Tuesdy, March 31 (end of the 1st quarter)

• Baltic Dry Index - minus 31 to 1615. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan's Recession Deepens as Jobless Rate Jumps to 3-Year High, Wages Fall // Australian Central Bank Abandons Growth Forecast, Says Recession Is Likely // Asian Stocks Slump, Paring This Month's Rally, on Economic Growth Concerns // Fiat Debt Rating Is Cut to Junk by S&P as Chrysler Strives for Partnership  // European Stocks Rise, Pushing Stoxx 600 to First Monthly Gain Since August // Consumer Confidence in U.S. Stays Near Record Low as Home Prices Decline // U.S. Stocks Gain, Led by Financials as Shares of Lincoln National Advance
• Markets were in a better mood as they closed out the month of March and the first quarter of 2009. Euro traded nearly 3.4 of 1% higher against the US Dollar as traders squared their books, down for the quarter but for the month, the US Dollar ended higher. NYMEX crude was trading 3% higher, but still just barely under the $50/barrel line. Gold ended a tad higher, while silver lost a percent. Assisted by a falling dollar and bullish equity markets, base metals traded higher today. Nickel almost didn't make it according to indicator charts, but a $300/tonne jump at the end of the session helped nickel also end the month in the green. Dow Jones reports three month nickel ended the day, month and quarter at $4.47/lb . The BDI slipped again, down 31 to 1,615 and nickel inventories slipped under 107,000 with a minimum inbound, but a nice withdrawal from Busan. The news out today wasn't necessarily positive, but the bulls were not to be denied a big March. Economists has expected March consumer confidence index to rise to 28 from a 25.3 reading in February,  but job worries kept it at 26. The Case-Shiller 20-city home price index fell a record 2.8% in January, and is now down 29% from mid 2006. And the Chicago Purchasing Managers Index fell to 31.4, much more than expected. In overseas reports, new housing starts plummeted in Japan, unemployment was worse in Germany than expected, and Canada's GDP slipped more than expected. The lone bright spot? Italian retail sales were expected to fall .4%, but they actually only fell by .3%. All in all, government reports showed a dismal outlook, but with 1/2 hour left on Wall Street, the Dow is flirting with a 200 point gain on the day. MarketWatch's perennial bear Paul B. Farrell, in an article titled '6 reasons I'm calling a bottom and a new bull', stated " Unfortunately, markets are notoriously unpredictable, ruled by mobs of irrational investors who are all bad guessers, No one can predict in advance when those "10 worst" or "10 best" days will actually occur. Not on Main Street. Certainly not on Wall Street. Why? In his classic, "Stocks for the Long Run," Wharton economics Prof. Jeremy Siegel studied all the big market moves between 1801 and 2001. Two centuries of data. Siegel concluded that 75% of the time there was no rational explanation for big moves up in stock prices or big moves down. Lesson: Market timing is a loser's game." April will start out with reports on Construction Spending, Motor Vehicle Sales, the ADP Employment Report, and the ISM Mfg Index. More important reports are due out Thursday, with the G-20 meeting expected to get a lot of attention. For metals, the outlook for metals appears to be mostly unchanged, while equity markets could prove far more interesting.

  Base metal production cuts by end-Q1 2009 - The long list of output curbs by mining and metal producers has continued to grow rapidly in the first quarter of 2009. - more

  Stainless steel sheet prices expected to drop - The price average for Type 304 cold-rolled stainless steel sheet dropped to $2,376/ton in March with buyers and other market insiders talking about $2,040 for May deliveries in a flat-rolled market where demand dropped 18% in 2008 and showed signs of sliding further in the first quarter. - more

  Japan exports 20 mt molybdenum oxide to China for the first time - Japan exported 20 mt of molybdenum oxide to China for the first time in February 2009, according to the country's customs data released Tuesday. - more

  Special duty imposed on import of steel - The ministry of commerce and industry has recommended imposition of a special duty on import of cold-rolled stainless steel-a value-added intermediate for stainless steel products following complaints of inflow of under-priced stainless steel into India from countries including China, the US and the European Union by domestic producers. - more

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

• Indicators at 7:30 am CST show 3 month nickel trading around $.01/lb lower, wile all other base metals are slightly higher. Indicator charts show nickel off earlier highs, and bouncy. Metals are being helped by a lower US Dollar this morning, nearly 1% lower against the Euro. NYMEX crude futures show a 2-1/2% gain, but still below $50/barrel. Gold and silver are slightly higher and quiet. In overnight trading, Asian markets needed slightly higher, while European markets are up around 2% this morning. US futures imply Wall Street will open in a better mood than yesterday. Market will be watching a Chicago-area manufacturing gauge report and the Conference Board's consumer confidence report issued today, the S&P/Case Shiller home price gauge for January, and speeches from two Federal Reserve bank presidents.  LME nickel inventories fell a little overnight. Our afternoon update will be delayed again today.  Leaving Monday's entries on front page as there was a lot of news yesterday.    
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Ed is on a trip and his reports are delayed. We had not received by the time we posted our morning update.
• (Sinocast) Asia's largest nickel producer Jinchuan Group Limited aims to yield 500,000 tons of nonferrous products, and obtain operating revenue of CNY 50 billion and a profit of CNY 2.1 billion in 2009.Notably, the company turned out 400,000 tons of nonferrous products, and reaped operating revenue of CNY 55.1 billion and a profit of CNY 4.2 billion last year, double of the profit goal for 2009.
• (ABC) China has secured the first of several major bids to invest in Australian mining firms. The Australian treasurer has given the go-ahead for Hunan Valin Iron and Steel Group to buy up to 17.5 per cent of the Fortescue Metals Group.
• (JMB) Japanese demand of hot rolled special steel products will decrease by 50% to 938,500 tonnes in monthly average in April-June from same period of 2008, which is decreases for 3 quarters in a row, according to Ministry of Economy, Trade and Industry
• Galaxy Resources Limited Consolidates Tenement Holdings in Ravensthorpe - more
• Gladstone Pacific Nickel Ltd: Proposed Merger Agreement Lapsed
• OECD: China's growth may slow to 6.3% in 2009 - more
• (China) Industrial output growth slows to 5.2% in Jan-Feb - more
• Look to reinvest in commodities "around Christmas - more
• Outlook seen mixed for commodities in second qtr - more
• Russia steel protection has suicide look - more
• 6 reasons I'm calling a bottom and a new bull - more
• Economy rescue: Adding up the dollars - more
• A Pitched Battle for Turf Between the Bears and the Bulls - more
• Jay Leno - The market rallied after the Treasury said it was going to help banks sell off their toxic assets. That’s the big problem, banks can’t sell toxic assets. Well, duh. I mean, I’m no economist, but maybe you should stop calling them toxic assets. Huh? Isn’t that like KFC advertising salmonella chicken?

  China's Baoshan Steel says prices to stay low - Baoshan Iron & Steel Co., China’s biggest steelmaker, said product prices will stay at “low levels” in the second quarter as mills haven’t cut production fast enough to cope with the drop in demand. - more

  Strike Two for Antam as Jindal Stainless Backs Out of Smelter Project Investment - PT Aneka Tambang Tbk has suffered another major blow, with India-based Jindal Stainless Ltd. pulling out of a massive smelter project in Southeast Sulawesi, a top Antam official said on Monday. - more

  Intl Ferro may cut jobs; To restart 1 furnace - International Ferro Metals Ltd said on Tuesday it may cut as many as 135 jobs and that all senior employees will take a 10 percent salary reduction because of the difficult economic environment. - more

  Mining projects in Madagascar - The new army-backed president of Madagascar, Andry Rajoelina, said on Monday his administration was reviewing all contracts with foreign investors because the country was receiving too little revenue. - more

  USA's Imports Of Ferro-Alloys In January 2009 Decreased By 31% From That In Dec. / 08 = Imported 73,890 Tons In Total, Imports Of High Carbon FeCr Were On Low Level - more

  Smelter explosions ‘due to sulphur content’ - The water leak and resulting small explosions at the Braemore Resources-Mintek trial ConRoast smelter last week appeared to result from treating high-sulphur material, and solutions were being examined, Tom Curr, the manager of Mintek’s pyrometallurgy division, said yesterday. - more

  India's Commerce Ministry Plans To Levy Anti-Dumping Duty On Stainless Steel- Concerned over an increased level of protectionism, the World Bank has found India to be the most active in initiating anti-dumping measures against imports affecting 19 countries. - more

  Steel anxious to start talks - United Steelworkers has convinced Vale Inco to turn over sensitive financial information to the union and that bodes well for contract talks starting next week, says USW Local 6500 president John Fera. - more

  Base metals to start strong recovery in 2009 - but more pain to come first - A report out from Société Générale today suggests that base metals will outperform precious metals this year and see a good further increase next. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 31 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, March 30

• Baltic Dry Index - minus 32 to 1646. (chart)
• Live dollar trading graph now in lower right corner of this page - (chart of dollar index)
• Headlines - (Bloomberg)  Asian Stocks, U.S. Futures Fall as Geithner Fuels Bank Concerns; BHP Drops // Ireland Loses Top S&P Rating as Crisis Boosts Debt Costs, Swells Deficit // European Stocks Fall as U.S. Warns on Bank Aid; Deutsche Bank, Daimler, BHP Decline// Canada Stocks Drop on Concern U.S. Banks Need More Federal Aid  //  Obama Says GM, Chrysler Have One Final Chance to Restructure or Lose Aid // Geithner Says Some Banks to Need `Large Amounts' of Aid, Warns Against Tax // U.S. Stocks Drop the Most in Three Weeks on Concern Over Banks, Carmakers
• Volatility index jumped up by 5 points today, never good for markets. The US Dollar and Euro ended with the Dollar only slightly higher. NYMEX crude ended down over 7%, while safe haven's gold and silver also ended lower. Base metals, except for tin, all ended lower. Indicator charts show nickel spent a little time in the green, but just barely in early afternoon trading, but the climb out of the morning tank could not hold, and nickel slumped. Dow Jones reports three month nickel ended the day at $4.33/lb . The Baltic Dry Index continues to flounder, down another 32 points, while inventories of nickel stored in LME warehouses rose to over 107,000 tonnes. We have now seen inventories increase by over 7% since passing the 100,000 tonne mark on the 16th. Can't add any comments on the market today. Caught the President's remarks about GM and Chrysler in an airport lobby. Will be visiting a customer tomorrow so morning update should be on time, but afternoon update will be delayed again.

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• The Commodity Tracker - pdf here
• Weekly Forecast by SMM Specialist - here
• Metals & Mining - pdf here
• Weekly Commodity Price Report - pdf here
• ISRI Friday Report - pdf here
• Global Mining News - pdf here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - "The weakness in the equity and commodity markets shown on Friday has spilled over into today. Several negative pieces of economic news came out over the weekend that made investors nervous, which in turn boosted the US dollar on safe haven buying and lowered commodity prices. ... We are currently at $9,500 on nickel, up $25, posting the only positive number in the metals complex today." (read Ed Meir's complete morning base metals report here)
• Minmetals Makes Revised Offer for OZ Minerals - more
• (RFCM) -Norilsk Nickel forecasts revenues at $6.3bn in 2009 - Norilsk Nickel ’s investment plan for 2009 to amount to nearly $1bn
• (JMB) Japanese ferroalloy consumption at steel making process decreased by 4.4% to 2.399 million tonnes in 2008 from 2007, which was the first drop in 0 years, according to Japanese industry association.
• Four Bad Bear Markets - updated daily - graph here

  New Caledonia Nickel Workers Oppose Cut In Hours -An estimated 200 members of New Caledonia’s CSTNC union have held a demonstration outside the government seat, demanding that working hours remain the same at the SLN nickel company. - more

  Stainless steel importers oppose import curbs - The stainless steel importers have opposed any fresh move by the government to curb imports of the alloy, saying it would hit the user industry that needs to ship value added steel to produce export-oriented products. - more

  Spain's Tubacex seeks cut in working hours - Spanish stainless steel tubemaker Tubacex wants staff to cut their hours by 60 percent until the end of the year to cope with falling orders, a company source said. - more

  Japan two major stainless enterprises considered allying - Japan two major stainless enterprises considered allyingMar.30 MetalBi--Nippon Steel&Sumikin Stainless Steel Corporation (NSSC) and Nisshin Steel Corporation were considering forming an alliance and a newly formed holding company would account for 50% share of the Japan domestic stainless steel market. - more

  World's Ni-Based Stainless Steel Prices Bottom Out - The world's transaction prices of nickel-based stainless CR sheets are thought to have bottomed out both in Asia and the West. A case in point is Japanese export prices for Asian destinations, mainly China. - more

  China raises export rebates for HR stainless, silicon steel and CR to 13% - According to a joint official statement issued by the Ministry of Finance and the State Administration of Taxation China will raise export rebates for HR stainless steel, silicon steel and CRC from current 5% to 13% effective as of Apr 1st 2009 - more

  Negotiations On FeCr Price For Shipments In Q2 / 09 Are Carried Over To April = Key Point Is Plan To Raise Electric Power Fee In South Africa - more

  Outokumpu wins China stainless steel deal - Delivers stainless steel to chemical tankers in China - more

  Proto tests nickel laterite treatment - Proto Resources & Investments Ltd is commencing its expanded clean technology test program after 16 months working on new technologies for the treatment of the PLS (pregnant liquor solution) left over once nickel and cobalt have been removed during nickel laterite processing. - more

  Norilsk Botswana Ops Request Voluntary Redundancies - Co Exec - Russian nickel miner OAO Norilsk Nickel said it has requested voluntary redundancies at its Botswana operations as a way to cut costs, the company said Monday. - more

  Baoshan Iron & Steel: Don't See 1Q Loss Amid Weak Market - Baoshan Iron & Steel Co. (600019.SH) doesn't expect to post a loss in the first quarter despite difficult market conditions, General Manager Fu Zhongzhe said Monday. - more

  Fitch Changes Norilsk Nickel Outlook to Negative; Affirms Ratings at 'BBB-' - Fitch Ratings has today changed Russia-based OJSC MMC  Norilsk Nickel's (NN) Outlook to Negative from Stable.  - more

  Couresy AISI - In the week ending March 28, 2009, domestic raw steel production was 1,006,000 net tons while the capability utilization rate was 42.1 percent. Production was 2,140,000 tons in the week ending March 28, 2008, while the capability utilization then was 89.7 percent. The current week production represents a 53.0 percent decrease from the same period in the previous year. Production for the week ending March 28, 2009 is down 2.1 percent from the previous week ending March 21, 2009 when production was 1,027,000 tons and the rate of capability utilization was 43.0 percent.

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures - most days available in this daily report under nickel here (charts and archives)
• London Metal Exchange inventory changes - most days  available this daily report under nickel here (archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Commodities Price - available here
• India Metals Prices - Delhi - March 30 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge.

Friday, March 27

• Baltic Dry Index - minus 36 to 1,678. (chart) (Dry bulk market still point South here)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan Heads for Deflation as Prices Stall, Retailing Falls Most Since 2002 // G-20 Won't Discuss Need for New Reserve Currency, Japanese Official Says // China Chastises West on Stimulus in Leadership Bid Before G-20 Gathering // Asian Stocks Fluctuate; Electronics Makers Advance, Power Companies Drop // Britain's Economy Contracts More Than Estimated on Retail, Building Slump // European Stocks Snap Six-Day Rally; Air France, Philips, Cap Gemini Fall // U.S. Banks Lost $836 Million on Derivatives Trades in First Annual Deficit // Americans' Spending Slows, Confidence Remains Near Low as Job Losses Mount // Fed Buys $7.54 Billion of Treasuries in Second Action to Cut Credit Costs // U.S., European Stocks Drop, Led by Commodity Producers; Exxon Mobil Slides
• Dollar was trading stronger today after comments made by senior Japanese and Russian officials forecast the dollar's status as the global reserve currency would not likely even be discussed at next week's G20 meeting. The euro took a hit after Germany's finance minister, Peer Steinbrueck, warned the euro was at risk if the EU's 'Stability and Growth Pact' isn't adhered too. Currently the Dollar is nearly 2% higher against the Euro. NYMEX crude is lower by nearly 4%, but still over $52/barrel. Gold is down over 1% and silver down nearly 2%. Base metals ended mostly lower on a stronger dollar. Indicator charts show nickel spiked in the green early, then fell as the Dollar gained strength, and made a slight comeback in late afternoon trading. Dow Jones reports three month nickel ended the day at $4.39/lb , down a penny on the day, and down $.11/lb for the week. The Baltic Dry Index ended lower on the day and week. Inventories of nickel stored in LME approved warehouses increased and now stand over the 106,000 tonne mark. That is a 6% increase in just the last two weeks. The news out of the US this morning revealed consumer spending fell slightly in February, while the University of Michigan consumer confidence rose slightly to 57.3 from 56.3 last month. Richard Curtin, director of the Reuters/University of the consumer survey, reported "The good news is that the free fall in confidence has ended. The bad news is that consumers expect their financial situation to remain dismal for the rest of 2009." Bloomberg reported this morning that they are now seven states with unemployment rates over 10%. President Obama is meeting with bank leaders today. Hopefully he is giving advice, and not asking for it. Australia nitched the Chinese takeover offer of copper and gold miner Oz Minerals on national security grounds. Apparently a couple of the mines are located close to an Australian weapons testing ground. We will probably hear more about this, as Australia didn't seem to have a problem letting Russia buy some Australian mines a few years back. Speaking of Russia, they are rattling sabers over their claim to the Arctic region again. Apparently they strongly believe that by their dropping their little flag on the ocean floor, they now own the place. If this is how we claim land today, we might have to go back into history to see who actually planted the first flag on the Arctic Circle. And this would also mean there is no trespassing on our moon!! For all you readers who smoke, keep in mind that the tax on a pack of cigarettes in the U.S. increases by $.62/pack next Wednesday. Geologists are talking about the increased activity of earthquakes in California this week (chart here), while Fargo is fighting a flood, the Plains are hunkered down for a blizzard, and the Southeast is preparing for severe storms. Sorry, metals news was a little light this afternoon, so we thought we would try out being a weatherman. Have a safe and relaxing weekend!! 

  Commodity/Economic Comments

• GFMS - "Although GFMS Metals Consulting has taken a fairly positive stance concerning demand prospects, the problem going forward is the capacity overhang-currently idled capacity, Chinese nickel pig iron capacity, and both greenfield and brownfield expansions. This is likely to procure any return to the bull market conditions seen earlier this decade over our forecast period to 2012..... the capacity will overhang the market for much of the forecast period, which should put a cap on prices even under an optimistic demand scenario."
• (Reuters) The London Metal Exchange said on Friday its dividend per ordinary share, also known as an A share, would be 39 pence and be paid on April 27.
• (Dow Jones) Iron ore miners have struck deals with Chinese steel mills to temporarily sell shipments at 40% discount to last year's term rates, aiming to secure volume even as the miners' biggest customer continues to demand a slash in prices.
• (Dow Jones) Opposition lawmakers walked out of the Zambian National Assembly Thursday in protest at the government's decision to scrap the windfall tax on mining companies, Zambia's Times newspaper reports Friday
• Fed Watch's Tim Duy - “The Fed is well aware that their actions have taken policymakers to a place where no respectable central banker wants to tread. They are clearly worried about the risks to monetary independence from their response to the crisis, and rightfully so. I hope too that they are worried about the precedent that we should accept the Fed as an informational black hole in return for Federal Reserve Chairman Ben Bernanke’s commitment to ensure the trains run on time. Butier is right - such a precedent damages the democratic process, and is a high price to pay.” - more
• If You Thought GDP Was Bad, Wait Til You See GDI - more
• Worst quarter for the economy since the 1930s - more
• Mr. Taleb Goes to Washington - more
• Russian 'Arctic military' plan - more  Report: Russian subs to help stake Arctic shelf - more

  ThyssenKrupp to slim down with revamp by 0october -   German industrial conglomerate ThyssenKrupp will implement a reorganization by October this year in an effort to make Germany's biggest steelmaker leaner and more responsive.... It also said it was not planning to sell it stainless steel division. - more

  Xstrata places all bets on Nickel Rim South - This is going to be a an interesting year for Xstrata Nickel's Greater Sudbury operations. - more

  European steelmakers announce April surcharges (EN 1.4000 = AISI 410, EN 1.4301 = AISI 304, EN 1.4401 = AISI 316)

• ThyssenKrupp - here
• Outokumpu - pdf here
• ArcelorMittal - pdf here
• Acerinox Group - pdf here
• Deutsche Edelstahlwerke GmbH - pdf here

  Beijing mine deal rejected over security - Citing national security concerns, Wayne Swan has knocked back a big Chinese investment in an Australian mining company. It is believed to be the first time the Federal Government has rejected a significant investment on security grounds.- more

  Steelmaker contests IOSHA violations - ArcelorMittal continues to contest the three safety order violations and $2,975 fine issued by IOSHA following a flash fire at its Burns Harbor plant more than a year and a half ago. - more

  US steelmakers want EU-style derogations from climate rules - As US lawmakers prepare to draft the country's emerging climate policy, fears have been expressed by steelmakers and other energy-intensive industries about competitive disadvantage, echoing a debate that has been raging in Europe since the adoption of the EU emissions trading scheme. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:45 am CST show 3 month nickel trading around $.05/lb   lower, with all base metals softer this morning. The US Dollar is trading 1-1/2% higher against the Euro, while NYMEX crude futures are down 2-1/2%. Gold is down 1-1/2% while silver is down 2-1/2%. In overnight trading, Asian markets ended slightly lower, while European markets are also trading lower. US futures show Wall Street should open lower, but they are off earlier lows. The Commerce Department reported this morning that U.S. real consumer spending declined 0.2% in February, due mostly to rising prices, while personal incomes fell more than expected. Consumer sentiment figures will be released in about an hour.  
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Watch - pdf here
• Daily Metals - pdf here
• Metals Intelligence - pdf here
• GFMS quarterly newsletter - pdf here
• EUROFER newsletter - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal futures continued to push higher yesterday, along with oil markets and equities. There seems to be a sea-change in the trading environment for most markets these days, with dips being well supported and rallies allowed to run relatively unchecked. This is playing itself out most dramatically in the US equity markets, where stocks are on track to close out their best month since 1987. More importantly, the recent sell-off in equities, particularly in the last hour of trading, has now been replaced by good buying going into the close. These gains, in turn, set the stage for higher commodity prices, which feed back into equities, and on it seems to go. The sizable price appreciation we have seen in metals over the past few weeks is arguably justified, as the macro statistics out of the US are showing some moderation in the economy’s rate of descent. However, as is usually the case when prices move in an extended direction in the absence of “new news”, things tend to get overdone, and we suspect that we have been close to this point for many of the metals for some time now. We are seeing a modest correction in metals and energy prices today, with lead being off rather sharply on little news. ... We are currently at $9,600 on nickel, down $125, and pushing towards the bottom end of the trading range." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Russian miner OAO Norilsk Nickel said Thursday it plans to produce at least 220,000 metric tons of nickel at its Russian facilities, and cut its copper production by between 4% to 5% and platinum group metals by 3% to 4%...... Norilsk produced 232,302 tons of nickel in Russia in 2008.
• (FT) The London Metal Exchange will on Friday break with 159 years of tradition and propose that members receive a dividend payment for the first time. But the proposal faces opposition at Friday’s annual general meeting from some LME members who support a continuation of the existing system for distributing the profits generated by the exchange.
• (SG) It’s reported that European ferromolybdenum price by last week has dropped to below US$ 21/KG and around US$ 20.5~21/KG due to sluggish demand and high stock level.
• (Rusmet) South Korea's POSCO, the world's No. 4 steel maker, may have to extend its production cut to 30% if market conditions continue to worsen, its new CEO warned on Friday.
• (PIR) Authorities in New Caledonia have on Wednesday eased the alert level for tropical cyclone Jasper, which has started to lose intensity as it slowly moves further away from the West coast of the French territory’s main island, the Grande Terre.
• (JMB) Japanese ferroalloy consumption at steel making process decreased by 4.4% to 2.399 million tonnes in 2008 from 2007, which was the first drop in 0 years, according to Japanese industry association.
• (Interfax) Shanghai-listed Ji'en Nickel Industry Co. Ltd. plans to acquire nickel resources worth a maximum of RMB 100 million ($14.64 million) in northeastern China's Jilin Province this year, the company announced on March 25.
• (Interfax) China's stainless steel mills introduce weekly ex-works pricing - Domestic stainless steel mills, including Shanxi Province-based Taiyuan Iron and Steel Group Corp. (TISCO), have shifted from releasing monthly ex-works prices to making weekly adjustments in order for their prices to better reflect that of the spot market, an industry analyst told Interfax on March 25.
• PBS Frontline - 10 Trillion and Growing - full episode - here
• What's the state of the economy? - more

  Stainless steel output to drop for 3rd consecutive year: analysts - World stainless steel production is likely to register its third consecutive year-on-year fall in 2009, according to analysts speaking this week at Metal Bulletin's Asian Ferroalloys conference in Hong Kong. - more

  Chinese buying spree sparks fears of base metal shortage in Asia - Robust Chinese demand could result in a supply shortage of base metals in Asia even as the rest of the world grapples with low demand, market sources said this week. - more

  Deutsche Bank Raises 2009 Forecasts for Copper, Lead  - Deutsche Bank AG raised 2009 price targets for most base metals including copper on expectations the global economy will stabilize, while cutting calls for next year and 2011 on “a slower than previously expected recovery”. - more

  Steelmakers feel the price pinch due to the narrow gap with global prices - Chinese steelmakers are headed for troubled times as steel products makers are finding it tough to sell their products due to the narrow price gap with global prices, analysts said yesterday. - more

  Miners cut jobs to cut costs - The Minerals Council of Australia has updated its estimated number of job losses in the Australian mining sector to 11,153. - more

  FeCr Plant In Zimbabwe Is Wondered To Be Possible To Resume Its Production - Mugabe President of Zimbabwe visited in last week Kwekwe district and, then, expressed an anxiety for the serious matter, which such two important companies in the industries of Zimbabwe as Zimasco and Ziscosteel have suspended to operate. - more

  MEPS Average Steel Prices Continue to Slide in All Regions in March - Mill outages continue in the US, with operating levels now under 50 percent. - more

  SHFE steel product futures prices may slide next week - analyst  - The prices of newly launched rebar and wire futures contracts on the Shanghai Futures Exchange (SHFE) are expected to slide slightly next week in line with domestic spot prices, an analyst told Interfax on March 27. - more

• Steel Futures Jump in Debut After Eight-Year Wait  - Steel futures jumped on the first day of trading on the Shanghai Futures Exchange, as investors bet that prices and demand for the building material may benefit from the government’s stimulus spending. Steel shares rose. - more

  Norilsk Nickel production remains profitable - General Director of mining and metallurgy giant Norilsk Nickel maintains that his company has positive economic results despite the financial crisis. - more

  Corrosion resistance - Scientists at the US Department of Energy's Brookhaven National Laboratory have patented an ultrathin film that, when used to coat metal surfaces, makes them resistant to corrosion and eliminates the need for hexavalent chromium. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 27 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, March 26

• Baltic Dry Index - minus 26 to 1,714. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Economy Recovering Due to Government's `Decisive' Action, Zhou Says // Taiwan Unexpectedly Keeps Interest Rates Unchanged as Export Decline Slows // Asian Stocks Rise on U.S. Economic Reports, Hutchison Profit; Sony Gains // ECB May Extend Length of Loans to Banks, Buy Private Debt, Papademos Says // Pirates Hijack 2 Chemical Tankers Off Somalia, EU Force Says  // European Shares Drop, Led by Hennes & Mauritz, Retailers; Volkswagen Gains // Geithner Says U.S. Needs `New Rules of Game' to Avert Another Bank Crisis // Economy Contracted 6.3% in Fourth Quarter, Profits Fell Most Since 1953 // Mortgage 30-Year Fixed Rate Falls to 4.85%, Lowest in Freddie Mac Records // Gasoline Tops $2 a Gallon, First Time Since November  // Jobless Rolls in U.S. Jump to Record 5.56 Million in Week; New Claims Rise // Stocks in U.S. Climb, Extending S&P 500's Biggest Monthly Rally Since '87
• Today was one of those odd days, when nearly everything was up, defying typical market logic. The US Dollar is presently trading 1/3 of 1% higher against the Euro. Typically, this is not good news to commodities, but today, they didn't seem to mind. NYMEX crude is trading over 1-1/2% higher, while gold is up less than 1% and silver is up over 1%. Base metals too, bucked the dollar news, and all ended their trading session higher. Indicator charts show nickel opened higher at the bell and spent the first four hours of trading on an steep incline, tempered later possibly by the shift in the Dollar/Euro equation. Dow Jones reports three month nickel ended the day at $4.40/lb . The Baltic Dry Index was down again, slipping 26 points. And inventories of nickel stored in LME warehouses grew to over 105,000 tonnes. Nickel inventories have now grown by over 5% since last Monday. In other U.S. news, initial unemployment claims increased, and the 4th quarter GDP numbers were lowered to a negative 6.3%. While one of the worst quarter's on record, the adjusted GDP numbers were not as bad as some had feared. Retail sales in Great Britain fell harder than expected, German consumer confidence declined for the first time in seven months, and the ECB reported growth of loans to the private sector in the euro zone fell. Had a reader send us a link yesterday on why the new housing sales numbers released yesterday weren't quite the "breath of fresh air" as we had hoped. Here is the graph they sent us (here). In our defense, we plead guilty of trying not to be "so" negative all the time. We said the news was a breath of fresh air, and not something that excited us. A breath of fresh air is like entering a darkened room and finding out it is NOT the bathroom of a local chili sampling facility. Excitement is like entering a darkened room and having an unknown woman start making out with you. Reality is when someone turns on the lights, and you realize its your sister. (our apologies to any of those who felt we are describing your typical Friday night date). We get more e-mail's about the personal comments we make, and while our comments obviously reflect our own personal thoughts on particular matters, we try not to become overly bearish or bullish. We sure don't want anyone to accuse us of being unbalanced ........ newswise, that is.       

  Checked your 401K statement lately?

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• The U.K.-based GFMS Metals Consulting, as reported by the Dow Jones Newswire, forecasts nickel to average $4.74/lb in 2009, with a 21,000 ton surplus. They also predict that the stainless steel industry may rebound in the 4th quarter, which would help nickel demand increase by 15.3% in this quarter, although down 3.3 for the year. They also estimate nickel demand to grow by 9% in 2010 and 2011.
• David Callaway, in a MarketWatch article today - "Depending on how you look at it, Obama's and British Prime Minister Gordon Brown's strategies either will save the world or destroy it by summertime. No middle ground."
• Rio Tinto Mothballs Hismelt Plant For A Year - more
• RBS Sempra Commodities CEO David Messer quits - more
• Macquarie interviews Jim Rogers - more
• Outlook brighter for commodities - more
• Big funds more wary of commods than ever - more
• Commodity Fund’s Assets May Double in 2009, Global Advisors Say - more
• We're In Danger of Being Blinded by Market Bottom Predictions - more
• Who's minding your retirement plan? - more

  Wellington slashes base metal forecasts - It feels like optimism is starting to return to the base metals on the back of China's stimulus package and global monetary easing. But analysts Steve Parsons and Ryan Walker at Wellington West Capital Markets are far from convinced. - more

  Norwegian company gets nickel contract  - INTEX Resources Philippines Inc., a unit of Intex Resources ASA of Norway, got a $2.95-billion government contract on Tuesday to explore and develop nickel reserves in an area straddling the provinces of Oriental and Occidental Mindoro, according to an international non-government organization (NGO). - more

• Atienza confident RP can hit $1-billion investments in mining  - Environment and Natural Resources Secretary Jose L. Atienza yesterday expressed optimism that the Philippines will be able to achieve its original investment target this year of $1 billion instead of its revised target of just $800 million. - more

  Japan steel output seen at 18 mln tonnes in April-June - Japan's industry-wide steel output is likely to come to about 18 million tonnes in the April-June quarter, the same level as in the previous quarter, the head of Japan's steel association said. - more

  Erdene to cut back Mongolian mining - Erdene Resource Development Corp will cut back molybdenum production in Mongolia after prices fell 73 percent since November. - more

  Ahead of the Bell: Steel sector - An analyst cut his earnings estimates for several steel makers Thursday, saying demand has remained low in March, though he believes profits could improve later this year. - more

  Mining firms 'cheat Africa out of millions' - Anti-poverty groups revealed on Wednesday that mining transnationals routinely deprive African countries of huge amounts of tax revenue that could be used to boost social development.- more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:40 am CST show 3 month nickel trading around $.09/lb higher, with all base metals trading solidly in the green this morning. The US Dollar is trading 1/10 of 1% lower against the Euro, while NYMEX crude futures are 1-1/2% higher. Even gold and silver are both trading about 1% higher. In overnight trading, Asian markets ended much higher, the S & P Asia 50 Index up 3%. In Europe, the markets are quiet, and futures show Wall Street should open in the green, although the enthusiasm has wavered some after two reports came out in the last few minutes showing the 4th quarter GDP has been revised down to a 6.3% decline, and weekly initial jobless claims rose 8,000 to 652,000. Ongoing jobless claims rose 122,000 to a record 5.56 million.   
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Metals Intelligence - pdf here
• Commodity Watch - pdf here
• SSINA Announces Election of New Chairman and Vice Chairman - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices lost ground on Wednesday, this despite macro data out of the US that came in far better than expected. ... We seem to be making up lost ground for yesterday's indifferent session by being pushing sharply higher today. ... It seems difficult to stand the way of the advances we are seeing in metals. Dips are turning out to be short-lived, while chart patterns, at least the short-term ones, look constructive. No doubt, markets are teeing off the spate of recent statistics that is signaling some moderation in the rate of descent for the US economy, but as Atlanta Federal Reserve President Dennis Lockhart correctly pointed out yesterday "One month does not make a recovery so we have to be careful not to react too strongly" adding that "most of the data that we follow appears to signal a continuing recession, at least a few more months". That view should keep the upside potential for most metals in relative check, the current improvement in prices notwithstanding. ... We are currently at $9,900 on nickel, up $300; nickel has been largely sitting out the action on both the upside and downside, with charts continuing to show a sideways drift." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Base metals on the London Metal Exchange traded higher in Europe Thursday boosted by a rise in Chinese exchange prices, as analysts said the metals could retest resistance in coming days.
• (Dow Jones) Nickel miners that have shuttered operations because of plunging prices are hoping they can restart mining by 2010, but more production cuts are likely in the meantime with prices remaining low, demand weak and a surplus still forecast for the year.
• A weaker dollar tends to support commodities by making commodities cheaper in other currencies.
• Mettalica defers nickel laterite op study due to mkt conditions - more
• (Yieh) China imported 1.126 million tons of steel scrap in February, up by 62.5 percent compared with last month and up by six times from the same period of last year, which is also the largest monthly import since September 2005.
• (SG) It’s reported that China’s Zhangjiagang Posco formally notified their domestic agent to drop stainless steel 304 base price by RMB400/ton to RMB15,000/ton this week.
• (Asia Pulse) State-owned mining company PT Aneka Tambang Tbk (Antam) in 2008 booked an audited net profit of Rp1.36 trillion (US$118 million) or down 73 per cent from Rp5.12 trillion in 2007.
• (MNP) Metallica Minerals will defer the current feasibility study at its NORNICO project northwest of Townsville until market conditions and nickel prices improve.
• BHP Billiton loses 400 jobs, Rio to close smelter - more
• High River says not to buy Chaya nickel deposit - more
• Patrick Newport, IHS Global Insight - "One key statistic pointing to “better-times-ahead,” however, has bears watching. Last week, the Census Bureau reported that single-family housing permits (which are not influenced by weather as much as other housing numbers) increased 11.2% in February, but today, it revised this increase to 16.1%. Until we get another two positive readings on single-family housing permits, at best we can say that housing has likely hit an inflection point. An inflection means that the market is shrinking, but not in collapse."
• Ian Shepherdson, High Frequency Economics - "Sales remain incredibly weak, but, as with the existing sales numbers, we are prepared to hazard the view that the post-Lehman meltdown is now over and the market is stabilizing. That’s not the same as a recovery, but it is better than continued declines in sales."
• Philippines - January imports down 34.5% at $3.27B
• Steel yourself for the facts - more

  China steel firm axes Indonesian nickel project - A $500 million nickel pig iron project planned for Indonesia has been scrapped, a senior official at Shanghai Tsingshan Mineral Company Ltd, the majority partner in the venture, said on Thursday. - more

  Price Of Domestic Stainless Scrap Rises To Yen 100,000 / Ton For Decreasing Generated Quantity = This Rise Of Domestic Scrap Price Opposes To Policy To Reduce Purchase Price As Adopted By Stainless Mills - In view of the fact that the operation at stainless steel mills to produce stainless steel in January - March quarter of 2009 is anticipated to decline to a low level of 35 - 40% of their nominal capacity, these mills in Japan have shrunken considerably quantities of nickel-based stainless steel scrap (new clippings) to be purchased by them from domestic sources in the quarter. - more

  BHP Billiton weighs up Yabulu nickel refinery's future - BHP Billiton says its Yabulu refinery in Queensland is back to normal operations following a reduction in processing due to the closure of the company's Ravensthorpe mine in January.. - more

  China Ferro-Alloy Output May Fall 20%, Sinosteel Says  - China’s ferro-alloy production may fall by more than 20 percent this year as the global recession cuts demand for steel in the world’s largest producing nation, said Sinosteel Jilin Ferroalloy Co. Ltd. - more

• China steel futures contract joins global race - China will join the race for a global steel benchmark with its first major steel futures contract on Friday, but it will need to thread a fine line to woo both local speculators and big mills. - more
• Asia Steel-China prices rebound 1 pct after falling 6 weeks - Chinese spot steel prices edged up 1 percent after six weeks of consecutive losses, as traders resumed buying on dips after staying away from the market for over more than a month. - more
• Are production cuts the best way to support Chinese steel product prices? - Domestic steel product prices have been falling since early February and remain at a very low level at present, with prices of rebar and hot-rolled coil falling by between RMB 500 ($73.18) and RMB 700 ($102.45) per ton. - more

  Steel Prices in Developing Markets Suffer Contagion From Industrialised Nations - The Turkish steel market has now entered an uncertain trading period. Buyer expectations and successive price revisions by sellers are destabilising market fundamentals. - more

  Scientists patent corrosion-resistant nano-coating for metals - Scientists at the U.S. Department of Energy's Brookhaven National Laboratory have developed a method for coating metal surfaces with an ultrathin film containing nanoparticles - particles measuring billionths of a meter - which renders the metal resistant to corrosion and eliminates the use of toxic chromium for this purpose. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 26 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, March 25

• Baltic Dry Index - minus 18 to 1,740. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan Exports Plunge Record 49% as Deepening Global Recession Saps Demand // Australia to Guarantee States' Debt After Crunch Drives Up Borrowing Costs // Asian Stocks Gain on Policy Optimism; Commonwealth, Tokyo Electric Climb // Netherlands to Boost Spending by More Than $23 Billion to Tackle Recession // Norway's Central Bank Cuts Interest Rate to 2% to Revive Economic Growth // German Business Confidence Declines to a 26-Year Low as Recession Deepens // Porsche Turns to New Lenders in Sign Banks Are Struggling to Extend Credit // European Stocks Rise for Fifth Day, Led by Inditex, Premier; Siemens Falls // Fed Buys $7.5 Billion of Treasuries in Effort to Trim U.S. Borrowing Costs  // Hedge Fund Employee Pay May Decline 25% in 2009 as Investor Fees Evaporate // Geithner Predicts U.S. Dollar to Remain World's Dominant Reserve Currency // Durable Goods Orders, New-Home Sales in U.S. Indicate Less Drag on Growth // Stocks in U.S. Rally, Extending S&P 500's Biggest Monthly Gain Since 1987
• The Dollar dipped against the Euro, now down by 1/2 of 1%, after U.S. Treasury Secretary Timothy Geithner, responding to a question, said he was open to discuss the Chinese proposal to increase the use of the IMF's Special Drawing Rights. He clarified the statement later by insisting the dollar would remain the world's reserve currency, and the Euro is off session high's. NYMEX crude is trading down nearly 1% after the U.S. Energy Information Administration reported crude oil stockpiles rose last week to the highest since 1993. Demand for gasoline continues to increase, and oil is trading off earlier lows. Gold and silver reversed their earlier losing trends and are slightly higher on the aforementioned remark, but they too are off session high's on the clarification. Base metals did a 180 at the announcement from the Commerce Dept today, but the exuberance did not last out the session. Indicator charts show three month nickel lagged early, got a boost with the surprise report, but lost much of the gained ground late. Dow Jones reports three month nickel ended the day at $4.35/lb  . The Baltic Dry Index continues to slip backwards, while nickel inventories stored in LME warehouses grew to over 104,000 tonnes after large shipments hit both Rotterdam and Singapore yesterday. Sucden's day old chart (here) reflects today's trading took the market under the TTL1 trendline, and closing in on the TL3 support line of $9285. The US Commerce Department issued two reports today, both shocking to bearish economists. US Durable Goods and New Home Sales, both which had been expected to fall, instead showed increases. Sales of new homes jumped by 4.7% in February, while Durable Good orders jumped 3.4%. For the doom and gloom crowd, this was like taking a punch in the solar plexis. Typically the 'half empty crowd' can give all sorts of reasons for explaining away any hints of positive economic news, but today their reasons seemed more desperate, than genuine. One even credited tax refund checks for the increases in both? Hey, put away the shotgun and welcome the good news. Maybe civilization as we know won't be coming to an end anytime soon. Or maybe its just a blip on an otherwise gloomy radar screen. Either way, enjoy the fresh air while you can breath it.  Does this mean we have bottomed out? Who knows? The volatility index is still running over 40 points, so there is still a lot of skepticism and fear in the market. BBC, while reporting the increase in factory orders, quoted RBS Greenwich Capital's David Ader as saying "It's not having much of an impact [on the market] and we don't see an effort to interpret it as a sign the economy has bottomed out." Hello?! Maybe he was referring to the markets in Asia because they were already closed for the evening, because US markets were way up on the news, and European markets, that had floundered earlier in the day, went green on the news.  We couldn't help but chuckle when we read the way this Globe and Mail article started "Google Inc. chief executive Eric Schmidt and co-founders Larry Page and Sergey Brin maintained their traditional salaries of $1 last year even as the value of their combined stakes in the Internet search leader plunged by nearly $26-billion (U.S.)." While the US taxpayer has a right to be angry over the AIG bonus scandal, we feel the accusatory structure of this sentence, used when describing these two men having the audacity of taking a whole $1 each from their company's budget, might be pushing things just a wee bit. We know that is not what the author meant, but hey, you gotta smile at how it sounds. And another $1 year employee tells an inside story at AIG, while telling the company to screw (here).

  Commodity/Economic Comments

• Frederic Dickson, chief market strategist, Davidson Companies - "These tidbits of good economic news appear to be adding fuel to the recent stock market rally, suggesting that investors are more optimistic about the timing of a bottom to the recession than economists, who don't see the economy bottoming out until the fourth quarter of this year at the earliest."
• Dan Greenhaus, analyst with the equity strategy group at Miller Tabak & Co - "The depth of the economic decline may be behind us ... Before we all go celebrating the bottom in the economy and the stock market, we mustn't forget that there are still major, major headwinds facing the economy that will inhibit our economic performance going forward."
• Concord Steel to lay off about 100 workers for at least six months - more

  ENRC Sees 2Q Ferrochrome Contracts From $0.70/lb To $0.90/lb - London-listed Kazakh miner Eurasian Natural Resources Corp. chief executive Wednesday said the company expects second- quarter ferrochrome prices to settle between 70 and 90 U.S. cents a pound. - more

  Nickel producer eyeing switch to other minerals as prices drop - Local nickel processor Platinum Group Metals Corp. is looking at venturing into manganese and chromite given the dampened demand and prices of nickel, a company official said.  - more

  Iron ore pricing delayed - Negotiations on the annual benchmark prices for iron ore imports are not likely to conclude before April 1, when a new annual agreement usually comes into effect, according to analysts. - more

  Japan steel output seen at 18 mln tonnes in April-June - Japan's industry-wide steel output is likely to come to about 18 million tonnes in the April-June quarter, the same level as in the previous quarter, the head of Japan's steel association said. - more

  Shanghai Construction Steel Price Graph

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:40am CST show 3 month nickel trading around  $.08/lb lower, with all base metals trading in the red this morning. The US Dollar is now trading down 15/100th's of 1% against the Euro, while NYMEX crude futures are down over 2-1/2%. Gold and silver are both down this morning, gold just barely, while silver is down 1-1/2%. In overnight trading Asian markets ended unchanged, while European markets are trading lower this morning. US futures show Wall Street could open quietly, with no clear direction yet in evidence. Markets could open higher though, as the Fed has just reported that durable goods orders rose 3.4% in February, while economists had forecast a decline of 1.2%. Papau New Guinea got hit with a reported 6.0 magnitude earthquake this morning. News out of the area is limited and sketchy at this point (report). And in New Caledonia, the northern part of the island has been put on as "orange alert" because of Tropical Storm Jasper (map).  Australian regulators have given its nod of approval to the Chinalco-Rio deal.
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Daily Metals - pdf here
• Metals Intelligence - pdf here
• AIIS March 2009 Steel Market Import Survey - doc here
• Preliminary Report US Imports of Steel Products - here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices backed off yesterday after several days of steady gains, as a slight pull-back in US equities, and a general round of profit-taking set in. Trading conditions were rather quiet, and no sparks emanated from testimony given in front of Congress by Treasury Secretary Geithner and Fed Chairman Bernanke. We are seeing a weaker tone set into the metals again this morning, but most of the metals are off their worst levels of the day. The selling comes after Shanghai markets struggled overnight, and despite a weaker dollar and a slightly higher opening call expected for US stocks. ... We are currently at $9,580 on nickel, down $170, with charts continuing to show a sideways drift with a slight downward bias." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Roughly 20% of total global refined nickel production has been cut so far, analysts estimate, but few major cuts have been made since January despite rumors that OAO Norilsk Nickel may taper output at its Africa-based operations, that BHP Billiton Ltd. (BHP) might close its Yubulu refinery in Queensland and that Cuba might curtail production, said Societe Generale analyst David Wilson.
• (Yieh) Korean crude steel production plunged by 25 percent, year-on-year in February, hitting a 10-year low.
• (ABIX) The Supreme Court of Western Australia has begun to hearing allegations of breach of fiduciary duty against former Western Areas Exploration directors David Cooper and Terry Streeter, dating back to the late 1990s. It is being claimed the pair channelled a major nickel deposit discovery away from the company and into their own unrelated venture, Western Areas NL. The original group wants 10 million shares in the new one as compensation.
• (NY Times) The European bank does not deny that Europe faces a painfully deep recession. It is projecting the economy of the 16-nation euro zone could contract by up to 3.2 percent in 2009, while its best-case scenario for 2010 is an anemic 0.7 percent growth. Joblessness is expected to rise sharply. (source)
• Commodities: Big Picture - more
• Japan exports, imports dive as demand shrivels - more
• ENRC sees 2009 iron ore prices falling 30-40 pct - more

  China to raise export tax rebates on Apr 1 -Xinhua - China will raise the tax rebate rate on exports of some textiles, iron and steel, non-ferrous metals, petrochemicals, electronic information and light industrial goods from April 1, the Xinhua news agency said on Wednesday, citing an announcement from the State Council. - more

  Nickel mining a ‘lonely’ industry - “Lonely” was how Western Areas managing director Julian Hanna described the state of the nickel industry yesterday at the official opening of the group’s $30 million Cosmic Boy concentrator - more

• Albidon teeters on brink of collapse - The future of nickel miner Albidon is still in doubt after the company said it had been unable to secure agreement from its senior lenders and unsecured creditors for a $US23.8 million ($34.7 million) funding deal with China’s Jinchuan Group. - more
• Concentrating on nickel - The Western Australia Minister for Mines and Petroleum Norman Moore yesterday officially opened the Forrestania Nickel Concentrator, the Western Areas board announced. - more
• Global Nickel drops medical acquisition - Subiaco-based Global Nickel Investments says it will look for other takeover opportunities after it dropped its planned acquisition of a medical device company. - more

  Australia antitrust body clears Rio-Chinalco deal - Australia's competition watchdog cleared Rio Tinto Ltd's $19.5 billion tie-up with China's state-owned Chinalco, clearing one obstacle to a deal that still needs the approval of the finance minister. - more

  Ambatovy Nickel Project / Madagascar Is Not Affected, Monitoring Closely Its Movements = Attitude For Political Turmoil Adopted By Sherritt / Canada As Major Shareholder - Sherritt International Corporation (Sherritt) of Canada has been developing the Ambatovy nickel project in Madagascar and, in relation to the political turmoil suddenly emerged on the 17th March of 2009 in Madagascar, Sherritt said that the Ambatovy nickel project has not been affected by this political trouble in Madagascar but we are keeping an eye on it. - more

  Turkey: Arab Iron and steel imports up 37% yoy in Feb-March 09 - Arab imports of the Turkish iron and steel products amounted to more than 1.972 million tonnes during February and March 2009 compared to 1.441 million tonnes during the same period in 2008, with an increase of 36.8%. - more

  Iron Ore Benchmark System May Be Scrapped, Deutsche Says - The annual iron price benchmark contract system may be scrapped as producers seek individual arrangements, Deutsche Bank AG said. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 25 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, March 24

• Baltic Dry Index - minus 15 to 1,758. (chart)  (Article) "Tanker market facing toxic mix of oversupply and weakening demand"
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Bank of China Fourth-Quarter Profit Drops 59% on Mortgage, Loan Writedowns // Yen Weakens to Five-Month Low as U.S. Bank Plan Spurs Higher-Yield Demand // China Yuan Forwards Signal Appreciation for the First Time in Six Months // Baltic Currency Pegs Are `Burning Fuse' as 50% Devaluation Looms, RBS Says // U.K. Inflation Unexpectedly Rose to 3.2% in February on Food Costs, Pound // European Shares Rise for Fourth Day; Deutsche Bank Gains, Rio Tinto Falls // Geithner, Bernanke Call for New Wind-Down Powers After AIG's U.S. Bailout // U.S. Stocks Retreat After Rally; Citigroup, Alcoa, Newmont Mining Decline
• The US Dollar continues to trades around 1/2 of 1% higher against the Euro, while NYMEX crude has slipped over 1-1/2% to under $53/barrel. Gold is down nearly 2% to nearly $922/oz, while silver is lower by nearly 2-1/2%. With little else to guide them today, base metals took their cue from the rising dollar and all ended in the red. Indicator charts show nickel started trading a little lower and traded within a fairly narrow band for the entire session. Dow Jones reports three month nickel ended the day at $4.41/lb . The Baltic Dry Index slumped again, down 15 points, with iron ore shipments from Australia reportedly keeping it from sinking faster. Nickel inventories reversed the last two days of decline, with a large gain taking totals to over 102,500 tonnes. Cancelled warrants also declined. Wall Street spent most of the morning lower, but in the last half hour, has gone green.... now back in the red..... Market Watch's daily 'The Technical Indicator' advised subscribers today that in their opinion, the current bear market rally still has some gas too it, before it inevitably fades. Roelof van den Akker, technical analyst at ING Wholesale Banking, told CNBC that they wouldn't be surprised to see new lows on the S & P in the coming weeks, with long term support around 600 (it bottomed out at 666 two weeks ago). Kirby Daley, senior strategist at the Newedge Group to CNBC that the rally on Wall Street is not part of a new bull run. Edward Harrison, writing on the naked capitalism blog, stated "I do not believe that Barack Obama will get another chance at stimulus or at bailouts if the economy sinks. He has expended too much political capital in achieving what he has achieved thus far. This is why I have decided to get onboard with this package. Honestly, I do not think it will be entirely successful - the writedowns in commercial real estate for one are too many. But, too much time has passed and there is zero opportunity for another solution at this point. The Geithner plan is all that we are going to get for the majority of 2009. So we better hope it works." Treasury Secretary Tim Geithner to House Financial Services Committee today - "I share the anger and frustration of the American people, not just about the compensation practices at AIG and in other parts of our financial system, but that our system permitted a scale of risk-taking that has caused grave damage to the fortunes of all Americans." Charles Evans, president of the Chicago Fed, today - "I expect that before the year is out, we'll see positive growth rates for the GDP in the U.S. but it will not feel especially good because the unemployment rate is likely to going to keep going up and the labor market won't truly improve until the beginning of 2010." Unidentified American opening his quarterly 401K statement today - "*&^%#@ ?+%# !!" 

  Commodity/Economic Comments

• (RBC) Novolipetsk Steel estimates its steel production at roughly 10m tonnes in 2009, the Russian rolled steel producer indicated in a statement today. NLMK's steel output is projected to reach 2.1m tonnes in the first quarter of the year, which is 21 percent greater than in Q4 2008.
• (MB) Outokumpu will suspend ferro-chrome production at its Kemi mine in April this year due to low orders, a company spokesman told MB.
• (Fed) U.S. home prices rose 1.7 percent on a seasonally-adjusted basis from December to January, according to the Federal Housing Finance Agency’s monthly House Price Index. December’s previously reported 0.1 percent increase was revised to a 0.2 percent decline. For the 12 months ending in January, U.S. prices fell 6.3 percent. The U.S. index is 9.6 percent below its April 2007 peak.
• U.S. Seeks Expanded Power to Seize Firms - more
• Keeping hope alive Commentary: Bear market rallies can be violent and exciting - more

  Norilsk Says Nickel High Enough to Maintain Spending, Output - OAO GMK Norilsk Nickel, the world’s largest miner of the metal, said prices are high enough for it to maintain spending and output, bucking an industry trend that is forecast to result in the largest ever production cuts.  - more

  Outokumpu to temporarily lay off 1,830 staff  - Finnish stainless steel maker Outokumpu Oyj said on Tuesday it would temporarily cut 1,830 staff at its Tornio, Finland site and halt some production due to weak demand, sending its shares lower. - more

  Universal Stainless sees Q1 loss - Universal Stainless & Alloy Products Inc revised its outlook for the first-quarter and said it now expects to post a loss, partly due to lower orders and a drop in surcharge revenue. - more

  Global Molybdenum Supply May Have Deficit in 2011, Erdene Says - Steelmakers will struggle to secure supplies of molybdenum, used to toughen the metal, in 2011 as the economic crisis spurs producers to shelve 100 million pounds of new supply, said Erdene Resource Development Corp. - more

  Senator Barnaby Joyce launches petition against miner - The petition comes after it emerged that Prime Minister Kevin Rudd held private talks with China's fifth most powerful man - Li Changchun - on Saturday. - more

 Other Steel News

• Nigeria: Pensioners Threaten to Shut Down Delta Steel Company - Over 4000 irate pensioners of Delta Steel Company (DSC), Ovwian-Aladja in Delta State, yesterday stormed Government House, Warri and the Steel Township with placards, threatening to shut down the company if the federal government failed to pay their 45 months pension arrears. - more
• Russia Novolipetsk posts Q4 loss, sees weak Q1 - Russia's Novolipetsk Steel (News) slid to a fourth-quarter net loss and said steel markets continue to deteriorate, which will impact its results in the current quarter, sending its shares lower. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:35 am CST show 3 month nickel trading around $.06/lb lower, with all base metals trading in the red this morning. The US Dollar could be the culprit behind this, as it is trading over 1/2 of 1% higher against the Euro. NYMEX crude futures are 1% lower, and gold and silver are trading about 1-1/2% lower. In overnight trading, Asian markets ended solidly higher,  while European markets appear to be in a holding pattern. Wall Street futures reflect a potential lower opening, as traders take some profits after yesterday's 497 point gain on the Dow. The S & P is up 23% from its 666 low just a few weeks ago. Fed Chairman Ben Bernanke and Treasury Secretary Timothy Geithner will testify before the House Financial Services Committee today, in reference to the AIG bonus scandal. And President Obama will speak to the nation this evening.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Daily Metals - pdf here
• Metals Intelligence - pdf here
• Global Mining News - pdf here
• The Commodity Tracker - pdf here
• Commodity Observatory - pdf here
• Weekly Forecast by SMM Specialist - more
• China Commodities Weekly - more
• AIIS February 2009 Steel Market Import Survey - doc here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals prices pushed higher yesterday, as copper prices touched a 4-1/2 month high on Monday, but compared to the goings-on in the US stock market, the action was pretty tame. The Dow closed up by an impressive 497 points on the day, capping its biggest two-week advance since 1938, as investors were encouraged by a Treasury plan ... In terms of today's trading action, metals are off across the board, with copper giving back about three-quarters of yesterday's gains after Shanghai snapped a seven-day winning streak and closed lower. The rest of the metals are also quite weak, with lead and zinc bearing the brunt of the selling. ... We are currently at $9,700 on nickel, down $150 and still in a very uneventful trading range. " (read Ed Meir's complete morning base metals report here)
• (SBB) Turkish largest ferro-chrome producer Eti Krom has decided to stop production due to weak market conditions and low demand, Steel Business learns from the company.
• (Yieh) According to the French Steel Federation, the steel production in February has dropped significantly due to the economic crisis. The crude steel production in French totaled 1.026 million tonnes in February 2009, down by 35.7% YoY.
• World trade to plunge 9% in '09: WTO - more
• (FT) China’s central bank on Monday proposed replacing the US dollar as the international reserve currency with a new global system controlled by the International Monetary Fund.
• Aronstein Turns Commodity Bull After Picking 2008 Top - more
• Toyota, Honda Cut Auto Output as U.S. Demand Falls - more
• Cosatu threatens to strike over Eskom tariff request - more
• Bank of China Q4 earnings down 58% - more

  Stainless Steel Output May Fall By at Least 10%, Recyclers Say - Stainless-steel producers will probably cut output by at least 10 percent this year because there are few signs that demand will strengthen any time soon, the Brussels-based Bureau of International Recycling said. - more

  Vale trying to lower project costs, sees Goro in Q2 - Brazil's Vale continues to look for cost savings at its key projects and expects two nickel mines under construction will produce metal in the next few months, a company spokesman said on Monday. - more

  Steel Production Cuts: A Global Perspective - The steel industries of each producing country are all curbing output at different rates during the global economic slowdown, and thus a snapshot of each nation's production cuts is helpful to interpreting the health of the steel industry. - more

  Mines Minister Norman Moore opens new WA mining plant - Western Australia's newest nickel processing plant was officially opened by Mines and Petroleum Minister Norman Moore today. - more

  Courtesy AISI - In the week ending March 21, 2009, domestic raw steel production was 1,027,000 net tons while the capability utilization rate was 43.0 percent. Production was 2,140,000 tons in the week ending March 21, 2008, while the capability utilization then was 89.7 percent. The current week production represents a 52.0 percent decrease from the same period in the previous year. Production for the week ending March 21, 2009 is up 5.3 percent from the previous week ending March 14, 2009 when production was 976,000 tons and the rate of capability utilization was 40.9 percent.

• US ferrous scrap export prices slide; volumes off - US ferrous scrap export activity continues to slow as sources tell Platts of falling prices in India and declining demand from China. - more

  Finnish steel company Outokumpu announces job cuts at Tornio Works - Finnish steel maker Outokumpu Oyjhas concluded statutory negotiations at its Tornio Works in Finland, resulting in temporary lay-offs for most of the employees, the company said on Tuesday (24 March). - more

  Norwegian firm gets nod for S. Luzon nickel project - The environment department yesterday approved the mining permit of Oslo-based miner Intex Resources ASA for a nickel project in southern Luzon. - more

  ZIMASCO applies for exemption from duty - The Zimbabwe Mining and Smelting Company has applied for exemption from payment of royalties, levies and import duty as part of efforts to restore viability, an official said. - more

  Posco Q3 production losses may hit 1M tons - Posco, Asia’s third-biggest steelmaker, plans to extend output reductions made from December into the second quarter amid “weak” demand from automakers and builders. - more

  African Eagle extracts high nickel at Tanzania project - African Eagle Resources Plc , a mineral exploration and development company, said on Tuesday leach test results at its Dutwa project in Tanzania confirmed good nickel recovery, sending its shares up as much as 19 percent in early trade. - more

  Mining service cos see recovery after gloomy 2008 - Mining service companies are beginning to see a recovery in their order books, the first green shoots of confidence in an industry slammed by the global economic downturn. - more

  Poseidon Nickel Moves To Take Over Cawse Nickel / Western Australia= Negotiating With Norilsk Nickel / Russia - According to an information from Australia, Poseidon Nickel is moving to take over Cawse Nickel in Western Australia (its parent company is Norilsk Nickel in Russia). Poseidon Nickel is a mining company and its real power has been held by Mr. Andrew Forrest said as a billionaire, who has made a fortune by having taken a chance on the boom of material resources. - more

  Rio Tinto sees iron ore price drop, but not 50 pct - Iron ore prices are certain to fall in 2009, the first decline in seven years, but not by the 50 percent suggested by some steel makers, Rio Tinto RIO.A said on Tuesday. - more

  Russian authorities to scrutinize Norilsk Nickel deals - paper - Russian authorities have decided to examine the financial position of Norilsk Nickel and its transactions carried out in favor of shareholders, a business paper said on Tuesday. - more

  Thread Gaging Reference Guide - pdf here

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, March 23

• Baltic Dry Index - minus 9 to 1,773. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China to Keep Buying Treasuries, Backs Dollar's Role, SAFE Official Says // `Bull-Market' Equities Rally Has Begun, Templeton Asset's Mark Mobius Says // Japanese Home Prices Slump to 24-Year Low as Recession Curbs Jobs, Wages // Asian Stocks, U.S. Futures Rise on Optimism at Governments' Growth Efforts // Euro Currency of Choice as Quantitative Easing Drives Dollar Depreciation // Stocks in Europe Gain on U.S. Asset Plan; Deutsche Bank, BNP Paribas Climb // US Home Resales Unexpectedly Increased in February // Treasury Announces $1 Trillion Public-Private Plan to Buy Banks' Bad Debt
• The US Dollar, which was beaten badly last week, is trading 5/100th's of 1% higher against the Euro. NYMEX crude is up nearly 3-1/2% and near $54/barrel. Gold is slightly lower, while silver is slightly higher.  Base metals ended mixed, with indicator charts showing nickel opened higher in pre-market trading, but slipped into a very narrow band for the trading session. Dow Jones reports three month nickel ended the day at $4.47/lb . The Baltic Dry Index continues to slide, but is showing signs of turning positive this week. Nickel inventories stored in LME warehouses slipped for a second day, with cancelled warrants slipping under 1%. This could indicate slowing production is finally showing up in the warehouse numbers, but demand is slowing also. If a person were to look at the headlines this morning, one might assume the existing home sales report issued this morning, was a ray of sunshine. In reality, you have to stretch to make it that way. While the media is reporting sales increased 5.1% over January, they could easily say "sales fell 4.6% from a year ago". They might also remind readers that foreclosures are running 30% higher than this time last year, 45% of all sales were classified as 'distressed properties', or national median existing-home price for all housing types was 15.5% lower than this time last year. Or they could mention the inventory of available houses continues to grow, and now stands at a 9.7 month supply. But ok. Existing home sales rose 5.1% from a dreadful January last month. Treasury Secretary Tim Geithner announced his new plan (here) this morning to get toxic assets off the bank books, and in response, Wall Street took on the appearance of the running of the bulls festival in Pamploma, Spain. We don't understand the full particulars of the proposal, and doubt you would care what our opinion was, if we had formed one. But we were always under the impression that the Federal Deposit Insurance Corp. (FDIC) role was to protect 'bank liabilities', not to protect 'bank assets'. So we are curious to see exactly how their role in this will play out. And the Federal Reserve is so busy printing money these days, we are surprised they have time to get involved in yet another plan. From reading the responses to this plan on financial forum's, it is difficult to "separate the wheat from the chaff", as the general expression of deep anger and resentful mis-trust for the government's handling of anything these days, makes it difficult to tell the fact based opinion's from those prejudiced by personal belief's. Toxic asset? Is that anything like alimony payments? Price we pay for risky decisions we made in the past that didn't quite work out like we had hoped? If true, then we, the taxpayer's are the new groom, some would say sucker, who comes along to negate the ex's mistake, by, some would also say, by making a similar mistake. Will it work? Anyone notice the name of the volcano that erupted in Alaska today. Mount Redoubt. Last time Tim Geithner announced a bank plan, the markets fell 4%. Today he is up nearly 4%. All of these programs seem to be introduced with one goal in mind - get the banks to borrow again, as if that were the magic pill the economy needed. We wonder if it's not so much the unwillingness on the banks part to lend money, as it is the inability and unwillingness of people and business' fearful for their own future, to take on the risk of a loan. Nothing like watching your 401K lose half its value, your house lose 15% of its value, and your hard working neighbor lose his job, to make you want to run out and buy a new bass boat. After solid gain's on Wall Street, the bottom callers are climbing out of their caves once again. Hope they are right, but we heard the same back in November, after the market tanked in October. It was interesting to read GoldMoney's James Turk in his Sunday's "Freemarket Gold and Money Report"  echo nearly verbatim what we said last week about the Fed's decision - "How bad is it out there that the Fed would take this big gamble to risk hyperinflating the dollar to try saving insolvent banks? What does Bernanke see that he would expand the Federal Reserve's balance sheet by another $1.2 trillion? What is he not telling us?". Oh well, whatever happens, we can not help but think back to the words of the great Winston Churchill who is said to have stated "America will always do the right thing, but only after exhausting all other options."

  Reports

• Weekly Commodity Intelligence - pdf here
• Commodities Daily - pdf here
• Weekly Commodity Price Report - pdf here

  Commodity/Economic Comments

• Chinese jobless reemployed while steel workers protest - more
• Mobius Says Bull Rally Has Begun as Emerging Markets Erase Loss - more
• Europe’s Exports to U.S. Drop 4%, the Most in 5 Years - more
• Paul Krugman NY Times - "The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved."
• Treasury Secretary Tim Geithner to WSJ - "We cannot solve this crisis without making it possible for investors to take risks. While this crisis was caused by banks taking too much risk, the danger now is that they will take too little. In working with Congress to put in place strong conditions to prevent misuse of taxpayer assistance, we need to be very careful not to discourage those investments the economy needs to recover from recession."
• The New New Plan — Same As the Old Plan. - more
• Bloomberg - Economists surveyed by Bloomberg this month projected the economy will continue to contract at least through the first half of this year and that unemployment will climb to 9.4 percent by the end of 2009 and remain elevated through at least 2011.

  China to cap steel output at 460m tons in 2009 - China plans to cap its crude steel output at 460 million tons in 2009 and at around 500 million tons in 2010 as it pushes the world's biggest steel industry to get into shape. - more

• China Steels Itself To Become Leaner And Meaner - Merging inefficient steel makers will enable the country to command a larger role in the global market for the metal. - more

  EU crude steel production slightly improved - Crude steel production in the European Union increased slightly from January to February 2009. According to preliminary statistics from the World Steel Association, output from the 27 EU member states totalled 10.06m tonnes in February. - more

  US mining giant still paying Indonesia military - US-based mining giant Freeport McMoRan is paying Indonesian troops to protect a large gold and copper mine in Papua, despite regulations requiring the military to hand over to police. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:45 am CST show 3 month nickel trading around $.01/lb lower, with most base metals trading higher. Three month nickel ended Friday at $4.51/lb, three cents lower than Thursday's close. The US Dollar is trading slightly weaker against the Euro, by 4/100 of 1%, while NYMEX crude futures are trading a little over 1/2% higher. Gold and silver are both trading less than 1/2 of 1% lower. In overnight trading, Asian markets ended markedly higher, with European markets strong this morning, and US futures up almost 200 points. U.S. Treasury Secretary Timothy Geithner released details this morning about the government's latest plan to help rid banks of toxic assets clogging the financial system, which markets initial reaction to is very positive. Don't be surprised if base metals attempt to play catch up to this equity bull stampede.   
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• ISRI Friday Report - pdf here
• Weekly Scoreboard - pdf here
• Metals & Mining Weekly - pdf here
• BNP The Base Case - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "There are a number of crosscurrents swirling around metals for the moment, and it is very difficult to judge whether the current rally will sustain itself. ... We are currently at $9,950 on nickel, down $25 and still trapped within a very uneventful trading range. A small rally seen in nickel on Friday did not go anywhere and faded later in the day." (read Ed Meir's complete morning base metals report here)
• (Interfax) China's imports of both refined lead and zinc rose on an annual basis over January and February, while the country's exports of refined lead, zinc, nickel and tin tumbled, according to figures released by the General Administration of Customs on March 23.
• China Feb Base Metals Table Of Trade Data - more
• (JMB) Japanese raw steel output is expected to keep less than 20 million tonnes for April-June as January-March.
• (AMM) North American Stainless Inc. (NAS) is raising prices on flat-rolled stainless products that it has in stock.
• Carpenter to Close UK Facility; Lowers Outlook - more
• Commerzbank Says German Economy to Shrink as Much as 7% in 2009 - more
• Momentum is with base metals - more
• The 'False" Commodity Boom - more

  Metals Insider: Fed's shock and awe tactics rout bears - The U.S. central bank sprang a big surprise on financial markets last Wednesday, provoking an instantaneous and wholesale reappraisal of the global financial landscape. - more

  Hernic Says 2nd-Quarter Ferrochrome Talks Delayed  - Hernic Ferrochrome Ltd., which shut the last of its four furnaces in January, said quarterly price talks will probably be delayed until next month because sales volumes have plunged. - more

  South Africa: Commodity Prices 'Set to Soar' - Mining group Xstrata on Friday said cutbacks in mineral production in response to the global recession could come back to haunt buyers as prices rise significantly due to shortages once demand recovers in response to a raft of stimulus measures implemented to deal with the global recession. - more

• ArcelorMittal Says U.S. Steel Upturn to Start 2nd-Qtr  - ArcelorMittal, the world’s biggest steelmaker, expects steel markets in North America and Brazilian to start recovering from the current slump in the second quarter. - more
• Traxys Says Industrial Metals Demand to Rebound in 6-12 Months - Demand for industrial metals will rebound in 6 to 12 months as efforts by governments and central banks to revive economic growth feed through to increased consumption, according to trader Traxys SA. - more

  China steel industry stimulus plan to promote M&A - Chinese government released on March 20 the Three-Year Stimulus Plan for Steel Industry, which focuses on promoting enterprise merger & acquisition, eliminating backward production capacities and controlling overall output. - more

  BlueScope, OneSteel May Increase Output Cuts, Deutsche Says - BlueScope Steel Ltd. and OneSteel Ltd., Australia’s largest steelmakers, may need to increase production cuts as domestic demand may fall 30 percent this year, Deutsche Bank AG said. - more

  Nippon Steel, BMA agree 57 pct cut in coal price - Nippon Steel Corp has sealed a year-on-year discount of around 57 percent on coking coal contracts with BHP Billiton Mitsubishi Alliance for fiscal year 2009/10, a Nippon Steel official said on Monday. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 23 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, March 20

• Baltic Dry Index - minus 13 to 1,782. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• There will be no wrap-up posted today as we will not have internet access. Nickel is down a whooping penny at 12:30 pm EST. We apologize for the inconvenience and wish all our readers a safe and restful weekend.

  EU steel makers: 1 in 6 jobs lost or cut back - European steel makers said Friday that one in six workers have lost their jobs or are working shorter hours as demand for steel has collapsed. - more

  Global steel output tumbles in Feb as outlook worsens - Global crude steel production tumbled 22 percent year-on-year in February to 84 million tonnes as steelmakers cut output sharply due to falling demand. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:40 am CST show 3 month nickel trading around $.01/lb lower, with other base metals mixed and quiet. The US Dollar is recovering a little ground this morning, up nearly 1/2 of 1% against the Euro, but will likely end much lower for the week. NYMEX crude futures are down nearly 2% but still over $50/bbl. Gold and silver are down around 1% on a stronger dollar. In overnight trading, Asian markets ended lower, and this morning, European markets are slightly lower. US futures are slightly positive, but struggling. No reports out of the US today, but industrial production in the EU fell less than expected, and retail sales climbed higher than expected in Canada.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Daily Metals - pdf here
• SSINA Releases Market Date for December 2008 - pdf here
• EUROFER Newsletter Issue 04 - March 2009 - pdf here
• GFMS Quarterly Newsletter - pdf here
• February 2009 Crude Steel Production | - pdf here
• World Crude Steel Production as of January 2009 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal markets are mixed as of this writing, and are not looking as robust as they did yesterday. Oil prices are lower, and US stocks are also expected to open down as well, so for the moment, the metals that are currently higher seem to be on their own. The dollar is slightly stronger today, and perhaps having something to do with the more restrained tone. ...  We are currently at $9,975 on nickel, down $30 and trapped within a very narrow trading range. Charts still look indecisive." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) The Philippine government and Intex Resources ASA (ITX.OS) will sign on Monday a 25-year contract that will allow the company to mine for nickel in the provinces of Mindoro, south of Manila, a senior official of the Mines and Geosciences Bureau said Friday.
• Malaysia to become largest stainless steel player in Asia - pdf here
• Spain January Industrial Orders Tumble 30% On Year - more
• ThyssenKrupp to cut more than 3,000 jobs: report - more
• China posts annual govt budget online for first time - more
• China's big recycling market is sagging - more

  Moly oxide prices down on slow demand, reduced China buying - Molybdenum oxide and ferromolybdenum prices eased this week amid weak demand in Asia, Europe and North America and on signs that Chinese buying of oxide may be slowing, market participants said Thursday. - more

  Hernic Ferrochrome CEO, says all furnaces shut down - South African ferrochrome producer Hernic said on Friday it shut all its four furnaces at the start of this year owing to weak demand for the steel-making ingredient, and expects the market to recover well after June. - more

  Steel prices ease on slow inventory rundown - Chinese spot steel prices edged down 0.4 percent, falling for a sixth consecutive week, as inventory rundown remained slow due to sluggish demand from end users and slumping exports. - more

  Coking-Coal Price Struck at $115-$125, Citigroup Says  - BHP Billiton Ltd., the world’s largest miner, agreed with Nippon Steel Corp. to benchmark coking coal prices of $115 to $125 a metric ton, Citigroup Inc. said, a reduction of as much as 62 percent from last year.  - more

  Metallic Glass Will Replace Stainless Steel - Titanium is best known for being one of the toughest materials out there, but no one could have imagined that it would end up being used to replace glass, in applications that demand strong and transparent materials. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 20 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, March 19

• Baltic Dry Index - minus 66 to 1,795. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) India Inflation Cools to Slowest in Two Decades, Giving Room for Rate Cuts // Coke's Failed Bid Shows China Joins U.S., EU Enforcers as Deal Gatekeeper // Asian Stocks Rise on Federal Reserve Bond Plan; Commonwealth, Zijin Gain // Germany Unlikely to Find Way to Fix Toxic Bank Assets Soon, Otremba Says // Russia Won't Print Money to Cover Deficit That May Last Years, Putin Says // European Stocks Gain on Fed Plan; UBS, Xstrata, Prudential, Hermes Advance // `Rambo Fed' Pledges Treasuries, Mortgage-Debt Purchases to Combat Crisis // Auto Suppliers to Receive $5 Billion in U.S. Aid to Help Avert Bankruptcy // Dollar's Rally Crumbles as Fed Ramps Up Printing Presses to Revive Economy // Stocks in U.S. Fall on Skepticism Over Fed Bond Purchases; JPMorgan Drops
• A sentence from a Bloomberg article pretty much draws a pretty potent picture of commodities trading today. "Every commodity in the Reuters/Jefferies CRB Index of 19 prices climbed, while the dollar tumbled." The Euro continues to trade higher against the US Dollar, by over 1-1/2% and off session highs. NYMEX crude is trading 5% higher, also off session highs. Gold up 1-1/2% and silver up over 4%, both off session high's. Base metals all ended higher, but they too closed off session high's. Indicator charts show three month nickel jumped higher at the start of the day, and for the most part, held its own thru most of the day, trading in a $300/tonne range. Dow Jones reports three month nickel ended the day at $4.54/lb . The Baltic Dry Index fell once again overnight, but the slide could be slowing. Nickel inventory growth shows no such sign of slowing, and is approaching 102,000 tonnes. Sucden's day old nickel chart (here) shows nickel broke out of a trendline squeeze on Monday, with RSI and SStoch not giving much promise for any major movement today. But London trading had ended for the day, when the Fed shocked the markets with its bombshell yesterday. The dollar took a hard dive, and metal traders knew where base metals would head when markets opened today, no matter what the charts might have forecast. Wall Street is fumbling around today, looking for its legs. US equity markets opened higher but have since fallen into the red.  Markets are still trying to decipher all the implications of the Fed announcement yesterday, and economists and analysts are debating. Suppliers to US auto makers got a $5 billion bailout today. It's amazing how the thought of any government bailing out a private business would have had us muttering things like 'socialism' in years past. Now our government is passing out bailout dollars like candy at a Christmas parade. Who's next? Home builders and their suppliers? Analog tv makers and their suppliers? Rotary telephone makers and their suppliers? At this rate, who knows, one day they could even be bailing out the banks! What? They did?! Oh, we are so screwed.   

  Commodity/Economic Comments

• (Dow Jones) Russian steel output decreased 35% on the year to 8.2 million tons in January-February, the Federal State Statistics Service said in a report obtained by Prime-Tass news agency Thursday.
• (CRU) Vale has temporarily closed the Agua Limpa iron ore mine in Minas Gerais, southeast Brazil.
• Warwick sells nickel project - more
• EU rejects idea of more stimulus - more
• Global crisis brings threat of protectionism - more
• Will Chinese growth rebound and revive the shipping markets? - more

  Expert: China's steel exports may contract 80% - China's steel exports could contract 80 percent by volume this year, more than the previously forecast 50 percent, a senior domestic industry expert told an industry conference Wednesday. - more

• China's non-ferrous metal industry profits down 45% in 2008 - The aggregate profit of China's non-ferrous metal producers fell 45 percent last year to 80 billion yuan (11.73 billion U.S. dollars), the China Nonferrous Metals Industry Association said Thursday. - more

  Updated Shanghai construction steel price graph

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:40 am CST show 3 month nickel trading around  $.11/lb higher, with all base metals trading solidly in the green. The Euro continues to climb against the dollar, up 1-13/% and now only 2% lower for the year (it was 6% lower yesterday morning). NYMEX crude futures are soaring, up 6-1/2% already. Gold is up by nearly 1% and silver is up 2-1/2%. In overnight trading, Asian markets ended higher, and this morning, European markets are higher. US futures show Wall Street will open higher. Wall Street reacted strongly, and positively, to yesterday's surprise news that the Fed would buy $300 billion in longer-term Treasury's and raise the size of lending programs already aimed at reducing mortgage rates by another $750 billion . See below for how the Euro, gold and silver reacted. We find it rather puzzling that the market responded so favorably to what some referred to as the Fed's 'shock and awe' move, considering most economists had been forecasting this was the Fed's last 'ace-in'the-hole', that would probably only be played if the recession grew into a greater crisis. If this is true, then are things worse that we are being led to believe? If we use the Obama analogy that your neighbor's house is on fire, if you saw an air tanker dropping water behind your house, wouldn't you wonder exactly what the heck was on fire? Moody's Investors Service lead U.S. sovereign rating analyst, Steven Hess, told Reuters ''The buying of Treasury bonds by the Federal Reserve is something that people have been expecting for some time. It's not a surprise, given their statement that the economy is doing worse than expected.' The market has had time to digest the ramifications of th announcement, so today could tell whether yesterday's response was justified, or just a kee jerk reaction to the surprise. Market Watch quoted Germany's Landesbank Baden-Wurttemberg credit analysts as saying "On the one side, this is clearly positive news as the measures will help stabilizing the housing market and therefore will have a positive impact especially for banks.. However, on the other side, the question is at what price? Bottom line is the Fed is adding a trillion dollars to their balance sheet. In the long run, the price for these massive rescue measures might be inflation as once the economy recovers the Fed might be not able to raise interest rates quickly enough." Weekly jobless figures have just been released, and first time jobless claims fell by 12,000 to 646,000, while continuing jobless claims hit a new record high of 5.47 million. Later this morning we will have the Philly Fed Manufacturing Index figures.
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "We had a mixed day yesterday in metals; by the official close, most complexes were off on the day, but bulls were thrown something of an unexpected lifeline in the wake of the Federal Reserve announcement. The Fed surprised participants by announcing that it would be buying up to $300 billion of long-term bonds (of 2 to 10 year maturities) in a further attempt to drive rates lower.  ... It is off to the races again today; metals are up sharply, this time more broadly, as are energy prices, which have just poked above $50 resistance. However, two other key “props” noticeable yesterday are lacking today. For one thing, the dollar is not extending its gains, and is practically unchanged against the Euro, while US stock futures are trading at slightly lower levels. If these trends persist, we could see some selling set in over metals during the course of the day. We should also keep in mind that the spark setting off yesterday’s rally -- the Fed move -- could prove to be only a temporary upside distraction at best, as participants will eventually refocus on the relentless barrage of poor macro news. I ... We are currently at $10,050 on nickel, up $175, and not doing very much over the last 24 hours. We remain neutral on the complex for the time being, pending clear definition on the charts." (read Ed Meir's complete morning base metals report here)
• (SBB) US scrap prices are eroding further and there is now widespread speculation that April’s prices will fall below the baseline used by electric furnace mills to establish raw material surcharges. This would eliminate surcharges for May deliveries.
• Indonesian nickel miner INCO secures US$250 mln loan - more
• ThyssenKrupp Falls After Forecasting Loss in Second Quarter - more
• ThyssenKrupp sees Q2 loss, reorganises business - more
• Mining & metals sector fundamentals strong: Report - more

  China steelmakers want ore at '07 price level -group - China's steel industry reiterated on Thursday its view that term iron ore prices should fall by at least 40 percent to 2007/08 levels, pressuring miners to accept deep price cuts, as steel firms struggle with faltering demand. - more

• China steel association appeals for output cut - China Iron & Steel Association (CISA) has urged domestic steel plants to cut output under the current situation of oversupply and soft demand. - more
• Non-ferrous metal industry sees signs of rebound - China's non-ferrous metal industry is showing some signs of recovery with major companies recording narrower losses, an industry association official said on Thursday. - more
• Market Tendency On Imports Of Ferro-Alloys At 13th March 2009 = Sudden And Sharp Fall Of High Carbon FeCr Price In China Is Marked To See Its Issue - more
• Tough times ahead for metal firms, says CNIA - China's non-ferrous metal industry is expected to witness hard times this year after drastic profit drops in 2008, according to the China Non-Ferrous Metals Industry Association (CNIA). - more

  South Korea’s February Steel Output Falls 25% on Demand Slump - South Korea, Asia’s fourth-biggest steelmaking nation, produced 25 percent less crude steel in February as the economic slowdown cut demand from automakers and builders. - more

  Chrome smelting company to see its smelters running again - The Chief Executive Officer of the Zimbabwe Mining and Smelting Company, ZIMASCO, Mr Josphat Zvaipa, says the Ferro chrome smelting company in Kwekwe could see its smelters running again. - more

  Fox launches $6m takeover of Hannans - The Terry Streeter-backed Fox Resources has launched a $6 million all-scrip takeover of junior explorer Hannans Reward to increase its spread of iron ore and nickel assets in Western Australia. - more

  EU Steel Prices Continue to Drift Downwards - The EU mills continue to curb capacity but many market players question whether the cuts are sufficient. - more

  Can you tell exactly when the Fed announcement was made yesterday...

Euro

Gold

Silver

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 19 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, March 18

• Baltic Dry Index - minus 113 to 1,861. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Coca-Cola's $2.3 Billion Bid for Huiyuan Juice Blocked by China Regulator // Bank of Japan to Buy More Government Bonds to Spur Lending, Revive Growth // Dollar Drops Versus Euro on Concern Fed Stimulus May Undermine Currency // Asian Stocks Rise for Fourth Day on Japan's Bank Plan, U.S. Housing Starts // Rio Tinto's Stake Sale to China Prompts Australian Senate to Hold Inquiry // U.K. Unemployment Rises at Fastest Pace Since 1971 on Deepening Recession // FSA Seeks Greater Oversight of U.K. Economy, Risk Control, Bank Regulation // European Stocks Drop for Second Day; Rio Tinto, BHP Billiton, Shell Fall // Fed Officials May Clash Over How to Inject Credit Into Shrinking Economy // Consumer Prices in U.S. Increase More Than Forecast as Index Climbs 0.4% // Stocks in U.S. Fall Before Fed Decision; IBM Retreats, Sun Micro Advances
• The US Dollar continues to trade lower against the Euro, down 8/10 of 1%. NYMEX crude is trading over 2% lower, but off earlier lows. Gold busted strong support and is down over 2-1/2%, while silver is down nearly 4%. Base metals almost all needed lower, except for a late session spurt by aluminum. Indicator charts show nickel fell early and held fairly steady for the trading session. Dow Jones reports three month nickel ended the day at $4.47/lb . The Baltic Dry Index continues to fall, and inventories of nickel in LME warehouses continue to grow, already over 101,000 tonnes. The WBMS announced today that refined nickel market recorded a 54,100 tonne surplus in 2008. It reported an additional 15,100 ton surplus in January of 2009.  The AIG bonus mess continues to occupy the media's attention, as it has inflamed the public and nothing sells news like a controversy. While we share the public's outrage over this whole situation, we reserve our anger to the 'system' that created the whole situation. If you think we are ticked off, think about all the hard working employees who worked for AIG's very profitable divisions, who are now watching colleagues that nearly wiped them out, get huge bonus' after nearly destroying the company. We can all find our own 'bad guy' in this, but until the system is changed, this will all repeat itself in the future. Gordon Gekko, in the movie 'Wall Street', stated "greed, for lack of a better word, is good". This movie, released in 1987, and this line in particular, symbolised the 80's as the decade of excess. In other words, we have been here before. And as predictable as nickel prices will rise and nickel prices will fall, mines will make great profits, and mines will lose money, we will all be in an uproar now, but as a society, we will soon forget. At least until it happens again.

  Reports

• China Commodities Weekly for the Week of March 9-13, 2009 - more

  Commodity/Economic Comments

• Angel Commodities analyst - "Despite higher inventory levels in copper, nickel and aluminium, base metals futures prices have rebound from the lower levels this week but overall outlook for base metals may remain weak as the fundamentals still remains poor and the inventory situation indicates a surplus in the market."
• Proto Resources & Investments Ltd purchased Warwick Resources Ltd’s Waite Kauri North nickel project in Western Australia for 4,000,000 shares ($120,000) and 5,000,000 options. The transaction is conditional upon the completion of due diligence by Proto within 21 days.
• (MB) Brazilian crude steel output down 39% in February
• The Great Depression was more depressing - more
• Mining giant angry over release of 'sensitive data' - more

  Metals Insider: Will nickel pay the price for past excess - Stainless steel production fell off a cliff in the fourth quarter of last year and with it went a sector that accounts for around two-thirds of global nickel demand. - more

  More nickel output cuts needed to erode over-supply - Nickel prices may fall further if producers do not make more cutbacks as a demand recovery is unlikely before the end of the year and inventories will continue to build at a fast clip. - more

  Feds should buy nickel on the cheap - The president of Mine Mill Local 598/CAW is calling on Natural Resources Canada to "take ownership of natural resources" to eliminate the "peaks and valleys" of selling a product such as nickel. - more

  Japan crude steel output dives record 44 pct - Japanese crude steel output in February fell a record 44 percent from a year earlier to its lowest since 1968 as a global slump hits key customers in the auto sector, and no upturn is seen soon. - more

  Kazakh mining output fall stokes fears of unrest - A sharp fall in Kazakhstan's industrial output has put Central Asia's biggest economy on course for its worst slowdown in a decade, raising the prospect of social unrest in its crucial mining sector. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:45 am CST show 3 month nickel trading around $.09/lb lower, with the rest of base metals mixed but mostly lower. The US Dollar continues to loose ground against the Euro, trading nearly 3/4 of 1% lower, still nearly 6% higher on the year. NYMEX crude futures show a 1% drop this morning, having come close to hitting the $50/barrel level yesterday. Gold and silver are trading lower, around 1% at present. In overnight trading, Asian markets ended slightly higher, while European markets are trading slightly lower this morning. US futures show a lower opening on Wall Street. AIG will be on the hot seat today, and you can count on some very angry Congressmen grandstanding for taxpaying voters. US consumer prices came out today a little higher than expect4ed, thanks to energy costs. Italian industrial production fell less than expected, while Canadian wholesale sales fell more than expected. While the Fed is expected to leave rates alone, traders will be watching their statement this afternoon closely for clues to future recovery.  
• Forbes morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "We suspect the reason behind yesterday's disconnect in metals vs. strong performances seen in other markets, has to do with the notion that perhaps we have done too much, too quickly. ... It is for all these reasons that we would advise caution at these levels as far as the metals are concerned, particularly on copper and ali, since the macro backdrop does not yet justify prices advancing far beyond their established trading ranges.  ... We are currently at $9,950 on nickel, down $150, and giving up most of yesterday’s gains. We remain neutral on the complex for the time being, pending clear definition on the charts" (read Ed Meir's complete morning base metals report here)
• (Interfax) China's Ministry of Commerce has been officially notified by the Russian Ministry of Industry and Trade that Russia will initiate an anti-dumping investigation into certain stainless steel sheet products imported from China, MOFCOM announced on March 17.
• (JMD) LME - nickel inventory/ Surpasses 100 thousand tons for the first time in 14 years
• (Yieh) It is reported that China's steel stock totaled 10.96 million tonnes on March 15th hitting the highest level.
• Global steel can recycling rate reaches highest recorded level - more
• China Appliance Plan to Spur Added Demand, Morgan Stanley Says - more
• China Lost 25 Million Jobs on Financial Crisis, Center Says - more
• An angry shareholder's letter to Heron Resources - pdf here (large file)

  Steep Steel, Aluminum Shipment Declines Continue in U.S., Canada - For the second month in a row, steel shipments from metals service centers in the United States and Canada fell by more than 40% from year-ago levels during February, the Metals Activity Report from the Metals Service Center Institute shows. - more

  China seen net steel importer in March-association - China is likely to become a net importer of steel products in March, as overseas orders in the world's top steel producer slumps, the text of a speech posted on the industry group website said on Wednesday. - more

• China steel plants on verge of loss at current price, official - Steel prices in China have slumped back to the low point of last November currently, almost equaling the level of 1994, said Shan Shanghua, secretary general of China Iron & Steel Association (CISA), adding steel plants are widely on the verge of loss at current price level. - more
• China May Ship 80% Less Steel Products as Orders Drop - China may export 80 percent less steel products this year because of the global recession, leading to rising inventories in the world’s largest producer of the material, the China Iron and Steel Association said today. - more

  Goldman Deepens Iron Ore Price Forecast to 40% Drop on Slowdown - Goldman Sachs JBWere Pty deepened its contract iron ore price forecast to a record 40 percent decline because of slumping global steel production. - more

  Hyundai Steel Cuts Hot-Rolled Price on Weak Demand  - Hyundai Steel Co., South Korea’s second-largest steelmaker, cut the price of hot-rolled coil by 14 percent on weak demand, the first reduction the company has made this year on its products. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 18 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, March 17

• Baltic Dry Index - minus 84 to 1,974. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Bank of Japan May Make Loans to Banks to Replenish Capital, Spur Lending // Standard Chartered Reports `Strong' Start to 2009, No Need for New Capital // Hong Kong Jobless Rate Climbs to 32-Month High of 5% as Recession Deepens // Asian Stocks Advance for Third Day as Standard Chartered Fuels Bank Rally // German Investor Confidence Unexpectedly Increases for Fifth Straight Month // European Stocks Fall for First Time in Six Days; Shell, Zodiac Shares Drop // Housing Starts in U.S. Unexpectedly Rise Amid Surge in Condo Construction // Nucor Plunges After Forecasting Loss on Unexpectedly Low Demand for Steel // Bernanke May Need `Massive' Asset Purchases to Counter Deeper Contraction // Regulators Say State Funds Can Handle Insurer Failure // Stocks Rise on Gain in Housing Starts; Centex, Home Depot Shares Advance
• The US Dollar continues to trade lower against the Euro, by about 1/4 of 1%. NYMEX crude is up 2% nearly 2%, while gold and silver are lower, but off session lows. Base metals ended mixed, from quiet to lower. Indicator charts show today's trading was exactly opposite of yesterday's, with an pre market jump and a downward trend most of the trading day. Dow Jones reports three month nickel ended the day at $4.57/lb , just $20/tonne shy of yesterday's close. The Baltic Dry Index fell again, while nickel inventories, now free from the psychological 100,000 tonne level being broken, gained overnight with a large shipment into Rotterdam, and a smaller one into Vlissingen. It looked like our analogy of the bullfighter teasing the bull with the housing construction report this morning would not pan out, as Wall Street opened lower. But you can only tease a rally bull for so long before he charges, and while the bears took a lunch break in New York, the bull finally made its move. Thanks to an 82% increase in the construction of apartment buildings, U.S. housing starts surged 22% in February, the largest percentage gain in 19 years. Good news indeed, though housing construction remains 47.3% lower than a year ago. And while some, like economists from Wrightson ICAP, blew the figures off as a "weather-related fluke", you can't blame traders for finding the report a breath of fresh air.  

  Commodity/Economic Comments

• (China Mining) Steel prices on China's market dropped slightly this week (March 9~13), the fifth week of this round of price slump. Some steel plants are planning either to cut or suspend production once again on the sliding prices. Analysts expect the stimulating effect on steel prices by the new round of output cut will probably be postponed to May or June, as steel production capacity are resuming production in China
• Bank Lends Conservatively, Gets Pressured And Criticized By Government For Not Loaning Enough - more
• (Dow Jones) Macedonia-based nickel producer FENI Industries is halving its ferronickel production target in 2009 as a result of nickel prices falling about 80% from the 2007 record high, the company told Dow Jones Newswires. The company aims to produce about 8,000 metric tons of ferronickel in 2009.
• Housing Starts graph - courtesy Calculated Risk - here
• David Swensen's Guide to Sleeping Soundly - more

  Rio Tinto: Metals prices unlikely to rebound this year - Metals prices are unlikely to stage much of a rebound during 2009 because of a large stock and production capacity overhang despite an expected improvement in demand over the course of the year, Rio Tinto PLC  said in its annual report Tuesday.  - more

  Supply-demand impact of production cuts in metals space - With many economists putting their global GDP forecasts for 2009 at the lowest level in more than a quarter of a century (GDP was 0.9% in 1982), it is fair to assume that underlying demand for commodities like nickel, copper and iron ore will see comparable declines. - more

  US ferrous scrap exports off as steel downturn hits buyers - US exports of shredded scrap plunged 38% in January to 394,362 mt from 636,699 mt in January while shipments of heavy melting scrap No. 1 dropped a more modest 24% as overseas buyers caved under the pressure of the global steel downturn. - more

  Controversy Swirls Around Rio Tinto-Chinalco Deal - When Tom Albanese, chief executive of London-listed miner Rio Tinto, first announced a $19.5 billion strategic partnership with the state-owned Aluminum Corporation of China, or Chinalco, in February, 2009, he must have known it would raise a few eyebrows. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:40 am CST show 3 month nickel trading around $.03/lb higher, but struggling to maintain positive momentum. Metals are mixed as souring equity markets has affected overall optimism. The Euro is trading higher against the US Dollar, but off session highs and at 1.10 of 1%. NYMEX crude futures show a slight increase, while gold and silver are both slightly lower. Yesterday's late afternoon dive by Wall Street into the red, caught the attention of world markets. In overnight trading, Asian markets ended only slightly higher, while European markets are trading lower this morning. US futures have turned negative, showing Wall Street may continue yesterday's late day profit taking. Housing starts took an unexpected jump in February, thanks in part to condo construction, so the bulls have caught a glimpse of the bullfighters blanket this morning, and could make another charge. An African mining site is reporting Chinese firms may be interested in purchasing the closed Kabanga (Tanzania) and Munali (Zambia) nickel mines. No confirmation on the report yet.
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Commodity Outlook - pdf here
• Daily Metals - pdf here
• Metals Intelligence - pdf here
• The Commodity Tracker - pdf here
• Global Mining News - pdf here
• Weekly Forecast by SMM Specialist - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals enjoyed a solid rally on Monday, drawing strength from falling copper stocks, a weaker dollar, and a surging US stock market. However, a vicious round of profit-taking set in over the stock market late in the day, where a 200-point reversal led to a modestly lower finish.  ... Should Monday's late day fade in US equities extend into today's session (equity futures are called only modestly higher as of this writing), we could see a rather good sized sell-off in a number of metals over the course of the day.  ... Moreover, we think most markets, including metals, have done too much too soon, and could be due for a modest pullback. ... We are currently at $10,295 on nickel, up $200. Nickel is moving higher, but at a glacial pace, and not enough to make much of an impression on the charts. We remain neutral on the complex for the time being, as there are more interesting markets to be in at the moment."  (read Ed Meir's complete morning base metals report here)
• (SG) It is reported that China produced 1.25 million tonnes of high carbon ferrochrome in 2008 a YoY rise of 190,000 tonnes. In the meanwhile imports of Cr ore increased by 750,000 tonnes to 6.84 million tonnes.... Due to weak stainless steel market, domestic ferrochrome price keep sliding.
• (AFR) Australian-listed Mirabela Nickel has successfully raised capital for its Santa Rita nickel mine in Brazil. The $US120 million ($A182 million) capital raising was substantially oversubscribed. It will allow Mirabela to secure a $US190 million debt package.
• Market Watch - Bailout anger creates perils for both parties - by Greg Robb - " Another worry for politicians is that the stock slide this year has been the steepest since the majority of American households began to hold equities in retirement plans. In the late 1980s, only 20% of American households held stock. But that percentage has jumped to over 70% because of the advent of 401(k) plans, said pollster Scott Rasmussen. So the pain is more widely felt." - source
• (AMI) The Zambian minister for mines, Maxwell Mwale, may soon begin negotiations with Chinese Jinchuan Group with a view to it taking over the Munali nickel mine.
• (Dow Jones) Macquarie Cuts 2010 Nickel Forecast 22% To $5.00/Lb
• (AMI) Chinese Firm Interested in Kabanga Nickel
• Ford to cut European output but to keep jobs - more
• Ford Forecasts Russian Sales May Plunge 50% as Economy Falters - more

  TISCO eyes overseas chrome resources - Taiyuan Iron and Steel (Group) Co. Ltd. (TISCO), China's largest stainless steel mill, recently set up joint venture with domestic alloy producer Shanxi Jinzhong Wanbang Gongmao Co. Ltd. and Turkish chrome miner CVK Mineral Mining Inc. to jointly explore chrome resources in Turkey, a TISCO employee told Interfax on March 17. - more

  China steel prices drop - Chinese steelmakers chasing business from China’s $585-billion stimulus package may have upped production too quickly and undercut their prices, according to the Wall Street Journal. - more

• WSJ: Steelmakers Are Jumping the Stimulus Gun - It appears some business people are no different than investors at extrapolating some moderate change in trend and creating a full blown thesis out of it. - more
• Rio Tinto: China to lead recovery in metals demand - Rio Tinto Ltd sees demand for metals and minerals picking up rapidly once economic activity recovers, driven by a sharp recovery in Chinese demand. - more

  Commodities, Emerging Markets May Lead a Rally, Merrill Says - Commodities and emerging market stocks and currencies are likely to lead any further rebound in markets, Merrill Lynch Global Wealth Management said. - more

• Iron ore contract prices seen down 30-35% says miner - Iron ore benchmark contract prices are set to fall 30-35 percent from levels set last year to reflect lower demand amid the global recession, Australian miner Territory Resources Ltd said on Tuesday. - more

  Courtesy AISI - In the week ending March 14, 2009, domestic raw steel production was 976,000 net tons while the capability utilization rate was 40.9 percent. Production was 2,140,000 tons in the week ending March 14, 2008, while the capability utilization then was 89.7 percent. The current week production represents a 54.4 percent decrease from the same period in the previous year. Production for the week ending March 14, 2009 is down 6.0 percent from the previous week ending March 7, 2009 when production was 1,038,000 tons and the rate of capability utilization was 43.5 percent.

  Russian Steel Workers Win First Protest, Pay Claim - Steelworkers at the Zlatoust steel mill, which is owned by Vadim Varshavsky’s Estar group, have won an unprecedented claim for wages cut by the company, following a local court ruling and a 5-day hunger strike. - more

  Steel producers ask for higher import tax - The Viet Nam Steel Association has urged the Government to raise import tax on steel by between 1-10 per cent to protect domestic production. - more

  Outlook -India steel seen flat to lower on econ slowdown - India steel long futures are likely to trade sideways to lower this week as traders bet on a tepid economic outlook after India's watched-for industrial production figures came in weak, analysts said. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 17 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of

Monday, March 16

• Baltic Dry Index - minus 64 to 2,058. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Asian Stocks Rise on Optimism Stimulus Will Revive Growth; Mazda Advances // EU May Increase $32 Billion Ceiling on Aid to Members Facing Cash Shortage // Barclays Discusses Sale of iShares as Bank Tries to Avoid Government Stake // European Stocks Advance for Fifth Day; Barclays, UBS Lead Gains // Geithner Urges Banks to Go `Extra Mile,' Keep Credit Flowing to Businesses // Depression Fears Subside on Bernanke's Remarks, Rally in Banking Stocks // Global Stocks Rally on Outlook for Economies, Banks; Barclays Shares Jump
• The US Dollar continues to trade lower against the Euro, down 3/4 of 1%.  NYMEX crude is trading over 1% lower, after falling sharply this morning on news that OPEC had decided over the weekend not to make further production cuts. Safe haven gold is down nearly 1%, while silver is down nearly 2-1/2%. Base metals trading ended pretty much like it was trading this morning, with all metals ending higher except for tin. The indicator chart for nickel looks like the dreaded climb a bike rider faces in the morning at the beginning of an uphill bike rally. Except for a momentary dip in mid afternoon, nickel spent the day climbing and ended the day doing the same. Dow Jones reports three month nickel ended the day at $4.58/lb . So what happened to nickel today? Any news? Not hardly. In fact, the news wasn't all that good. The Baltic Dry index fell again over the weekend, implying less raw materials are being shipped worldwide. And inventories of nickel stored in LME approved warehouses rose over the 100,000 tonne mark overnight. The price of steel continues to decline in China on lower demand. Norilsk acknowledged its not making money mining nickel in Africa, but has yet to make any decision on the future of the Tati Nickel in Botswana and Nkomati in South Africa. In Australia, Norilsk is rumored to be negotiating with billionaire Andrew Forrest for the sale of its closed Cawse Nickel Mine. A billionaire wants to buy a nickel mine? Well now that could be seen as a positive sign. If you look really, really hard, that is. In other words, the fundamentals for nickel have not changed. But world markets have switched from a "doom and gloom scenario", to a "feel good, things are going to get better soon" attitude. And nickel has not been excluded from this. It all started last week, when a few CEO's from a couple of the major banks said they were actually making money. For a market that was betting most of the major banks would be owned and operated by the US taxpayer at anytime, this gave the market a euphoric shock. And this weekend, President Obama's week old directive to his staff to do an all out media blitz finally paid off, when the Fed Chairman Ben Bernanke gave a 60 Minute interview and stated he felt the recession would end later this year. And even though the Empire State Manufacturing Index came out much lower than economists expected, and industrial production fell more that economists expected, Wall Street is most likely going to experience its 5th straight day of this rally. We know we are sounding too negative, and we apologize, but the more we learn about this market, the more we realize how much of it makes little sense on a day to day basis. As stated above, this rally began with big bank CEO's saying they were suddenly profitable. Aren't these the same guys who were telling the markets they were financially sound only hours before they were on the verge of bankruptcy last year? And if someone was pouring billions of taxpayer dollars into your coffers, wouldn't you find yourself profitable - no matter how recklessly you might have run the company prior? Nothing personal against Mr Bernanke, but he is a little more optimistic than the members of his board have been recently. Came off as a very nice guy though, and he has that 'trust me and I will take care of you' look about him. It was his calmness that impressed us. Considering he gets grilled every month by Congressmen looking to grand stand for a ticked off public, this interview was probably chicken feed for him. So, is this a bear market rally day number five ... or have we seen the bottom?

  Reports

• Commodities Daily - pdf here
• Daily Metals - pdf here
• Weekly Commodity Price Report - pdf here
• Facts and Fantasies about Commodity Futures  Yale Working Paper 2004- pdf here

  Commodity/Economic Comments

• (Dow Jones) LME base metals will likely retreat this week and next as recent gains were driven by "unsustainable factors" such as short-covering, says Barclays Capital..... Kosovo-based nickel miner Ferronikeli is currently running operations at 50% due to the low nickel prices, the company said Monday. The miner is producing 350 metric tons of nickel a month, down from 700 tons. It has been running at 50% capacity since October ... Kazakhstan produced 560,393 metric tons of steel in January-February, a fall of 18.6% on the year, the State Statistics Agency reported Monday. .... Russian nickel miner OAO Norilsk Nickel said Monday it was still operating its two African operations even though one is near break-even point and the other is undergoing an expensive expansion program. Gerhard Potgieter, managing director of Norilsk Nickel Africa, said no decision had been made other than to maintain costs and production at Tati Nickel in Botswana and Nkomati in South Africa, a 50:50 joint venture with African Rainbow Minerals.
• Judy Zhu, analyst at Standard Chartered  - ""Demand has not yet picked up. We expect base metal prices will bottom out in the second half of this year before a possible slight rebound, and will continue to rise next year."
• (Yieh) Thailand's government has decided to impose a 5-year anti-dumping tax on cold rolled stainless steel from Taiwan, Japan and Korea commencing at the middle of March this year.
• (Germany) EnBW Says Power Sales to Industry May Fall More Than Forecast - more
• Russia Feb output slowdown 2nd fastest on record - more
• Diplomatic relations thru the media - Friday - Chinese Premier Premier Wen Jiabao - "Of course we are concerned about the security of our assets. To speak truthfully, I'm a little bit worried. I would like to call on the US to honor its words, stay a credible nation and ensure the safety of Chinese assets." Saturday - US President Barrack Obama - "There's a reason why even in the midst of this economic crisis you've seen actual increases in investment flows here into the United States. I think that not just the Chinese government, but every investor, can have absolute confidence in the soundness of investments in the United States."

  Vale’s Agnelli Sees Possibility of More Output Cuts - Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, may further pare metals output if demand slumps, Chief Executive Officer Roger Agnelli said. - more

  Metals Insider - Every dog must have its day? - Sentiment on the LME metals complex is still trapped between the conflicting signals coming from East and West, resulting in choppy, consolidatory price action last week. - more

  Miner puts 5000 jobs on the line - Mining company Xstrata has threatened to axe 1000 coal mining jobs if the Federal Government goes ahead with its emissions trading scheme. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:35 am CST show 3 month nickel trading around $.18/lb  higher, with only tin trading lower at the moment. The US Dollar is trading over 1% lower against the Euro, which is helping metals. NYMEX crude is showing over 4% lower on news OPEC will not making further cuts to production. Gold and silver are 1/2 and 1-1/2% lower respectively. In overnight trading Asian markets ended higher, and this morning, European markets are trading higher. Wall Street futures imply a solid opening for American markets. Here are your two primary drivers behind the solid opening Wall Street is set to have today. The New York Times ran an article Saturday called "Has the Economy Hit Bottom Yet?"  that contained encouraging hints for the future - here  Secondly was the 60 Minutes interview of Fed Chairman Ben Bernanke last evening - here While Mr Bernanke confirmed he would not let another bank collapse like Lehman, the content of his interview was overshadowed by the calmness and professionalism of the man himself. His forecast of a bottom to the US economy sometime later this year, was balanced by his statement that we were not out of the woods yet. On the other hand, MarketWatch ran an article "A few who got it right - What do those who called the downturn think?" - more Outside the world of speculation, Bloomberg has already reported on the first Fed report of the week "The Federal Reserve Bank of New York’s general economic index dropped to minus 38.2, the lowest level since data began in 2001, from minus 34.7 in February, the bank said today. Readings below zero for the Empire State index signal manufacturing activity is shrinking." Market is in a feel good mode today, so we doubt this news will damper the bull.
• Bloomberg morning base metal news - more

  Reports

• Metals & Mining Weekly - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Commodity Outlook - pdf here
• Chart Store Weekly Scoreboard - pdf here
• ISSB World Steel Review - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals ended up mostly higher on Friday, except for zinc, which experienced a late-day fade by the close. However, all the metals closed well off earlier highs, as a weak energy market and a tentative advance in US stocks prompted a bit of a pullback. Metals are mostly higher in quiet trading as of this writing, with zinc and lead out in front, up by $24 and $25 MT, respectively. The dollar is substantially weaker, now trading above 1.30 against the Euro, and helping the positive tone we are seeing in metals.... We are currently at $10,000 on nickel, up $400. We remain neutral on the complex for the time being, as charts are not telling us much, with a sideways drift still very much in place. LME stocks have tipped over the 100,000-ton mark overnight." (read Ed Meir's complete morning base metals report here)
• (Asia pulse) Moody's Investors Service said Friday it has downgraded its rating outlook for POSCO to negative from stable due to a downturn in the global steel industry while retaining its A1 foreign currency bond rating for the steelmaker.
• (Dow Jones) Kosovo's Ferronikeli Nickel Mines Running At 50% On Low Price
• China’s Net Coal Imports Jump on Overseas Purchase - more
• European car sales drop 18 per cent in February - more
• Breakdown of China's stimulus package - graph here
• Bailouts: An Affront to the Market and to Democracy - pdf here

  Chinese to take over nickel prospecting - A nickel exploration company has sold part its mining interests in Tanzania to a Chinese mining firm, Songshan Mining Company Limited, under a three per cent royalty agreement. - more

  Forrest’s Poseidon May Buy Norilsk Cawse Nickel Mine  - Poseidon Nickel Ltd., an Australian exploration company chaired by billionaire Andrew Forrest, is in talks to buy OAO GMK Norilsk Nickel’s Cawse mine. - more

• Decision on Chinalco and Rio's deal to be delayed for 90 days - The Australian Foreign Investment Review Board (FIRB) decided on Monday to delay the decision on Chinese major mining company Chinalco and Australia's aluminum producer Rio Tinto's deal for 90 days, according to report of Australian Associated Press. - more

  Enlarging Reduction Of Nickel Production In 2009 Is Partially Offset By Operations Of New Facilities = Nickel Production In 2008 At All Of Major Companies, Excluding Vale, Had Decreased - The nickel production in 2009 is anticipated to be strengthened to reduce at nickel producers, who are less competitive on its cost-wise. On the other hand, in view of starting up operations of new nickel projects, it is marked how extent does an effect of the decreased nickel production put an influence on supply and demand of nickel. - more

  Steel sales spurt in February, expansion plans reopen - The steel sector is limping back to normalcy, with sales and despatches in February significantly better than the previous month, leading some producers to revisit expansion plans. - more

  Tokyo Steel Reduces April Prices, May Deepen Production Cuts - Tokyo Steel Manufacturing Co., Japan’s largest maker of girders, said it will reduce product prices for April contracts and may deepen production cuts. - more

  South Korea Plans to Start Stockpiles of Scrap Steel  - South Korea plans to begin stockpiling scrap steel to smooth out fluctuations in supply and costs, aiding manufacturers including Posco, Asia’s biggest steelmaker by market value - more

  Goldman Cuts Steel-Price Forecast as Customers Use Stockpiles - Goldman Sachs Group Inc. cut its forecast for European steel’s price this year by 14 percent because users of the metal are taking longer than the bank had expected to run down inventories. - more

  Global Mining M&A Drops 40% to $127 Billion, Ernst & Young Says - Global mining mergers and acquisitions slumped 40 percent to $127 billion last year and the value of transactions will drop further in 2009 amid a commodity price rout, according to Ernst & Young LLP.  - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 16 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, March 13

• Baltic Dry Index - minus 79 to 2,122. (chart)  (Dry bulk market still fragile - here)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Wen Is `Worried' at Safety of U.S. Treasuries, Asks for Assurances // Asian Stocks Rise Amid Japan, China Stimulus Optimism; PetroChina Advances // Switzerland, Luxembourg, Austria Loosen Secrecy Rules to Fight Tax Evasion // Stocks Gain, Snapping Four Weeks of Losses; Barclays, Credit Suisse Climb // Jobless Rate Above 10% Defines Recession Across U.S. as Bernanke Predicted // U.S. Imports, Exports Slide a Sixth Month, Raising Threat of Protectionism // Summers Says It's Impossible to Predict End to Crisis, Signs `Encouraging' // Stocks in U.S. Fall as Credit-Card Concern Halts Bank Gain; Discover Drops
• The US Dollar continues to trade higher against the Euro, by a little over 1/4 of 1%. NYMEX crude is down 1/5 of 1% as trader eye the OPEC meeting this weekend with a weary eye. Gold is up slightly, while silver is up over 1-1/2%. Base metals ended higher, except for zinc, but nearly all off session lows as US equities opened and fell. Indicator charts show nickel trading was confined to about a $200/tonne spread, with the session low coming early, the session high coming mid day, and closing about mid way between. Dow Jones reports three month nickel ended the day and week at $4.35/lb . The Baltic Dry Index closed lower for the day, and for the week fell 103 points. Nickel inventories also fell overnight, but for the week rose by 120 tonnes and now sit less than 250 tonnes from the 100,000 tonne level. Cancelled warrants rose over the 1.5% level for the first time this year overnight. It appears Wall Street is a having a tug of war day between the short term bullish trend and the long term bearish trend. Financials and retail sales gave the bulls something to charge on this week, but now concerns that credit card companies will report large defaults next week, is giving the bears so room to roam. It's Friday, and there is some profit taking going on. It's also the 13th, so some superstitious traders may be playing it safe. And if you think there is no such thing as superstition in the market place, you may want to explain why S & P trading bottomed out last week at 666.   
• Have a relaxing and safe weekend!!

  Commodity/Economic Comments

• (Credit Suisse) The number of announced production shutdowns identified has grown from 75 to 142, now representing 12.4% of global zinc supply, 17.2% of nickel, 43.7% of ferrochrome, 12.7% of aluminium, 4.1% of copper and 10.8% of iron ore.
• (Dow Jones) Australian Mines Ltd. said Friday it was considering focusing on gold mining after suspending its nickel operations in late 2008. The company told Dow Jones Newswires that given the market conditions it was leaving its 1,500 metric ton Blair nickel mine on care and maintenance and may switch to gold mining.
• (Dow Jones) U.S. nickel exports rose 17.7% in  January from the previous month, and/but was up 19.6% from the previous year, the Commerce Department reported Friday.
• (Dow Jones) U.S. nickel imports fell 8.7% in January from last month, and was down 24.4% from the previous year, the  Commerce Department reported Friday.

  Outlook for steel market in 2009 "concerning": Highveld - The outlook for the steel market for 2009 remains "concerning, with no indication of when any improvement in economic conditions will favour increased production and sales," South Africa's Highveld Steel and Vanadium said Friday. - more

  Courtesy AISI - In the week ending March 7, 2009, domestic raw steel production was 1,038,000 net tons while the capability utilization rate was 43.5 percent. Production was 2,140,000 tons in the week ending March 7, 2008, while the capability utilization then was 89.7 percent. The current week production represents a 51.5 percent decrease from the same period in the previous year. Production for the week ending March 7, 2009 is up 6.0 percent from the previous week ending February 28, 2009 when production was 980,000 tons and the rate of capability utilization was 41.1 percent.

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:45 am CST show 3 month nickel trading around $.09/lb higher, with all base metals trading ni the green this morning. US Dollar is trading higher against the Euro, but by less than 1/10 of 1%, while NYMEX crude futures are up by 1%. Gold is trading nearly a percentage point higher, while silver is up over 2%. In overnight trading, Chinese Premier Wen Jiabao admitted the world crisis was making it difficult for his government to meet their growth target for the year, and that the government had further plans in place to stimulate the Chinese economy. With this re-igniting the rumors of a new stimulus, Asian markets ended much higher. European markets are following suit, as are Wall Street futures. Market analysts are a buzz this morning with gossip on the Chinese Premier's remark about "future action" it would take to boost its economy. Not one of them, that we have listened to this morning, has discussed the implications of another statement made by the Chinese Premier in a press briefing. "We have lent a huge amount of money to the United States.  I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets." In a follow-up he stated "Of course we are concerned about the safety of our assets. To be honest, I am a little bit worried." Typically such a statement would be a big story, but apparently there are bigger fish to fry during a bear bounce, such as the Jim Cramer - Jon Stewart debate, which came to head last night. Bank of America Chief Executive Ken Lewis told reporters his bank was profitable in January and February and would make about $50 billion in profits by the end of the year. Financials, as you can imagine, have been way up since Citigroup claimed profitability earlier this week. Looks like the market has been, and is being kind to investors this week. Nice to see retirement plans growing a little, instead of freefalling. Hope it lasts for awhile. All we can say is "it's about freaking time." 
• Bloomberg morning base metal news - more
• Reuters - more

  Reports

• BMO The Goods - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• ISRI Scrap Report - pdf here
• Commodity Watch - pdf here
• Nickel to lose shine on weak consumer demand - pdf here
• Looking through Nickel Industry - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals ended on a mixed note on Thursday, but this was still better then where the day started, when prices were uniformly lower. A ferocious rally in both energy and in the US equity markets yesterday had surprisingly little impact on metals, as we suspect the complex was still troubled by the lingering impact of the poor macro headlines coming out of China earlier in the day ... Whereas metals did not put on an aggressive upside show yesterday, the complex is catching up today. Some of the advance is being spurred by talk from China’s Premier Wen Jiabao, who suggested that extra stimulus spending could be in the cards in order to hit China's 8% growth target this year. The Premier also called on Washington to ease worries about the safety of its vast U.S. assets, and reaffirmed China's commitment to keeping the Yuan steady. ... We are currently at $9,700 on nickel, up $245. Nickel has been surprisingly listless over the past several weeks, with trading confined to a very narrow range. We remain neutral on the complex for the time being."  (read Ed Meir's complete morning base metals report here)
• Trubaopt - Inventories of chrome ore at Chinese ports to date have exceeded 1.5 million tonnes, which is 3 times more than in same period last year, according to market analysts. However, some of them provide a more modest assessment, referring to the increase in stocks as only two times.
• China has much room for new stimulus package - more
• Glencore Opens Up to Bondholders as Metal Slump Bites - more
• Russian car sales collapse deepens-AEB - more
• Russia's AvtoVAZ to cut 2009 production by 36 pct - more

  Russia metals firms could lose 100,000 jobs-report - Russia's ferrous and non-ferrous metals industry could shed 100,000 jobs this year as the global economic downturn crimps demand, Russia's Ministry of Industry and Trade said in a report obtained by Reuters. - more

  Mine gloom buries 11,000 skilled jobs - Nearly 11,000 mining jobs have been cut since June and more cuts are expected as global growth slows and commodity prices plummet, according to the Minerals Council of Australia. - more

  Turkey's Exports Of Chrome Ore In Jan. - Feb. / 09 Decreased To Half Of That In Same Period / 08 = Exported 135,000 Tons, Exports For China Were Still Favorable - Turkey exported 135,673 tons of chrome ore in January to February of 2009, which had a considerable decrease of 49.1% compared with that (266,461 tons) in the same period of 2008. - more

  Iron ore prices may fall as Chinese steel stockpiles continue to grow - Iron ore spot prices could fall further as Chinese steel and iron ore stockpiles continue to grow, analysts say. - more

  BHP Should Spin Off Units on Slump, JPMorgan Says - BHP Billiton Ltd., the world’s largest mining company, should spin off its underperforming aluminum and nickel assets to boost returns during a forecast prolonged slump in metal prices, said JPMorgan Chase & Co. - more

• Dwyka Resources Secures Muremera Nickel Project - Dwyka Resources Friday announces that through its wholly owned subsidiary Danyland, it has secured 100% ownership of the Muremera Nickel Project following an agreement with BHP Billiton and will proceed immediately with the planned exploration programme. - more

  Our sole sponsor has posted a new surplus list of stainless steel inventory online - lot of pretty standard stuff you might be interested in - here

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 13 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, March 12

• Baltic Dry Index - minus 70 to 2,201. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Ex-BNP Banker Convicted of Insider Trading in `Landmark' Hong Kong Verdict // Geithner Is Said to Push G-7 to Ease Criticism of China's Currency Policy // Japanese GDP Shrank at Sharpest Quarterly Rate Since 1974, Revisions Show // Singapore Press Cuts Wages of 3,000 Workers, Freezes Hiring to Pare Costs // Singapore Press Cuts Wages of 3,000 Workers, Freezes Hiring to Pare Costs // Swiss Central Bank Cuts Interest Rate, Buys Currencies to Push Down Franc // Trichet Approaches Zero Interest Rates by Stealth With New Deposit Weapon // European Stocks Rise for Third Day; Carrefour, Holcim, Credit Suisse Climb // Foreclosure Filings in U.S. Rose 30% as Lender Efforts to Stem Tide Fail // Stocks in U.S. Advance After GE Says Debt-Rating Cut Won't Hurt Business (Globe & Mail) EU rejects U.S. stimulus call
• Commodities and currency markets got a jolt this morning, when "the Swiss central bank cut its interest rate close to zero and started buying foreign currencies to stem the franc’s appreciation". This move helped the US dollar climb against the Euro, by 1/4 of 1% at wrap-up time. NYMEX crude is up over 4% as speculators look to this weekend's meeting by OPEC and potential production cut announcements. Gold and silver are trading higher on the Swiss news, while the rising dollar put a crimp on base metals, with most ending lower. Indicator charts show nickel spent the day in decline, with a bounce in late trading. Dow Jones reports three month nickel ended the day at $4.29/lb . The Baltic Dry Index slipped yet again overnight, while LME stored LME inventory numbers did as well. Inventories are now 160 tonnes shy of the 100,000 level. Wall Street is over 2% higher on news that .... well there really wasn't that much positive news, unless negative news that wasn't as negative as it could have been qualifies. Retail sales fell less than expected in February, and the bulls looked past this and to the government revision that sales were actually better in January, than previously reported. Other reports today include (quoting Market Watch) "U.S. households saw their net worth fall by $11.2 trillion, or 18%, to $51.5 trillion at the end of 2008, wiping out five years of gains, the Federal Reserve reported Thursday." (Bloomberg) "First-time claims for U.S. unemployment benefits rose last week, holding above 600,000 for a sixth straight time, as companies kept cutting payrolls to reduce costs amid a worsening recession."
• Thus the average American may be 18% poorer than they were last year, and a whole lot more of them are not working and far worse off than they were this time last year, as long as we all continue to shop ... all must be well. And why not. Based off a report yesterday, the U.S. federal deficit has grown to $765 billion in the first five months of the budget year. That is the deficit - the difference between what our government spent over the last 5 months, compared to what it received during the same period. The debt - that amount of money we American's already owe from years of fiscal irresponsibility, stands close to $11 trillion dollars. And they wonder why it's no longer just your typical hard core survivalist buying guns, gold, and building gardens these days.   

  Commodity/Economic Comments

• Macquarie Research is forecasting 2009 will see the world's third consecutive drop in global stainless steel production, and forecasts production will fall to 23.4 million tons, compared to 26.3 million tons produced in 2008.
• The Chinese General Administration of Customs announced that China exported 60.52 million tonnes of finished steel products in 2008 down by 12.4% YoY. Exports of semi steels fell by 79.9%, and of finished steel products, by 5.5%. Imports of semi steels rose by 4.2%, while imports of finished steel products fell by 8.5%. Imports fell to a seven year low. Li Yizhong, minister of Industry and Information Technology, told reporters that steel output  in China has returned to 90% of normal capacity. According to customs data released Wednesday, exports of steel products from China, hit a 52-month low of 1.56 million tonnes, down 62% from the same period last year. China also advised that its trade surplus for February was 4.841 billion U.S. dollars, the lowest since February 2006. Chinese production of nickel during the first two months of 2009 rose by 44.1% YOY. Imports of iron ore during February rose 6% YOY.  
• ISSF Member Companies - more
• (SeaTrade Asia) Shipbuilding orders received in February worldwide fell to 193,000 dead weight tonnes (dwt), down 50% month-on-month and by 98.4% year-on-year.
• China - Economic graphs - here
• Four Bad Bear Markets compared - graph here
• Canada - TD predicts 10% unemployment rate - more
• Hazardous cargo ship sent into savage storm - more

  World stainless output declined for second successive year in 2008 - World stainless steel output declined for a second successive year in 2008, figures released on Thursday by the International Stainless Steel Forum (ISSF) indicated. - more

  Economy hurts demolition companies - The demolition machines chewed into the parking deck behind the Garland H. Jones Building downtown, gnawing on concrete clusters mixed with steel beams and reinforcement bars. - more

  2007 iron ore prices sought by Chinese mills - Shougang - The annual tit-for-tat that is the iron ore price negotiations between Chinese mills and overseas mines is hotting up with the mills holding the whip hand for the first time in years. - more

  Shanghai construction steel prices

  Shipping Special Report: Sea and enemies - Piracy is a very real and growing threat and one that can even land the unwary lawyer in hot water. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:45 am CST show 3 month nickel trading around $.09/lb lower, with all base metals trading in the red this morning. And with that being the case, you can pretty well expect the US Dollar is doing better against the Euro, which it is, by less than 1/10 of 1%. NYMEX crude futures show a 2%+ increase, while gold and silver are trading slightly higher. In overnight trading, Asian markets ended slightly lower, while European markets are trading lower this morning. US futures imply a weaker opening on Wall Street. A government report released this morning, show US retail sales were much stronger in January than previously reported. While down 0.1% in February, January figures were revised to a 1.8% increase from an earlier reported 1%. This was followed by a report from the Labor Department  showing state unemployment benefits rose 9,000 to a seasonally adjusted 654,000 last week. And last night, mortgage giant Freddie Mac said it was seeking more billions from the government's TARP fund, after reporting yet another huge quarterly loss. Wall Street is in a bullish, corrective mood, after two consecutive days in the black. And it is looking for a reason to stay that way. The news out so far today, won't be helpful.  
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Commodity Outlook - pdf here
• Metals Intelligence - pdf here
• China Metals report - more
• Damstahl Stainless Steel Report - pdf here
• World Bank Commodity Markets Review - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices fell yesterday, with copper giving back a hefty 4% on the day and falling to a one-week low, as the barrage of poor macroeconomic headlines, particularly from China, continued to pound the markets. An indecisive tone to the US stock market, coupled with a big selloff in energy, were also instrumental in keeping the pressure on as well.  ... We are seeing more selling set in today following a weak session in Shanghai. A mixed crop of macro headlines out of China, including one showing that annual industrial output growth slowed to 3.8% in January and February from 5.7% in December, is pressuring prices In addition, it was reported that Chinese retail sales growth slowed to 15.2% in the first two months of the year compared with 19% in December.  ... Out of India, Bloomberg reports that the country posted its first back-to-back decline in industrial production in 16 years. Output at fell 0.5% in January from a year earlier after a revised 0.6% drop in December. Prime Minister Singh has reduced taxes and the central bank slashed interest rates to a record low, but these measures have yet to bear fruit .. We are currently at $9,581 on nickel, down $219 in very listless trading." (read Ed Meir's complete morning base metals report here)
• (SG) According to Mr Yu Zisu general manager of Pangang, the huge profits ear of steel industry has gone and will never return. As per Mr Yu a majority of the steelmakers are making losses as the oversupply intensifies lured by lofty prices in the previous years before coming of abrupt pressure of the slowing economy.
• (FT) The majority of investors plan to increase their exposure to commodities but are shifting away from the long-only, passive indices that characterised the asset class in the early 2000s and are instead moving into more sophisticated instruments. The findings, in a survey by Barclays Capital among 230 institutional investors, corroborate anecdotal evidence that pension funds, sovereign wealth funds and other investors were shifting away from indices such as the S&P GSCI.
• (CM) China's steel products export in February hit a 52-month low of 1.56 million tons, down 62 percent from the same period last year and 18 percent from the previous month, according to customs data released Wednesday.
• (Reuters) South Korea seeks 200 tonnes of nickel cathode
• Global recession deepening, Geithner says - more
• Freddie Mac posts $23.9-billion loss - more
• Daimler puts 18,000 truck workers on partial layoff - more
• CSM slashes US auto sales outlook for 2009 - more
• ‘Great Recession’grips world — IMF - more

  World economic crisis drives 2008 stainless production lower - Hong Kong, 12 March 2009. The world stainless steel production reached 25.9 million metric tons (mmt) in 2008 according to preliminary figures released today by the International Stainless Steel Forum (ISSF). The total is 6.9% lower than 2007 level. - more

  Australia's Western Areas to double nickel output - West Australian nickel miner Western Areas NL plans to double output of nickel-in-concentrate in 2010 after signing a supply agreement with BHP Billiton, the world's top miner. - more

  World Production Of Ferro-Chrome In CY 2008 = The Output In Q4 / 08 Had Large Decrease Of 34.5% Compared To That In Q3 / 08 - In order to cope with the suddenly and considerably decreased world production of stainless steel, ferro-chrome producers in the world, mainly in South Africa, have entered from October of 2008 into the structure to reduce their production of ferro-chrome and, according to a primary report compiled by ICDA (International Chrome Development Association), the world output of ferro-chrome in the fourth quarter (October - December) of 2008 came to approximately 1,428,000 tons. - more

  Jinchuan Group expecting $292 mln in net profit this year   - Jinchuan Group Ltd., China's largest nickel producer, expects a net profit of RMB 2 billion ($292.66 million) in 2009, which will represent a decline of more than 50 percent from that recorded in 2008, a company employee told Interfax on March 12. - more

  China mills demand 2007 iron ore prices-Shougang - Shougang Iron & Steel, China's sixth-largest steel maker, said on Wednesday Chinese steel mills would only accept global iron ore prices close to the 2007 level, which would give both miners and steel firms reasonable profit margins. - more

• Novolipetsk Says China Steel Demand Might Dip After Revival - OAO Novolipetsk Steel Chairman Vladimir Lisin said demand in China may dip after a “small revival.” - more

  Philippine mining industry hit by financial crisis - Mining companies in the Philippines are cutting staff, putting some projects on hold and scrambling for cash as the global crisis financial drags down commodities prices, industry officials say. - more

  Severstal posts $1.2 billion net loss in fourth quarter - Severstal, Russia's biggest steel producer, reported a net loss of $1.2 billion for the fourth quarter of 2008 because of an "exceptional drop" in demand for steel. - more

  US steel plate mills are undercut by service center deals - A lack of demand and a strong effort to clear service center inventories are combining to sharply drive down steel plate prices in the US. - more

• China's steel rebar prices remain weak over Feb 27-Mar 10: CISA - China's domestic steel rebar prices continued to be weak over the period February 27-March 10, the latest survey on domestic prices by the China Iron and Steel Association showed Wednesday. - more
• Egyptian steelmakers demand protection against low priced imports - Egyptian steel producers are demanding that the government take steps, including imposing import duties on steel products, as a means of protection against lower priced imports, steel producers in Egypt told Platts Monday. - more
• Dumping on Global Trade - The European Union's move last week to apply antidumping duties on U.S. biodiesel is particularly riling to Americans, coming as it did just hours before Gordon Brown's lecture to the U.S. Congress about resisting protectionism. - more

  New Secretary General for ISSF - Dr Staffan Malm, Secretary General of ISSF, has announced his intention to retire at the end of March 2009 after eight years at the helm of the world’s leading stainless steel forum. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 12 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, March 11

• Baltic Dry Index - minus 27 to 2,271. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Investment Surges 26.5% on Stimulus; Exports Decline by a Record // Japan's Machine Orders Drop for Fourth Month as Exports, Earnings Collapse // Yen Advances as UBS Posts Larger-Than-Forecast Loss, China's Exports Slump  // Asian Stocks Extend Global Rally as Citigroup Buoys Banks; HSBC Advances // UBS Has $18 Billion Loss for 2008, Wider Than Reported, on U.S. Settlement // Global Confidence Drops as Economies Contract, More Companies Need Rescue // Stocks in Europe Rise; Rio Tinto, Deutsche Bank, BMW, Barclays Shares Gain // Citigroup, Bank of America Bondholders May Be Next to Share Bailout Pain // Geithner May Use Capital Injections to Help U.S. Banks Sell `Bad' Assets // Fed Interest-Rate Policy Didn't Cause U.S. Housing Bubble, Greenspan Says
• The US Dollar continues to trade lower against the Euro, by 2/3 of 1%. NYMEX crude oil is trading nearly 2-1/2% lower after data show US inventories of crude unexpectedly grew last week. Gold is up over 1-1/2%, while silver is trading nearly 2-1/4% higher. Base metals ended much like they were trading this morning, with aluminum the only winner on the day. Indicator charts show nickel traded in a very thin range today of only $200/tonne, and Dow Jones reports three month nickel ended the day at $4.44/lb . The Baltic Dry Index slipped overnight, down 27. Nickel, stored in London Metal Exchange authorized warehouses grew overnight, and now stand only 16 tonnes shy of the 100,000 tonne level. Factory orders in Germany plunged 8% in February, much worse than expected. Germany is reeling today from news that a teen gunman has killed 16 at a Winnenden school.  Back in the States, where the public is learning details about a single gunman killing 10 in Alabama overnight, foreclosures.com reported that U.S. foreclosures in February jumped by 67% after dropping in January. This is shocking, especially when you consider all the announcements made last month by the big banks and Fannie and Freddie, that they would be putting in place a temporary moratorium on bankruptcies. Unless those announcements were not supposed to take effect until March the 1st, then this dismal reading could have been much worse. As it stands, 121,756 American families lost their homes in February, up from 72,694 in January. Wall Street is having a problem today building on yesterday's market momentum, with early morning gains slipping away into the red. Kevin Giddis, a bond analyst with Morgan Keegan & Co told MarketWatch, "Very little has changed as it pertains to the economy, so enjoy the rally and look for another place to sell."

  Commodity/Economic Comments

• (China media) Stainless steel output in China fell by 3.56% YOY in 2008. Imports fell 28.59%, exports fell by 18.8%, and consumption fell 5.17% in 2008 YOY. Production of molybdenum-based stainless steel grew 18.6% in 2008, while production of duplex stainless steel grew by 159.5%.
• (Dow Jones) Ukraine is likely to produce 30 million metric tons of steel in 2009 compared with 37.1 million tons in 2008 as orders fall due to the financial crisis, the industrial policy ministry said Wednesday.
• (Dow Jones) Russian steelmaker OAO Severstal (CHMF.RS) said Wednesday it will not pay a dividend for the fourth quarter of 2008 or 2009, and plans to cut capital expenditure by two thirds, as well as cutting thousands of jobs, citing a "very challenging outlook", although the firm said that it sees moderate improvement in steel demand.
• Iran: global economic order 'unfair' - more

  Metals Insider:Stockpiling can be bad for your health - China, as every reader of this column should know by now, is snapping up metals at the recent cycle lows to add to its "strategic reserves." - more

  Samancor: re-started furnaces to produce 130,000 tonnes/yr - South Africa's privately owned Samancor Chrome said on Wednesday the two furnaces it re-started this month would produce an annualised 130,000 tonnes of ferrochrome, but was unsure when the market would recover. - more

  Nickel miner expanding product line - Platinum Group Metals Corp. is expanding its product line to ensure the continuous operation of two ferronickel smelter plants in Northern Mindanao. - more

  China world trade falls stunning 25% - China has shocked the world with a stunning collapse in global trade, but there is some hope its continued domestic investment could soften the blow to the Australian mining sector. - more

  Ukrainian steel output could drop 19% in 2009 – ministry  - Steel production in Ukraine could fall 19.1% in 2009, to 30 million tonnes from 37.1 million tonnes in 2008, Deputy Industrial Policy Minister Serhiy Hryschenko said Tuesday. - more

  Sector Snap: Steel - Weak demand continues to pull down prices in steel sector, analyst says - more

  Courtesy China Economic Information Daily

• China: Analyzing Trade, CPI Numbers - On Monday CPI and PPI numbers for February came out. CPI was down 1.6% year and year and PPI was down 4.5%, in line with or slightly below expectations and, according to Bloomberg, the highest rate of deflation among the 78 countries they follow. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:45 am CST show 3 month nickel trading around  $.03/lb lower, as are all base metals except aluminum. The US Dollar continues to fall, trading down 6/10 of 1% against the Euro. Gold and silver are trading slightly higher, while NYMEX crude futures show a near 1-1/2% drop. In overnight trading, Asian markets ended well higher, while European markets are slightly higher in morning trading. With little news to direct it, Wall Street is carrying forward under the positive momentum from yesterday's biggest one day gain since November, and shows a higher opening. US markets were happy to hear Rep. Barney Frank's statement that the Securities and Exchange Commission was close to reinstating the uptick rule limiting short sales, and even overlooked Fed Chairman Ben Bernanke's call for more government oversight into Wall Street's dealings yesterday. Typically, such a statement would drive a market lower, but yesterday, nothing was stopping the bull run. Looking at the world markets these days is like being in a doctor's office, being told the world patient has cancer and a leg that won't quit bleeding. Until the bank bleeding stops, the economic cancer can't really be dealt with adequately. Yesterday's announcement by Citigroup that it is was profitable the first two months of this year, gave traders hope that the doctor was finally bringing the bleeding problem under control. We will see if it holds. In the mean time, based off this chart by EconomPic, stainless or nickel is not the business to be in these days (graph here)   
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Base Metals Special Report - pdf here
• China Commodities Weekly for the Week of March 2-6, 2009 - here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices finished higher yesterday, led mainly by copper, which was boosted by yet another fall in LME stocks-- now down by some 46,000 tons since the end of February. Other variables were also instrumental in preserving the gains in metals; the dollar finished slightly weaker, while the US stock market had its best rally for the year, finishing some 400 points higher on the day. ... As of this morning, prices are mostly lower in quiet trading despite quite a bit of data that is making the rounds. ... We are currently at $9,875 on nickel, down $60, and fairly quiet." (read Ed Meir's complete morning base metals report here)
• (SBB) SBB reports that stainless steel production increased at some Chinese mills in February but output is likely to remain unchanged in March, according to company officials.
• (Yieh) According to the statistics from the customs, Japan exported stainless scrap of 15,700 tons in January, up by 0.9 percent on last December.
• (AMM) Zhangjiagang Posco Steel Co. Ltd. plans to stop producing 400 series stainless steel this month and has already stopped offering material, while Baosteel Group Corp. Ltd. also plans to reduce 400 series production and replace it with increased output of 200 and 300 series stainless, market sources said
• (CM) China is expected to launch steels futures contracts on the Shanghai Futures Exchange (SHFE) at the end of March, an insider revealed.
• Raw Material: Who Is Benefitting from China's Rising Demand? - more
• (China Daily) China's foreign trade reached $266.77 billion in the first two months this year, down 27.2 percent from a year ago, according to the General Administration of Customs.
• Chief Executive peter Hambro of Peter Hambro Mining Plc - "I wish that I could be more positive. There are signs that things are getting better but I don't how they can become properly better until the banking system is in good shape. I am scared about the whole world at the moment."
• Banks were January net buyers of 1.1 million oz of gold: CPM - more
• China plays down deflation fears - more

  China Jan/Feb steel output rises on yr earlier - China's production of crude steel in January and February combined rose 2.4 percent from a year earlier, the Ministry of Industry and Information Technology said on Tuesday. - more

• Chinese steel market needs output cut - Mr He Yonghua - According to Mr He Yonghua GM of Shanghai Baoxia Metal Co market prices of construction grade steel products like rebar and wire rod continue to drop since February, making operators puzzled about the future market. Steel market was no likely to warm up without mills' production cut. - more
• China Shipping says coastal shipping rate down 39 pct - China Shipping Development Co Ltd said on Tuesday its average freight rate for domestic coastal bulk cargo contracts dropped nearly 40 percent in 2009, following plummeting global freight rates. - more

  Xstrata sacks 106 S african workers over strike - The world's largest ferrochrome producer, Xstrata said on Wednesday it had dismissed 106 workers at its Rustenburg smelter in South Africa for taking part in an illegal strike over pay. - more

  Norilsk Nickel to re-sell buyback shares-paper - Russian mining giant Norilsk Nickel has decided to sell the same shares it recently bought back from investors at a hefty discount to the buyback price, Kommersant newspaper reported on Wednesday. - more

  Western Areas shares in trading halt - Nickel producer Western Areas NL shares are in a trading halt pending an announcement about a concentrate offtake and funding agreement. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

• Baltic Dry Index - plus 36 to 2,298. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Consumer Prices Fall for First Time Since 2002 as Economy Falters // Malaysian Government Unveils Second Stimulus Plan as It Predicts Recession // Dollar Declines as Global Stock Gains Reduce Safety Demand for Greenback // Asian Stocks Rally From Five-Year Low as HSBC Surges; Sony, Hyundai Drop // Banco Popolare Becomes First Bank in Italy to Ask for Aid From Government // Industrial Production Slumps in U.K., France, Threatening Deeper Recession // European Stocks Gain, Led by Financials; UniCredit, Deutsche Bank Advance // Hedge Funds May Eliminate a Record 20,000 Jobs in 2009 as Losses Cut Fees // Bernanke Urges Overhaul of Financial Regulations to Stem Buildup of Risks // U.S. Stocks Rally as Citigroup's Profit Outlook Drives Bank Shares Higher
• The US Dollar continues to trade lower against the Euro, but off session highs and currently by only 1.1%. NYMEX crude has been fairly quiet so far, only trading higher by 1/2%. Gold and silver are much lower, in the area of 3%, with gold falling below $900/ounce. Backed by the strength in the Euro, base metals all traded higher today. Indicator charts show nickel opened quietly, then as US equity markets opened with their foot on the gas, nickel joined the race. Dow Jones reports three month nickel ended the day at $4.50/lb . Fundamentally, nothing changed for nickel today. Inventories stored in LME warehouses slipped slightly, but still rest less than 500 tonnes away from the 100,000 tonne level. The Baltic Dry Index rose slightly, but Seatrade Asia reports "The Baltic Dry Index yesterday rose to the highest since October 9 on demand to ship South American grains." China reported production of steel increased compared to the same time last year. This is positive, keeping in mind that last year at this time, China was rushing to prepare for the Olympics. China National Bureau of Statistics released data today showing that in February, the consumer price index fell 1.6% .... factory prices of industrial products fell 4.5%, raw materials, fuel and power purchase prices fell 7.1%. In Europe, industrial production in the UK and France fell much more than expected in January, as did Germany's exports. Back here in the States, wholesale stock-to-sales ratio grew to 1.30. So fundamentally, nothing positive changed for nickel, or for that matter, the global economy. But psychologically, we stated yesterday in our morning briefing "Looks like another rough opening, but this market is technically overdue for a bounce, albeit a corrective move only, not necessarily a shift in overall direction." Today's stock market, on the heels of surprising news that the 'butt of all penny-stock' jokes last week, CitiBank, is potentially profitable again, followed the spiking financial sector, and appears to be starting a 'corrective bounce'. And bruised and battered base metals jumped on the bandwagon. Will the rally stick? That is very unlikely. And nickel? With nothing but bad news coming from market fundamentals, traders will continue to watch the dollar, other commodities, and world stock markets to gauge investor sentiment. That being said, a 5% gain in only a half a day of Wall Street trading, is a very welcome site indeed.

  Reports

• Commodities Daily - pdf here
• Commodity Tracker - pdf here
• 2009 Reuters Global Mining Summit Notebook - here

  Commodity/Economic Comments

• Macquarie analyst Jim Lennon - "For stainless steel, 2009 will be the third successive year of decline in world production and this represents a significant disruption of a long period of strong growth. We now foresee that even by 2011, world demand will remain just below the level achieved in 2007, suggesting a prolonged slowdown and little need for new capacity over this period."
• DailyFX Research - China has set a plan to cut its export taxes to zero in an effort to encourage producers to sell their products abroad, the nation’s commerce minister said today. He added that the Asian country will “use all possible measures to ensure the stable growth of our exports and prevent a large drop in external demand.”
• Macquarie analyst Jim Lennon  - “With steelmakers looking to cut production again, iron ore purchases have been reduced and there are reports of distress sales and offers by iron-ore traders... We would expect exports from India to contract once again in coming months.”
• Zambia asks Glencore to surrender two copper mines - more
• Will China Buy The World? The Beijing Debate - more
• $50 trillion reportedly wiped off world financial assets - more
• They Tried to Outsmart Wall Street - more
• Should there be limits on commodity investment? - more

  Oriental Peninsula defers Palawan nickel project - Listed miner Oriental Peninsula Resources Group, Inc. will defer commercial operations at a Palawan nickel mine given low metal prices and bad weather in the area, a company official said. - more

  Ferrochrome prices are sliding weekly - U.S. ferrochrome prices have been slipping by about 1¢/lb weekly as spot buyers stay away from the market, and traders see little chance of a recovery as long as steelmakers are operating below 50% of capacity. - more

  China Jiugang postpones Kazakh JV plan - ex-chairman - Jiuquan Iron and Steel Group, one of China's biggest stainless steel makers, has postponed its joint venture project with Eurasian Natural Resources Corp Plc, the Chinese company's former chairman said on Tuesday. - more

  China Jan/Feb steel output rises on yr earlier - China's production of crude steel in January and February combined rose 2.4 percent from a year earlier, the Ministry of Industry and Information Technology said on Tuesday. - more

• China's consumer prices fall but steel output rises - China's consumer price index fell for the first time in more than six years in February, dropping 1.6 per cent from a year earlier. - more
• Prices hit as China turns away iron ore - Hopes are fading that the New Year rebound in Chinese iron ore demand was the start of a lasting recovery. - more
• China's Baosteel says considering to quit $2.8 bln JV - Baosteel Group, China's largest steelmaker, is considering shedding its 50 percent stake in a 19.4 billion yuan ($2.84 billion) joint steel plant, a Baosteel official said on Tuesday. - more

  Samancor warns of job cuts - Samancor Chrome, the South African chrome miner and ferrochrome producer that is jointly owned by BHP Billiton and Anglo American, on Tuesday warned that it could retrench up to 900 employees or 20% of its workforce as a result of continued output cuts. - more

  Morning Briefing (8:00 AM CST is 1PM in London until 3/29/09)

• Indicators at 7:30 am CST show 3 month nickel trading around $.07/lb  higher, as are most base metals. The strength in the Euro this morning is adding fuel to metals, as it is trading over 1-1/2% higher against the US Dollar. Gold and silver are both trading over 1% lower, while NYMEX crude futures show a nearly 1% rise. In overnight trading, Asian markets ended higher. In today's trading, European markets are trading higher, and futures show Wall Street will open strongly. A memo to employees of Citigroup from CEO Vikram Pandit claims Citigroup was profitable during the first two months of the year. With everyone agreeing that until the financial system is stabilized, there can be no economic recovery, this news from Citigroup is being welcomed by traders. CEO Ken Lewis of Bank of American told the Wall Street Journal that its problems were not as serious as Citigroup. Fed Chairman Ben Bernanke is making a speech right now, in which he has reiterated the Fed will not allow big banks to fail. United Technologies announced this morning it will cut 11,600 jobs. Manpower released a report this morning. According to MarketWatch, "for the first time since the survey started in 1962, the seasonally adjusted net employment outlook -- the number of firms hiring minus those firing workers -- turned negative." That means the survey found more employers plan to fire in the future, than hire. A reporter on NBC last night reported that President Obama is discouraged by his inability to get thru to Wall Street, and has ordered his big guns into the media spotlight.
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Global Mining News  - pdf here
• Weekly Commodity Price Report - pdf here
• Steel Founders' Society of America February 2009 Casteel Reporter - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Copper ended lower on Monday in a very quiet session, as the metal seems to be stalling somewhat as it hovers around the upper end of its trading range. Nevertheless, we avoided any kind of heavy selling in light of the ongoing declines in LME inventories. Other metals were mixed; aluminum edged lower, as did nickel, but lead pushed slightly higher. Quiet conditions are again evident in today’s session, but this time, buyers seem to be having the upper hand, as another dip in LME copper stocks continues to steady the overall complex. In addition, a decent bounce in European and Asian equity markets, and a slight retreat in the dollar away from its safe haven status, is also contributing to the more positive tone. ...We are currently at $9,655 on nickel, down $20, but recovering from a $9450 low seen earlier in the day."  (read Ed Meir's complete morning base metals report here)
• (JMB) Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) announced on Monday the firm reduces the selling price by 60,000 yen per tonne for nickel series cold rolled stainless flat steel and by 43,000 yen for chrome series cold rolled flat steel for domestic distributors for March order. The firm reduces stainless plate selling price by 60,000 yen.
• Donald Coxe Speech for the 2009 Prospectors and Developers Association of Canada (PDAC) Convention - more
• PDAC 2009 Convention – the Mining Bust of a Generation? – by Stan Sudol - more

  Jinchuan Says China Is Unlikely to Buy Nickel for Reserves Now - Jinchuan Group Co., China’s biggest nickel producer, said the nation’s State Reserve Bureau is unlikely to buy the metal for its stockpiles now. - more

• China's top industrial official sees "positive signs" but cautious about recovery - China's top industrial official said Tuesday he has observed "positive signs" in the economy but warned it's still too early to talk about a recovery. - more

  Miners aiming high amid lower demand this year - Amidst the global economic downturn, local mining companies have set higher production targets this year primarily due to last year's shortfalls. - more

  Actual Quantities Of Ferro-Alloys Supplied And Consumed In Japan For Oct. - Dec. 2008 = Decreased Crude Steel Output By 14% Had Put Considerable Influence On Both Produced And Consumed - more

  China promises $7.8bn for Rio Tinto expansion - China is shoring up support for its investment in Rio Tinto by promising to invest up to $US5 billion in its expansion plans. - more

  Nordic Steel Price Forecast - Flat Products - The MEPS February Nordic Average Hot Rolled Coil transaction price slipped by over €20 per tonne. Hot rolled plate values recorded a larger fall of approximately €60 per tonne. - more

• Iron ore contract prices could fall 40pc in 2009 - ANZ - Falling steel prices in China spell "clear warning signs" that may lead to iron ore prices declining as much as 40 per cent in 2009. - more
• Metals to stay low but Rio, BHP a good bet -Baring - Near-term metals prices will stay low but big miners with high quality, low cost assets, such as BHP Billiton and Rio Tinto, are a good bet, the investment manager for Baring Global Resources Fund said. - more

  ENRC to review output cutbacks in Q2 - Kazakh mining group Eurasian Natural Resources Corp Plc will review its heavy production cuts in the second quarter, but it's still too early to draw conclusions from a few positive economic signs, Head of Marketing Jim Cochrane said on Monday. - more

  Nickel in Coffee - Last week, Danish media reported that Swedish researchers had measured the level of nickel in a number of coffee brands and that they concluded that the amount of nickel is higher in cheaper coffee. - more

  United Steelworkers sees more layoffs - The global recession and crisis in financial markets will likely lead to more layoffs among North American unionized workers, a top official from the United Steelworkers union said on Monday. - more

• All Operations To Idle At Severstal's Steubenville-Mingo Plants - Severstal North America officials told workers Monday the Electric Arc Furnace at the company's North Plant will be idled at the end of March. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, March 9

• Baltic Dry Index - plus 37 to 2,262. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) HSBC Falls to 13-Year Low in Hong Kong on Bad Loans Concern, Late Trades // Japan Posts First Current-Account Deficit Since 1996 as Exports Collapse // Malaysia May Spend $8 Billion in Second Stimulus as Export Slump Hits Jobs // Asian Stocks Decline a Second Day on Mounting Capital Concern; HSBC Slumps // Lloyds Declines as British Government Takes Majority Stake, Insures Assets // Straumur-Burdaras Seized by Icelandic Government After Funding Dries Up // Swiss Re Names Credit Suisse's Kielholz Chairman After Posting Record Loss // European Stocks Fall for Third Day, Paced by HSBC, Lonmin; Drugmakers Rise // AIG Told U.S. Failure Would Cripple World's Banks, Money Funds, Insurers // Ben Graham Shows S&P 500 Still 27% Too High as Buffett Loses $119 Billion // U.S. Stocks Fluctuate as Bank of America's Gain Offset by Buffett Warning
• The US Dollar is still trading higher against the Euro, but by a little over 1/10 of 1%, primarily on technicals . NYMEX crude oil is trading by over 3-1/2% higher on speculation OPEC members may agree to cut oil output at this weekend's meeting in Vienna, and news that Shell halted oil shipments from Nigeria due to a militant attack on its pipeline last week. Gold and silver prices are trading over 2-1/2% lower on news the world's largest bullion-backed exchange-traded fund reported its first outflow since early January. Base metals traded quietly today, and except for lead, ended lower. Indicator charts show nickel spent the day in choppy trading, but limited to a range of $200/tonne. Dow Jones reports three month nickel ended the day at  $4.38/lb . LME stored inventories of nickel grew over the weekend, and if they receive any shipment of equal size to today's growth amount, we will pass the 100,000 tonne level tomorrow. As it stands right now, we are less than 400 tonnes from that mark. The Baltic Dry Index is higher today but Dahlman Rose analysts noted that the strength in the BDI is "stemming mainly from grains activity as opposed to being industrial-driven". While the world news is gloomy, there were some positive bits of info out today. Car sales increased last month in both China and India. We posted an update to the Shanghai construction steel price below, which finally turned upwards. Whether it will last or not is anyone's guess, but we will keep you updated. US equity markets are choppy this morning, with no clear direction established for the day. Warren's Buffet's remarks to CNBC unnerved traders early this morning, followed by news that his mentor's "Graham’s and Shiller’s earnings ratio" reportedly would forecast the S & P needs to fall another 27% to bring the current slump in line with the three worst recessions since 1929. Having already fallen 56% over the last 17 months, this finding was mostly discarded into an ever growing stack of doom and gloom forecasts, but effectively added another heavy chain around the neck of any would be bulls who might have hoped to continue Friday's ending session sprint. The World Bank warned over the weekend, that the global economy will shrink for the first time since World War II, and put in its worst performance since the Great Depression. And South korea has announced it will buy metals to build up its strategic reserves, but noted, no nickel needed. Sheesh! Did we mention car sales increased in China and India?  

  Reports

• 3/6/09 Weekly Scoreboard - pdf here
• Weekly Forecast by SMM Specialist - here
• Reuters Global Mining and Steel Summit - here
• Weekly Commodity Intelligence - pdf here
• IMF Average Weekly Prices for Non-Fuel and Fuel Commodities - pdf here

  Commodity/Economic Comments

• (Dow Jones) South Korea plans to increase its purchases of strategic metals by 39% in 2009 to more than 200,000 metric tons. The country's Public Procurement Service will buy more copper, aluminum and minor metals for its strategic stockpile, and reduce its purchases of lead, zinc, tin and nickel, a PPS official said Monday.
• (Dow Jones) Lawmakers from Zambia's largest opposition party have warned of civil unrest in the country as a result of rampant job cuts in the mining sector, state-owned Zambia News and Information Services reports Monday.
• (Asia Pulse) Tata Steel, the country's leading steel maker, today said its February sales rose by 47 per cent to 5.84 lakh tonnes as demand firmed up from consuming sectors like automobile and construction.
• (Reuters) Eleven out of 38 investment banking specialists working in industrial metals and energy did not get a bonus last year, preliminary results of a survey carried out by UK recruiter BlackSheep showed on Monday.
• (Dow Jones) January Chinese and Japanese steel exports fell to their lowest level in over four years as the global economic downturn continued to take its toll on key automotive, construction, appliance and heavy machinery customers around world, data from the U.K.'s Iron and Steel Statistics Bureau showed. China, the world's biggest exporter with exports of 56 million metric tons in 2008, exported just 1.7 million tons in January, its lowest monthly export since July 2004. Meanwhile Japan, the world's second largest exporter with exports of 37 million tons in 2008, exported 1.9 million tons in January, its lowest monthly export since January 2001.
• Giorgio Radaelli, chief strategist at wealth manager BSI in Switzerland - "The recession is very dire. You have an incredible rise in risk premium so people expect the worst. Banking results are getting worse."
• Warren Buffett to CNBC - "People are confused and scared."
• European based Sentix research group - "The absence of ideas and action by officials on this and the other side of the Atlantic is unnerving investors more and more... Furthermore, investors are taking note of the sharply deteriorated economic situation in eastern Europe."
• India - Car sales jump in Feb but recovery distant - more
• “Always Darkest Before the Dawn” - more
• China’s February box throughput plunges - more
• Will falling iron ore prices propel drybulk shippers? - more
• Chinese ports brace for bleak year ahead - more

  Reuters Summit-Steel Assn sees better demand by end 09 - Global demand for steel is down around 20 percent at the moment, but with destocking nearing an end, the industry is likely to see some signs of recovery by the end of the year, a top industry official said on Monday. - more

  Iron ore prices plunge adds to gloomy outlook - Hopes are fading fast that the new year rebound in Chinese iron ore demand was the start of a lasting recovery. - more

• Half our mining companies will sack staff - More than half of Australia's mining and resource companies will sack staff in the next 12 months because of the dramatic economic downturn. - more

  Shanghai construction steel pricing - just a correction or a change in trend?

  The Last Days of the Oligarchs? - They are larger-than-life figures at home and abroad, men who saw themselves as the Carnegie's or Rockefeller's of Russia. They are known as oligarchs, and they may soon be thrown into the dustbin of history by the economic crisis. - more

  Molybdenum sulfide does away with (some) carbon nanotube problems - Carbon nanotubes are discussed as a future alternative to silicon-based transistors, but some material properties have turned out as an obstacle to industrial implementations - more

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

• Indicators at 7:45 am CST show 3 month nickel trading around $.05/lb  lower in a quiet session. Base metals traded in London are mixed and mostly softer. The US Dollar is trading nearly 1/2 of 1% higher against the Euro, NYMEX crude futures are a little over 1/2 of 1% higher, and gold and silver are trading about 1/3 of 1% lower. Asian markets ended lower overnight, European markets are trading lower this morning, and US futures show American markets will most likely follow the other markets into the red when they open. Markets opened today on the backdrop of a report released by the World Bank on Sunday that predicted that the global economy and the volume of global trade would both shrink this year for the first time since World War II. Market Watch lead story this morning is titled " A water-torture bear market". Think our readers heard that description of the market from us last week. MSNBC lead story is titled "Buffett to CNBC: Economy 'Has Fallen off a Cliff'" (more). Looks like another rough opening, but this market is technically overdue for a bounce, albeit a corrective move only, not necessarily a shift in overall direction. That appears to be heading lower for sometime.   
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Daily Metals - pdf here
• Metals & Mining Weekly - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals ended the week on Friday on a mixed note, with copper, zinc, and tin finishing modestly higher, while the rest of the group ended slightly lower. The complex was weighed down by yet another downdraft in US equities, especially during midsession, and the stronger dollar, which according to Bloomberg, finished at a six-year high against a basket of leading currencies.  ... With little news out over the weekend, markets are pushing lower this morning, as bank worries and deteriorating credit markets are hurting sentiment in the equity markets. ... We are currently at $9,775 on nickel, down $75, and starting to fade once again, as nickel never really managed to push higher with the rest of the group last week. Charts suggest a push down to $9250, the late February intraday low, which also lies along the bottom end of the trading range (green line)"   (read Ed Meir's complete morning base metals report here)
• (Yieh) Statistics showed that Japan imported 5,121 tons of stainless steel scrap in January 2009, down by 20.7 percent month-on-month, and will continue to decline in the after three months.
• (AP) Steel-bridge and specialty girder-manufacturer Grand Junction Steel, a company founded 62 years ago, is closing its doors and eliminating 100 jobs.
• The U.S. Financial System Is Effectively Insolvent - more
• The $700 trillion elephant - more
• Interesting chart comparison - here
• China February car sales up 33 pct on year - group - more
• China predicted to become world's No 2 economy by 2010 - more
• 'Over 20m migrant workers jobless - more
• CNBC Gives Financial Advice - video here

  Jinchuan CEO: Low Price Ended Nickel Sale To China Reserves - Jinchuan Group Ltd. lost a deal to sell nickel to China's State Reserve Bureau because the company felt the price offered by the agency was too low, Yang Zhiqiang, Jinchuan's chief executive, said Saturday. - more

• China to Overcome Global Recession First, Rogers Says - China’s stimulus spending will help its economy overcome the global recession sooner than the U.S. and other countries, investor Jim Rogers said. - more

  Metals Insider: Eastern promise lightens Western gloom - The LME industrial metals have recently been languishing at historical lows with sentiment in thrall to the dual financial and manufacturing crisis gripping large parts of the developed world. - more

  Nickel Price Is Unable To Be Sustained Even By Information Of Stockpiling In China = LME Nickel Stocks Are Approaching To Scale Of 100,000 Tons After Interval Of 14 Years - LME nickel prices have currently strengthened a pace to fall and LME nickel stocks as of the 25th of February came to 98,600 tons, which indicated a power to reach 104,000 tons as recorded in May of 1995 and corresponded to 8% of the world nickel production. - more

  Norilsk may close Tati Mine - The future of Tati Nickel Mine hangs in the balance following the surfacing of information that majority shareholder Norilsk Nickel could be pulling out of Africa to focus more on its Russian operations.- more

• Tati workers at the rock face of retrenchment - Tati Nickel Mining Company has given all workers between 1st and 31st March to apply for voluntary separation or face the high likelihood of involuntary exits and retrenchments from the mine. - more

  Malaysia to become key stainless player with new plant due 2010 - Malaysia is set to become one of the largest stainless steel producers in Asia with the construction of a $1.6 billion in the Tanjung Langsat industrial area, Pasir Gudang, in the state of Johor, the official Bernama news agency said Friday. - more

  Steel import license applications into Europe fall 7% in February - Global applications filed in February to import steel products into the EU-27 slipped 7% compared with January at 1.70 million mt, and 36% year on year, with China's filings decreasing 12% on the month to 216,000 mt, according to European Commission data obtained by Platts. - more

  Metal Bits Self-Assemble Into Lifelike Snakes - In the basement of a nondescript building here at Argonne National Laboratory, nickel particles in a beaker are building themselves into magnetic snakes that may one day give clues about how life originally organized itself. - story and video here

  Shuttering of Two Steel Plants Expected to Affect Whole Nation - Work being moved to three U.S. locations because of recession. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 9 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Friday, March 6

• Baltic Dry Index - plus 58 to 2,225. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Zhou Pledges Forceful Central-Bank Policies to Restore Confidence in China // Toyota Shock May Spur Japan Supplier Bankruptcies Without Government Aid // Bank of China to Lend at Least $73 Billion to Support Economy, Xiao Says // Asian Stocks Fall on Concern Losses at Financial Companies Will Increase // British Airways Debt Is Reduced to Junk by S&P, Remains on Negative Watch // Euro's Founders Foresaw No Chance of Currency Breaking Up, Verplaetse Says // European Stocks Fall for a Second Day; Intesa, UniCredit, Wolseley Decline // Unemployment Rate Rises to 8.1%, Highest in 25 Years, as 651,000 Jobs Lost // Volcker Says Commercial, Investment Banks Should Be Split to Avoid Crisis // Brazil's Output Plunges by the Most in 17 Years, Boosting Rate Cut Outlook (Market Watch) Friday rally falls to wave of give-backs
• The U.S. Dollar continues to trade 1% lower against the Euro, but is off session lows. NYMEX crude is off session high's, but still trading up higher by over 1-1/2%. Gold and silver are up, but by less than 1% and not showing the 'safe haven' buying they have in recent months. Base metals ended mixed, and indicator charts show nickel took an early morning bounce, only to watch the price slowly slide thru the rest of the session. Dow Jones reports three month nickel ended the day at $4.47/lb . Baltic Dry Index continues to rise, up 58 points. Nickel inventories stored in LME warehouses fell by a small amount overnight. For only the third time since Feb 4th, no LME authorized warehouses received a single shipment of nickel. There were 6 days in January alone that we did not see any received shipments, so the fact it has only happened twice in the last 32 days, is nothing to excited about, but note it as trivia. U.S. markets are lower so far today, after an early morning sucker's rally, but we aren't seeing the sense of 'panic' that we have witnessed during recent Friday's. Maybe it's because the market has been in a slow bleed for so long, instead of just having that one big "get-it-over-with-crash" that causes people to jump out windows, that traders are growing more numb with the loss of blood, or in this case, cash. Even the boxer realizes that if he is stepping into the ring only to get knocked out again, there comes a time, when it's in his best interest, to sit on the sidelines, until the odds swing to his favor. And speaking of sidelines, while most of the world has already started theirs, we Yanks start our weekend in a few hours. So blow off all this economic stress, and go find something fun to do. If you don't have any money, think back to when you were young and didn't 'need' money to have fun.
• We wish you all a safe and relaxing weekend.  

  Commodity/Economic Comments

• Mark Parr, analyst at KeyBanc Capital Markets - “We lack evidence of end demand recovery across most key end markets, and pricing metrics for scrap and steel products look likely to remain in a downtrend for March.”
• (Market Watch) The consensus of private forecasters is for the unemployment rate to get close to 9% next year, with some forecasters looking for a 10% rate. The Federal Reserve doesn't expect the unemployment rate to fall below 7% until 2011.
• (WSJ) The Labor Department reported today that its most comprehensive measure of joblessness hit 14.8% in February, from 13.9% in January. That’s just about 1 out of 7 Americans who are either unemployed and looking for a job, want a job but stopped looking, or part-timers who want full-time jobs.
• Unemployment Graph - here
• Commentary: 'Green jobs' won't do much to end recession - more

  Reuters Summit-Battered mining sector waits for recovery - Mining industry players, burned by a collapse in prices after several years of booming markets, are prepared for an extended downturn, hoping China will eventually regain its enormous appetite for metals. - more

  China sees signs economy might be recovering - China sees signs economic growth is recovering but is watching closely to determine whether it needs to expand its huge stimulus effort as global conditions worsen, top economic officials said Friday. - more

• Signs that Asian markets may be bottoming - After a big rout in US markets overnight when benchmark indices like the Dow Jones Industrial and S&P 500 plunged to new 12-year lows, Asian markets are all opening up substantially lower on the last day of what has been a fairly horrific week for investors worldwide. - more

  Mining firms hit by crisis - Mining companies are cutting staff, putting some projects on hold and scrambling for cash as the global financial crisis drags down commodities prices, industry officials say. - more

  China Wuhan Steel says unable to afford term ore - Wuhan Iron and Steel Group, China's third largest steel mill, has bought iron ore only on spot markets since January as it cannot afford 2008 term prices because steel oversupply is hurting profits, its president said. - more

  Hot-rolled steel sheet drops to $480/ton; cheaper imports available - The steel sheet market has continued to weaken this month with buyers reporting spot prices for prime hot-rolled sheet in coil around $480/net ton, down from the $499 price average of February. - more

  Brazil Economists Slash Lending Rate Forecasts on Output Drop - Economists slashed their forecast for Brazil’s benchmark lending rate after being surprised by a report showing industrial output fell the most on record.  - more

  Shanghai construction steel pricing

  Analyst points to steel industry's strength - An KeyBank Capital Markets analyst said Friday the steel industry was in relatively solid financial condition despite weak demand for the metal and expected further declines in prices this month. - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.03/lb higher, with all base metals currently higher. The Euro is helping metals, having done a complete 180 from yesterday, and now it is trading 1% higher against the US Dollar.  NYMEX crude futures show 1-1/4% higher, while gold and silver are only slightly higher. Asian markets ended lower overnight, European markets are trading lower this morning, and US futures show a negative opening on Wall Street. The much feared February jobs data has just been released and came in just slightly worse than expected, with the unemployment rate jumping to 8.1%. 651,000 is the largest one-month jobs loss in almost 60 years. As we upload the morning briefing, the markets have not really had time to react to this report yet.    
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• BHP Presentation to Barclay's Conference - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices gave ground on Thursday, but considering the steep rise in the dollar and the carnage that befell Wall Street, the complex did a good job holding up as well as it did. Although commodities have to some extent, decoupled from the equity markets of late, yesterday's move lower in stocks was too large to ignore. ... Metal prices are slightly higher at the time of this writing, as a receding dollar and another dip in LME copper stocks is leading to some buying. Even an unexpected weekly rise in Shanghai copper stocks (see our table above) did not lead to much selling overnight. However, trading remains quiet ahead of the key February nonfarm payroll number out later, with US equity markets expecting the worse, and already pointing to yet another lower opening.  ... We are currently at $9,915 on nickel, up $95, and still very quiet; stocks have pushed up over the 60,000 ton mark on the LME."(read Ed Meir's complete morning base metals report here)
• (JMB) NSSC Lowers Stainless Wire Rod Price by 12-20% for Mar-May
• (AFB) The South Australian Economic Development Board (SAEDB) has suggested that the state's mining sector is unlikely to recover from the global financial crisis before 2015. The SAEDB said in its economic statement that the wider Australian mining sector on the other hand should be able to accomplish this
• Mining Jurisdictions & Investing in Stable, Friendly Regions - more
• Rolls-Royce, Ferrari Suffer as Slump Reaches New Rich - more
• European Car Output to Fall 25%, Sales to Drop 20% - more
• Australian Dollar Will Drop 17% This Year, Morgan Stanley Says - more
• The Obama Budget: How Will It Impact Commodities? - more
• Commodity Prices Bottoming Out, Recovery Due, Barclays Says - more
• Interfax - Iron ore stockpiles at China's 22 major ports stood at 60.6 million tons on Friday, March 6, up 2.18 percent from Feb. 27

  Commodity traders face tighter rules - The prospect of more regulation of global commodities markets increased on Thursday after a leading watchdog asked for new powers to gather information about transactions in the opaque over-the-counter market. - more

• Commodity Boom Wasn’t Speculation, Regulators Say - Commodity markets were more likely driven by supply and demand than speculation in last year’s price spikes, an international group of regulators said, while calling for more powers to guard against manipulation. - more

  Baosteel Says Steel Prices Are Close to Output Costs  - Baosteel Group Corp., China’s largest steelmaker, said prices are close to its production costs, indicating that the country hasn’t had a “real” demand recovery. - more

• Glut of steel could worsen as shipbuilding orders plunge - Surplus of steel supply for shipbuilding in China may worsen due to the decline of new shipbuilding orders and growing production capacity of steelmakers, an expert said. - more
• China Feb steel output worrying oversupply -CISA - China's crude steel output was 1.42 million tonnes a day in February, equivalent to about 520 million tonnes a year and a "worrying oversupply", Deng Qilin, chairman of the China Iron & Steel Association, said on Friday. - more

  FeCr Price For Shipments To Japan In Q1 / 09 Is Contracted Again At 87 US-Cents / Lb. = Nippon Steel & Sumikin Stainless Steel, For Limited Quantity - "Nippon Steel & Sumikin Stainless Steel so far expressed to skip with nil of new contract on import of high carbon ferro-chrome (including charge chrome) for shipments to Japan in the first quarter (January - March) of 2009 but said on the 2nd of March that, as a result of adjustment of the existing contracts, a margin to purchase some quantity of high carbon ferro-chrome has been found out and, therefore, started to contract again this ferro-alloy on the basis of benchmark price of 87 US-Cents per lb. of Cr CIF. " - more

  Mining firms worried about China money - Concern surrounding Chinese investment in Australian resource companies has reached fever pitch but lawyers say there are measures that could protect the national interest without removing the welcome mat. - more

• Mine sector 'needs to boost jobs' - The Queensland Resources Council (QRC) says the mining sector will need to employ about 20,000 people over the next 10 years, despite the global economic downturn. - more
• Cyclone Hamish May Bring Rain, Wind to Northeast Australia - Tropical Cyclone Hamish, located off Australia’s north east, may bring damaging wind gusts to coastal regions, Australia’s weather forecaster said. - more

  If iron ore benchmark system ends, we will have to follow: Vale - Brazilian miner Vale, the staunchest supporter of annual pricing of iron ore (the benchmark system), admits that an eventual migration to a new pricing system, such as spot or index-based, is out its hands and that at the end of the day, Vale would have to follow the direction taken by the market, Fidel Blanco, managing director of iron ore sales, said Thursday at Handelsblatt's Stahlmarkt conference in Dusseldorf.- more

  German Steel Production Plunges as Global Recession Deepens - German raw iron and steel production plunged in February as industrial output fell and manufacturing orders extended the worst decline on record. - more

  In Cuba: Hydroelectric Power Station in Moa, Holguin Almost Ready - The construction of the small Hydroelectric Power Station (PCHE) of two megawatts in Nuevo Mundo, Moa in the eastern province of Holguin, is almost complete. All that needs to be finished is the water drainage channel after using the potential energy. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 6 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, March 5

• Baltic Dry Index - plus 83 to 2,167. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Globe & Mail) U.S. factory orders fall for record sixth month (Bloomberg) Taiwan Names Hsuan to Oversee Revamp of Chip Industry // Philippines Cuts Rate Less Than Expected on Inflation // China’s Wen Says 8% Growth Target Is Within Reach // Asian Stocks Rise as China’s Wen Affirms Economic Growth Target  // Bank of England Cuts Rate to Record Low 0.5%, Will Buy $211 Billion Assets // European Government Bonds Rise as Trichet Signals ECB May Cut Rate Further // European Banks May Need $50 Billion for Bad Loans in East, JPMorgan Says // European Stocks Retreat; Aviva, Salzgitter, BHP Billiton Shares Decline // Mortgage Delinquencies in U.S. Increase to Record as Homeowners Lose Jobs // Citigroup, Once World's Biggest Bank by Value, Sees Stock Decline Below $1 // U.S. Stocks Retreat After China Signals No Additional Stimulus; GM Slumps
• The US Dollar is still trading higher against the Euro, off earlier highs but still up by nearly 1%. NYMEX crude is down nearly 3%, while gold and silver are both trading in the 2% higher range. Base metals ended mixed, and for the most part, quiet. Indicator charts show nickel opened lower and spent much of the day trading in a $125/tonne range, before late trading saw it slump hard. Dow Jones reports three month nickel ended the day at $4.45/lb . The Baltic Dry Index rose again, as did LME inventories of nickel. According to Sucden's day old chart (here), the RSI and SStoch showed a market opening this morning in an overbought situation, and with the Euro much weaker, nickel held its own today. And then there was yesterday's big news that China's Chairman would announce a new stimulus in his speech to the National People's Congress last evening, something that we cast serious doubt on in yesterday's afternoon update. There is an old adage in the markets "Buy the rumor, sell the news", and today's market is proving that correct. While we were right, that there would be no "new" stimulus package announced in China last night, we also note that Chairman Wen's claim last evening, that China would still grow by 8% this year, could easily force the government to look at further stimulus incentives in the future. As AFP reported the 8% is a "rate officials have stressed is needed to prevent social unrest triggered by widescale unemployment". Back in the States, Market Watch wrote early this morning that "The bulk of Wednesday's rally was wiped away early Thursday as doubts surface over China's stimulus." Since that article, all of yesterday's gains on Wall Street have disappeared. Tomorrow could be a big day on Wall Street, as we get February employment numbers. It is also Friday, the day that the market apparently becomes nervous about FDIC bank seizure possibilities, so the weekly big bank nationalization debate will probably be a topic of discussion once again. But first, we have to make it thru today, and with the S & P approaching a 4% decline, today is looking brutal enough.

  Commodity/Economic Comments

• (Dow Jones) Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA announced late Wednesday it has temporarily suspended operations at Furnace 1 at its Cubatao, Sao Paulo State steel mill. ... According to a Usiminas press release, the shutdown will begin on March 9 and will last about 90 days.
• (SBB) Tsingshan Holding Group’s new nickel pig iron plant in Fuan city in China’s southern Fujian province will be commissioned later this year
• Glenn Maguire of Societe Generale - "Just because Premier Wen did not utter the exact words “we have a new stimulus package” should not detract from the fact that a significant ramp up in spending and sharp deterioration in the fiscal position is occurring."
• The Great Depression, to 1935 - here (good reading)
• China Exporters Blame Yuan in ‘Life and Death’ Crisis - more
• (AP) A stunning 48 percent of the nation's homeowners who have a subprime, adjustable-rate mortgage are behind on their payments or in foreclosure, and that's not the worst of it, new data Thursday showed. ... A record 5.4 million American homeowners with a mortgage of any kind, or nearly 12 percent, were at least one month late or in foreclosure at the end of last year, the Mortgage Bankers Association reported(more)
• Thermal Coal Prices May Drop, Standard Chartered Says - more

  China to Boost Commodity Imports to Build Stockpiles  - China, the world’s second-biggest energy user, will increase imports of commodities including oil and boost inventories of strategic raw materials while prices are at their lowest in seven years. - more

  ‘Suicidal' raw chrome export worsening - Merafe - The "unbridled" and "suicidal" export of raw chromite ore from South Africa - in place of the ten-times-more-valuable beneficiated ferrochrome - is worsening as in terms of the volumes of raw chromite ore that are being exported from South Africa to China. - more

  Mirabela offers uncertain outlook - Mirabela Nickel Limited reported a net loss of $48.42 million for the six months to 31 December, from a profit of $9.75 million a year ago. - more

  Indonesia Delays New Trade Rule Opposed by Exporters; Includes Crude Palm Oil, Cocoa, Coffee Exports - Indonesia has delayed a new trade rule covering payment for exports by up to six months because of strong opposition from exporters, Trade Minister said on Thursday. - more

  Emirates Steel Industries Receives First Sea Shipment of Iron Oxide Pellets - Emirates Steel Industries, the UAE’s only integrated steel producer, announced that they have reached another major milestone as they prepare to start up their new multi-billion dirham plant. - more

  India's April-Feb steel output up 1.3 pct on year  - India's steel output rose to 51.50 million metric tonnes in the first 11 months of the 2008/09 financial year that ends in March, up 1.28 percent from a year earlier, government data showed on Thursday. - more

  European steelmakers seek public money to cut CO2 - European steelmakers said Thursday they needed EU governments to help pay for euro1 billion ($1.25 billion) in climate change projects that could keep jobs in Europe as new rules penalize polluters. - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.06/lb lower, with all base metals trading lower. Considering the news from China was disappointing to all those speculating on another large stimulus package being announced, and considering the Euro is getting hammered today, base metals are holding up rather well. The Euro is trading lower against the US Dollar, over 1% lower, after the European Central Bank cut lending rates. Gold is up nearly 1%, with silver up 1.7%. NYMEX crude futures are down over 3%. In overnight trading, Asian markets ended mixed, with the S & P Asia 50 showing a 3/10 of 1% lower ending. European markets are lower this morning, and futures imply Wall Street could open in a grumpy mood. The Labor Department just reported new claims fell by 31,000 to a seasonably adjusted 639,000 last week, but continuing claims rose to a seasonally adjusted 5.11 million. Tomorrow, we get the big report - February labor statistics from the Fed.  
• Bloomberg morning base metal news - more

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Yesterday’s sharp rally also managed to lift other metals, with even aluminum posting a decent gain despite another rise in LME stock positions. In addition, strong gains in energy, and an overdue technical bounce in US equity markets, also insured that the environment remained conducive for those seeking to try their hand on the upside for a change.  As of this writing, we are retracing slightly in metals despite another small dip in LME copper stocks. Participants are also digesting the latest details coming out of China with respect to future stimulus moves. In this regard, China's Premier Wen Jiabao said overnight that the country will “significantly increase” spending outlays to rev up the economy, as it intends to achieve 8% growth this year. The Finance Ministry also added that it would raise spending on a variety of commodity stockpiling programs. However, while there was a projected increase in China's budget deficit this year to 950 billion Yuan, there was no increase in the overall size of the stimulus package, something that may be disappointing the markets today. The problem with all these stimulus programs is that, while they may provide an initial trigger to jumpstart growth, they need the private sector to come in and take over once the “pump is primed”. It is inconceivable to us that government spending, no matter how well intentioned or targeted, will be an adequate substitute for private sector resurgence.... We are currently at $9,900 on nickel, down $125, and giving up a good portion of yesterday’s gains. The market is not doing very much, trapped within a very tight $180 trading range."  (read Ed Meir's complete morning base metals report here)
• (Dow Jones) LME nickel prices are likely to retreat in the short-term, as its fundamentals are among the worst in the base metal complex, says Standard Chartered analyst Daniel Smith. "In terms of demand, nickel has been absolutely slaughtered," he says. Notes nickel producer Vale recently said nickel demand fell 58% in 4Q; Japanese stainless steel producers in Japan are cutting output by 40% in 2009; and China's output of low-quality nickel pig iron increased "quite a lot" in January, although it slowed in February."
• (Prime TASS) Jones)-Russia exported in January 14,000 metric tons of nickel, 38.3% less than in January 2008, the federal customs service reported Thursday.
• Federal Reserve Beige Book - "Looking ahead, contacts from the various districts rate the prospects for near-term improvement in economic conditions as poor, with a significant pickup not expected before late 2009 and early 2010."
• German New Car Sales Are Up 21.5% For February! Should We Follow Their Lead? - more
• (Yieh) In January, the export of Taiwan-made screws decreased 35%, compared with last year same time. however, the average price of screw USD2.791/kg have increased 18.7%.
• Worldwide depression? Think again  - more
• How commodities confirm the worst - more
• The best of times, the worst of times for U.S. Dollar - more

  China steel scrap prices average lower over February 20-27: CISA - China's domestic steel scrap prices averaged lower over the period February 20-27 across 22 major cities in the country, the latest survey on domestic prices by the China Iron and Steel Association showed. - more

• Chinese Steelmakers Want Iron Ore Price Cut by 50%  - Chinese steelmakers, the largest buyers of iron ore, want Cia. Vale do Rio Doce, BHP Billiton Ltd. and Rio Tinto Group to cut prices of the material by between 40 percent and 50 percent this year, Anshan Iron & Steel Group said. - more

  Market Tendency On Imports Of Ferro-Alloys At 27th February 2009 = FeCr Situation In Europe And China Is Being Sporadically Seen To Move - more

• Japan’s Production May Bottom Next Quarter, Trade Official Says - Japan’s factory output may start to recover next quarter after plunging at a record pace because companies have successfully reduced stockpiles, a Trade Ministry official said. - more

  Finished steel imports surge in January despite 5% levy - India’s finished steel imports surged 60% to 5.1 lakh tonnes in January from 3.2 lakh tonnes in December due to the high demand from auto and construction sectors, as per the latest data released by the steel ministry. - more

• JSW Steel says Feb crude output up 8.5 pct - JSW Steel Ltd, India's No.3 producer of the alloy, said on Thursday, its February crude steel output grew 8.5 percent on year to 0.33 million tonnes. - more

  Joy Global sees China-led rebound in the mining sector - The world's largest maker of mining equipment forecasts the emerging markets such as China will lead a rebound in the mining sector. - more

  Canada issues warning in wake of U.S. Steel layoffs - The Canadian government issued a warning on Wednesday to foreign companies considering massive layoffs to think twice before backing out of investment agreements made with Ottawa during better economic times. - more

  World Average Carbon Steel Prices - Latest Forecasts from MEPS - Sentiment across all manufacturing sectors has deteriorated further. - more

  Steel to Be Hit Hardest by Protectionism - Governments around the world are strengthening protectionism to boost their own economies -- a big blow to exporting nations such as Korea -- and the petrochemical and steel industries are likely to be hit hardest by the moves, according to a report Wednesday. - more

  Russian steelmakers raise output 15-17% in Feb - minister - Russian steel plants utilized 15-17% more capacity in February, but this is not a stable trend, Industry and Trade Minister Viktor Khristenko said. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 5 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Wednesday, March 4

• Baltic Dry Index - plus 50 to 2,084. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Wen May Announce New China Stimulus in State of Union Speech; Shares Surge // Australia's Economy Unexpectedly Contracts for First Time in Eight Years // Asian Stocks Advance on Optimism China, Japan Will Widen Stimulus Measures // Eurex to Focus on Europe, Not U.S., for Clearing of Credit-Default Swaps // European Stocks Advance; BHP Billiton, Xstrata Shares Gain on China Plan // Stocks Rise Around World; Commodities Climb on China Plan, Treasuries Fall
• The US Dollar has done a flip flop from this morning and is now trading lower by 4/10 of 1% against the Euro. NYMEX crude is trading nearly 6% higher, and was earlier. Safe haven gold continues to decline, down over 1%, while silver is trading even. Base metals had a big day. Markets opened higher on news of a possible new stimulus package out of China, and with the Euro gaining ground throughout the day, more fuel was added. Indicator charts show nickel opened higher, and gradually climbed throughout the day and was still looking upward when the session ended. Dow Jones reports three month nickel ended the day at $4.55/lb . The Baltic Dry Index gained another 50 points, and nickel inventories in LME warehouses registered their first daily loss since February 4th. Before you pop the champagne with that news, the cancelled warrants are threatening to slip under 1% again. Sucden's day old chart shows nickel trading thru yesterday (here). In our opinion, today's market activity worldwide, and not just in commodities, were not based on any change in fundamentals, nor any change in technicals, but strictly a wing and a prayer. Another mirage in the desert, if you will. We apologize for being so pessimistic on a day traders are finally having some fun, but what actually changed?
• The world media is ablaze with stories that Chinese Premier Wen Jiabao will ask for a larger stimulus in his State of the Union speech tomorrow, but according to today's China Daily, he will first be asking the National People's Congress to approve the 4-trillion-yuan stimulus package he announced last year (here). The speculation about more stimulus is somewhat confusing. Bloomberg reports "Li Deshui, China’s former statistics bureau head, told reporters in Beijing that Premier Wen Jiabao will announce “a new stimulus package” in his annual address to the nation’s legislature tomorrow". China Business News quoted Li Yizhong, minister of Industry and Information Technology, as saying ""The existing stimulus policies (you know, the ones the NPC has yet to approve) have already produced some positive effects and more policies will be put forward." (here) Now back to the original China Daily article we read the following "During the first two months of 2009, the country has launched stimulus packages for 10 major industries. In our opinion, the "packages" that everyone seems to be talking about, could very well be part and parcel of the original stimulus 'package'. Is the market gambling on a new large Chinese stimulus, or is it being a little overly enthusiastic, hearing what it wants to hear and not exactly what is being said? Maybe this is the reason Li Deshui is China’s 'former' statistics bureau head. We hope for the sake of all those people investing based on these reports, that it turns out to be true, but if it doesn't, it is going to be one monumental misunderstanding. Peng Yunliang, an analyst with Shanghai Securities in Shanghai said today "Obviously, this unusual rally suggests that investors are overly optimistic about what to expect from the legislature. They think the government will do more to boost spending to stimulate the economy." Regardless of what happens, and probably more importantly to the market, the Chinese PMI reportedly rose to 49 in February, and while still in contraction territory, its up for the 3rd month (here) and shows at least in China, things aren't looking quite so bleak. To the eternal optimist, a flower growing out of a pile of cow manure is just "a beautiful flower". To the eternal pessimist, it's a "big pile of s--t with a flower growing in it". We challenge either of them to lean over and take a whiff and tell us what the flower smells like. For the rest of us... we just trudge on, wondering what we've stepped in and "what the H-E-double L is all over the bottom of our shoe!!".

  Molybdenum seen weak in 2009 but recovery in 2011 - Molybdenum prices will stay low at between $10.50-$11 a lb this year because of weak demand from steel makers, but in 2011 it will rise to above $20 as demand rebounds, U.S.-based CPM Group said on Wednesday. - more

  Commodity/Economic Comments

• (Reuters) - Giuseppe Pasini, chairman of Italy’s steel makers’ body Federacciai, expects steel output there to fall by 30-35% YoY in 1Q09. While steel stocks remain low, Pasini says that there is still little consumer demand and no imperative for downstream users to restock. Italy’s crude steel output in January was down 40.4% YoY, while EU15 production fell 45.3%
• Neil Mackinnon, chief economist at ECU Group - "The mood in equity markets is still bleak but we need to be aware that sentiment-emotion is looking rather extreme, not that fundamentals look in any way supportive."
• Duke University/CFO Magazine Global Business Outlook - "Historic Recession To Last Another 14 Months" - pdf here
• What Are the Odds of a Depression? - more
• Australia - Classic imported recession will be a doozy - more
• Buffett's Losses: The Real Meaning for You - more

  Eurofer drops China stainless steel complaint - European steel industry association Eurofer said on Wednesday it was dropping an anti-dumping complaint against imports of stainless cold-rolled flat steel from China. - more

  Iron-ore mountains grow as China stalls - Outside China's biggest iron-ore port, Rizhao, in Shandong province, 10 ships sit waiting to unload their cargo. - more

  German 2009 steel output headed for 16-year low - German steel output is set to fall below 40 million tonnes this year for the first time since 1993, when an economic downswing hammered Europe's biggest economy, the German Steel Federation said. - more

• ThyssenKrupp Steel To Shut German Furnace Mid-March - ThyssenKrupp Steel AG plans to temporarily shut down one of four blast furnaces at its Duisburg, Germany steel works facility due to weak demand from customers affected by the global economic downturn, a company spokesman said. - more

  MOL halts new orders for ore carriers - Mitsui O.S.K. Lines Ltd. (MOL), the world’s largest operator of iron-ore carriers, has halted orders for new ships as demand for steel drops. - more

  U.S. Steel Canada to shut down Hamilton mill temporarily as sales slump - U.S. Steel Canada, formerly known as Stelco, is temporarily shutting down its Hamilton mill and most of its nearby Lake Erie operations, affecting 1,500 jobs. - more

  Courtesy AISI  - In the week ending February 28, 2009, domestic raw steel production was 980,000 net tons while the capability utilization rate was 41.1 percent. Production was 2,186,000 tons in the week ending February 28, 2008, while the capability utilization then was 91.6 percent. The current week production represents a 55.2 percent decrease from the same period in the previous year. Production for the week ending February 28, 2009 is down 1.8 percent from the previous week ending February 21, 2009 when production was 998,000 tons and the rate of capability utilization was 41.8 percent.

• Hundreds turn out for new mining jobs - Justin Davidson recently was laid off from his job for the second time in a year. This time, the layoff is likely permanent, he said. - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.11/lb  higher , with tin the only base metals trading lower at the moment. Word out of China has the government preparing to announce another stimulus package, and market is speculating this will help metals demand.  The US Dollar is trading just a tad higher against the Euro, while NYMEX crude futures show a 3% rise. Gold and silver are rebounding, at the moment, up 1/4% and 1-1/3% respectively. In overnight trading Asian markets ended higher, the S & P Asia 50 Index up 2.59%, again on news that Chinese Premier Wen Jiabao will announce a new round of stimulus in his State of the Union speech tomorrow. Europe likes the news as well, their markets up this morning. And as the MarketWatch headline reads this morning, "Global rally rolling westward". US futures show a strong opening on Wall Street on the news. The ADP employment index issued this morning, shows U.S. private-sector firms cut 697,000 jobs in February. While stunning in itself, the correction to January's numbers were equally stunning. January's loss numbers were revised much lower, from 522,000 reported a month ago to 614,000. Yesterday, the  Standard & Poor's 500 closed below 700 for the first time since 1996. The Dow Jones Industrial Average saw its lowest close since April 21, 1997. The markets seriously needs a positive ending today.
• Bloomberg morning base metal news - more

The Dow since Dec 2007

  Reports

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

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "We would have to agree with the slightly more upbeat prognosis being advanced by the commodity crowd. In this regard, we should remember that despite the relentless barrage of dire macro numbers, most of the firepower behind the expansive fiscal and monetary resources now being unleashed has yet to fully work its way through the system. The commodity markets may be starting to discount such a scenario and looking ahead, while the equity markets are somewhat more lost, weighed down by the woes in the financial sector. (Hence, the decoupling we are seeing). ... Metals are all up again this morning, with copper rallying to a three-week high, as yet another drop in LME inventories provides the buying impetus. ... Finally, the London Metal Exchange said Wednesday that its launch of the cobalt and molybdenum contracts could be delayed until early 2010.  ... We are currently at $9,800 on nickel, up $150. The market is not doing very much, and at best, climbing back slowly from the bottom end of the trading range." (read Ed Meir's complete morning base metals report here)
• (FT) Iron ore miners plan to postpone any agreement in annual negotiations with steelmakers until as late as the summer, betting that demand, and therefore market prices, will improve. Senior executives involved in the talks told the Financial Times that annual iron ore benchmark prices were still likely to drop for the fiscal year starting on April 1, but said that by waiting longer than normal, they hoped to avoid a large cut.
• (Lange) Bank of Communications has agreed a 750 million yuan worth loan, 37 percent of the total transaction value of 2.02 billion yuan, to Baosteel for its takeover bid for 56.15 percent stake in Ningbo Iron and Steel Co., Ltd, the first bank loan provide for a mill involved in merger activity after the government’s announcement of the rescue plans on the ten industries. The bank refused to give details about loan period and interest rate.
• Jim Rogers to CNBC Tuesday - "Suppose AIG goes bankrupt, it is better that AIG goes bankrupt and we have a horrible two or three years than that the whole US goes bankrupt. AIG has trillions of dollars of obligations, let them fail, let the courts sort it out and start over. Otherwise we'll never start over. ... I think it's astonishing, they're ruining the US economy, they're ruining the US government, they're ruining the US central bank and they're ruining the US dollar. You are watching something in front of our eyes, very historically, which is basically the destruction of New York as a financial center and the destruction of America as the world's most powerful country.... Power is shifting now from the money shifters, the guys who trade paper and money, to people who produce real goods. What you should do is become a farmer, or start a farming network." (source) As for Jim - he's buying farmland (here)
• Eclectica co-founder and CIO Hugh Hendry, hedge fund manager  - "McDonald's has got less chance of going bust than the British Government." (source)
• A Forecast of the Economic Outcome from Obama’s plan by Cumberland - pdf here
• More people die fishing than mining - more
• Why the U.S. Dollar Is Vulnerable to a Sharp Decline Now - more
• China’s Wen May Announce New Stimulus Measures to Revive Growth - more

  Canada government to examine Vale Inco job cuts - The Canadian government will examine plans by nickel miner Vale Inco to cut 423 jobs in Canada and wants to see the company honor its commitments to Ottawa, Industry Minister Tony Clement said on Tuesday. - more

• Layoffs don't violate commitment to Canada, Vale says - Nickel giant Vale Inco Ltd. is cutting 423 jobs in Canada but says the layoffs don't violate a commitment the company made to the government in 2006, not to reduce its work force for three years. - more
• Canada says Vale Inco job cuts may be allowed - The job cuts that nickel miner Vale Inco is planning in Canada may be allowed under the terms of an agreement the company struck with the federal government in 2006, Industry Minister Tony Clement said on Tuesday. - more

  Benxi sees good steel demand, no cutbacks - China's Benxi Iron & Steel Group, the parent of Bengang Steel Plates Co Ltd, sees "good" demand for steel and expects 2009 profits to at least match 2008's 1 billion yuan ($146 million), company chairman Yu Tianchen said on Wednesday. - more

• Baosteel expects profit in 1st quarter - Baosteel, China's second-biggest steel mill, posted a profit in the first two months of this year and is expected to post a profit in the whole first quarter as prices and demand rebound, a senior company official said on Wednesday. - more
• China's Guangxi moves ahead with metals buying plan - China's minerals-rich border region of Guangxi has completed a draft for a plan to buy metals as adhoc reserves to support local smelters that face weak demand, a local official said on Wednesday. - more

  Samancor May Restart Ferrochrome Output in First Half  - Samancor Chrome Ltd., the world’s second-biggest ferrochrome producer, may resume some output of the raw material by July after an improvement in demand from Chinese stainless steel makers. - more

• Irrationality Of FeCr Stocks Is Enlarging In Internal And External Markets = Japan Suffers From Overstocks, Europe Moves To Resume Purchases As Results Of Substantial Cancellations - Stainless steel companies in Europe have entered into the structure to reduce considerably their production of stainless steel from October - December quarter of 2008 but some of them have shown a sign to recover the production on a basic tone from March - April of 2009 and are supposed to have taken a certain concrete form for their de-stocking of ferro-chrome. Naturally, these European stainless steel mills are expected to resume their purchases of ferro-chrome. - more

  Construction starts on Vietnam`s first Ferrochrome plant - The Nam Viet Corporation commenced work on the construction of a Ferrochrome manufacturing plant in Trieu Son district of Central Thanh Hoa province on February 26. - more

  Standard Chartered Says Commodities Hedging Demand May Triple - Standard Chartered Plc, U.K.’s second-largest bank by market value, said “strong” commodity hedging demand from companies will help triple its clients this year and may spur hiring. - more 

   Rio economist sees rough year ahead for commodities - Global miner Rio Tinto expects 2009 to be a rough year in terms of both prices and volumes for key commodities, the firm's chief economist said on Wednesday. - more

• China 'nervous' over Rio Tinto-OZ Minerals deal scrutiny - PricewaterhouseCoopers says Chinese activity in the Australian mining sector will increase if the latest moves get regulatory approval. - more

  More than one worker in ten in the Russian mining and metals sector is currently out of work, or facing company-ordered reductions of work time or pay, or both. - more

  Universal Stainless enters new credit agreement - Universal Stainless & Alloy Products Inc said it had entered into a new credit agreement with PNC Bank, under which the steel maker will get a $12 million term loan and a $15 million revolving credit facility. - more

  US weekly steel production remains below 1 million st - Raw steel production in the US declined by 18,000 st or 1.8% for the week ended February 28. Total production was 990,000 st, down from the previous week's total of 998,000 st, according to the weekly report issued Tuesday by the Washington, D.C.-based American Iron and Steel Institute. - more (we believe this story is incorrect and based off the prior week's figures. The AISI has yet to publish last week's statistics online)

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 4 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, March 3

• Baltic Dry Index - plus 20 to 2,034. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Toyota Seeks Loans From Japan as Carmaker Forecasts First Loss in 59 Years // China's Economy May Recover in First Half, Deputy Central Bank Chief Says // Most Stocks in Asia Decline on Economic Concern; HSBC, BHP Billiton Fall  // GM Says Opel Running Out of Cash as Three European Factories Risk Closure // RBS Gave Goodwin $989,000 Pension at Late-Night Meeting, Government Says // Europe's Stoxx 600 Reaches 12-Year Low; Credit Suisse, Barclays Decline // AIG's Bailout Made Bernanke `More Angry' Than Any Other Episode in Crisis // Harvard Losing AAA Benefit in Bond Market Shows Perils of Derivative Debt // Ford's February U.S. Sales Drop 48%, Nissan's 37% Amid Deepening Recession // Madoff's Wife Ruth Says Her $62 Million `Unrelated' to His Alleged Scheme // U.S. Stocks Fluctuate After Bernanke's Warning on Banks; Home Depot Falls
• The Euro and the US Dollar are trading nearly even at the moment, while NYMEX crude trading less than 1% higher. Gold and silver are both lower by over 1%. Base metals all ended in the green. Nickel started off the morning with a near $400/tonne spurt, then backed off $200, where it spent most of the day, then appeared to get into trouble at the end of the session as the Euro lost ground. Dow Jones reports three month nickel ended the day at $4.38/lb . Albidon announced it was suspending operations at its Zambia Munali mine, costing another 350 miners their jobs. Munali produced 74,000 tonnes of ore in the first two months of this year. Based on 2008 quarterly financial results, the ore should have averaged somewhere in the range of 0.56% grade. Vale announced it was 900 jobs in operations around the globe. Inventories of nickel stored in LME authorized warehouses now rests less than 1,000 tonnes from the 100,000 level. One interesting note over the last two days. Typically the largest daily shipments of nickel come into the Rotterdam warehouse, but over the last two days, Rotterdam stock has fallen by 120 tonnes, while Singapore is getting the large arrivals. You have to go back to early February to find consecutive days when Rotterdam didn't gain, and that stretch lasted three days. The Baltic Dry Index continues to sneak forward, gaining a total of 4 points over the last 4 business days. The volatility index is also creeping higher, but off the 53.19 it reached during the yesterday's late trading rout on the Dow. Bernanke testified before Congress this morning, and the market's reacted negatively. During lunch, the market returned to the green, but now Treasury Secretary Tim Geithner is testifying and the market is floundering again. The government is apparently doing its best to try to convince the market it is on top of things, but the more media attention they receive, the more we get the impression that many of them have that 'deer in the headlights' look about them.  

  Reports

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

  Commodity/Economic Comments

• CBO estimates that the legislation implies an increase in GDP relative to the agency’s baseline forecast of between 1.4% and 3.8% by the fourth quarter of 2009, between 1.1% and 3.4% by the fourth quarter of 2010, between 0.4% and 1.2% by the fourth quarter of 2011, and declining amounts in later years
• Numis Securities - (ref Albidon) "We are placing our target price under review until we have more certainty on the composition and completion of the Jinchuan funding and therefore the future potential to restart the operation,"
• On Economy, Two United Voices Steer Obama Agenda - more
• Is the S & P due for a corrective bounce? - graph here

  Global ferrochrome industry has cut output by two-thirds: Merafe - The global ferrochrome industry has slashed output by around two-thirds in recent months in response to slumping demand, South Africa's Merafe Resources said Tuesday. - more

• Merafe to keep furnaces shut on soft demand outlook - South African ferrochrome producer Merafe Resources reported a four-fold rise in full-year headline earnings, but said it would not yet restart its suspended furnaces due to a soft short-term demand outlook. - more

  Nickel miner Vale Inco to cut 900 jobs globally, 350 in Canada - Vale Inco Ltd. said Tuesday it will cut about 350 Canadian jobs as it continues to restructure its operations amid slumping nickel prices. - more

  Cuba mulls reduction in nickel output - Cuba may soon join a growing list of countries shutting down nickel plants in the face of slumping prices, sources close to the industry said this week, in the latest indication the international economic crisis has begun to bite. - more

  With the world economy in the toilet, many traders maybe looking to the US Dollar for security, but most are looking to China for the first sign's of any economic recovery. But how does one do this when getting accurate information from China is not always easy, with a government that may have motives behind the numbers it 'officially' releases (as do other governments). One trick some economists and traders use, is to monitor the power consumption.  Annual power consumption growth averaged 14.52% in 2003-2007. In 2008, the growth rate fell to 5.23%. According to a Dec 20th report in the China Daily, power consumption for 2008 was broke down as follows - "The power consumption by primary industry ... an increase of 3.41% year-on-year; secondary industry ... an increase of 5.35% year-on-year; tertiary industry (service industry) ... an increase of 10.86% year-on-year; while urban and rural residents ...  an increase of 12.75% year-on-year."  The China Electricity Council also reported nonferrous metal and metallurgy sectors consumed 32.33 percent of the total, an increase of only 3.58% YOY. And while the numbers reflect growth, most of this came during the first two quarters of the year. In October, China experienced its first year on year decline in consumption since 1999. In November, consumption fell a further 3.7% from October, down another 6.4% YOY in December, and 12.88% YOY in January 2009. The January numbers are skewed a little from the week long New Years holiday, but even with this taken into consideration, the power consumption numbers from China give no evidence of an end to the industrial slowdown. In fact, based on the numbers that showed power consumption in the coastal province of Guangdong dropped 21% YOY, and 24% YOY for the Zhejiang province, the numbers reflect Chinese export industries are worsening. We did find an article by Shanxi Fenwei, written on the same day the CIC reported the plummet in January consumption, that stated YOY consumption had gained in select industrial areas over the past few weeks. You can read further here. They fail to mention that last year, the week long New Year's celebration was in February. Officials from the China Electricity Council, interviewed in the The Shanghai Securities News yesterday, while upbeat based off internal statistics not released to the public, admitted with the Chinese New Year change and the major winter snowstorm outages experienced last year, it will be difficult to compare January and February statistics YOY.  

  Norilsk edges to Africa adieu - Norilsk Nickel is considering terminating its $6.8bn investment in Africa, a move that could be preceded by the departure of Ralph Havenstein as the head of its international operations. - more

  More than 2200 fastener enterprises in Yongnian resume production - Until now, 98% of the enterprises which once stopped production or reduced production due to the financial crisis has resumed production and absorbed about 150,000 local migrant workers. - more

  Shanghai construction steel price

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

• Indicators at 7:40am CST show 3 month nickel trading around $.11/lb higher. All base metals, except for tin, are trading higher at the moment, as the Euro trades 4/10 of 1% higher against the US Dollar. NYMEX crude futures show a 2% gain this morning, while gold trades unchanged, and silver down by 1%. Asian markets ended slightly higher overnight, while European markets are slightly lower this morning. US futures imply Wall Street will open slightly higher, which after yesterday's bloodbath, could be what traders call a dead cat bounce, or suckers rally. Mainstream media disagreed with us yesterday, and gave most of the blame for yesterday's dive on the AIG loss and bailout. Whatever caused it, it was a bloodbath by days end. Some traders are wishing the market would do whatever it needs to do quickly to find a bottom, as the slow arduous descent is becoming like torturous water boarding, a sense you are about to drown, but never quite dying. Nickel inventories are up, as is the BDI.      
• Bloomberg morning base metal news - more

  Reports

• ABARE quarterly commodities report - pdf here
• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Global Mining News - pdf here
• Mining Deals: 2008 Annual Review - pdf here
• ISRI Market Report - pdf here
• Commodity Perspective Feb 2009 - pdf here
• Preliminary: U.S. Imports for Consumption of Steel Products January 2009 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices continued to lose ground on Monday, but the complex certainly was not alone, nor did it fare the worst among the various casualties. That distinction had to go to the crude markets, where prices sank by an astounding 10% on the day, bringing both crude oil contracts to just above the $40 mark. Not to be outdone, the Dow Jones Industrial average lost close to 300 points yesterday, with prices crashing through the 7000 mark, and potentially setting up a probe of much lower levels.  ... We are seeing a slight recovery in most markets today, and in fact, the bounce in metals looks to be the most impressive, with copper recouping all of yesterday’s losses and then some. There are decent recoveries in the rest of the group as well. ... We are currently at $9,775 on nickel, up $225, and recouping more than half of yesterday’s losses. Prices never got close to our support band of $9000-$9300 yesterday, but we nevertheless seem to be turning higher into the range in line with the general strength were seeing elsewhere."  (read Ed Meir's complete morning base metals report here)
• (Yieh) China’s Taiyuan Iron & Steel (Group) Co., Ltd. (Tisco) has announced to reduce its March local benchmark price by RMB2000/ton in order to stay competitively in the market.
• (JMB) NSSC Agrees to Reduce FeCr Price by 54.9% for January-March Nippon Steel & Sumikin Stainless Steel Corporation (NSSC) agreed with South African supplier to reduce ferrochrome purchase price by 54.9% for January-March from October-December. The firm followed earlier settlement in Europe.
• (Reuters) ""China has $2 trillion of reserves, and only one percent in gold and nearly all of the rest is in U.S. dollars," said Marcus Grubb, managing-director of investment research and marketing at the industry-sponsored World Gold Council."
• 3/2 - Nigel Gault, IHS Global Insight - "Do not be fooled by the rise in incomes and consumption this month. Household wealth continues to fall rapidly, employment is falling steeply, and consumer sentiment is at or near all-time lows. These are not the ingredients of a consumer recovery."
• 3/2 - Ian Shepherdson, High Frequency Economics - "The new headline GDP number Incomes were boosted by pay raises for government personnel and cost-of-living adjustments to several federal programs. Private compensation, by contrast, was unchanged."
• A Depression doesn't have to be Great - more
• Austrian Business Cycle Theory - more

  Albidon suspends Munali operations, shares drop - Albidon Ltd said on Tuesday it has suspended mining operations at its Munali project in Zambia due to low nickel prices, and plans to cut about 350 jobs. - more

  Baoshan Steel Cuts Prices, First Time in Three Months - Baoshan Iron & Steel Co., China’s biggest steelmaker, cut prices for the first time in three months after production in the country rose faster than a demand recovery, Mysteel Research Institute said. - more

• Norilsk Starts Shanghai Sales Office, Mulls Ventures  - OAO GMK Norilsk Nickel, Russia’s biggest mining company, will open a Shanghai office to increase metal sales in China and will consider joint ventures with Chinese companies. - more

  Norilsk Nickel CEO says no job cuts in Russia - Russia's Norilsk Nickel (GMKN.MM), the world's top producer of nickel, is not planning to cut any jobs in Russia even though low prices are likely to halve sales revenues this year from 2008, CEO Vladimir Strzhalkovsky said on Tuesday. - more

  FNX cuts spending as nickel demand falls - "Attrition across the board," is the mantra of the times for FNX Mining Co. Inc. "We tell our people, we're in a two-year war," said Dave Constable, vice-president of investor relations. "We've got to get from here through to the other side." - more

  Metal theft legislation threatens industry - Legislation introduced in the Congress in February meant to address the issue of metal theft, falls short of adequately addressing the issue. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 3 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, March 2

• Baltic Dry Index - plus 28 to 2,014. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan February Vehicle Sales Plunge 32% to Reach Lowest Level in 35 Years // Asian Exports Tumble as Global Recession Curbs Demand; Won, Rupee Decline // Asian Stocks Fall as U.S. Economy Deteriorates; BHP, Mitsubishi UFJ Drop // EU Leaders Reject Pleas for Eastern European, Auto Aid on Budget Concerns // European February Inflation Rate Holds Close to Lowest Level for 10 Years // Stocks in Europe Decline; Stoxx 600 Touches Six-Year Low as HSBC, BHP Drop // Manufacturing in U.S. Shrinks for 13th Straight Month on Collapsing Sales // GM, Chrysler May Report Sales So Low That Recovery Is 'Difficult to See' // Stocks Drop Worldwide, Treasuries Gain on Concern Economies Are Worsening
• The US Dollar continues to trade higher against the Euro, by 2/3 of 1%. NYMEX crude is down almost 10% and threatening to slip under $40/bbl again. Gold and silver are both trading about 1/2 of 1% higher. Base metals all traded lower, with one optimistic trader trying to make the day seem better by telling Dow Jones "Everyone is impressed by how steady prices are, considering what's happening on stock markets ... Maybe we've seen a short-term low." In other words, traders were impressed it wasn't much worse. Indicator charts show nickel started trading lower, and while it spent much of the afternoon steady, by late trading and after the "everyone is impressed" remark was published, nickel resumed its tumble. Dow Jones reports three month nickel ended the day at $4.31/lb . Nickel inventories rose, as did the Baltic Dry Index. World stock markets were just plain ugly today, with one New York trader mumbling he "would jump out a window but the snow would probably cushion his fall." Lot of reasons being thrown around about why the markets are so negative today, but when we read Mr Buffet's remarks on Saturday, we figured it would be ugly. When investors like Warren Buffet says things don't appear to be getting better before 2011, and commodity guru's like Jim Rogers says things like "If everybody believes that it is going to be better in the second half of 2009 then I promise you it is not going to be and certainly not in 2010." and "I expect to see social unrest or civil unrest in the US a couple of years from now." to a NDTV reporter (more), you find it hard to see anything rosy about the current set of affairs. According to a Chicago Tribune article over the weekend, the median home price in Detroit, Michigan sold in December 2008 for $7,500. No that is not a misprint. Here is the article (here). Unbelievable. Last summer, we were watching investors banter back and forth about whether we were in a recession or not. After the government finally admitted that we had been in one since December 2007, the argument shifted to whether we were heading into a depression. We don't seem to be seeing these arguments anymore, since there really is no definitive description of a depression, and whatever we are 'officially' in, sticks to high heaven. We also don't seem to be seeing anyone calling the bottom to the stock market these days. Here is some 'good' news for you today, as reported by MarketWatch "U.S. manufacturers said their business worsened again in February for the 13th straight month, but the pace of the decline didn't accelerate as expected." "Didn't decline as bad as expected" - "everyone's impressed metals didn't take a dive today". Sheesh. Even analysts and reporters are starting to sound like politician's these days.   

  Reports

• Weekly Commodity Price Report - pdf here
• Cotzias Economic Outlook Feb 2009 - pdf here
• Cotzias February Shipping Report - pdf here
• PDAC 2009 Blog Live Updates - here
• Weekly Nickel Forecast by SMM Specialist - more

  Commodity/Economic Comments

• (Dow Jones) "Diversified miner African Rainbow Minerals Ltd. will continue with its nickel output expansion plans (Nkomati mine), and aims to more than triple output by 2012, when it forecasts prices to recover, the company said Monday....."Stainless steel always takes longest to recover," Shiels (Stompie Shiels, executive director of business development at ARM) said, adding prices are forecast to begin to rise in 2011 or 2012."
• Warren Buffet - “This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone ‘all in.’ Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.... Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly. Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown. Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.” -  full letter to shareholders here
• "If we fail to demand this as Americans or our government fails to implement this across the board then we will suffer a Depression worse than the 1930s. This is not conjecture. It is not a prediction, nor drawn from how I "feel"." - more
• The Great Fall of China - We’ve covered the rapid decent of the once-mighty Chinese economy here in the Prosperity Dispatch for months and months. (2/3 of way down this page here)

   PDAC: China remains 'locomotive' for metals demand - Not only has the Chinese economy slowed substantially in recent months, but there has also been a profound change in mood. - more

  AK Steel Announces April 2009 Surcharges for Electrical and Stainless Steels - more

  Outokumpu says sees no relief from tough market  - Finnish stainless steel maker Outokumpu said on Monday tough market conditions would last for a while but it was well placed to weather the storm. - more

  Miners unavoidably set to face bear market - Last year, the Prospectors and Developers Association of Canada (PDAC) conference kicked off in Toronto on a very high note, as record-high metal prices prompted analysts and other commentators to project ever-higher prices and stronger demand from China for the coming year. - more

  Steel prices generally weaker in February, with some exceptions - Poor demand worldwide meant steel prices were broadly lower in February than in January, based on the Platts closing monthly price assessments, but there were noteworthy exceptions. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around  $.14/lb  lower, with all base metals lower this morning. The US DOllar is trading higher against the Euro, by about 2/3 of 1%, and NYMEX crude futures are showing a nearly 5% drop. Gold is nearly a percent higher, still under $950/oz though, while silver is flat. In overnight trading, Asian markets were much lower, the S&P Asia 50 Index down nearly 4-1/2%. China ended up, though, after Chairman Wen said there were signs the economy in that country was recovering. European markets are down sharply this morning, the Bloomberg European 500 down 3.67%. And US futures show Wall Street will start March in a grumpy mood, with Dow Jones futures down over 100 points. Warren Buffet's report to shareholders warning of doubtful recovery in 2010, has obviously sent a ripple worldwide. US savings rates rose to there highest level in 15 years, according to a report this morning, as nervous American's concentrated on building rainy day funds. The U.S. markets look to fall below major support lines today. If this happens, watch out. China is denying reports it may buy some refined nickel to build up reserves. Whether they do or not, is having little effect on the market today, as nickel inventories in LME warehouses stand less than 1500 tonnes shy of the 100,000 tonne level.   

  Nickel Falls for Third Day in London as Stocks Show Weak Demand - Nickel fell for a third day in London as the highest stockpiles in almost 14 years signaled weak demand for the metal used to make stainless steel. - more

  China Has No Plans to Buy Nickel for Reserves Now - China, the world’s largest metals consumer, has no plans to buy nickel for its strategic reserves now, according to the China Nonferrous Metal Industry Association. - more

• China's SRB may buy 10,000-20,000 T nickel reserves - China's State Reserves Bureau (SRB) may buy 10,000-20,000 tonnes of refined nickel from local smelters as reserves at a time when domestic demand is weak, industry sources said on Monday.- more
• DJ China Reserve Agency To Buy Up To 30,000 Tons Nickel-Sources - China's State Reserve Bureau plans to buy up to 30,000 metric tons of nickel to support falling domestic prices, mostly from major producer Jinchuan Group Ltd., an analyst with a Beijing metals consultancy said Monday. - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Market Weekly - pdf here
• Metals & Mining Weekly - pdf here
• The Fortis Bank Asian Metals Monthly report - pdf here
• SAISI Steel News 4th Quarter 2008 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices ended mixed to modestly lower on Friday, as demand worries resurfaced in the wake of revised US fourth quarter GDP data showing that the economy shrank at its fastest pace since 1982.  ... As of this writing, we are broadly lower in most commodity markets, with the exception of gold. ... We are currently at $9,653 on nickel, down $347, and nearing good support evident at the $9000-$9300 area, but the upside remains uninspiring."  (read Ed Meir's complete morning base metals report here)
• (Yieh) Severstal Warren, sheet/plate producer and subsidiary company of Russia’s OAO Severstal and Severstal N.A. in North America, announced to completely cease all operations from April 1 due to continuous global economic depression.
• (AIF) PT International Nickel Indonesia, which has a large nickel venture in Sulawesi, said it will carry on work on three projects valued at US$582 million this year. The projects include a coal-fired power plant in Karebbe, Sulawesi, the reduction of emission of ashes from its nickel processing factory and the conversion of energy, said Arif Siregar, the president of the subsidiary of the Canadian-based INCO LIMITED.
• (JMB) Nippon Steel, Sumitomo Metals in Talk to Merge Stainless Pipe Subsidiaries - Nippon Steel and Sumitomo Metal Industries consider integration of the groups' stainless steel welded pipe makers. They are in final talk to merge Nippon Steel group's Nittai Corporation and Sumitomo Metals group's Sumikin Stainless Steel Tube as early as July.
• Warren Buffett to shareholders Saturday - "We're certain, for example, that the economy will be in shambles throughout 2009 -- and, for that matter, probably well beyond -- but that conclusion does not tell us whether the stock market will rise or fall."
• Nariman Behravesh, IHS Global Insight - The recently enacted $787 billion stimulus package will have virtually no impact on growth in the first half of this year, but will help to turn the economy around by the second half. Even then, the best we can hope for is an average growth rate of around 0% in the third and fourth quarters, with a small contraction in the third quarter followed by weak positive growth in the fourth quarter. Bottom line: we are in the midst of the worst recession in the post-war period, even factoring in the massive stimulus program "
• RDQ Economics - "... we agree with Bernanke’s assessment that recovery will only occur once the financial system has been stabilized"
• Zach Pandl, Nomura Global Economics - "The decline in GDP in the fourth quarter was the largest since 1982 and the fourth largest in post-war US history. But perhaps the most surprising thing about it is how commonplace it looks in the current global environment: Fourth quarter real GDP declined by 5.8% in the Euro area, 6.0% in the UK and 12.7% in Japan. Many emerging markets also experienced double-digit declines during the quarter. "

  Russia 'may buy metals' to boost mining companies 27th February 2009 - The Russian government is weighing up the possibility of buying metals in order to boost its flagging mining companies, a senior political figure in the country revealed yesterday (26th February). - more

  Indonesia's Antam sees '09 nickel output down a third - Indonesian state-owned miner, PT Aneka Tambang Tbk, plans to produce 12,000 tonnes of ferronickel in 2009, down about 32 percent from a year ago in anticipation of slowing demand, the company said in a statement. - more

  Nippon Steel, Sumitomo Metal to integrate stainless steel businesses - Nippon Steel Corp. and Sumitomo Metal Industries Ltd. said Monday they will integrate their arc-welded stainless steel pipe and tube businesses to achieve high competitiveness amid falling demand in the wake of the global economic downturn. - more

  MMTC / India Reduces Floor Price Of Chrome Ore For Export = For Shipments In March - April / 09, To Reduce To US$250 / Ton FOB For Concentrate - According to an information from India, MMTC has revised and reduced largely the floor price of chrome ore to be shipped from India in March 1st to April 15th of 2009. - more

  DJ MBMI Signs Deals To Export 125,000 Tons Philippine Nickel Ore - Canada-based MBMI Resources Inc. (MBR.V) said it has signed four contracts to ship a total of 125,000 metric tons of nickel ore to certain Asian buyers. - more

• Philippine Feb Nickel Ore Shipments 834,000 Tons, Up Sharply -Philippine nickel ore shipments in February rose to 834,000 metric tons from 351,000 tons in January on rising demand from China, the Mines and Geosciences Bureau said Monday. - more

  Commodities fundamentals are improving - In an interview to NDTV Profit’s Namrata Brar and Prashant Nair, legendary investor Jim Rogers who made his fortune with the Quantum Fund, speaks about the current economic situation and his call on equities and commodities. - more

  EU Average Carbon Steel Prices - Latest Forecast from MEPS - With the economic crisis deepening, we forecast a further steel price reduction for the flat products sector in the short term. - more

  China’s Manufacturing Shrinks as Crisis Cuts Demand - China’s manufacturing shrank for a seventh month in February as the global financial crisis cut exports and growth across Asia. - more

  BHP says rains halt one iron ore mine in Australia - World No. 3 iron ore miner BHP Billiton Ltd/Plc said operations at one of its iron mines in Australia's Pilbara region were suspended due to heavy rains. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - March 2 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

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