodging Demand // State Lawmakers Racing to Close Budget Gaps Across U.S. as Deadlines Loom // Orders for U.S. Durable Goods Beat Forecast in May // U.S. Economy Grew 1.9% in First Quarter // U.S. Stocks Slump as Oracle Tumbles
• The Euro is now trading over 1/2 of 1% lower against the US Dollar. NYMEX crude is off 9/10 %and trading at $90.21/barrel. Gold is down over 1.1% and silver is off 1.7%. Base metals ended the session mixed. Indicator chart show nickel traded choppy today, with a near $300 tonne range. For the day and week, Dow Jones reports three month nickel closed at $10.05/lb , up a penny and where it closed on Wednesday, thus negating the trading action of the last two days. Stockpiles of nickel stored in LME approved warehouses rose for the first time in twelve days and now stand just over the 109,850 tonne level. And just in time for the weekend, another bear crawls out of his den - New recession begins next year, Shilling says - more Sorry we just aren't buying it yet. This spring and summer bear a striking resemblance to last years slow down and irregardless of all the double dip talk that year, we never dipped into recession. Have a great safe and relaxing weekend!!

  Reports

• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• The Fed's forecasts - Serial disappointment - more
• Pessimism about National Economy Rises, Personal Financial Views Hold Steady - more
• Survey: Banks Easing Lending Standards, but Not for Consumers - more
• Federal Reserve Frets Over Fiscal Recklessness Behind Calm of 0.09% Yield - more
• Guest Contribution: What Happens if U.S. Defaults? - more

  AK Steel To Buy Raw Material - With the gradual increase in the iron ore and coking coal prices due to increase in demand, AK Steel Holding Corporation might consider obtaining raw material assets from outside. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.01/lb lower, but the metal is see sawing sharply this morning and off earlier high's. Other base metals are mostly lower and quiet at the moment. The Euro is down 3/10 of 1% against the US Dollar at the moment. NYMEX crude is down nearly 1/10% and trading at $90.95/barrel. Gold is down 1/4% and silver is off more than 1.8%. In overnight trading, Asian markets ended higher with China up over 2-1/3%. European markets are quiet and slightly higher and US futures so no direction yet. For the first time since the 8th of this month, nickel inventories rose. And for a Friday, there is a lot of market news available.
• Reuters morning -  Copper rises on dollar, Greek deal boost - more
• LME Morning - Metals edge higher, warehouse wars shake markets - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals fell sharply on Thursday as a stronger dollar and lingering concerns about growth prospects continued to weigh on the markets. However, most markets were transfixed by the goings-on in energy, where investors were blind-sided by the surprising announcement out of the IEA that about 60 million barrels of crude oil would be released onto the markets. The crude will be doled out in 2 million barrel per day installments, with the US providing half the supply from inventory, while Europe and other Pacific OECD nations furnish the rest.  The announcement resulted in $6-$8 losses in both crude contracts, double-digit losses in products, as well as record daily trading volumes in Brent. We suspect the IEA will be far more aggressive in discounting this oil in order to get it to move than the Saudis have been, which leads us to conclude that the energy markets will be trading somewhat lower in the weeks ahead, at least until the IEA sales program comes to an end. What this means for metals is not known at this stage. Certainly, yesterday’s action did not show the two complexes moving all that much in tandem, with aluminum somewhat of an exception, as it is perceived to be a proxy play on energy play. However, on balance, lower energy prices should be constructive for metals, as this will reverse some of the inflationary forces in the economic system and perhaps persuade central bankers to hold off on raising interest rates. On the other hand, if and when funds liquidate energy positions, as was the case yesterday, it is inevitable that some of the selling spills over into other groups. With respect to Greek developments, we had an announcement late yesterday that after a session of intense negotiations, Greek Finance Minister Evangelos Venizelos had finally clinched a five-year deal with the EU and the IMF on extra tax rises and spending cuts. Prime Minister Papandreou confirmed the agreement and said that the legislation would now be put before parliament. The progress resulted in a decent rebound in the Euro, which finished the day around $1.4250, up from $1.4170, and also helped eliminate a triple-digit loss on the Dow. Despite the agreement, one should not gloss over the challenge that lies ahead for both Greece as well as the Euro-regime. An article in Thursday's New York Times calculates that the $40 billion in tax increases and spending cuts that the Greeks want to push through by 2015 is equivalent to 12% of the country’s GDP, and that a similar package in the US would amount to $1.75 trillion over the next four years, considerably higher than anything being considered right now. On top of all this, Greece has also promised to generate another $72 billion by selling off prime state assets, which many consider to be national landmarks. With such fantastic numbers being bandied about, one could legitimately ask whether such severe measures will likely kill the patient (and perhaps finish the currency off as well) before yielding any results. In the meantime, Reuters reports that at meetings on Wednesday, banks and insurers in Germany, France, Spain, and Belgium were asked by their national authorities to roll over their holdings of Greek debt voluntarily when the bonds mature. We wonder if credit agencies will soon "flag" such pressure and declare Greek bonds to be in default since the agencies will argue that authorities are prompting bond holders to act in a way that they otherwise would not. Speaking of defaults, US debt-ceiling negotiations are floundering badly, with Republicans walking out of talks yesterday over disagreements with their Democratic colleagues. Republican negotiators have said that they will not favor any Democratic-supported tax increases in budget parameters that are being negotiated prior to an agreement for raising the ceiling. The talks on this issue – or what remains of them – will likely drag on until August 2nd, the deadline for the extension, and the ensuing political brinkmanship will needlessly unnerve the markets in the process. Sadly, the goings-on in Greece are not providing our politicians with any kind of wake-up call with respect to what potentially be waiting for us if we do not get our own fiscal house in order. In market action right now, metals are mixed, with copper back over the $9000 mark, but the rest of the metals are only marginally changed on the day. The positive news out of Greece, coupled with decent gains in Asian equity markets, have contributed to the steadier tone. The Chinese stock market was particularly strong, with equities posting their biggest two-day gain in six months after the Chinese Premier wrote an opinion piece in the Financial Times saying that he was confident Chinese price rises would be kept firmly under control this year. The dollar is pretty much unchanged right now, trading at $1.4270, while US equity markets are expected to open somewhat higher. Despite the somewhat more stable tone, we remain nervous about markets going into next week, as we think the Greek/Euro-debt situation still has the potential to unravel, while further energy-related selling in the commodity space could have somewhat further to go. .... Nickel is at $22,000, down $125, with only a $350 trading range in place today.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (DJ) China To Lower Zinc Ingot, Scrap Nickel Import Tarrifs From June 1
• (Yieh) Reportedly, South Korean Posco signed memorandum of agreement (MOA) with Russian Mechel to jointly explore the natural resources and produce stainless steel. Under the agreement, the two sides will build a stainless steel plant in Russia and explore the natural resources in Siberia and other countries.
• (Interfax) Mergers and acquisitions (M&As) by Chinese companies will account for at least 30 percent of global resource transactions within the next five years, Keith Spence, president and partner of Canadian investment company Global Mining Capital Corp. told Interfax.
• Conference Board Leading Economic Index Increases 0.8% in May - more
• China's manufacturing sees sizable slowdown - more

  DJ Chinese Stainless Steel Maintenance Weighs On Nickel; 2H Rebound To Be Capped - Summer maintenance at Chinese stainless steel makers may put nickel prices under pressure in the coming weeks, but prices are likely to recover in the second half of the year as rising domestic stainless steel capacity will boost demand for the raw material, industry participants said. - more

  European moly oxide prices hit 2011 low on aggressive Q3 sales - Molybdenum oxide prices in Europe slumped this week as substantial third-quarter consumer inquiries flushed out a wave of aggressive selling, pushing the market below the $16/lb level for the first time since last November. - more

  Stabilizing prices in the horizon. - The stainless steel market started 2011 on a good note, and with April being the exception, the positive trend has continued until now. - more

  Philippines' Nickel Asia sees 20 pct rise in sales volume -  The Philippines' biggest nickel miner, Nickel Asia Corp , said on Friday it expects its sales volumes to increase about 20 percent this year, with about 60 percent of output going to China. - more

  Price Of Stainless Scrap In Japan Is Being Reduced Further, Reflecting Sensitively Fallen Nickel Price = Owing To Nickel Price As Broken US$10 At End Last Week, Domestic Scrap Price Was Reduced By Yen 10,000 - LME nickel price for cash at the 16th of June fell to a lower level than US$10 per lb. after an interval of 7 months and, having felt a repugnance for this aspect, the domestic price of nickel-based stainless steel scrap (new clippings) in Japan had at once fallen considerably at the end of last week, having resulted in the very low one as seen in February of 2010. - more

  New start hopes for nickel mine - Tasmania's mothballed Avebury nickel mine could again be a major employer under a new owner or in a fresh partnership with its current operators. - more

  Governor arrested over mining graft case - The governor of Agusan del Norte has been arrested for a graft case at the Sandiganbayan yesterday but wasn’t likely to spend time in jail after posting bail immediately after his arrest was made. - more

  PNG province calls for deep sea mine waste dump regulations - Landowners in Papua New Guinea have long been concerned about the impact of deep sea waste disposal from mining. - more

  City of Norilsk Still Tops Pollution List - The Krasnoyarsk region city of Norilsk remained Russia's most polluted city for the 19th year running, though it managed a slight decrease in harmful emissions — unlike the country in general. - more

  RusAl Reviewing New Norilsk Chairman - Aluminum giant United Company RusAl said the chairman of Norilsk Nickel should be independent rather than representing a particular shareholder. - more

• What Andrey Bougrov Can Bring To Norilsk Nickel Board? -  This Tuesday brought big news to Norilsk Nickel’s shareholders as freshly elected during the AGM company’s board of directors picked Andrey Bougrov as their chairman. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 23

• Baltic Dry Index - plus 8 to 1,414. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China’s Manufacturing May Expand at Slowest Pace in 11 Months, PMI Signals // China Money-Market Rate Reaches 3-Year High After Suspension of Bill Sale // Euro Weakens, Stocks Fall on Trichet Red Alert // Li & Fung Says Wal-Mart May Gain Market Share Amid Weakening U.S. Recovery // Obama Says Withdrawal From Afghanistan Will Aid ‘Nation-Building at Home’ // Trichet Says Risk Signals Are Flashing Red as Debt Crisis Threatens Banks // Selling $50 Billion in Greek Assets Is Herculean Task // Greece Budget Hole Threatens to Swallow Europe // European Stocks Tumble as Fed Cuts Growth Forecast; BBVA, Bayer Retreat // Bernanke Leaves Door Open to Further Easing // Potato Chips Cited as Culprit for U.S. Weight Gain by Harvard Researchers // Jobless Claims Rise, Confidence Falls // Gold Drops Most in Seven Weeks as Slow Economy, Oil Slump Ease Inflation // Dollar Advances After Fed Signals No More Stimulus; Euro Falls on Greece // Russia Stocks Drop Most in Seven Weeks as IEA Stockpiles Spur Oil Tumble // Stocks Drop on Economy Concerns as Euro Falls
• The Euro took another beating against the US Dollar today, down 1-1/4% at the moment. NYMEX crude is off 4-1/2% and trading at $91.15/barrel. Gold is down over 1/8% and silver is off 3.7%. Base metals fared better, all ending lower but with less extreme declines. Indicator charts show nickel spent most of the session in a slow decline, until mid afternoon, when it spiked back nearly to where it started. For the day, Dow Jones reports three month nickel ended at $10.04/lb , down a penny on the day, and considering the bath the Euro took, ended remarkably strong. Stockpiles of nickel held in LME approved warehouses fell again yesterday and now sit just over the 109,600 tonne level. Fed Chairman Ben Bernanke may wish he had had more 'green shoots' he could have reported yesterday, but in fact, his press conference was rather sobering. At least, that is how the markets took it with the Dow taking an 80 plus point plunge as he finished. Not to be outdone, this morning European Central Bank President Jean-Claude Trichet reported that "risk signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks'. Jobless claims rose, new home sales fell (I swear I don't know how we keep falling when we are told we are at the bottom of the crater?). Then out of the blue this morning, dual announcements came from the US Department of Energy and International Energy Agency that reserve oil stockpiles would be released. Now? Oil prices are already falling but they do this now? Markets generally do not like surprises and this one was not taken well. And we can't blame them. After watching the HBO movie 'Too Big Too Fail' and finding out how close the US, and the world for that matter, came to a situation far more serious than the Great Depression, we can understand why few trust their government to be completely honest with them. In their defense - they really can't be, for had Main Street Joe Six Pack known how bad it really was at the time, there would not have been a Dollar bill to be found in a US Bank, nor a street in a US city that would have been safe.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Citi) The weakness seen in the nickel/stainless complex will impact the Q3 European benchmark settlement for high carbon ferrochrome prices. A fall is now widely expected and the question is the size of the fall. We expect a 10c/lb fall as a base case.
• (Macquarie) Over the January to May period, we estimate apparent nickel demand in China at 263kt, up 21% YoY but real use at 279kt, up 16% YoY. This implies destocking of 16kt year to date. Real Chinese consumption appears to be slowing due to weakness in stainless steel production and the market moved into small apparent surplus in May.
• Lower Taxes, Higher Commodity Prices Drive Income in States - more
• Recap: Ben Bernanke’s Press Conference - more
• The Food-Stamp Crime Wave - more
• Consumer Reports Index Finds Half of Americans Languish While More Affluent Households Flourish - more

  Nickel: A Bellwether For Copper? - Is this year’s worst-performing LME metal a canary in the coal mine for copper? And is there any hope in sight for nickel prices? - more

  Chinese demand for metals remains strong - China’s crackdown on lending in an effort to control inflation appears not to have affected metal consumption, despite fears of a slowdown in infrastructure and real estate construction. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.09/lb lower, with other London traded base metals lower as well. The Euro is trading nearly 9/10 of 1% lower against the US Dollar. NYMEX crude is off 2-2/3% and trading at $92.87/barrel. Gold is down 6/10% and silver is 3/4% lower. In overnight trading, Asian markets fell but China rose over 1-2/3%. European markets are lower this morning and US futures imply yesterday's 'Bernanke bummer' may continue. Nickel inventories continue to fall.
• LME Morning - Metals weaken as Fed restricts flow of easy money, dollar higher - more
• Reuters - Copper retreats as lack of stimulus hint buoys dollar - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices fell slightly yesterday, as money pulled to the sidelines ahead of the Fed policy statement and the subsequent press conference hosted by Chairman Ben Bernanke, neither of which turned out to be that inspiring. However, most metals recovered from earlier lows on account of a slightly stronger Euro and a brief upward blip caused earlier on reports of an "incident" with one of the French nuclear reactors. French authorities quickly put the story to rest, saying that the plant had encountered only an internal breach of some waterproofing material and that the setback was not serious. Of course, the more relevant market issue has to do with the ongoing Greek situation. In this respect, the various markets seem to be in the process of discounting the passage of the Greek austerity measures and the subsequent release of monies owed to the country. We wrote in earlier commentary that in the lead-up to these critical votes, markets should strengthen or remain stable, but that investors will subsequently -- and rather quickly -- shift their focus towards more pressing global macro concerns. This seems to be happening right now, as markets are again on the defensive given the number of macro developments over the past 24 hours. Here in the US, the Fed policy statement seems to have gotten more pessimistic about the state of the US economy, with the Fed saying that while the recovery is continuing at a moderate pace, growth is slower than expected. However, the Fed said it believes that some of the headwinds would be short-lived, including those generated by supply disruptions from the Japanese earthquake and the "effect of higher food and energy prices on consumer purchasing power." The Fed downplays the chance of another downturn, saying that it "expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline", but despite this upbeat projection, it still slashed about a half point off its estimate of gross domestic product growth for 2011. Importantly, it did not signal any additional moves to pump new money into the system, but by virtue of its $2.7 trillion balance sheet, it is quite obvious that it will remain a source of ongoing liquidity for some time to come. It seems to us that there is quite a bit of wishful thinking built into the Fed statement in that it expects easing price pressures and a recovery to automatically take place in the 2nd half of the year. In our view, without a significant and sustained downward correction in energy prices, the second half may not come in as strongly as the Fed expects. More importantly, the global economy desperately needs to see lower oil prices in order for recent pricing pressures, especially in emerging economies, to be reversed and for central banks to back away from their recent tightening stance. Other macro reports from outside the US also continue to show a marked slowdown in activity. Out of China, factory activity expanded at its slowest pace in 11 months in June, with the HSBC "flash" manufacturing purchasing managers' index coming in at 50.1, only a shade higher than the contraction territory that lies below the 50 mark. On the positive side, the slower rate of factory activity resulted in reduced pricing pressures, with the sub-index of factory input prices falling to 51.1 in June from 60.1 in May. Incidentally, there was a good snap-shot of recent economic activity in China written up by Bloomberg last week and contained in this link. (Duplicated in our attachment as well if this does not open) .... Nickel is at $21,900, down $250; charts continue to look miserable.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Interfax) China's steel mills are facing decreasing market demand, rising iron ore costs and a drop in bank loans, the China Iron and Steel Association (CISA) announced July 22.
• CaNickel revives Bucko Lake - more
• Commodities Tumble After Federal Reserve Cuts Growth, Employment Forecasts - more

  Zambia Nickel Mine Halted After Accident - Union - Operations at Zambia's sole nickel miner, Munali Nickel Mine, have been halted following an accident that damaged ventilation fans at the underground shaft, a union official told Dow Jones Newswires Thursday. - more

  China’s Imports of Laterite Nickel Hit Historical High of 4.19 Million mt in May - According to data from China Customers, China’s imports of laterite nickel ore in May were 4.19 million mt, hitting a historical high, and imports from January to May were 12.27 million mt, up by 62% YoY. - more

  DJ Minmetals MMG Unit Considering Restart, Sale Of Nickel Mine - Minmetals Resources Ltd. is working on plans to restart its mothballed Avebury nickel mine in Tasmania, but will consider offers that have been received to run or buy the asset, the Australian arm of the company said Thursday. - more

  Outokumpu CEO says more restructuring in sight -paper - Beleaguered Finnish stainless steel maker Outokumpu will be turned back to profit and more restructuring will be done, its chief executive was quoted as saying in A Finnish business daily on Thursday. - more

  Domestic Consumption Of Nickel Metal In Japan For April 2011= Consumed 3,785 Tons As Decreased By 9.6% From That In March - According to the data compiled and released by the Ministry of Economy, Trade and Industry, Japan consumed 3,785 tons of nickel metal in April of 2011, having decreased by 9.6% compared with (4,188 tons) in the previous month of March. - more

  Norilsk: Russia’s most polluted city in 2010 - The city is the headquarters of the Norilsk Nickel company, the world’s top producer of nickel and palladium and one of the leading producers of platinum and copper. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 22

• Baltic Dry Index -  minus 3 to 1,406. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Dow Jones reports three month nickel ended the day at $10.05/lb

  On the road today so the afternoon update will be posted late and will be brief.

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.01/lb higher with other London traded base metals mixed and quiet. The Euro is trading nearly 1/10 of 1% lower against the US Dollar this morning. NYMEX crude is off over 1/3 of 1% and trading at $93.82/barrel. Gold is down more than 1/10% while silver is off 3/4%. In overnight trading, Asian markets ended higher, with China quiet and slightly lower. Europe is trading lower this morning, and US futures show Wall Street has yet to decide an opening direction. Nickel stockpiles fell yesterday and now sit just over the 109,950 tonne level. Since last weeks article with analysts forecasting a huge surplus coming in nickel, current stockpiles have dropped another 2000 tonnes and have fallen below 110,000 tonnes for the first time since August 2009.
• LME Morning - Metals drift lower, slow trade seen ahead of FOMC meeting - more
• Reuters - Copper down as market eyes Greek debt, Fed meet - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• US Imports of Steel Mill Products - more
• Thyssenkrupp Nirosta July Stainless Surcharge - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals finished slightly higher yesterday, as the Euro rose against the dollar for a fourth day in a row on hopes that the Greek crisis is now slowly working its way towards more clarity if not an outright resolution. In this regard, late yesterday, the Greek government survived a no-confidence vote by an eight-vote margin, and later today, the cabinet is expected to approve a draft bill implementing a multi-pronged austerity plan. The government will aim to get the measure approved by the full parliament on June 28 and then push implementation of the reforms in time for an extraordinary meeting of Eurozone finance ministers scheduled for July 3rd. All this should free up another tranche of money for Greece. The Euro was up again on news of the no-confidence vote late yesterday, getting to over $1.44, while the yield on Greek government bonds also narrowed slightly against the benchmark German Bond. The streets of Athens were reported to be calm, with Bloomberg reporting that traffic was running normally through a main square where 20,000 demonstrators had gathered before parliament just the night before. We wrote in Monday's commentary that we expected a firmer tone leading up to the Greek vote, but that once these developments were behind us, markets may start to fade going into next week. Right now, markets are still in that gray area, slightly jumpy as they wait for the vote on the Greek austerity package by the Parliament, but likely ready to rally if and when it passes. However, any bounce will be brief, as there are still serious doubts about its implementation. In this regard, a disturbing article we read in the Wall Street Journal pointed out that despite all the austerity measures in place over the past year, not one Greek public official has yet to be laid off and that the brunt of the service cutbacks and tax increases thus far have largely fallen on the Greek private sector. The author points out that at the time of the first bailout, foreign creditors should have insisted that all parties in the Greek Parliament -- as well as the unions -- be signatory to the accords. However, because it was only the governing party that signed, the Greek political mosaic is now fractured, and opponents of austerity, as well as the unions, are freely criticizing the package while hoping to extract additional concessions from a clearly panicked EU. This means that the upcoming austerity package, when finally implemented, will likely lead to an even more public turmoil, particularly if layoffs start gathering pace. In the meantime, Euro zone creditor governments are starting talks with commercial banks and insurers about a "voluntary" private sector contribution to a second rescue program for Greece, a source in the German government told Bloomberg. Private bondholders will be asked to commit to rolling over their Greek bonds when they mature, but a more ambitious plan for a bond swap extending maturities by seven years was shelved. The authorities have to be careful here, as even a voluntary rollover could be deemed to be a default by the credit agencies. As we watch the Greek drama unfold, other countries are experiencing similar low-grade tremors, with Italy and Spain both riling the debt markets in recent days.  Markets are mostly mixed as of this writing, with copper lower and trading again below the $9,000 mark basis three-months LME, while the rest of the metals are mixed. Energy prices are slightly lower, and the Euro is now at 1.4380 after getting over $1.44 at one point after the Greek no-confidence measure failed. US equities are expected to open lower ahead of the Fed policy statement and Chairman Bernanke's press conference later today. ....  Nickel is at $21,870, down $10, and very quiet.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Dow Jones) WBMS: Global Nickel Market In 1,600-ton Surplus Jan-April
• (Yieh) According to statistics, China exported 175.4 thousand tons of stainless steel flat products, soared by 21.7% month on month, almost close to the record highs of 177.973 thousand tons in last March. It’s analyzed that the lower stainless steel flat products in the Chinese domestic market was the major for the large exports in May.
• (FAN) Turkey's largest ferro-chrome producer Eti Krom, part of the Yildirim group, plans to cut high carbon ferro-chrome production at two of its four furnaces from 15 June-15 Nov or until the market demand rebounds
• (JMB) Ni Series Stainless Sheet Market Price Weakens by 10,000 Yen/t in Japan
• Nickel Prices Fall for the Tenth Consecutive Week - more
• Is China set to roar in commodities trading? - more
• China raises bank reserves to contain inflation - more
• ENSO state remains neutral over the Pacific - more

  Nickel-Concentrate Imports by China Double to Record as Production Climbs - Imports of nickel ores and concentrate by China, the largest consumer of the refined metal, climbed to a record in May as nickel pig-iron producers ramped up output to meet demand from stainless-steel makers. - more

  Quantities Of Crude Stainless Steel Produced By 7 Major Companies In Japan For April 2011 = Major 7 Companies Produced 296,000 Tons In Total As Increased By 3.9% From That In March - The total quantity of crude stainless steel produced by seven major stainless steel companies of Japan in April of 2011 came up to 296,617 tons, having increased by 3.9% compared with that (285,353 tons) in the previous month of March - more

  Zimbabwe: ZMF Engages Govt Over Chrome Exports - The Zimbabwe Miners' Federation has engaged Government seeking an extension of chrome ore exports by 36 months to allow miners to recapitalise their operations. - more

  USTKE calls New Caledonia strike to shore up local employment - New Caledonia’s USTKE union has called a general strike today to push for the increased hiring of locals. - more

 Interros' Bugrov Elected Norilsk Board Chairman - The battle for the control in the world's largest nickel miner, OAO Norilsk Nickel , intensified Tuesday as a representative of Russian billionaire Vladimir Potanin, one the fighting shareholders, was elected chairman of the board. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 21

• Baltic Dry Index - minus 9 to 1,409. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) CapitaLand to Double China Portfolio Over Five Years on Economic Expansion // Pork Prices in China Seen Staying at Highs as Domestic Shortage Persists // Corn Stocks Plunging to 1974 Low as China Adds Brazil-Sized Crop to Demand // Asian Stocks Rise as Easing Concern of Greek Default Boosts Mining Shares // Papandreou Confidence Vote May Decide Greece’s Fate // German Investor Confidence Falls in June // IMF Sees ‘Considerable’ Risks to Spain Economy, Urges Additional Overhauls // European Stocks Advance Most in Two Months Before Greek Confidence Vote // Bank of America Said to Weigh Cutting $21 Billion China Construction Stake // Geithner Says Europe’s Leaders Failing to Speak With Unity on Greek Crisis // U.S. Existing-Home Sales Hit Six-Month Low // Stocks Rally, Euro Strengthens; Oil Advances
• The Euro is currently trading 2/3 of 1% higher against the US Dollar. NYMEX crude is off 4/10 of 1% and trading at $92,89/barrel. Gold is up 1/4% and silver is up nearly 1.1%. Base metals ended mostly higher today. Indicator chart show nickel had a mountain top day, up in the morning, flat thru mid session, then a fall late. For the day, Dow Jones reports three month nickel closed at $9.92/lb . Stockpiles of nickel stored in LME licensed warehouses fell for a ninth consecutive day and now sit just over the 110,550 tonne level. Greece concerns seem to be muffled today and markets are back in a risk taking mood. Nickel appears to be trading higher on the Euro, as fundamentals do not appear to be any better today than yesterday.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Ryerson Customer Link - pdf here

  Commodity/Economic Articles and Comments

• (SG) Several European stainless steel producers have already cut back output and are planning cuts up to 50% to try and prevent further price falls this includes ThyssenKrupp, Aperam, Outokumpu and Acerinox. The dilemma they are facing is that in reducing output they also decrease the demand for Nickel and could suffer falling surcharges.
• (FAN) In April, America imported about 4,876.757t of low carbon ferrochrome, down by about 61% compared with the same period of 2010 and up by about 130% compared with the previous month.
• Missing bolts led to Chennai shelter collapse: Corporation - more
• Inflation: What’s the Worry? - more
• House Prices May Not See Recovery Until 2014 - more
• History of the Bolt & Nut Industry in America - more

  May Crude Steel Production 2011 - World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 130 million metric tons (mmt) in May 2011. This is 4.2% higher than in May 2010. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.15/lb higher this morning, with other LME base metals trading higher as well. The Euro is presently trading over 4/10 of 1% higher against the US Dollar. NYMEX crude is up 1-1/4% and trading at $94.41/barrel. Gold is up nearly 1/4 of 1% and silver is over 4/10 of 1% higher. IN overnight trading, Asian markets ended higher, with China up nearly 1.2%. European markets are trading higher, with US futures higher as well. Nickel inventories fell again yesterday.
• Bloomberg morning - more
• LME Morning - Metals range narrowly as fate of Greece hangs in limbo - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices were mostly weaker on Monday, as investors waited to size up developments with Greece. We had a mixed showing in other markets; energy prices finished lower (on Brent), the dollar was slightly weaker, while US stocks finished higher after an early fade. However, on the whole, we are seeing a more downward bias set in over most commodity complexes, as many more groups are starting to wobble in light of growing growth concerns from China. In this regard, we are seeing more weakness in the iron ore markets and pockets of the steel industry, areas that have been holding up well up to now. Metals are higher as of this writing, as markets are starting to discount the passage of the Greek no-confidence vote and the likely acceptance of the austerity package now weaving its way through the country’s parliament. The no-confidence vote will take place late today and so we should have results by the time Asian markets open on Wednesday. Assuming it survives, the Greek government will then try to push through a five-year package of tax hikes, spending cuts, and privatization measures, all before an extraordinary meeting of Eurozone finance ministers set for July 3. Having already missed targets agreed in its first bailout and basically frozen out of the credit markets, approval of the austerity package is required if Athens wants to receive the next tranche of funds and work its way towards securing a second package worth an estimated 120 billion Euros. It will not be an easy task and success is far from assured, but the market’s focus now remains on short-term developments. In this respect, and as we wrote in yesterday’s commentary, we should see a slight bounce set in over most markets as investors express some relief that the threat of a Greek default is now postponed, if not eliminated altogether. In the meantime, credit rating agency Fitch said yesterday that it would view a Greece sovereign debt swap or any kind of rollover of maturities, even a voluntary one, as a default. In other news, individual Chinese commodity trade flow data was broken down by category and released overnight. The data shows that imports of refined copper dropped 6.9% in May to a 30-month low after falling 16.6% in April. Imports are now off a stunning 47% from May 2010 levels. The numbers are not exactly much of a surprise, as earlier statistics suggested a decline was in the offing. Exports of refined copper in May totaled just over 20,000 tons, well off the 44,000 tons seen in April. However, exports are running well ahead of last year, and year-to-date, they are around 144,000 tons, or about 15% of total imports. This makes us somewhat wary about the recent decline we have been seeing in Shanghai inventories, as the drawdown we are seeing in stocks could be feeding the export market as opposed to local consumption. We will summarize the individual Chinese trade numbers and present our usual charts later in the week. .... Nickel is at $21,975, up $325.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (SO) According to report of Steel and Metals Market Research (SMR), the global stainless steel output is predicted to reach 34 million tons in 2011, up by 7%~10% from a year previous.
• (MB) China's nickel ore imports surge past 4m tonnes in May
• (AMM) Baosteel Stainless cuts July prices on falling demand and weak nickel

  Australia's commodity forecaster revises metals & coal outlook - Following are the latest forecasts for production and exports released by the Australian Bureau of Agricultural and Resource Economics and Sciences on Tuesday. - more

  TABLE-China implied metal demand falls in May - China's apparent demand for refined copper dropped 2.1 percent in May from the previous month and 13.5 percent from May 2010, Reuters calculations based on official Chinese data showed on Tuesday. - more

  Market Tendency On Imports Of Ferro-Alloys At 15th June 2011 = Mood In Recession Is Enlarging To Raw Materials For Stainless Steel Production - The market tendency by item on imports of ferro-alloys into Japan at the 15th June of 2011 is as follows - more

  Courtesy AISI - In the week ending June 18, 2011, domestic raw steel production was 1,858,000 net tons while the capability utilization rate was 76.0 percent. Production was 1,816,000 tons in the week ending June 18, 2010, while the capability utilization then was 75.4 percent. The current week production represents a 2.3 percent increase from the same period in the previous year. Production for the week ending June 18, 2011 is up 0.9 percent from the previous week ending June 11, 2011 when production was 1,841,000 tons and the rate of capability utilization was 75.3 percent.

   Norilsk Nickel to elect new board at AGM on Tuesday - Russia's largest nickel maker Norilsk Nickel will elect a new board of directors at an annual shareholders' meeting on Tuesday. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 20

• Baltic Dry Index - minus 5 to 1,418. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Home Prices Cool as Government Steps Up Bid to Avoid Property Bubble // Short Sellers Hammer ‘Solarcoaster’ as Glut of Chinese Panels Sinks Prices // China Stocks Drop to Nine-Month Low on Economic Growth, Bank Loan Concern // Asian Stocks Fall, Extending Seven-Week Streak of Declines; Utilities Gain // Europe Falters in Bid to Rescue Greece // London House Asking Prices Increase to Record as Demand Spreads to Suburbs // Euro Falls Versus Dollar, Yen on Delayed Agreement for Greek Bailout Loan // Euro, Stocks Recover After Juncker Eases Concern About Greek Fiscal Crisis // Stocks Cheapest in 26 Years as S&P 500 Falls  // Republican Districts Seen Bearing Brunt of Social Security Cuts // Bernanke May Face ’Self-Induced Paralysis // U.S. Stocks Rebound From Early Losses
• The Euro rebounded today and is now trading slightly higher against the US Dollar. NYMEX crude is down just over 1/3 of 1% and trading at $92.67/barrel. Gold is trading down slightly and silver is down nearly 1/10 of 1%. Base metals traded mostly lower today, but ended well off session lows, for the most part. Indicator charts show as the Euro rebounded, nickel was thrown a lifeline and rose out of the gutter in afternoon trading, For the day, Dow Jones reports three month nickel ended the day at $9.82/lb , up 2 cents from Friday's close. Stockpiles of nickel stored in LME warehouses fell to just under the 110,900 tonne level today, after an eighth straight day of declines was reported. The last time stockpiles were this low was in August of 2009. US equity markets are rebounding some today, but markets will probably remain subdued as the US Fed begins to meet tomorrow and Fed Chairman Ben Bernanke holds his second post meeting press conference. Markets will be looking to Bernanke for re-assurement that all is well.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Robry Weekly Economic Assessment - more

  Commodity/Economic Articles and Comments

• (DJ) Worldsteel: May China Crude Steel Output +7.8% At 60.2M Tons
• (DJ) Worldsteel: May Global Crude Steel Output +4.2% At 130M Tons
• (SN) Total stainless imports reached 198,619 ton through YTD March 2011, a 50.6% increase compared to YTD March 2010 according to the latest report from SSINA.
• Number of the Week: Compensating for High Gas Prices - more
• What Google Can Tell Us About a Double Dip Recession - more
• IMF Sees Risks to Global Economy Mounting - more
• Jobless Rate Lower or Flat in Most States - more
• Backlog of Cases Gives a Reprieve on Foreclosures - more
• With executive pay, rich pull away from rest of America - more
• 7 life lessons from the very wealthy - more

  New plant to meet 40 pct of steel imports at home by 2013 - Turkey will import 40 percent less stainless steel than it currently does when the construction of a stainless cold-rolling plant built jointly by Turkey's Kibar Holding and South Korea's Pohang Iron and Steel Company (POSCO) is completed in 2013. - more

  Zhangjiagang Pohang Stainless Steel establishes a 1 million-ton steel production line - POSCO`s stainless steel production subsidiary in China, the Zhangjiagang Pohang Stainless Steel (ZPSS) became the first foreign company in China to establish a 1 million-ton steel production line in China. - more

  Stainless steel & carbon markets not the same - IT may not be a breaking news that Arcelor Mittal has spun off its stainless steel business to form a new unit, Aperam, in 2011. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.10/lb lower, with all LME traded base metals lower at the moment. The Euro is down nearly 6/10 of 1% against the US Dollar. NYMEX crude is off 1-1/2% and trading at $91.63/barrel. Gold is off nearly 2/10% and silver is lower by 1-1/2%. In overnight trading, Asian markets ended lower, with China off 6/10 of 1%. European markets are lower this morning and US futures imply a lower opening for Wall Street. Nickel inventories continue to fall, but risk aversion is the name of the commodity game these days on Greece default concerns and slowing economic growth.   
• LME Morning - Base metals ease, as risk aversion mounts - more
• Reuters Metals - Copper falls on worries about Greek bailout - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• SMM Nickel Price Forecast - more
• Steel Founders' Society Of America Casteel Reporter - pdf here
• Monday Market Monitor - China - WEEK 24 - Dragon down on knees - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals closed mixed on Friday after a spate of Euro-based worries trimmed earlier gains, while mixed US macro data also prevented a much sharper rise. However, US equity markets finished higher, snapping a six-week losing streak, while the dollar also lost a little ground on news that German Chancellor Angela Merkel dropped her previous insistence on forcing a rescheduling of Greek government bonds through an extension of maturities by seven years. The extension idea had met ECB and French resistance all along and led to credit-rating companies warning that the move was tantamount to a default since original terms were being tampered with. Merkel said on Friday that she was open to a "voluntary rollover" of the country's debt, which means that bondholders no longer are forced into any kind of provisions. Of course, many bond investors have already headed for the exits and more will follow, but those who stay the course will want to know that by the end of their holding periods, Greece will have the money to pay them back. European authorities now have the tricky problem of deciding how to convince bond holders of just that, and met over the weekend in order to decide when to approve a further 12 billion Euros in loans. Meeting into the early hours of Monday, ministers said that the next tranche of aid would be paid by mid-July, allowing Athens to avoid default, but said it was up to Greece to show concrete progress on plans to cut spending, raise taxes and generate other revenue streams first. The Greek parliament therefore has to now pass an austerity budget, something that would not happen before Tuesday when it first takes up a vote of confidence. In the meantime, the impasse is clearly weighing on most of the markets today, helping push the Euro a little lower and leading to a broad-based decline in most commodity markets. Base metals are lower once again, although copper is still hovering around the $9,000 mark, while Brent energy prices have shed another $1.50/brl on top of the steep declines seen on Friday. Over the short term, we expect the Greek government to survive a vote of no confidence and to pass an austerity budget, meaning that the essential aid from the EU/IMF will resume, thus allowing the commodity markets to breathe a little easier and stage a respectable bounce on account of a possibly stronger Euro. We would therefore not want to get too short here in light of such a possibility. Despite the eventual agreement, we think any "solution" for Greece will be a temporary fix at best, as the country remains a critical weak link in the Eurozone. Greece's GDP-to-debt ratio stands at a daunting 150%, the highest in Europe, and some $400-$500 billion of government bonds are also outstanding. Of this amount, about $80 billion is held by the ECB, while $120 billion was bought by French and German banks. This is why French banks were put on credit review last week and we would not be surprised to see a similar downgrade of German banks in the weeks to follow. Moody’s also warned on Friday that it might downgrade Italy’s debt on similar contagion fears. The ripples are even extending to the US, where we saw significant redemptions in some bond and money market funds last week as investors sold out of funds said to be holding positions in Greek-heavy European institutions.  In sum, the European authorities have their work cut out for them no matter what kind of short-term plan they put through. Eventually, they need to articulate a unified course of action in order to convince the markets that they have a handle on their debt crisis. The easiest way out is for the countries under the most stress to “grow” out of their problems, but failing that, the authorities have to look at other interim measures. Two logical steps that come to mind include having a far bigger stabilization fund, and running transparent stress tests on European banks in an attempt to identify which ones have to raise more capital (most likely will have to anyway) and which need to reorganize or merge. On the other hand, borrowing countries have to be allowed to break out of the vicious cycle of being given more money that they cannot possibly hope to pay back. This will mean agreeing to an eventual restructuring of their payment streams conditional on getting their fiscal houses in order. This was the essence behind the German proposal, but the fear was that such a plan could open the floodgates and spark contagion-like problems in other countries. However, the easy out of kicking the can down the road by throwing more money (i.e. loans) at the problem does not solve anything and will only make an eventual default all the more traumatic. In a way, it might be better to bite the bullet sooner rather than later. .... Nickel is at $21,400, down $225. Charts continue to look miserable, and we seem to be on track to test the November 2010 low of $20,400 (marked in red).   (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) Recently, the European stainless steel mills have planned to cut the production due to the surplus of output, down nickel prices and flat market.
• (Interfax) Jinchuan Group Ltd. (Jinchuan), China's largest nickel producer, has reduced its ex-works refined nickel price for the fourth time this month by as much as RMB 11,000 ($1700.26) per ton, according to a June 20 online announcement from the company.
• (AMM) Japan's steel output up 7.3% in May
• World Economic Outlook Update - more

  Trouble in the Ring of Fire Mining as Workers Walk off Job - Over two dozen First Nation and non-native workers employed by Cliffs Natural Resources have walked off their job-site in the Ring of Fire Mining Camp this weekend. - more

  Metal Service Center Shipment Levels Strengthened in May - Shipments of steel and aluminum products by U.S. and Canadian metals service centers returned to more robust growth rates during May, the Metals Activity Report from the Metals Service Center Institute shows. - more

  A study of laterite and its economic significance - Sultan Qaboos University has recently conducted a comprehensive study of laterite in Oman. The project, launched by Dr Salah al Khirbash, at Earth Science Department, College of Science, has focused on four areas with nine laterite profiles through several field trips. - more

  Is Stainless Steel Cookware Better Than Aluminium Cookware ?- Aluminum kitchenware as opposed to steel cookware. Many people possess aluminum while some choose stainless steel. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 17

• Baltic Dry Index - minus 1 to 1,423. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Bond Sale Fails for Second Time This Year on Rate Increase Concern // Bank of Korea May Need to Slow Pace of Rate Increases, Board Member Says // India Signals Slower Pace of Interest-Rate Rises on Global Economic Risks // Consumers Fade in China Economy Racked by Inflation With ‘Peak Days’ Gone // Medvedev Says State Dominance of Russian Economy Threatens Nation’s Future // Papandreou Challenged by Confidence Vote // Greek Default Threat Ignored Makes European Bank Stress Tests ‘Irrelevant’ // Merkel Agrees to Voluntary Greece Bondholder Role // Biden Says Deficit Reduction Talks Seek Signal With $4 Trillion in Savings // Payrolls Dropped in 27 States, Led by Calif. // IMF Cuts Forecast for U.S. Growth Again Amid Risk of Contagion From Europe // Stocks, Euro Rise on Greece Compromise
• The Euro is now trading 3/4 of 1% higher against the US Dollar. NYMEX crude is down 2-1/3% and trading at $92.71/barrel. Gold is up 4/10 of 1% while silver is trading even at the moment. Base metals ended the session mostly lower after early morning bull runs lost steam by mid afternoon. Indicator charts show that is exactly what happened to nickel, a morning run, followed by an afternoon balk. Dow Jones reports three month nickel ended the session right where it started, at $9.80/lb , although the day saw a near $700/tonne trading range. Nickel fell $.56/lb for the week and is down $.90/lb on the month. Stockpiles of nickel stored in LME warehouses fell again Thursday and now register just under the 113,400 tonne mark.  The International Monetary Fund forecasts the world economy will slow during the second quarter (that would be the quarter with two weeks left in it- real tough to forecast that!) but expects things to pick up in the latter half. In other words, while risks are now pointed to the down side, they see very little chance of a double dip. Good news and you can all rest easier tonight. In the mean time, enjoy your weekend!! 

  Reports

• Commodities Daily - pdf here
• ABN Amro/VM Group Metals Monthly - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) Goldman Sachs Group Inc. (GS) and other owners of large metals warehouses are being scrutinized by the London Metal Exchange after being accused by users like Coca-Cola Co. (KO) of restricting the amount of metal they release to customers, inflating prices.
• In Poll, Conflicting Signals Over Role of Government - more
• Structural Unemployment or Not, Jobs, Jobs, Jobs is Part of the Answer - more
• How Today's Conservatism Lost Touch with Reality - more

  European nickel premiums ease, demand worries weigh - Premiums for physical nickel in Europe eased from last month, traders said, as demand worries for the stainless steel material dominate. - more

  (Late post but good background info) Guide To Warehousing As LME Board To Discuss Potential Changes - As the London Metal Exchange board meets Thursday to discuss potential changes to the way LME-approved warehouses, particularly in Detroit, store aluminum, Dow Jones Newswires takes a look at the key issues facing the exchange and puts paid to several of the myths surrounding the metals storage system. - part one part two

  INCO to build nickel factory in Bahodopi, C Sulawesi - PT Inco (Tbk) will realize its commitment to build a nickel processing plant in Bahodopi, Morowali district, Central Sulawesi province, before the end of June 2011, according to a clause in the work contract signed by the Indonesian government and PT Inco Canada in 1968. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.14/lb higher, with all London traded base metals higher this morning. The Euro is adding support to commodity traders, up 2/3 of 1% against the US Dollar. NYMEX crude is down over 1-1/2% and trading at $93.49/barrel. Gold is down slightly while silver is off more than 1/2 of 1%. In overnight trading, Asian markets ended lower, with China off nearly 9/10 of 1%. European markets are trading higher this morning and US futures have yet to decide where they want to go. Nickel inventories fell for a seventh straight day.     
• LME Morning -  Base metals drift as Greek crisis saps confidence - more
• Reuters - Copper stable, economy fears weigh, weak dollar supports - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• SSINA Releases Market Data for March 2011 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices finished lower on Thursday, with aluminum touching a two and a half week low and nickel tumbling to an eight month low. Copper finished down as well, but still managed to defend the $9,000 mark, a rather impressive display of resiliency, all things considered. All in all, markets were somewhat calmer yesterday, and did not exhibit the same degree of panic they did on Wednesday. There was not much that transpired in terms of news, except for the fact that the IMF staged something of an about-face, agreeing to pay its share of Greece's latest aid tranche in order to buy the EU more time to implement a stabilization program. The IMF’s move did not make the overall package any more palatable to the markets; the Euro closed practically unchanged on the day at around $1.42 against the dollar, but not before sinking to $1.4070 earlier on. In addition, we did not see much improvement in the European debt markets; yields on two-year Greek notes rose to 30% for the first time ever as investors still seem to be banking on an eventual default. Portuguese and Irish two-year yields also climbed to record levels, while the 10-year Spanish yields jumped to 11 year highs. This morning, markets are generally mixed; precious metals are slightly lower as are energy prices, but metals are higher, except for aluminum and lead. The Euro is slightly stronger, (now at $1.43 against the dollar) as there are more hints, this time from the French president, that the EU will likely reach a compromise on what to do about Greece. In addition, the German finance minister said that an agreement would be reached involving private creditors. Even China got into the game, saying that its "vital" interests are at stake if Europe cannot resolve its debt crisis, and that it would all it can to help by buying more European debt and encouraging bilateral trade. In the meantime, Greek Prime Minister Papandreou replaced his finance minister on Friday in a broad cabinet reshuffle; the finance post will now be go to a Socialist who challenged Papandreou for the party leadership four years ago. So far, initial reaction to today's developments in the debt markets appears to be modestly positive, with the difference in interest rates on Greek 10-year bonds and the German benchmark narrowing from a record 16% to 15.4%.  We do not expect much to happen today as investors will likely move to the sidelines ahead of potential weekend developments. It will also be fairly light on the US macro front, with consumer sentiment readings and the index for leading economic indicators slated to come out later in the day. Out of China, the country's president Hu Jintao said that the world economic recovery remains "slow and fragile". Addressing an economic forum in St Petersburg, he also added that it was vital to press ahead with reforms to the international financial system that would give emerging markets a greater say in financial governance. Elsewhere in China, the country has mobilized troops and raised the disaster alert levels to their highest level after days of downpours forced the evacuation of more than half a million people in central and southern provinces. Forecasters warned that there is more rain in the forecast, at least through Sunday. Price-wise, we still are of the view that most commodities will be moving lower over the course of June, weighed down by the Euro crisis and the bid that the dollar will receive as a result. More importantly, the global economy needs to see much lower energy prices in order to jump-start demand and to persuade central banks to finally drop their tighter money stance. ...  Nickel is at $21,919, up $326. Charts continue to look miserable, and we seem on track to test the November 2010 low of $20,400.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Xinhua) China Jinchuan cuts refined nickel prices twice since Wed.
• (Interfax) The rapid growth of China's high energy-consuming industries, such as the steel and nonferrous smelting industries, is the main reason behind the country's current major power shortage, the Economic Information Daily reported June 14, citing deputy director of the National Energy Agency (NEA), Liu Tienan.
• (MBN) Yusco keeps 300 series export prices unchanged
• (SBB) Chinese stainless 304 export offer prices down $100-150/t
• (SM) Global use of molybdenum has soared to new heights of 474 million pounds in 2010 surpassing the peak in 2007 of 470 million pounds. China reined the arena becoming the largest producer and consumer of molybdenum.
• Thyssen Stainless IPO Is Preferred Option, Unit Worth About EUR3 Billion - Sources - more
• Two employees at Sandvik Materials Technology involved in a fatal accident - more
• (Reuters) Russia n group Norilsk Nickel posted 2010 net profit of more than $5 billion, general director Vladimir Strzhalkovsky told reporters on Friday, while revenue for 2010 was around $15 billion.
• (Interfax) China produced 290.35 million tons of steel products in the first five months of 2011, up 8.5 percent year-on-year, according to figures released by Shanghai-based Mysteel Information on June 17.
• How to Turn Republicans and Democrats Into Americans - more
• Fukushima: It's much worse than you think - more

  Global stainless steel output seen up, profits low-INTERVIEW - Global output of stainless steel is expected to rise well above pre-crisis levels this year but steelmakers' profits will be hurt by falling prices and sector-wide excess capacity, a senior industry analyst said on Thursday. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 16

• Baltic Dry Index - plus 19 to 1,424. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Indicator Points to ‘More Moderate’ Growth as Central Bank Tightens // Japan’s Quake-Proof-Building Makers Prepare for Even Bigger Shock in Tokyo // Chinese Holdings of Treasuries Rose in April as Fed Purchases Near End // India Raises Interest Rates for a 10th Time Since 2010 to Tame Inflation // Europe Faces ‘Lehman Moment’ as Greece Unravels // Euro Declines to Three-Week Low on Concern Europe Debt Crisis Is Worsening // Greece, Ireland, Portugal Lead Sovereign Credit-Default Swaps to Records // U.K. Retail Sales Drop More Than Forecast // Stocks in Europe Drop for Second Day as Papandreou Calls Confidence Vote // Goldman Sachs Sees No Panic in Options as VIX Takes Six Weeks to Exceed 20 // Foreclosure Filings Plunge as Bank Delays Mask ‘True Face’ of U.S. Crisis // Confidence Erodes Among Factories, Consumers // U.S. Stocks Rise as Economic Data Offset Concerns About Europe Debt Crisis
• While the Euro continues to trade lower against the US Dollar, it is only 1/10 of 1% lower at the moment. NYMEX crude is up 1/3 of 1% and trading at $95.11/barrel. Gold is down nearly 2/10 of 1% and silver is off over 3/4 of 1%. Base metals ended the session lower, with nickel taking the biggest hit again. Indicator charts show the day was spent in choppy trading but a clear overall trend pointed downward. Dow jones reports three month nickel ended the session at $9.80/lb, a new low for 2011. Nickel stockpiles stored in LME authorized warehouses fell for a sixth straight day yesterday, and now read just under the 111,750 tonne level. Economic reports issued today in the US were dismal. New home starts, up slightly off a record low figure. Jobless claims fell, but still well above 400,000 week. The most discouraging report, in our opinion, was the Philly Fed index slipping into the negative. This follows the New York Fed earlier this week, which also went negative. The US Economy, while weak, is still growing. But it remains hyper sensitive to shocks and a new slowdown in manufacturing could have a detrimental snowball effect.    

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Shiller Sees ‘Substantial’ Probability of Recession - more
• Worry About Growth or Inflation, Not Both - more
• Bloggers as the Conscience of Wall Street - more
• How China could yet fail like Japan - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.08/lb lower, with all London traded base metals trading lower. The Euro continues to fall against the US Dollar, over 1/2 of 1% this morning. NYMEX crude is up slightly and trading at $94.85/barrel. Gold is down more than 1/10 of 1% and silver is 1%. In overnight trading, Asian markets ended lower, with China off more than 1-1/2%. European markets are trading lower this morning, and US futures show yesterday's bear run may not be over yet. Jobless claim numbers are to be released in half an hour and a positive reading could help markets recover some today. Nickel inventories fell again yesterday.    
• Bloomberg morning - Copper Falls Most in a Week on Concern Greece’s Debt Crisis May Cut Demand - more
• LME Morning - Metals retreat as fundamental mood darkens, dollar firms - more
• Reuters - LME copper slips, U.S. data, Greek debt weigh - more

  Nickel Stockpiles Fall for Sixth Day on Declines in Rotterdam - Nickel inventories tracked by the London Metal Exchange fell for a sixth day on declines in Rotterdam. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - The bottom fell out of a number of markets on Wednesday, with commodities sustaining their biggest loss in about a month, as oil led the overall group lower. The plunge in oil prices was the steepest decline we have seen in some time, with Brent losing almost $7 a barrel at one point. Grains were also very weak, with corn finishing limit-down and now at a three month low, as is wheat. Base metals were off sharply as well, although copper performed impressively, giving up only a portion of the monstrous gain it racked up on Tuesday. It is, however, catching up somewhat today. It seems that the confluence of bearish events that we have been highlighting for some time all seem to have come together yesterday, with the deteriorating Greek situation being the straw that finally broke the camel's back. Shortly after two allies of Greek Prime-Minister Papandreou's coalition said they would not support budget measures being debated, the prime minister himself offered to resign and head up a national unity government. Late last night, he announced a cabinet reshuffle after which he will seek a vote of confidence in parliament. Should he lose the vote of confidence, which at this stage is possible despite the ruling party having a 5-seat majority, fresh elections could be around the corner. With investors sensing that Greece could be potentially rudderless at a critical time, panic swept over the European debt markets yesterday, sending sovereign debt yields soaring. On cue, Moody's warned that a Greek default could reverberate across the European banking system and promptly put three big French banks on review for a possible downgrade. Commodities were also hit hard by the soaring dollar as it regained its safe haven status amid the market tumult, racing to $1.4130 against the Euro yesterday. Money also poured into Treasury bonds, where yields once again broke the 3% mark. US stocks sold off sharply as well, with earnings downgrades not helping. In this respect, Owens-Illinois sank 11% after lowering its forecast for Q2 profits on account of higher costs and weaker demand in Australia. After the close, Ford also said it would miss estimates in part because of rising commodity prices. Out of the US, there was little on the macro front that gave the markets much to cheer about, as the data released reinforced the notion of a slow-growth phase hitting the US economy. In this regard, May industrial production came in at .1%, below the .2% forecast, while April’s reading was revised to unchanged. The smaller Empire survey arguably had more of a bearish impact, falling to an eight-month low and going against expectations calling for an increase. On the housing side, US homebuilder sentiment unexpectedly declined in June to its lowest level since September 2010, with the NAHB/Wells Fargo Housing Market index falling to 13 in June from 16 in May. The index had come in at 16 in six of the past seven months as of May, but in any event, it is lingering below the 50 mark considered a turning point into favorable territory. On the inflation front, US CPI increased in May by .2%, ahead of the .1% forecast, but more worryingly, excluding food and energy, core prices increased 0.3%, the largest increase since July 2008 and well above the consensus gain of 0.1%. In sum, we seem to entering an unenviable situation of rising inflation and slowing growth, with the former variable much more pronounced in emerging markets and figuring as an immediate threat to growth prospects in those countries. Shorter-term, the commodity markets will be closely watching the goings-on in the Eurozone over the next few days. The authorities will now have to scramble to put something together, as nothing focuses the mind more than a potential market meltdown playing out in one's backyard. In our view, the current crisis will force officials to pick a side in the Greek crisis, either going with the option of more unconditional aid, thus kicking the can down the road (but placating the markets in the process), or biting the bullet by allowing a "controlled restructuring" of existing paper, which is a convoluted way of saying that bondholders, including many of the central banks, have to take a haircut on the Greek obligations they hold. Early indications are that the decision will be postponed a bit longer, as we have reports out today that the International Monetary Fund is expected to pay its share of Greece's latest aid tranche in order to buy the EU more time. The EU and the IMF had previously demanded that Greece implements a 5-year austerity before releasing the next tranche of 12 billion euros in money, but that seems to be the sticking point that the Greek Prime Minister is having trouble pushing through. Until such time as the markets get a clearer indication as to which way this latest crisis plays out, we expect to see further Euro weakness, dollar strength, and consequent downward pressure on commodities. Markets, particularly metals, have to deal with the additional headache of a potential Chinese rate hike being in the cards. In fact, the Shanghai Composite Index slid 1.5% overnight after the Economic Information Daily said in an editorial that an interest-rate increase in China isn’t “far away.” In terms of the current market action, metals are lower once again, but copper is holding up well, still hovering around the $9000 mark, which we think will eventually give way. There is more pronounced weakness in the rest of the group, with nickel hitting eight-month lows and aluminum very weak. Oil prices were up earlier, but are now off by about $.40/brl, while the dollar is up, now trading at $1.4080 against the Euro, and close to its highs for the day. Asian stocks finished lower, with Hong Kong stocks hitting fresh 2011 lows, while European stocks are down, setting up another modestly lower opening for Wall Street. ... Nickel is at $21,800, down $230, and close to its lows for the day. Another close below key support of $22,200 today (likely) could set up a potential test of the November 2010 low of $20,400. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) It's reported that on June 13, Brazil's Ministry of Industry and Foreign Trade Development released a notice to start anti-dumping investigations on imports of stainless steel cutlery from China.
• (MB) The ferro-chrome market is braced for a quarterly benchmark fall of at least 10 cents as producer shutdowns look likely to be insufficient to compensate for the high levels of stocks in the market, market sources said.
• Zimbabwe miners to meet ownership deadline: official - more
• (SM) The American Forest & Paper Association released its May 2011 U. S. Containerboard Statistics Report today. Containerboard production rose when compared to April 2011, with month over month average daily production up 0.3%. The containerboard operating rate for May 2011 was down 1.5 points over May 2010 to 93.8%.
• CR Index: Consumers feel the pain of stalled job growth - more
• Carrier Survey Says Expectations Still Strong - more
• Reason Seen More as Weapon Than Path to Truth - more
• The Wisconsin Supreme Court Crisis - more

  Chinese nickel prices seen down, investors may stock up-trade - Chinese spot nickel prices may drop in the next one to two months as stainless steel mills cut demand, but this may allow investors to stock up the metal that generated profit margins of more than 25 percent in the last two years, trade sources said. - more

  Nickel not making too many dimes - While the mining boom is continuing apace, there is a growing consensus that nickel is the poor cousin. - more

  ‘Victoria’s secret’ has eyes popping in Canada’s mining industry - Michael Winship laughs when he thinks of the racy nickname his colleagues gave to a grubby nickel deposit with 110-year-old working roots in the Sudbury basin. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 15

• Baltic Dry Index - plus 5 to 1,405. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Inflation Heading for 6% Shows Danger for Wen Extending Rate Pause // China Developers’ Outlook Lowered to ‘Negative’ by S&P as Credit Tightens // Copper Stockpiles Dropping 50% in China May Spur Imports // Euro Retreats to Lowest Level This Month Versus Dollar on Greece Deadlock // Greek Bailout Talks Deadlock as Pressure Mounts // U.K. Jobless Claims Rise Faster Than Estimated While Growth in Wages Slows // Greek Police Resort to Tear Gas as 20,000 Rally Against Austerity Measures // European Stocks Slide Amid Concern Over Greek Aid Deadlock, Led by Banks // Fed Officials Discuss Explicit Inflation Target // Manufacturing in New York Area Shrank in June // Consumer Prices in U.S. Exceed Forecast // U.S. Industrial Production Rose Just 0.1% in May // U.S. Stocks, Oil Fall on Manufacturing Data
• The Euro continues to get pounded, now down 1.6% against the US Dollar. With that kind of hit, you just know commodities are going to get whacked as a stronger Euro is favorable for commodity traders. NYMEX crude is down 2.2% and trading at $97.19/barrel. Safe haven gold is up slightly while poor man's gold, silver, is up 3/10 of 1%. Base metals ended the session lower as well. Indicator chart show most of nickel's activity came late when traders tried to take nickel positive, only to see it collapse late. For the day, Dow Jones reports three month nickel closed at $9.99/lb, its first time below $10/lb since last November. Stockpiles of nickel stored in LME approved warehouses fell again yesterday, and after five straight losing sessions, they now stand just over the 112,250 tonne level. After receiving a lot of media attention the last few days, thanks in part to a Bloomberg feature article and poll, nickel fell out of the spotlight today. Nickel closed below support today for the first time, and another close below tomorrow, could bode poorly for nickel's technical outlook.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• U.S. vs. Greece, Is Debt Situation Even Comparable? - more
• Most CEOs Expect Higher Sales, Spending and More Hiring - more
• Manpower Survey: U.S. Employers Still Optimistic on Hiring Plans - more
• U.S. Economic Confidence Plunges in Early June - more

  Ramu fate hangs on ruling in PNG court - Miners in Papua New Guinea will be watching closely a decision to be handed down in Madang Court next week. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.11/lb lower, with all London traded base metals lower at the moment. The Euro is down over 1% against the US Dollar this morning as the Greece bailout talks stall. NYMEX crude is off over 1/2 of 1% and trading at $98.92/barrel. Gold is down nearly 6/10% and silver is lower by 1-1/3%. In overnight trading, Asian markets ended lower, with China off 1%. European markets are lower this morning and US futures show the bear is back on Wall Street. Nickel inventories continued to fall yesterday. 
• LME Morning - Base metals halt rise as rising dollar, flakey appetite weighs - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Great American MetalWorking Monitor - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices surged yesterday for their biggest one-day rally in three months, pulling the rest of the metals up with it. Other markets were also up sharply, sparked by relatively constructive data out of both China and the US. We referenced the Chinese macro data in yesterday's note, but out of the US, investors were relieved to see that the macro data released, while not exactly positive, was not worse than expected. In this regard, May retail sales fell for the first time in 11 months, but the .2% dip was less than the .7% decline expected. Producer prices came in at .2%, breaking sharply from April's .8% spike, but nevertheless providing some comfort from higher inflationary pressures. (We have to assume that the sharp bust we had in commodity prices during the first two weeks in May was likely picked up by the relatively lower PPI numbers). There has not been much follow-through to yesterday's big gains in today's session; metals are modestly lower, while oil prices are also down by about $.70/barrel. European and Asian equity markets struggled, leading to a lower opening call for Wall Street. The dollar is surging again today, now at a weekly high of $1.4280 on continued concern over the deadlocked negotiations over Greece. An emergency session of Euro finance chiefs in Brussels yesterday failed to make any headway in advance of a formal ministers meeting next week. In the meantime, protesters gathered outside the Greek Parliament as lawmakers began to debate budget cuts and asset sales, while two allies of Greek Prime-Minister Papandreou's coalition said they would not support the measures being proposed, further trimming the slim six-seat lead the government has in Parliament. Europe’s leaders must hammer out a Greek package in order to persuade the IMF to pay another $17.3 billion tranche originally due in June. The IMF had indicated that it would withhold part of this payment unless the EU comes up with a plan to close the country's funding gap for 2012, hence the pressure that being brought to bear on the group. With the two camps basically split on ideological grounds (basically, for and against restructuring), it is hard to find room for compromise. .....  Nickel is at $22,065, down $250, and at a new 2011 low. Nickel has still not been able to stitch together a sustained move higher for much of the month. Two closes below $22,000 support could lead to further weakness. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) According to report, India’s crude stainless steel production totaled 2.9 million tons, soared substantially by 12% year on year. Also, the country’s finished stainless steel production was 2.6 million tons in 2010; however, the country’s demand was only at 2.4 million tons. Accordingly, India has become the world’s largest stainless steel consumer.
• (SSY) China's May crude steel production rose by 7.8% from a year earlier to an all-time high of 60.3 Mt, according to the latest data from the National Bureau of Statistics.Total output in the first five months of this year amounted to 290.4 Mt, up 8.5% from the corresponding period last year. This suggests the impact of the ongoing power shortages and China's tightening measures, as yet, has had a limited impact on the steel sector.
• RUSAL abandons claim to declare invalid conversion of MMC Norilsk Nickel shares into ADR and transaction with Trafigura - more
• Q+A-What ails the Philippine mining sector? - more
• Universal Stainless to buy Patriot Special assets for up to $130 mln - more
• Sarkozy warns of soaring commodity prices - more

  Recent Slowdown Just Temporary, Says FMA’s Kuehl - Although the gloom and doom brigade has been out in force in recent weeks, and the markets reflect a new sense of impending doom, the slowdown is only temporary and not the start of another breakdown in the economy, says a leading manufacturing industry economist. - more

  Imports And Exports Of Nickels By China In April 2011 = All Of Imports And Exports, Excluding Imports Of Ni-Ore And Exports Of FeNi, Decreased From Those In March - According to the customs-statistics released in China, the quantities of nickels (nickel metal, nickel oxide, nickel matte, ferro-nickel and nickel ore) imported and exported by China in April of 2011 were as per the table shown below. - more

   Nickel glut is bad news for mining plans in state - Nickel, a metal that two companies have considered mining in Minnesota, is heading for the biggest glut in four years, driving prices lower into 2012. - more

  Mechel Reports Accident at Southern Urals Nickel Plant's Roasting Workshop - Mechel OAO, one of the leading Russian mining and steel companies, reports an accident at the roasting workshop's electric furnace #2 in Southern Urals Nickel Plant, which is part of Mechel Group. - more

   New mine for northern Tasmania - The state government is expected to formally grant a new mining lease to Proto Resources within weeks, giving the final go ahead for the company to develop a nickel mine at Barnes Hill, just west of Beaconsfield. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 14

• Baltic Dry Index - minus 12 to 1,400. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Chinese Mount Global Homebuying Spree as Governments Squeeze Local Markets // China’s May Home Sales Value Rises 17% as Developers Release New Projects // China Raises Bank Reserve Requirements // India Wholesale Prices Rise Faster-Than-Estimated 9.06% From Year Earlier // Argentina Airports Shut, Qantas Cancels Flights on Volcanic Ash From Chile // Japan Needs Olympic Pool-Sized Storage Space to Contain Radioactive Sludge // Sugar Rising as Thailand Port Congestion Worst in Memory: Freight Markets // Asian Stocks Rise, Erasing Earlier Declines, After China Economic Reports // Euro Finance Chiefs Race to Avert Greek Default // U.K. Inflation Holds at Fastest Pace Since 2008; Weale Seeks Rate Increase // European Stocks Advance as China’s Industrial Production Exceeds Estimates // BofA ‘Significantly Hindered’ Foreclosure Review of Its Loans, U.S. Says //  Retail Sales in U.S. Fell in May as Demand for Autos Slumped // Optimism of U.S. Chief Executives Fell in Second Quarter on Sales Outlook // Stocks in U.S. Rally on Retail Sales; Caterpillar, DuPont, Apple Advance
• The Euro is presently trading at 4/10 of 1% higher against the US Dollar, supporting commodity trading. NYMEX crude is now up 1.4% and trading at $98.69/barrel. Gold is up 1/3 of 1% and silver is up nearly 1.2%. Base metals ended the session higher, with all except nickel showing strength. Indicator chart show nickel spent the day in choppy trading, in a narrow band of less than $300/tonne, but ended on the positive side. For the day, Dow Jones reports three month nickel closed at $10.12/lb It appears that nickel came close to bouncing off support on three separate occasions in today's session, but for a second day, support held firm. Stockpiles of nickel stored in LME approved warehouses slipped slightly yesterday and remain at a level of just over 112,500 tonnes. Nickel is getting a lot of media coverage in the last few days, thanks to a feature article by Bloomberg on Monday. Nearly all forecasting and predictions, so pick your poison.

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Articles and Comments

• (Commodity Online) Barclay's - In our view, however, our expected market surplus of 12Kt for the second half of the year, which represents less than 1% of annual global demand, does not justify a downward price move that has placed extreme pressure on the profit margins of high-to-medium grade NPI producers in China. Moreover, even with expectations for NPI output in China this year of close to 200Kt, apparent Chinese consumption of refined nickel has risen a robust 13% y/y YTD, demonstrating that the strength of growth in stainless demand for nickel has overridden negative substitution effects from the competition between the two potential inputs...... The Chinese National Bureau of Statistics (NBS) production data for May showed mixed trends across the metals with refined nickel production growing the fastest, up 35.7% y/y and 9% m/m, while refined zinc was the weakest falling 6.7% y/y and 4% m/m. We believe the strength in nickel production reflects both strong stainless steel demand and the ramping up of NPI production in response to that demand.
• The Sector Financial Balances Model of Aggregate Demand and Austerity - more
• Chart Of The Day: For American Workers, No Economic Recovery - more
• ECRI’s Achuthan: Prolonged U.S. Slowdown Underway - more
• Google Can Help Predict House Prices, Unemployment - more
• High Correlation Between Retail Sales and Job Creation - more
• U.S. Macro in Three Charts: Credit Flows - more
• The coming global financial crisis - more

  Nickel’s Floor Probably Isn’t $20,000, Macquarie’s Lennon Says - Nickel’s price floor probably isn’t $20,000 a metric ton because nickel pig iron producers in China are lowering their costs, Jim Lennon, global head of commodities research at Macquarie Bank Group Ltd. said. - more

  METALS INSIDER-Nickel still a slave to bear narrative - Two LME contracts, tin and nickel , closed yesterday at fresh 2011 lows of $24,800 per tonne and $22,275 per tonne respectively, basis three-month metal. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around  $.01/lb lower, with other London traded base metals trading higher this morning. Nickel is off earlier highs and bouncing off support for a second day. The Euro is trading 2/10 of 15 higher against the US Dollar. NYMEX crude is off 6/10 of 1% and trading at $96.72/barrel. Gold is up 1/5 of 1% and silver is up 1/4 of 1%. In overnight trading, Asian markets ended higher, with China up over 1.4% after reports showed industrial production grew higher than expected in that country. Even news of an interest rate hike on the back of expanding inflation evidence could not block the enthusiasm out of the market, which had been starving for some good news. European markets are trading higher and US futures show the bull will make an opening run on Wall Street. Nickel inventories fell slightly yesterday.    
• LME Morning - Base metals rise following Chinese data, falling dollar underpins - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices hit their lowest level in three weeks yesterday, as traders continue to fret about the pace of the global recovery and sovereign debt issues with respect to Greece. In this regard, Standard & Poor's downgraded Greek sovereign paper by three notches, bringing it close to default status and assigning it the lowest rating of any country it rates. Although the Greeks quickly protested the S&P decision, arguing that the agency was not taking into account the steps the country has taken and will continue to take, it was too late to change anything. After being been badly burned by the mortgage crisis, agencies are taking no chances these days, downgrading first and reviewing things later. In Greece's case, we think S&P has it right, as we do not see how the country can hope to pay its debts off with almost no growth to speak of, while the possibility of debt relief seems to be a dicey proposition at best and conditioned on the country taking on even more loans. Ironically, the currency that benefitted most from yesterday's downgrade was not the dollar, but the Swiss franc, which soared to a record high against the Euro. The dollar struggled on account of rate differentials with Europe, as the feeling is that any US rate increase will be far from immediate, while the ECB could move again as soon as next month. Chinese macro data out was released overnight and was largely positive in terms of growth readings, although inflation remains a worry. The government reported that China's inflation accelerated to 5.5% in May, with producer prices jumping 6.8%. Both are well ahead of government targets, prompting the authorities to raise reserve requirements by half a percentage point. The ratio now stands at a record 21.5% for larger banks, more than double US requirements. It was also reported that industrial production rose 13.3% last month, slightly ahead of estimates, while retail sales were also up sharply, rising 16.9% in May after a 17.1% gain in April. (We should note that higher inflation readings exaggerate increases in retail sales). Rounding up the numbers, fixed-asset investment expanded 25.8% in the first five months of the year. The Shanghai Composite Index ended higher on the macro data as investors were presumably pleased to see the economy maintain its momentum in the wake of tightening measures. This optimism is feeding into metals right now, where we are higher across the board. However, the complex will still have to contend with the possibility of yet another interest rate hike the government could conceivably put through, something we think is a more effective tool in slowing the economy down than reserve requirements. It was interesting to note that the government chose not to proceed with this step today, but we think they will eventually have no choice but to do so. Despite the current bounce in metals, we still think the overall bias favors the downside and would treat the current advance with the appropriate caution. In other markets, the Euro is higher right now, trading at $1.4420 as European finance chiefs begin emergency discussions on what to do about Greece. Yields on 10-year Greek bonds climbed to 17.12%, a record high, but investors are clearly sensing that something will be in the works, which is why the Euro is doing as well as it is right now. Oil prices are mixed, with WTI prices down by about $.42, but Brent is slightly higher. US stocks are called to open higher following a firmer tone in both Asia and Europe. Out of the US today, we get May retail sales (expected at +.2%), as well as May PPI (expected at .1%). In other news, China's refined copper output slowed in May to 439,000 tons, down from 454,000 tons in April. Output of primary aluminum rose to a monthly record of 1.536 million tons, up 8.7% from a year ago and higher than April's previous record of 1.459 million tons. There were gains in most other metals as well, except for zinc, which was down from a month ago and up only marginally from year-ago levels. The table in our attachment contains the main categories:  ...  Nickel is at $22,246, down $29 and the only metal that is down today. We did hit a low of $22,130 earlier, breaking key $22,200 support, although we have yet to take it out on a two-day closing basis. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (JMB) Nickel mine invested by Sumitomo Corp/ To start test runs of smelting within this month
• (Yieh) Reportedly, China’s steel production reached record highs in May due to strong demand from construction. According to report, the crude steel production totaled 60.25 million tons in May, up by 7.8% in comparison of that in last May.
• Demand for foreign capital to grow amid mining boom, says Wayne Swan - more
• Vale’s Controlling Shareholder Group Seeks Bigger Role After CEO’s Ouster - more
• Commodities Watch: Nickel Stockpile A Growing Concern - more
• PNG Mining Director Calls For Pollution Controls - more
• Glencore plays down ENRC bid talk - more
• Glencore profit rises; it’s not in ENRC talks - more
• (China) Industrial value-added output up 13.3% in May - more
• (China) China raises bank reserves to contain inflation - more
• (China) China's CPI up 5.5% in May - more

  Chinese nickel prices seen down, investors may stock up-trade - Chinese spot nickel prices may drop in the next one to two months as stainless steel mills cut demand, but this may allow investors to stock up the metal that generated profit margins of more than 25 percent in the last two years, trade sources said. - more

  China May aluminium, alumina, nickel output hits records - China's production of nickel, primary aluminium and its raw material alumina hit records in May on increased capacity that could see aluminium output rise further in June. - more

  Sherritt's Ambatovy project's output delayed; capex hiked - Diversified miner Sherritt International Corp has pushed back the expected date of the first output from the Ambatovy nickel project to the first quarter of next year and forecast a 16 percent increase in capital costs. - more

  POSCO No. 2 stainless steel maker - POSCO has become the world’s No. 2 stainless steel producer after expanding the capacity of its Chinese stainless steel joint venture, the steel giant said Monday. - more

  Outokumpu sees Q2 clearly in red, shares fall - Finnish stainless steel maker Outokumpu said it would make an operating loss in the second quarter, weighed down by 148 million euros ($214 million) of one-off restructuring and impairment costs. - more

  Use of Cuban-Made Gel Enables Reforestation in Soils of Nickel Producing Area - The use of Hidrogel, a Cuban-made product, has allowed the reforestation in soils impoverished by the Comandante Pedro Sotto Alba nickel-processing plant in Moa, Holguin. - more

  Courtesy AISI - In the week ending June 11, 2011, domestic raw steel production was 1,841,000 net tons while the capability utilization rate was 75.3 percent. Production was 1,816,000 tons in the week ending June 11, 2010, while the capability utilization then was 75.4 percent. The current week production represents a 1.4 percent increase from the same period in the previous year. Production for the week ending June 11, 2011 is up 0.6 percent from the previous week ending June 4, 2011 when production was 1,830,000 tons and the rate of capability utilization was 74.8 percent.

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 13

• Baltic Dry Index - minus 10 to 1,418. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Lending Unexpectedly Tumbles, Adding to Evidence Economy Is Slowing // Hong Kong Home Sales Tumble After Government Raises Down Payments on Loans // Sino-Forest Decline Sends China Stocks Trading in Canada to 15% June Loss // ‘Perfect Storm’ May Threaten Global Economy: Roubini  // Vietnam to Hold Live-Fire Naval Exercises as Tension With China Increases // ECB and Germany May Be Forced to Compromise // ECB Stance on Greece Means Higher Debt Costs for Italy, Spain: Euro Credit // Italian Referendums Threaten Berlusconi // Portuguese, Spanish Bonds Fall on Debt Concern; Stocks, S&P Futures Rise // Euro Falls to Record Low Versus Franc as Leaders Clash on Greece’s Bailout // Farming Needs ‘Major Shift’ as Food System Fails, UN Farming Agency Says // European Stocks Advance, Rebounding From 2 1/2 Month Low; ENRC Leads Gains // Profits Seen Increasing Jobs as Earnings in U.S. Grow Fastest Since 1940s // Treasury 10-Year Break-Even Rate Narrowest in Six Months on Fed Rate View // U.S. Lawmakers Say Agreement on Cutting Debt Would Boost Flagging Economy// U.S. Stocks Are Little Changed as Energy, Material Producers Stall Rally
• The Euro is now trading less than 1/10 of 1% higher against the US Dollar. NYMEX crude continues to trade lower, now down over 2.1% and trading at $97.18/barrel. Gold is lower by 2/3 of 1% and silver is down by 3.3%. Base metals ended their session lower as well. Indicator charts show nickel falling early and then bouncing off Ed Meir's of MF Global's $10.07/lb support line on three occasions. For the day, Dow Jones reports three month nickel ended the session at $10.09/lb , and slipping under support ain after market trading. Stockpiles of nickel stored in LME approved warehouses slipped again on Friday and now total just over the 112,500 tonne level. While it looked early on this month that warehouses might turn around year long losses and start gaining, we have yet to see that happen this month. We still await any Norilsk's shipments into warehouses sine they began shipping again earlier this month - if there are any destined for storage, that is, and not headed directly to a customer site. Bloomberg posted the results of a survey they did with 17 metal analysts and the findings staggered the market. It appears the general consensus is nickel is heading into a huge surplus next year and prices could be down to $9/lb by years end - according to the survey. Ian Henderson at JP Morgan Chase was downright gloomy stating “I don’t think there is a commercial logic for the price where it is today. A nickel price of $15,000 is entirely possible.” If you missed the two nickel articles today by Bloomberg, they are below and a must read . Risk aversion is apparently on nearly everyone's mind these days as worldwide economies begin what everyone hopes is no more than a summer slowdown.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Bloomberg) “I’m not particularly optimistic about nickel,” said Ian Henderson, who manages about $10 billion of natural-resource assets at JPMorgan Chase & Co. in London, including the Global Natural Resources Fund, which doubled in two years. “I don’t think there is a commercial logic for the price where it is today. A nickel price of $15,000 is entirely possible.”
• The Economic Rebound: It Isn’t What You Think - more
• Number of the Week: Average Household Still Needs to Trim $26,172 in Debt - more
• Record IMF Greek Lending May Intensify Favoritism Concerns - more
• Broader Unemployment Rates, by State - more
• Spellbinding Lunar Eclipse Occurs This Week - more

  Global molybdenum demand hits new high in 2010: IMOA - Global demand for molybdenum hit a new high in 2010 at 474 million lbs contained molybdenum, the International Molybdenum Association said on Monday. - more

  Source - here

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.23/lb lower, with other London traded base metals lower as well. The Euro is trading 1/5 of 1% higher against the US Dollar, usually adding support to metals trading. NYMEX crude si off 1.1% and trading at $98.19/barrel. Gold is down more than 3/10 of 1% and silver is down 1-2/3%. In overnight trading, Asian markets fell, with China off 4/10 of 1%. European markets are trading higher this morning, and US futures show traders will try to shake off Friday's 172 point drop on the Dow and open in the black. Nickel inventories continued to fall on Friday. 
• LME Morning - Metals retreat as short-term sentiment crumbles, China data weighs - more
• Reuters - Copper eases after China loans data; inflation eyed - more

  Nickel Plunging Into Bear Market as Expanding Glut Outstrips Record Demand - At a time of scarcity in everything from crude oil to copper to corn, nickel is heading for the biggest glut in four years, driving prices lower into 2012. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Robry Weekly Economic Assessment - more
• SMM Nickel Price Forecast - more
• U.S. Exports of Stainless Steel Mill Products - more
• IMF Primary Commodity Prices - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper fell on Friday to its lowest level in about two weeks as the impact of mixed Chinese trade data and weakness in a host of other markets combined to send prices lower. Other metals dropped sharply in sympathy with copper, with lead and aluminum being particularly weak. US equity markets also had a bad day on increasing anxiety about the state of the US economy. The stronger dollar landed a punch as well, strengthening to $1.4340 against the Euro on renewed disagreements as to how to proceed with the Greek aid package and its aftermath. Finally, the NYMEX WTI contract dropped by more than $3/brl, basically giving up all its post-OPEC gains, although Brent's drop was far more restrained due to a soaring arbitrage. We are lower in metals right now as we start the new week. Oil and gold prices are also both off, with Asian stocks setting the negative tone early on, extending a seven-week losing streak on fears that the global recovery is losing steam. However, European shares were more stable, and this is leading to a slightly higher opening for US equity futures. The Euro is holding steady, trading at $.1.4360, but did get to a low of $1.43 earlier in the Asian session. We suspect that the Euro will very much be in the spotlight this week after having its worst weekly loss against the dollar since early May. So far, we are getting mixed messages about the progress of financial assistance to Greece heading into a June 20 Eurozone finance ministers' meeting. Germany is sticking to its demands that private investors contribute to a second bailout (either in the form of a haircut, an extension on existing debt, or an agreement to buy more bonds), but the ECB remains opposed to any debt restructuring, even refusing to put its own Greek bonds under such a scheme. Earlier in the year, investors were told they would not need to make any sacrifices on their debt before 2013, and so reneging on this pledge would “not exactly help build trust in the markets,” this according to AG Chief Executive Officer Martin Blessing. Taking a different view, Bloomberg quoted Bundesbank President Jens Weidmann as saying that the Euro can withstand a Greek restructuring. “If the [Greek] commitments are not met, that cancels the basis for further funds from the aid package,” Weidmann told a German newspaper over the weekend. “This would be Greece’s decision, and the country then would have to bear the surely dramatic economic consequences of a default. I don’t think this would be sensible, and it would surely put partner countries in a difficult situation. But the Euro would even in this case remain stable.” Weidmann’s depiction of a default as a viable option contrasts with warnings from other officials who described it as a “Lehman Brothers catastrophe”. None of these diverging views will help the Euro in the short-run since investors will want to move to the sidelines as they wait for a dominant view to emerge. .... Premiums for physical metals in Europe remained mostly unchanged in the past week. The premium for copper in Rotterdam was around $75-85 a ton over vs. $70-80 the week prior, while duty-paid aluminum was $205-235 a ton over compared with quotes of $210-240. Premiums for duty-unpaid material were quoted at $140-150 over, while tin premiums for Chinese material were at $500-$600 a ton over versus $450-600 seen last week. Standard-grade Malaysian tin was at $350-550 a ton over versus $325-475. ... Nickel is at $22,411, down $439, at has been looking miserable on the charts for some time now. We seem to be heading towards testing key support at $22,200, which was the late May intraday low. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Interfax) Baoshan Iron & Steel Co. Ltd. (Baosteel) announced June 10 it will lower ex-works prices for certain steel products by between RMB 100 ($15.41) and RMB 500 ($77.05) per ton in July.
• Hopes of Glencore takeover boost ENRC shares - more
• Fortescue may challenge resources rent tax on constitutional grounds, says Forrest - more

  Nickel Producers Face Output Cuts as Prices Slump, BofA Says - Slumping nickel prices will force some producers to cut output in the next two years to prevent an oversupply, according to Bank of America Merrill Lynch. - more

  EU stainless steelmakers' profits to fall in Q2 - European stainless steel producers' profits look set to shrink in the normally strong second quarter as prices for their products fall and customers opt to work off stocks rather than make fresh purchases. - more

  Movement To Reduce FeCr Production In Winter Is Enlarging In South Africa = Tata's South African Plant Has Suspended Its Operations From June - In order to avoid high fees of electric power applied to winter time in South Africa, a reduction in production of ferro-chrome at South African producers is enlarging. Merafe Resources of South Africa already announced the plan to reduce their production of charge chrome during June to August and Tata Steel of India also announced their having suspended its operations at the Richards Bay plant in South Africa for the next 3 months from the 1st of June. - more

  POSCO’s China subsidiary completes plant expansion - Zhangjiagang Pohang Stainless Steel, a China-based stainless steel subsidiary of POSCO, on Monday completed the facility expansion project that pushes up its annual production capacity to 1 million metric tons. - more

  Cuban Nickel Industry Moving Forward - The Cuban Business Company Cubaniquel is making investments that will increase productions, improve efficiency, and reduce the negative environmental impact of this industry, one of the most important in Cuba. - more

  Norilsk Nickel launches operations at Lake Johnston, Australia - OJSC MMC Norilsk Nickel announces that preparatory works to start the mine and concentrator operations at Lake Johnston, Australia have been completed in accordance with the Company’s production plan. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 10

• Baltic Dry Index - minus 10 to 1,418. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Reports Less-Than-Estimated Surplus // Hong Kong Raises Down Payments on Home Loans to Cool Real Estate Market // Bank of Korea Raises Benchmark Interest Rate to 3.25% to Tame Inflation // Asian Stocks Set for Sixth Week of Decline Amid Interest-Rate Rise Concern // Germany’s 2011 Growth Forecast Raised to 3.1% // U.K. Manufacturing Declines More Than Forecast on Holidays, Japanese Quake // Trichet Escalates Greece Clash as ECB Puts Onus on Governments for Rescue // European Stocks Tumble to 2 1/2-Month Low; Sulzer, Hermes, Total Lead Drop // Second Half 2011 U.S. Growth Rebound Intact // Small Businesses Loans Make Wall Street Comeback // Oil Falls Most in Four Weeks on Saudi Arabia’s Plan to Increase Production // US Stocks Fall in Longest Dow Slump Since 2002
• The Euro is now trading nearly a full percent lower against the US Dollar. NYMEX crude is down 2-1/2% and trading at $99.33/barrel after Saudi Arabia bumps up production in defiance of OPEC. Gold is down over 6/10 of 1% and silver is lower by  nearly 2-1/2%.. Base metals ended the session lower on a stronger Dollar and concerns about lower than expected China metal import numbers. For the day and week, Dow Jones reports three month nickel ended the session at $10.36/lb . Stockpiles of nickel stored in LME approved warehouses took a second day of big hits, and now sit at a new low for the year, just over 112,900 tonnes. This is also the lowest we have seen stockpiles read since August 2009.
• Have a safe and relaxing weekend!

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Credit Agricole analyst Robin Bhar - "The fact that there is even talk of QE3 in the wake of weak US data suggests that the headwinds will not dissipate quickly and investors could seek refuge in hard assets, such as metals, as a hedge."
• Citigroup Global ups stake in JSL Stainless - more
• Shiller Says U.S. Home-Price Declines of 10% to 25% ‘Wouldn’t Surprise Me’ - more
• Three Jobs Scenarios: Which Is Most Likely? - more
• Investor Jim Grant Says ECB ‘Factually Insolvent’ - more
• How Underwater Are American Households? - more

  The Charges Against Big Nickel Companies - In 1946, in New York City, the Anti-Trust Division of the Department of Justice filed a complaint against Inco and its wholly owned U.S. subsidiary, International Nickel Co. Inc. - more

  Two Vale employees killed at Stobie Mine - t's a “very rough day” for Steelworkers Local 6500 members after two of their colleagues were killed in an accident at Vale's Stobie Mine late on June 8, the union's president, Rick Bertrand, said. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around  $.09/lb lower in choppy trading, with other London traded base metals mostly lower. The Euro is presently trading nearly 1/2 of 1% lower against the US Dollar. NYMEX crude is nearly 1% lower this morning and trading at  $100.95/barrel. Gold is off nearly 2/10% and silver is down over 1/2%. In overnight trading, Asian markets ended lower, with China closing up 1/3 of 1%. Europe is trading lower this morning while US futures show Wall Street may open lower. Nickel inventories took another big hit yesterday.  
• Reuters morning - Copper down after Chinese May imports fall - more
• LME Morning - Metals pare losses but remain lower as Chinese data, patchy sentiment weighs - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• US Imports of Stainless Steel Mill Products - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper carved out a modest gain yesterday in very quiet trading, while most other metals were mixed, as investors awaited Chinese import data out overnight. The numbers disappointed somewhat, with overall copper imports falling roughly 3% in May following a much steeper 13% decline in April, and coming in at just under 255,000 tons. Reuters estimates that the proportion of refined copper that can be backed out of the aggregate to be somewhere around 155,000 tons when the exact breakdowns are released later this month. However, copper scrap imports, not included in the totals, rose 5.7% from April to 400,000 tonnes, the highest volume seen so far this year and a trend that makes sense to us given the high cathode prices and the still unworkable arb. The markets are taking the data somewhat in stride, with copper prices down about $90/MT as of this writing. Investors may have been relieved that the rate of decline seems to be moderating, and may now be looking to June for a potential uptick following what is widely perceived to be a period of destocking. Certainly, the sharp decline we have seen in Shanghai exchange stocks supports the destocking view, although we do have our concern about just how much metal is being exported as opposed to used internally. Other data showed that imports of primary aluminum, aluminum alloy, and semi-finished aluminum products fell 2.%4 percent on the month, while inflows of aluminum scrap and alumina dropped 4.3% and 15.4%, respectively. The table in our attachment contains some of the import highlights, as released by Chinese customs and compiled by Bloomberg. On the overall trade figures, China reported a less-than-expected $13.1 billion trade surplus in May, as imports remained strong, (up 28%), while exports rose 19%. Sales to the US and the EU slumped to their weakest level since late 2009, but on the whole, the trade surplus numbers were respectable. If anything, they suggest that the government will likely have to continue to tighten monetary policy, as there does not seem to be any moderation in demand, at least viewed from the trade side .... Nickel is at $22,900, down $300.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (MNP) PAPUA New Guinea’s chief inspector of mines has halted work at the Ramu nickel-cobalt project over safety concerns – just the latest in a series of delays for the $US1.5 billion ($A1.4 billion) project.
• (CCR) China’s daily crude steel production volume fell 68,700 tonnes to 1.92 million tonnes in late May from the middle of the month, reports China Securities Journal, citing the China Iron and Steel Industry Association.
• (FIS) Norilsk Nickel, world’s largest nickel producer, announced plans to diversify its operations away from high reliance on nickel and add copper, coal and iron ore production. Currently Norilsk holds a 25% market share in global nickel market. At the same time Chinese output levels of refined commodity substitute, nickel pig-iron, are expected to double in 2011 challenging Norilsk in the market.
• (CRU) For much of this year, the fall in the LME cash nickel price, to a level of $22,455/t ($10.19/lb), has been attributed to fund managers selling commodities in the wake of growing uncertainty surrounding the global economic outlook. More recently, weaker nickel market fundamentals have become a factor too.
• Anfield Reports Updated Mineral Resource Estimate for Mayaniquel Nickel Project, Guatemala -- Significant Increase in Nickel Resources - more
• China's imports quicken, exports slow in May - more

  Europe metals premiums steady, Chinese demand eyed  - Premiums for physical metals in Europe remained little changed in the past week, with traders eyeing the return of top consumer China. - more

  Premium Of Nickel Briquettes Moves To Rise = Kwinana Refinery Of BHP Billiton Has Been In Troubles From End May - The global supply of nickel briquettes has been suffering from a lack of actual cargoes but, in addition to this problem, another factor to stimulate price of nickel briquettes has arisen, because the Kwinana refinery of BHP Billiton in Western Australia has been in troubles for production of nickel briquettes from the end May of 2011. - more

  Merafe: 2011 ferrochrome demand to outstrip supply - Global ferrochrome demand is expected to rise by 11 percent to 9.87 million tonnes this year, outstripping expected supply of 9.29 million tonnes, Merafe Resources said, citing a research firm. - more

  Icebreaking tanker hits the water -  This week, the specialised tanker being built by Nordic Yards for the Russian mining company Norilsk Nickel was floated out of the building dock in Wismar for outfitting. - more

  ENRC latest boardroom shake-up is a blow to confidence - analysts - It is ‘not inconceivable’ that ENRC’s founders could take the business private, according to analysts at JP Morgan Cazenove - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 9

• Baltic Dry Index - minus 6 to 1,428. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Australia Employers Added Fewer Jobs Than Forecast in May; Currency Drops // South Korea to Weigh Rate Increase as Household Debt Poses Risk for Growth // Japan’s Economy Shrinks 3.5% in First Quarter After Quake Disrupts Output // India’s Food Inflation Quickens to Eight-Week High on Onion, Fruit Costs // Asian Equities Decline on U.S. Economic Slowdown; Tokyo Electric Plunges // BOE Holds Key Rate at Record Low // Trichet May Signal July Increase as ECB Holds Rate // Unemployment Makes IHOP-to-Red Lobster Target Higher Incomes // Household Worth in U.S. Increases by $943 Billion, Fed Says // U.S. Stocks, Dollar Advance on Trade Data
• Abbreviated and late - Dow Jones reports three month nickel ended the day at $10.48/lb . Stockpiles of nickel stored in LME warehouses took a dive on Wednesady after gaining the last 4 of 6 business days. Stockpiles now total just over 114,150 tonnes and the total is the lowest recorded this month, but higher than where May ended at.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• What a China Slowdown Means for the World - more
• Average Job Seeker Gives Up After 5 Months - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.05/lb lower, with all London traded base metals lower but quiet yet again. The Euro is nearly 1/4 of 1% higher against the US Dollar at the moment. NYMEX crude is up 2/3 of 1% and trading at 101.39/barrel. Gold is down over 1/10 of 1% while silver is slightly higher. In overnight trading, Asian markets ended lower, with CHina down nearly 1/4 of 1%. European markets are trading slightly lower at the moment and US futures show Wall Street will try to shake off its bearish mood with a higher opening. Nickel inventories fell sharply yesterday.  
• Bloomberg morning - Copper Drops for Second Day as Central-Bank Rate Increases May Sap Demand - more
• LME Morning - Base metals mixed as macro fears linger, investors eye eurozone, US releases later - more

  Nickel Stockpiles Fall Most in Five Weeks on Rotterdam Decline - Nickel inventories tracked by the London Metal Exchange fell the most in more than five weeks on a decline in Rotterdam. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices fell on Wednesday, but finished off earlier lows while also managing to reclaim the $9000 mark by the close. However, trading over the past few days has been very quiet and largely concentrated on either side of the $9000 mark. Macro concerns continue to weigh on the various markets, particularly US equities and base metals, with energy being somewhat of an exception, at least thus far. Yesterday, the Federal Reserve's Beige Book came out showing more of the same, namely that growth in the Fed's 12 districts generally continued to expand, but at a more moderate pace. Four key districts -- New York, Philadelphia, Atlanta and Chicago – reported a slight deceleration in activity. Right now, metals are lower and not far off the lows of the day. We expect things to stay rather quiet at least until tomorrow when key Chinese trade data comes out. Reuters reported today that imports of major commodities -- with the exception of oil and some of the grains -- could be subdued in May, with an expected revival in copper shipments perhaps coming in the following month. We will have to wait and see what happens, but our inclination is that the copper numbers will indeed be somewhat on the softer side of estimates. Later today, we get the ECB rate decision (expected to be unchanged), but attention will be focused on the post-meeting press conference where ECB chief Jean-Claude Trichet is expected to say the bank will remain on guard over pricing pressures. Depending on his language, investors could be bracing for a further rate increase in July. The Bank of England is also expected to announce its rate decision, with no change expected here either. The Euro is not doing much right now, trading at $1.46, while sterling is a little higher, at $1.6425. ...  Nickel is at $22,607, down $98, and still very quiet today with less than a $300 per ton intraday trading range in place.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) Reportedly, Japan’s nickel based stainless steel scrap domestic prices dropped further in the beginning of June.
• (SO) According to the data issued by the China Iron and Steel Association (CISA), in late May (May 21-31) the member enterprises of the CISA produced 17.644 million mt in total, with an average daily output of 1.604 million mt, down 3.48 percent compared to mid-May (May 11-20).
• Asian fastener manufacturing cost up Demand still strong - more
• U.S. debt to exceed size of economy this year - more

  Nickel Pig-Iron Output in China Seen Surging in Challenge to Refined Metal - Nickel pig-iron output in China, the world’s largest metals user, may surge 50 percent this year, possibly curbing demand for the refined product and hurting prices that have lagged behind all other base metals in London. - more

  China 2011 stainless steel output seen up 13 pct-Indian assn - China's stainless steel output is expected to rise 13 percent this year to reach 14 million tonnes, bringing total surplus for the year to 2.5 million tonnes, the head of the Indian Stainless Steel Development Association said on Tuesday. - more

  World Output Of Molybdenum In Jan. - Mar. 2011 Quarter Increased = Such Copper Mining Companies As Codelco Turned To Increase Their Moly Production - The quantities of molybdenum produced in the western world for the first quarter (January - March) of 2011 were known.- more

  Outokumpu sees E.Asia stainless steel demand staying slow in Q3 - Finnish stainless steel maker Outokumpu Oyj expects East Asian stainless steel demand to stay "fairly slow" at least in the coming quarter, a senior official said on Wednesday. - more

  China's Jinchuan cuts domestic nickel prices by 1.7% on weaker LME - China's largest nickel producer, Jinchuan Group, has cut domestic prices for the two grades it offers by Yuan 3,000/mt ($463/mt), or about 1.7%, effective Wednesday, the company said in a statement. - more

  Mining Marshall Plan for Northern Ontario - What a difference a decade makes! Ten years ago, according to many in the Toronto-media, mining was a sunset industry and any modern industrial country/province should not be in such a supposedly “low tech” sector. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 8

• Baltic Dry Index - minus 22 to 1,434. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Asian Stocks Decline as Bernanke, Dudley Fuel Concerns About Global Growth // ‘Slow Poison’ Scars Indian Lungs as Asbestos Firms Sell $7 Roofs for Slums // German Industrial Production Fell in April // Merkel Called to Explain Greek Aid as ECB Clash Looms // Morgan Stanley May Cut Jobs as Barclays Trims // Greek Unemployment Rate Climbed to More Than 16% for First Time in March // European Stocks Decline for a Sixth Day; BP Retreats on OPEC Speculation // Dimon Asks If Bernanke Shares ‘Fear’ of Rules Slowing Economic Recovery // Bernanke Says ‘Uneven’ Recovery Still Needs Stimulus // Oil, Energy Stocks Rise on OPEC News
• The Euro is now lower by 2/3 of 1% against the US Dollar. NYMEX crude is up 2-1/2% after OPEC failed to agree to raise production. Crude is trading at $101.57/barrel. Gold is down 1/3% and silver is lower by 1.2%. Base metals ended the day mixed and mostly quiet. Indicator charts show nickel opened lower and fall early, then bottomed out right after our morning update and began to climb. By the end it had crawled into positive territory, but not by much. For the day Dow Jones reports three month nickel ended the day at $10.30/lb . Stockpiles of nickel stored in LME authorized warehouses rose only slightly yesterday and still stand just over the 115,100 tonne level. The bigger story is the fact nickel inventories have risen four of the six business days thus far this month. They rose only three times the entire month of May, four the month of April, three days in March, and six in February. Have the reports of a slowdown in stainless production put the nickel market into a surplus situation again? And will we see pricing fall below $10/lb this round? Stay tuned 

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• UNCTAD Price Formation In Financialized Commodity Markets - pdf here

  Commodity/Economic Articles and Comments

• New UNCTAD study charts impact of financial investors on commodity prices - more
• (Cabot) The IBD/TIPP Economic Optimism Index was released on Tuesday, showing a 1.8-point climb to 44.6 for the May 31-June 5 period. However, the number is still below 50, indicating many remain pessimistic. The six-month outlook jumped two points to 44.3.
• Twelve Corporations Pay Effective Tax Rate of Negative 1.5% on $171 Billion in Profits - more
• 20 Facts About U.S. Inequality that Everyone Should Know - more
• Bureau of Economic Analysis State Growth - more
• Full Employment, Quits and Private Tyrannies - more

  Greek Ferronickel Producer Larco Returns to Profit, ANA Says - Larco SA, Europe’s largest ferronickel producer, posted a pretax profit last year of 6.4 million euros ($9.4 million) after the price of nickel soared, the state-run Athens News Agency reported today, citing a Larco financial statement. - more

  Video: This Morning There Was a Massive Solar Explosion - more (this was actually yesterday morning)

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.04/lb lower, with other London traded base metals quietly lower as well. The Euro is presently trading over 4/10 of 1% lower against the US Dollar. NYMEX crude is off 1/2% and trading at $98.57/barrel. Gold is down 7/10 of 1% while silver is off almost 2-1/2%. In overnight trading, Asian markets ended lower, with China up slightly. European markets are trading lower after US Fed Chairman Ben Bernanke failed to calm markets, and US futures appear to be heading for a lower opening on Wall Street as well. Nickel inventories rose by just a handful of tonnes yesterday.  
• Bloomberg morning - Copper Drops as Concern About Economy Offsets Supply Disruptions - more
• LME Morning - Base metals ease, bearish tone emerges - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• GFMS Quarterly Newsletter - Issue 39 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Abbreviated commentary today: Metals closed steady on Tuesday, kept higher by a weaker dollar and ongoing concern about the strike situation in Chile. However, copper did ease back later in the day when Codelco CEO Diego Hernandez told Reuters on the sidelines of an industry conference in New York that he expected the protests to be resolved as soon as this week. (There is no word on the strike status as of this writing). Also setting the markets back, especially US stocks, was Federal Reserve chairman Ben Bernanke’s testimony in front of Congress acknowledging an unwelcome slowdown in the U.S. economy. The Dow lost a 100-point gain by the close to finish lower. Macro concerns seem to be holding sway despite the fact that the dollar is pretty much unchanged right now, trading at $1.4620 against the Euro. Copper is just above the $9000 mark, and there are modest declines in the rest of the group. The next major new events will be the OPEC decision later today (with the Saudis still pushing for an increase) and the Chinese metal import numbers out tomorrow. In the latter regard, the markets expect a recovery in refined copper imports in April. We still expect a lower short-term bias from here in practically most commodity complexes.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (TS) Steelmaker Acerinox has ordered 1,663 workers home until December at its plant in the Campo de Gibraltar. They say the measure is needed because of a fall in production.
• (Yieh) Recently, Asian nickel-based cold rolled (CR) stainless steel market has remained sluggish.
• Toledo Mining director resigns - more
• (TI) The April Trucking Conditions Index from industry forecaster FTR fell to a reading of 7.57 from a March reading of 13.30.
• Tropical Pacific neutral - more

  Baosteel sees China steel demand growing 5-7 pct - Baosteel's stainless steel unit expects stainless steel consumption in China to grow 5 to 7 percent per annum over the next five to 10 years, Lou Dingbo, president of the unit, said on Tuesday. - more

  Design fault delays launch of New Caledonia’s Vale nickel plant - New Caledonia’s Vale nickel company says there has been a further delay in launching full operations at its new plant at Goro. - more

  Western Areas celebrates export milestone - WA's latest export success story is set to reach a milestone today when Western Areas celebrates sending 100,000 tonnes of nickel concentrate worth $US300 million ($280 million) out of Esperance's port to China. - more

  New Nickel Ore Cargo Guidelines - Class society ClassNK has released new guidelines for nickel ore cargoes in an attempt to address safety concerns related to the carriage of potentially dangerous bulk cargo. - more

  Indonesia's nationalist push could scare off miners - Indonesia's push to renegotiate mining contracts to increase its royalties could scare off new investors willing to take on a number of other risks to tap abundant natural resources in the Southeast Asian country. - more

  Steelworkers, ATI working on new contract - With their current contract set to expire June 30, the United Steelworkers of America and Allegheny Technologies Inc. will begin bargaining early next month, a union official said. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 7

• Baltic Dry Index - minus 28 to 1,456. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Hong Kong Banks’ Mortgage Rate Increases Take Steam Out of Housing Boom // Euro Reaches Month High Versus Dollar as Greek Concerns Ease; Aussie Falls // Australia’s Central Bank Holds Key Rate, Sees Little Urgency to Increase // Europe’s Banks Too Fragile to Afford Greek Default // German Factory Orders Rebounded in April // U.K. Retail Sales Fall As Consumer Concerns Re-Emerge After April Holidays // Fed Is Said to Back Three Percentage-Point Capital Surcharge for Big Banks // Wall Street Probe Illustrates Levin’s Clout // Job Openings Fall First Time in Three Months // U.S. Stocks Rebound as Euro Gains
• The Euro continues to trade over 7/10 of 1% higher against the US Dollar. NYMEX crude is down 6/10 of 1% and trading at $98.42/barrel. Gold is down 1/10 of 1% and silver is higher by 6/10 of 1%.  Base metals ended the session only slightly higher for the most part, as traders waited top hear what US Fed Chairman Ben Bernanke said later today. Indicator charts show nickel was choppy, making a charge late in the session, only to see a $300/tonne collapse late. For the day, Dow Jones reports three month nickel ended a mere $10/tonne lower, or $10.26/lb . Stores of nickel stockpiles in LME approved warehouses fell yesterday and totals now read just over the 115,100 tonne level. Metal traders are struggling with a price supportive higher valued Euro and restrictive signals of another potential slowdown. It is not very often you will see the Euro gain 1/3%, 1/2% and even 1% on the US Dollar in a 24 hour period of time, as we have lately, and watch metals fall in traded value during the same period. For weeks we have been posting a link to Robry Weekly Economic Assessment, an individual that monitors the flow of natural gas and advises the health of the economy based strictly off those numbers. Today's assessment may be his last for awhile. It starts "The US Industrial economy has turned into recession. That is the call as the US Industrial economy weakened suddenly and dramatically last week (if pipeline scheduling is correct), as the prior-weeks surge in strong consumer spending evaporated. This is an early call and perhaps the recession can be aborted in its early stages (if the Federal Reserve acts very quickly and the press can drop its negativism), but the seeds of a downward spiral have been planted. Otherwise, this will be my last weekly economics post until fundamentals swing back to positive." It will be interesting to see if the Fed Chairman hints at a similar assessment this afternoon. Or maybe 'interesting' is an improper term to use.

  Reports

• Reuters Metals Insider - pdf here
• Robry Weekly Economic Assessment - more

  Commodity/Economic Articles and Comments

• Most Americans Haven’t Planned for Retirement and Other Areas of Concern - more
• Cancer costs put treatments out of reach for many - more
• Circling the Drain - more
• The Warren Court - more
• US Drought Monitor - more
• Second-Mortgage Misery - more

  Commodity Bubbles Caused by Speculators Need Intervention, UN Agency Says - Commodity markets need international oversight, more transparency and intervention to deflate bubbles because increasing speculation means prices are no longer driven by supply and demand, the United Nations said. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading only slightly lower and off earlier highs, with  other London traded base metals mixed and quiet. The Euro is currently trading nearly 6/10 of 1% higher against the US Dollar. NYMEX crude is off nearly 8/10 of 1% and trading at $98.24/barrel. Gold is up over 1/10% and silver is higher by more than 1%. In overnight trading, Asian markets ended lower, with China up 6/10 of 1%. European markets are trading higher this morning, and US futures are higher as well. Nickel inventories fell yesterday.    
• LME Morning - Base metals range narrowly, weak economic picture prevails - more
• Reuters - Copper steady on recovery prospects, dollar - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• Base Metals Monthly - pdf here
• Allegheny Ludlum July Stainless Steel Surcharge - more
• AK Steel July Stainless Steel Surcharge - more
• North American Stainless July Stainless Steel Surcharge - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Posted as soon as received (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Reuters) China's stainless steel output is expected to rise 13 percent this year to reach 14 million tonnes, bringing total surplus for the year to 2.5 million tonnes, the head of the Indian Stainless Steel Development Association said on Tuesday.
• Cronimet acquires 92 pc stake in Turkish firm for USD 3 mn - more
• Cass - Freight shipment volumes remained essentially flat in May, down .2% from April levels, but up 9.6% compared to 2010. At the same time, transportation expenditures continued to climb, rising 1.7% over the previous month and up 29% from May 2010.

  Baosteel sees China stainless steel demand up 5-7 pct - Baosteel's stainless steel unit expects stainless steel consumption in China to grow 5 to 7 percent per year over the next five to 10 years, Lou Dingbo, president of the unit, said on Tuesday. - more

  Vale's Goro nickel refinery to start in early 2012 - Vale SA, the world’s second-largest nickel producer, aims to start output from the refinery at its US$4.5 billion Goro project in New Caledonia in the March quarter of 2012. - more

  Nickel Company Aims for High Production - With over one million tons of nickel concentrates the company Commander Pedro Sotto Alba, in the town of Moa, aims to reach the 50th anniversary of its launch, occurred on July 23, 1961. - more

  Dumont nickel project slated for 2015 startup - Royal Nickel Corp.'s $2.3-billion mining project in Quebec's Abitibi region may not match the glamour of the new $1-billion Canadian Malartic gold mine 45 kilometres south, but it is marching steadily toward a 2015 startup. - more

  Deadbeat nickel firm exported - Pacific Nickel Philippines Inc. (PNPI) has exported over $1 billion worth of nickel ore from Nonoc island but has made no effort to pay its debts to the Asset Privatization Trust (now Privatization Management Office), the Department of Finance said yesterday. - more

  Average Prices Of LME Nickel In May 2011 Continued To Fall And Came Down To US$10.98 Per Lb. = A Rally Of Euro Currency Caused To Rebound Nickel Price At End May, Stocks Decreased To 114,000 Tons - The average prices of LME nickel in May of 2011 were known as US$24,210.00 per ton (US$10.981 per lb.) for cash and US$24,223.50 per ton (US$10.988 per lb.) for three-month futures, having continued to fall and come down to a lower level than US$11 per lb. - more

  Outokumpu special stainless to the dam in Tammerkoski rapids in Finland - Outokumpu delivers special stainless steel for the project where the dam in Tammerkoski rapids upper reaches will be completely rebuilt. - more

  Courtesy AISI - In the week ending June 4, 2011, domestic raw steel production was 1,830,000 net tons while the capability utilization rate was 74.8 percent. Production was 1,816,000 tons in the week ending June 4, 2010, while the capability utilization then was 75.1 percent. The current week production represents a 0.8 percent increase from the same period in the previous year. Production for the week ending June 4, 2011 is up 1.6 percent from the previous week ending May 28, 2011 when production was 1,801,000 tons and the rate of capability utilization was 73.7 percent.

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 6

• Baltic Dry Index - minus 5 to 1,484. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) IATA: World Airline Profits Forecast Down 54% // Stevens May Raise Rates Next Quarter, Money Markets Show: Australia Credit // Asian Stocks Decline to Lowest Level in a Week on U.S. Jobs; Tepco Plunges //  Wheat Fields Wilt in Drought as Parched Earth Spreads From China to Kansas // German Banks Top French on $23B Greek Debt // U.K. Factory Production Strengthens as Export Demand Picks Up, EEF Says // Euro Touches Month High Versus Dollar on Optimism EU Will Support Greece // Death Toll From German E. Coli at 22 // German Financial Regulator Criticizes European Union Banking Stress Tests // Stocks in Europe Tumble to 10-Week Low; Air France, SocGen Lead Decline // Slowing U.S. Growth Starts to Sow Doubts in Recovery Among the Optimists // Geithner Urges Minimum Global Rules on Swaps to Avoid ‘Race to the Bottom’ // Stocks, Oil Fall on Economy Concern
• The Euro is currently trading up over 1/4 of 1% against the US Dollar. NYMEX crude is down 3/4 of 1% and trading at $99.46/barrel. Gold is up nearly 6/10 of 1% and silver is nearly 2% higher. Base metals ended mostly higher, but quiet. Indicator charts show nickel opened higher but spent the first day of the trading week, in a gradual decline. Dow Jones reports for the day, three month nickel ended at $10.26/lb . Shipments of nickel broke with what has become traditional since January and grew for the third time in the last four business days. And it is still too early for Norilsk shipments, which just resumed, to be hitting warehouses yet. Stockpiles now read just under the 115,400 tonne level. Reuters has published a nickel graph which leaves little doubt where nickel prices have gone over the past 3 months (chart here). Metals markets are fearful of how deep the economic slowdown might go this time, offset with some hopes that China power restrictions might help the demand for refined nickel.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (MFG) Nickel traders tell AMM that they are seeing increased sales and inquiries for briquettes after BHP Billiton stopped production at its Kwinana refinery in Western Australia due to a hydrogen shortage in late May. Kwinana already declared force majeure in January due to heavy rains and operations had returned to normal when the hydrogen shortage hit.
• Comparing Recessions and Recoveries: Job Changes - more
• 25 Million Americans Are Unemployed Or Can't Find Full-Time Work - more
• Five down weeks stir crash whispers - more
• Number of the Week: Profits Rise, but Unemployed Ranks Don’t Shrink - more
• Tourism Driving Growth in New York, California, Florida - more
• Economists React: ‘Consider Me Worried’ - more
• A day in the life - more
• The World Top Incomes Database - more

  Norilsk resumes Arctic shipments after seasonal halt - Russian metals giant Norilsk Nickel resumed shipments from its Arctic port of Dudinka after flooding prompted a seasonal halt. - more

  Fortescue Says Chinese Iron Ore Demand Will Support High Prices - Fortescue Metals Group Ltd., Australia's third-largest iron ore exporter, said Chinese demand for the steel-making material will support high prices.- more

  International Ferro names BHP's Jordaan as CEO - International Ferro Metals has appointed former BHP Billiton manager Christiaan Jordaan as its new chief executive, after it found a replacement for incumbent David Kovarsky earlier than expected. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.04/lb lower, with all other London traded base metals higher at the moment. The Euro is down over 2/10 of 1% against the US Dollar. NYMEX crude is down over 1.1% and trading at $99.07/barrel. Gold is up slightly while silver is over 1.1% higher. In overnight trading, Asian markets fell, with China markets closed for Dragon Boat Festival. European markets are trading lower this morning and US futures show Wall Street may yet have more bear left. Nickel inventories rose again on Friday.    
• LME Morning - Base metals rise as dollar slide continues, QE3 hopes boost dip buying - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals, particularly copper, have shown impressive resiliency over the past two weeks, with declines usually proving to be short-lived despite increasing signs of decelerating economic growth now apparent from an increasing number of countries. We saw this scenario play out again on Friday when copper pared its losses in the wake of very disappointing US employment numbers to close sharply higher. The fact that a number of other commodity complexes, such as energy and precious metals, also joined metals in recovering lost ground on Friday suggests that markets are refocusing from the weakening macro picture and towards the struggling dollar, now trading at a one-month low against the Euro and briefly taking out the psychologically important 80 level against the yen this morning. While dollar-induced buying could lift commodities over the short-term, it seems to us that such an advance will not be easy to sustain given the backdrop of weaker growth. At some point, markets will have to downplay the impact of the currency and focus on the fact that slowing growth will reduce metal demand and put upward pressure on inventories. We do not think a global slowdown will last for months on end, but certainly, it very well could persist through the summer, in which case one should resist getting lulled in on the long side. Chinese markets are closed today, but we are modestly higher on the LME, although off our earlier highs. Copper is leading the advance on news that Codelco's El Teniente is producing at less than half of its capacity after most staff workers stayed home to avoid violence by striking contractors. Other reports from workers on the ground suggest that no production is coming out. Thousands of striking subcontractors demanding higher wages threw rocks at buses carrying staff workers to the mine site earlier this week.  ... Nickel is at $22,719, down $81, and on track to push lower in our view; next support is at $22,200 (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Interfax) Baosteel Resources Co. Ltd. (Baosteel Resources) has completed the acquisition of a 9.9 percent stake in Toronto Stock Exchange-listed Noront Resources Ltd. (Noront), the Canadian mining firm announced June 2.
• (AP) The Philippine Ports Authority (PPA) said the domestic and foreign traffic declined 7.64 percent and 1.36 percent, respectively, for the period in review, owing to poor cargo movement in the international and local markets .... The increase was attributed to high imports of coal and exports of sand aggregates, fish, chrome ore, chromite sand, manganese ore and nickel ore.
• (China) Increase in interest rates likely - more

  Market Tendency On Imports Of Ferro-Alloys At 31st May 2011 = China Raises Electricity Fees, South Africa Strengthens Regulations For Supply Of Electric Power - The market tendency by item on imports of ferro-alloys into Japan at the 31st May of 2011 is as follows - more

  Chinese VP in Cuba to meet on economic ties - Chinese Vice President Xi Jinping arrived in Cuba on Saturday for a three-day visit expected to accelerate fast-growing economic relations between the two communist-run countries. - more

  Nickel Asia sees robust sales for rest of the year - Listed mining firm Nickel Asia Corp. expects its first-quarter sales and net income to be sustained for the rest of the year due to healthy nickel prices and better production. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 3

• Baltic Dry Index -  no change to 1,489. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Statistics Official Steps Down on Suspicion of Leaking Economic Data // China Lead Smelters May Idle Capacity as Power Shortage Slows Consumption // China Stocks Erase Weekly Drop as Automakers, Solar Energy Shares Advance // Asian Stocks Decline as Investors Await U.S. Jobs Report; Honda, LG Drop // Syrians Protest Alone as Army Loyalty, World’s Inaction Leave Assad Free // German Government Bonds Decline as EU, IMF Ready Greece’s Second Bailout // Europe E. Coli Outbreak is Deadliest on Record // Greece to Get Next Aid Payment in New Bailout // European Stocks Decline as U.S. Adds Fewer Jobs Than Forecast; EON Falls // Moody’s Downgrade Warning a Call to Action on U.S. Debt, Lawmakers Say // U.S. Payrolls Rose Less-Than-Estimated in May; Jobless Rate 9.1% // Newell Rubbermaid Tumbles After 2011 Outlook Cut on Less Consumer Spending // Stocks Drop Following Jobs Data
• For a second day in a row, the US Dollar has taken a swan dive during the session and is not trading over 1% lower against the Euro.  NYMEX crude is now trading unchanged at $100.40/barrel. Gold is up over 1/2 of 1% and silver is slightly lower, Base metals ended the session mostly higher. Indicator charts show nickel opened higher this morning, fell thru much of the morning, but as the Euro turned sharply higher, nickel saw life return.  For the day and week, Dow Jones reports three month nickel closed at $10.33/lb . Stockpiles of nickel stored in LME authorized warehouses rose for a second time this week and now sit just over the 114,850 tonne level. Stockpiles only grew three times in May, four times in April, and three times in March, so June is already on pace to see inventories rise for the first time since December of last year. It was all about jobs today, or the lack thereof in the US. The US added a meager 54,000 jobs in May and the overall unemployment rate rose to 9.1%. With that news, any hopes for some major risk taking evaporated, and markets that were open, quickly reacted negatively. Commodities would have fared no better except for a second day the Dollar fell hard after morning reports came out. It was a week of ugly economic news and looks like summer is going to be rough on a lot of people. The good news for stainless steel users is the price of nickel is coming down, as will stainless steel prices eventually. The bad news for nickel producers is the price of nickel is coming down. Somewhere in the middle are the stainless steel producer and distributors, trying to figure out what will happen down the road and how best to prepare for it. Nickel prices are lower for the week, the month (all 3 days of it), and the year to date, but they remain much higher than  a year ago this day.
• Have a nice weekend!!

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Bankruptcy Filings Decline - more
• Manufacturing collapse - more
• CBO: Fannie, Freddie Guarantees to Cost Government $42 Billion - more
• Is the Slow Economic Data Due to Japan or Something Deeper? - more

  Chinese Economic Slowdown May Lead to 75% Plunge in Commodities, S&P Says - A “sudden” slowdown in China may lead commodity prices to fall as much as 75 percent from current levels, Standard & Poor’s said. - more

  Merafe to join Xstrata in ferrochrome project - Merafe Resources agreed to participate in a project led by Xstrata to expand a ferrochrome smelter in South Africa’s Limpopo province to meet "strong" demand from China and India. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.06/lb lower, with other London traded base metals quiet and mostly higher at present. The Euro is slightly higher against the US Dollar at the moment. NYMEX crude is off 2/3 of 1% and trading at $99.75/barrel. Gold is off 4/10 of 1% and silver is down 2%. In overnight trading, Asian markets ended lower, with China up 1%. European markets are trading lower, as are US futures, both both are quietly waiting for today's US job report for May. Nickel inventories rose for a second time this month.    
• LME Morning - Metals recover from recent lows on bargain hunting but sentiment still patchy ahead of US payrolls - more
• Reuters - LME Copper rebounds ahead of U.S. payrolls data - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - We saw substantial volatility and divergence in the commodity markets on Thursday, with energy erasing a steep decline to close higher, while base metals finished on their lows after a mid-day recovery failed. Surprisingly, base metals had a worse day than they did on Wednesday when the majority of the week's relatively poor macro readings came out. The dollar was all over the place yesterday, weaker earlier in the day against the Euro (at $1.45) rallying to $1.43, then falling back to $1.45 later on news of a Moody's warning that it might downgrade the US's credit rating if the White House and Congress do not make progress on the debt ceiling and accompanying spending cuts. Alarmed by the announcement, a number of US government officials put out statements after the close trying to reassure investors that the US will indeed reach an agreement by the August 2 deadline, if not sooner. However, that did not do much good, as the dollar continued to hover around $1.45 late yesterday. Metals are mostly mixed now, but energy markets are lower heading into next week's OPEC meeting where the cartel is expected to announce a further quota increase. The highly anticipated May nonfarm payroll report came out an hour ago, with the number coming out +54,000, substantially less then the 150,000-179,000 expected by various surveys. Unemployment pushed up to 9.1% from 9% last month. The sub-par number erased most of the earlier gains we saw in metals, with only copper holding on to a decent gain. We expect the selling to resume in earnest over the course of the day and heading into next week, as markets continue to discount a rapid slowing in the global economy. Moreover, technically, several complexes are on the verge of violating key trend line support levels, while longer-term moving averages have also been taken out in selected metals. ....  Nickel is at $22,519, down $56, and on track to test support at $22,000.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) Baosteel, China’s second largest stainless steel maker announced to cut stainless steel products for June delivery due to dropping nickel prices and poor spot market.
• (MBN) NSSC cuts 304 stainless export prices for a third month
• (Interfax) Government efforts to consolidate China's steel industry are pushing privately-owned companies out of the market, and may be contributing to the sector's shrinking profitability, according to industry experts.
• (SMR) Zambia's sole nickel producer, the Munali nickel mine, has offered its workers a 12% pay rise in a bid to ease labor unrest that disrupted mine output in April, union officials said Thursday.
• (China) Hard landing for economy 'avoidable' - Inflation will probably peak at the end of this month and a hard landing for the economy will be avoided, a senior economist said on Thursday, amid a manufacturing slowdown and persistent inflation concerns. - more

  China says PH dumped metal waste in port - China has accused the Philippines of dumping mineral wastes at one of its ports and has asked the Department of Environment and Natural Resources to investigate the matter. - more

  Supply And Demand Of Ferro-Chrome In Japan For Q1 / 2011 = Consumption Of Low Carbon FeCr Recovered, Having Resulted In Increase Of Its Imports - The quantities (on material base) of ferro-chrome produced, imported and consumed by Japan in the first quarter (January - March) of 2011 had been traced by us and the contents were as per the table attached hereto. - more

  $3.4B Vale investment creates 150-200 jobs - Vale's $200-million Challenging Ore Recovery (CORe) project now under way at the Clarabelle Mill complex in Copper Cliff won't just improve the bottom line for Vale. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 2

• Baltic Dry Index - plus 4 to 1,489. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Lending-Binge Hangover Looms in 2013 // Central Banks Says China’s Local-Government Debt Risk Needs ‘Attention’ // Manufacturing Growth Weakens from China to Europe as Global Economy Ebbs // China May Assume Some Local Government Debt, Reuters Says // Rice Soaring 50% in Thailand as Thaksin Seeks Votes in World’s Top Shipper // Asian Stocks, Metals Slump on Global Growth Outlook // Trichet Calls for Single Euro Finance Ministry // Greek Default Risk Raised by Moody’s as Bond Aid Readied // Merkel Says Europe’s Troubles Stem From Debt, Not From Any ‘Euro Problem’ // European Stocks Slump Amid Greek Debt Downgrade, Concern Over U.S. Economy // Fed May Signal Balance Sheet Will Stay at Record // Tornadoes Touch Down in South-Central Massachusetts, Killing Four People // U.S. Jobless Claims Fell Less Than Forecast // Stocks Fall on Economic Growth Concern
• The Euro is currently trading over 1% higher against the US Dollar. NYMEX crude is down over 1% and trading at $99.23/barrel. Gold is down 7/10 of 1% and silver is off over 1.8%. Base metals ended the day lower as well. Indicator charts show nickel opened lower, jumped toward positive territory early on, then fell back, only to decline further when US economic reports came out. For the day, Dow Jones reports three month nickel closed at $10.24/lb . Nickel stockpiled in LME approved warehouse saw its total fall yesterday and now stand just under the 114,600 tonne level. A second day of risk aversion as economic reports disappoint yet again. We still see no reason to be overly concerned as economy appears to be following last years pattern of a summer slowdown.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Pessimism - more
• Online Job Ads Jump - more
• World-Wide Factory Activity, by Country - more
• ADP’s Job Data Reliability? Not Great . . . - more
• Comparing Wages Across the U.S. - more
• 10 Year US Treasury under 3 - chart

  Slowdown in China's Economic Growth Could Prick Commodities Bubble - China’s demand for commodities has become so great that a slowdown in the country’s economic growth would likely force global prices to fall, according to Standard & Poor’s: - more

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

• Indicators at 7:05am CST show 3 month nickel trading around $.09/lb lower, with all London traded base metals lower at press time. The Euro is trading over 9/10 of 1% higher against the US Dollar, which typically gives metal prices a boost. NYMEX crude is up over 1/10 of 1% and trading at $100.44/barrel. Gold and silver are both trading slightly higher at the moment. In overnight trading, Asian markets ended lower, with China off 1.6%. European markets are trading lower this morning and US futures show Wall Street will try to shake off yesterday's big drop. Nickel inventories returned to their falling ways yesterday.    
• Reuters morning - Copper dips on gloomy US economic outlook - more
• LME Morning - Metals struggle to shake off economic woes - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals sold off yesterday, as did a host of other markets after a barrage of poor economic data --particularly out of the US-- proved too much for markets to ignore. Crude oil markets lost almost $3/brl, while on the equity side, the Dow sank by 280 points, its worst daily decline in a year. The dollar firmed slightly as did gold, both benefitting from the wider selloffs in other markets. We listed many of the sub-par manufacturing numbers that came our way from a number of countries in yesterday's note, but shortly after our report went out, US manufacturing numbers were released and also conformed to the poorer trend. In this regard, the May ISM index dropped to 53.5, well below the 57.6 estimate and about 7 points lower than the previous month. The index, which is now at its lowest level since September 2009, was knocked back by continued weakness in auto sales. In this respect, both GM and Ford posted sharp declines in May sales, although Chrysler bucked the trend with a 10% improvement. Toyota reported its sales were off by some 28% compared to the same period last year as supply-related glitches continue to hold back production. This morning, we are lower in metals once again, with copper close to its lows for the day and hovering just above the $9000. We suspect it is only a matter of time, (perhaps in response to a poor non-farm payroll report out tomorrow), that prices will head decisively into the mid to high $8000’s. We do not have much new to add to what we wrote in yesterday’s note. We have a hard time seeing how metal prices could move higher over the course of June given the fact that economic growth is now approaching "stall speed", particularly here in the US. For that matter, June could also prove to be a tough month for US equities as well. In this respect, CNBC reported this week that US equities have slipped in June in each of the last six years, and Wednesday's sharp decline was certainly not an auspicious way to start the new month. If the historical pattern plays out again this month, weakness in equities could very well generate additional pressure on commodities. .... Nickel is at $23,050, down $200, and still looking fairly weak.  (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (Yieh) It is reported that the global ferro-chrome consumption was expected to hit 9.5 million tons in 2011, which was higher than 8.4 million tons in 2010. Accordingly to market analysis, China’s ferro-chrome and chrome ore prices were expected to increase by 10% in 2011; also, it’s estimated that China’s ferro-chrome consumption would be at around 4 million tons, accounting 40% in worldwide market.
• (Interfax) The development of the special steel sector will be a major point of focus for China's 12th Five-Year Plan (2011-2015), state media reported June 2.
• Rising commodity prices no longer boosting Canadian growth: CIBC - more

  Philippines' Atlas says resumes operations at nickel mine - The Philippines' Atlas Consolidated Mining and Development Corp said on Tuesday its unit plans to ramp up nickel ore output to 100,000 wet metric tonnes (wmt) monthly at its mine in southwestern Palawan province after operations recently resumed.- more

  Zambia Munali Nickel Mine Offers Workers 12% Pay Rise To Ease Unrest - Zambia's sole nickel producer, the Munali nickel mine, has offered its workers a 12% pay rise in a bid to ease labor unrest that disrupted mine output in April, union officials said Thursday. - more

  Liang breaks POSCO glass ceiling - POSCO has named its first female group leader, setting a new precedent at the male-dominated steelmaker. - more

  Xstrata profit-sharing gives Nunavik $15.2 million - The Xstrata Nickel’s Raglan mine handed over a $15.2 million cheque to Makivik Corp. and the communities of Kangiqsujuaq and Salluit today in Quebec City. - more

  Former Liberty Mines director accused of insider trading by Alberta regulators - A former director of nickel and cobalt miner Liberty Mines Inc is accused of insider trading. - more

  Manila sees 2011 metallic mineral output value up 24 pct -  The Philippines expects the value of its metals output to rise 24 percent to 137.6 billion pesos ($3.2 billion) this year, as higher world prices encourage miners, and the government increased its forecast of the amount of investment it expects. - more

  China to witness 25pct jump in steel demand by 2015 - China, the world's largest crude steel maker, may see its demand for the material to increase to between 670 million tonnes and 750 million tonnes in 2015. - more

  Rio Tinto remains upbeat on China despite economic growth easing - Economic growth in the massive Chinese market is slowing, although the pace is still likely to outperform expectations and is supported by resource-intensive drivers, mining giant Rio Tinto says. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here  
• 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 1

• Baltic Dry Index - plus 5 to 1,485. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Manufacturing Grows at Slowest Pace in Nine Months on Cooling Effort // Taiwan Prepares for Chinese Tourist Influx Seen Boosting Economic Growth // China’s Home Prices Rose in May for Ninth Month Defying Curbs, Soufun Says // China’s Millionaires Jump Past 1 Million on Savings, Expansion of Economy // Power Thieves Keep 400 Million Indians in Dark as Singh Misses Energy GoalAsian Stocks Rise, Led by Tech Companies as Nokia Loses Share; Tepco Drops // EU Considers Sweeteners for Greek Debt Extension // German Government Bonds Decline For a Second Day Amid Greece Deal Optimism // European Stocks Sink as Economic Data Trail Forecasts; Monte Paschi Drops // Job Cuts Announced in U.S. in May Fell 4.3% From Year Ago, Challenger Says // GM, Ford Sales Fall as Higher Gas Prices Hit Buyers // Stocks Fall After Jobs Data Trails Forecast
• The Euro is trading slightly lower against the US Dollar. NYMEX crude if off nearly 1-3/4% and trading at $100.93/barrel. Gold is up 3/4 of 1%, while silver is down 1.4%. Base metals ended teh day lower after China's drop in its PMI was followed by further weak economic news from the States. Indicator chart show nickel faltering right off the bat, and was never able to muster energy enough to stop the slide. For the day, Dow Jones reports three month nickel ended at $10.52/lb . Stockpiles of nickel stored in LME authorized warehouses, while falling for the first 5 months of the year, did what they had done each of those falling months this year and rose for the first day of the month. They now total just under 114,900 tonnes after a very active yesterday, with multiple in and out bound shipments recorded. With Norilsk resuming shipping this week, we expect to see more gaining days in the near future. AK Steel announced stainless steel surcharges for July and they are lower than June. For instance 304 stainless drops from $1.276 in June to $1.1799 in July. Economic news from US was weak again, with the PMI dropping more than expected (still positive though) and the ADP reporting dismal new hire employment numbers. Wall Street is not in a good mood today.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Video - Loughrey Says Molybdenum Prices `Steady' at $17 a Pound - more
• Drop in Consumer Confidence Complicates Obama’s Re-Election Chances - more
• Share of Population on Food Stamps Grows in Most States - more
• Like a Virus, Falling Home Prices Spread the Pain - more
• Millionaires Control 39% of the World’s Wealth - more

  AK Steel Announces July 2011 Surcharges For Electrical And Stainless Steels - AK Steel has advised its customers that a $440 per ton surcharge will be added to invoices for electrical steel products shipped in July 2011. July 2011 surcharges for the broad range of stainless steel products that AK Steel produces can be found on the company's web site at www.aksteel.com. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.09/lb lower, but trading is quiet. All London traded base metals are lower at this time . The US Dollar is trading over 1/10 of 1% higher against the US Dollar this morning, adding pressure to commodity trading. NYMEX crude is down slightly and trading at $102.63/barrel. Gold is down less than 1/10% and silver is off 1-1/4%. In overnight trading, Asian markets ended higher, with China up less than 1/10 of 1%. European markets are down slightly at the moment, and US futures reflect a slightly lower opening for Wall Street. Nickel inventories jumped for the first day of June, something they have done every month this year, regardless of overall declines.   
• LME Morning - Base metals stable but off day's highs, weak dollar supports - more
• Reuters morning - Copper steady after China data, soft dollar supports - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Robry Weekly Economic Assessment - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals finished stronger yesterday, with both copper and aluminum pushing to four-week highs. A weaker dollar and rising energy prices provided a measure of support, although for the month as a whole, the complex was generally weaker, with copper falling for a third straight month. More broadly, the Reuters-Jefferies CRB index finished down 5.5% in May, marking its biggest monthly fall in a year. Metals are lower as of this writing, as a host of sluggish manufacturing readings out over the past 24 hours has knocked some wind out of yesterday's advance. Out of China, the government reported that manufacturing expanded at its slowest pace in nine months in May, with a key purchasing managers' index coming in at 52, down from 52.9 in April. A separate PMI reading, released by HSBC and Markit Economics, showed manufacturing growth slowing to its weakest level in 10 months. There was, however, some good news in that the PMI input sub-index fell to 60.3 in May vs. 66.2 in April, a sign of moderating inflation at the whole-sale level. Despite this, talk remains of yet another rate increase, possibly as soon as this weekend. This is undoubtedly weighing on Chinese stocks, which fell for their eight straight session yesterday. In other manufacturing reports also out today, India’s manufacturing grew at the slowest pace in four months, while out of Europe, the British reported May activity growing at its slowest pace in 20 months. Germany's manufacturing sector, although expanding from last month, did so by its slowest rate since October. .... Nickel is at $23,227, down $368. Unlike the other metals, nickel has not really been able to build any kind of momentum on the upside. We could see an eventual retest of $22,200. (Daily Metals Report here)
• MF Global Daily Metals Report backup link from MF Global site here - (typically posted between 8 and 10 am EST)
• (SBB) Production at BHP Billiton's Kwinana nickel refinery in Western Australia is being affected by a shortage of third-party supplied hydrogen...
• (Yieh) Reportedly, Taiwan’s Yieh United Steel Corp. (Yusco) announced to cut the stainless steel prices for June delivery. The company decided to decrease the domestic prices by NT$5,000~NT$6,000/ton and cut the export prices by US$30~US$200/ton.
• (China) PMI of manufacturing sector declines in May - more

  Stainless steel prices fall on drop in consumption - Fall in consumption across sectors have led to weakness in stainless steel prices in global markets, according to an assessment by MEPS, a metals consultancy based in UK. - more

  Outokumpu to sell stake in miner Talvivaara - Loss-making stainless steel group Outokumpu will sell its 4.3 percent stake in miner Talvivaara to the Finnish state, as part of a deal to reduce debt and bolster its financial health. - more

  Surigao mining firm disputes DENR suspension order - Mining firm Pacific Nickel on Wednesday disputed the bases of the national government for suspending its operations and export permit in Surigao del Norte, claiming they have not defaulted on their payments. - more

  Sumitomo Gets Nod To Explore Nickel In Solomons - The Solomon Islands Ministry of Mines has tipped Sumitomo Metal Mining Limited above Axiom Company of Australia.Both to explore nickel mining in Bugotu, Isabel province. - more

  Courtesy AISI - In the week ending May 28, 2011, domestic raw steel production was 1,801,000 net tons while the capability utilization rate was 73.7 percent. Production was 1,808,000 tons in the week ending May 28, 2010, while the capability utilization then was 74.8 percent. The current week production represents a 0.4 percent decrease from the same period in the previous year. Production for the week ending May 28, 2011 is down 1.1 percent from the previous week ending May 21, 2011 when production was 1,821,000 tons and the rate of capability utilization was 74.5 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

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