This page is archived news covering the period of May 2009
If you are looking for current daily market news, please visit here.

Stainless Steel News and Nickel Prices

Free comprehensive information on worldwide nickel market pricing, stainless steel prices and metals analysis and forecasts


Kiva - loans that change lives

Friday, May 29

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 196 to 3,494. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Indian Expansion, Japan Production Gain Add to Evidence Worst May Be Over // China GDP Forecasts Rise as Investment Outweighs Weakness in Steel, Power // Asian Stocks Gain as Japanese Production Report Boosts Commodity Companies // Stocks, Oil, Metals Rise on Evidence World Recession Easing; Dollar Drops // Euro-Region Inflation Rate Falls to Zero for First Time on Oil, Recession // Polish Economy Expanded in First Quarter, Only Growth in EU's East So Far // Britain Faces `Miserable' Years of Austerity After Brown, HSBC's King Says // Stocks in Europe Climb on Economic Optimism; BHP Billiton, Total Advance // Economy in U.S. Shrank at 5.7% Rate in First Quarter, More Than Estimated // Mortgage-Bond Yields Drop After Spurt Raised Concerns Over Home-Loan Rates // Business Activity in U.S. Contracts at a Faster Pace, Chicago Index Shows // Confidence Among U.S. Consumers Increases to Highest Level Since September // Dollar Slips to $1.41 per Euro as Economic Prospects Reduce Safety Demand
  • The US Dollar continues to trade lower against the Euro, down 1.2%, and off an earlier 2009 low. NYMEX crude is currently trading 1.4% higher and right at $66/barrel. Gold is up 1-3/4% and silver up 2-1/4%. Base metals ended solidly in the green, assisted by the lower Dollar. Nickel wasn't looking back today as it took off early and kept climbing throughout the trading session, although it lightened the pace in the afternoon. Dow Jones reports three month nickel ended the day, week and month at $6.32/lb , its new highest close this year. We estimate the average cost of cash nickel for May will be in the vicinity of $5.73/lb, after averaging $5.06/lb in April. LME stored nickel inventories rose again overnight, for a two day increase of nearly 1700 tonnes, with an Asian warehouse getting the brunt of the inbound flow. The Baltic Dry Index is giving no sign of slowing down, up another 196 points, and continuing to be bullish for metals. In US government reports today, the University of Michigan and Reuters consumer sentiment index rose to 68.7 from 65.1, but still remains low. The surprise for the day came when the Chicago purchasing managers index fell to 34.9 in May from 40.1 in April after economists had forecast recent improvements in the index would continue. Every field will have its weeds. Let us hope this report does not turn out to be a hard to kill, but fast spreading dandelion.
  • Have a safe and relaxing weekend!!

  Reports

  Commodity/Economic Comments

  • (Dow Jones) LME aluminum and nickel face the biggest downside risks of all the base metals, says Barclays Capital. ... Says nickel "is likely to at least erase recent gains."
  • (Societe Generale - "Until this (lack of consumption) changes nickel, as a market in clear structural surplus, will, in our view, struggle to make much further price progress."
  • (Dow Jones) Brazilian mining giant Vale S.A. (VALE) will lay off between 250 and 300 workers, starting in June, the local Estado news agency reported Friday.
  • (MW) Nickel. S&P raised its nickel price assumptions for 2009-2011 to $5/lb ($11,025 per metric tonne) and for the long term to $5.50 ($3,308).
  • (TS) Mechel jumped 26% after the Russian steel producer got an extension of a bridge loan to finance an acquisition and the restart of a shaft furnace at its Southern Urals Nickel Plant, which added 15% to capacity utilization.
  • China’s rare earth monopoly threatens global suppliers, rival producers claim - more
  • Another Milestone: U.S. Corporate Defaults to Date Match Total for All ‘08 - more
  • Why the Bulls Just Won't Die - more

  Zimbabwe nickel output down 25 pct in 2008  - Zimbabwe's nickel production fell by a quarter to 6,354 tonnes last year with platinum miners for the first time accounting for the bulk of the output, data from the country's Chamber of Mines showed on Friday. - more

  Russia's richest man threatens 'to smash in faces' of rivals - Writing on his blog, Mikhail Prokhorov, a metals magnate with a playboy reputation, claimed that the men hired placard-waving youngsters to greet his sister Irina as she opened an arts festival in Norilsk, a nickel mining town inside the Arctic Circle. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.14/lb , with all base metals higher on a lower Dollar, which is trading over 1% lower against the Euro this morning. NYMEX crude is over $66/barrel this morning, up 1-1/2%. Gold is 1-1/3% higher and silver is 2% higher in early trading. In overnight trading, the Asian markets that were open ended higher, with European markets also trading higher this morning. US futures reflect a potential stronger opening for the last trading day of May. The first quarter GDP fell -5.7% in the US, according to a report issued this morning by the US Commerce Department. This was better than the -6.1% estimate released earlier, and better than the -6.3% the US experienced in the fourth quarter of 2008. (more) With only 1/2 day left of trading to be had, May will reflect the highest average price for nickel so far this year. Based on the research that we published in November of last year, and earlier this year, this is following historical precedence. Next week, we will start to learn if history continues to repeat itself, or will fail due to the unusual circumstances that surround the worldwide economy, and the timing of the recovery. If history proves true, then May will prove to be the high point for 2009 nickel prices. If not, we have more price increases in store. We will have to wait and see.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metal prices closed higher yesterday, as a sharp rally in crude oil markets and a decent rebound in US equities spilled somewhat belatedly into the complex. The dollar also weakened over the course of the session, helping the bulls.  ... The macro economic numbers out of the US were a mixed bag yesterday. Durable goods orders for April rose a sharp 1.9%, well ahead of the .5% increase expected, but prior readings were revised sharply lower. Initial weekly claims data came out roughly in line with estimates, but the continuing claims figure, which is a gauge of how easily the unemployed are landing jobs, continues to push to record highs. Finally, new home sales for April also came in slightly less than expected. All in all, the data is telling us that while economic activity seems to be stabilizing after the freefalls noted in the fourth and first quarters, labor and housing are both still struggling, with no signs of Fed Chairman Bernanke's "green shoots" sprouting anywhere near these two beleaguered sectors. We are broadly higher in most metals this morning, (ali again being the exception) as favorable macro data out of Japan and a weaker dollar (now at 1.41 against the Euro) is boosting prices. From Japan, Bloomberg reported overnight that April industrial production rose for a second month in a row, as evidence continues to mount that the Japanese economy is stabilizing. Factory production climbed 5.2% from March levels, and came in well ahead of the 3.3% consensus estimate. ... Nickel is at $13,725, up $225; we are once again trying to take out $13,570 resistance, which if we can for two days running, could result in a rather substantial upside breakout. Given the advance seeing in the other metals, we think nickel has been a relative laggard, and that fund money could push into it next." (read Ed Meir's complete morning base metals report here)
  • (AP) Hyundai Steel Co., South Korea's second-largest steelmaker, said Friday that it would cut prices for its steel products next month in line with weak demand and the falling cost of raw materials such as steel scrap. The price of hot-rolled steel will be cut to 780,000 won (US$620) per ton from the current 880,000 won starting June 1. Also, the price of hot-rolled stainless steel will be slashed to 29.4 million won from the current 3.55 million won, the company said.
  • China Economists Raise Growth Forecasts Amid Signs of Weakness - more
  • Japan’s Industrial Production Surges Most in 56 Years - more
  • China's strong interest lightens steel's outlook - more
  • The Second Crash – On the Way and Unstoppable - more

  Heron, China's Shanshan to cooperate on nickel project - Heron Resources and China's Ningbo Shanshan will jointly develop Heron's Yerilla nickel-cobalt project. - more

  Sumitomo-led nickel venture to invest $3B - Japan's Sumitomo Metal Mining Co. Ltd. and local holding firm Nickel Asia Corp. will put up a $3-billion nickel ore processing plant in northeastern Mindanao next year. - more

  LME Confirms Joined Consortium Bidding For LCH.Clearnet - The London Metal Exchange confirmed Friday it has joined the consortium of banks and brokers which is collectively considering a possible offer for LCH.Clearnet Group Ltd. - more

  CITY FOCUS: How long can China keep the miners shining? - Grab your pick-axe and hard hat - the miners are on the move again. The FTSE mining index has rallied 50 per cent in the past three months, with shares including Rio Tinto, Anglo American, Xstrata and Kazakhmys recording glowing gains. - more

  China will create another boom in this metal soon - When Carl Wilhelm Scheele discovered element 42 back in 1778, he could scarcely have imagined just how important this silvery-white metal would become one day. - more

  • China Craves Molybdenum - For the first time in years, the Chinese have become net importers of molybdenum,” reports Chris Mayer in his latest Special Situations alert. - more

  Rising Scrap Costs Should Lead Higher Long Product Prices - Long product consumption continues at a low ebb in the US. Any improvement in nonresidential building and government financed infrastructure projects is unlikely to boost steel demand until late 2009/early 2010. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, May 28

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 134 to 3,298. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg)  Retail Sales in Japan Fall for 8th Month on Worsening Employment Prospects // Asia Currencies Drop, Led by Won on North Korea Threat; Ringgit, Pes // Asian Stocks Drop on ANZ Banking Share Sale, Lower Metal Prices; BHP Falls // Government Bond Yields Soar After Rout in Treasuries; Stocks, Metals Drop // U.K. Retail Sales Worsened This Month; June Will Be `Difficult,' CBI Says // OPEC Keeps Production Quotas Unchanged in Bet That Oil Demand Will Recover // Stocks in Europe Drop on Borrowing Costs; Barclays, Deutsche Bank Decline // Government Bond Yields Soar After Rout in Treasuries; Stocks, Metals Drop // Mortgage Delinquencies, Foreclosures in U.S. Rise to Records Amid Job Cuts // U.S. Durable-Goods Orders Hovered Near Lowest Level in 13 Years in April //
  • The US Dollar is trading 7/10 of 1% lower against the Euro, while NYMEX crude is trading over 2% higher, and closing in on $65/barrel. Gold is up nearly 1-1/3% higher, while silver is nearly 3% higher on the lower Dollar. And the lower Dollar helped  push base metals into the green for the day, although nickel reaped the main benefit. In fact, looking at the indicator chart for nickel and the daily chart for the Euro looked strikingly similar. As the Euro rose during the afternoon, nickel parroted, rising and falling with the currency traders. Dow Jones reports three month nickel ended the day at  $6.10/lb , a new high close for 2009. LME stored inventories took a twist last night and had a large gain, pushing levels back up to just below 110,000 tonnes. The Baltic Dry Index continues to send strong bullish signals, up 134 points. Sucden's day old chart shows yesterday's minor pullback in nickel prices (here). Cancelled warrants remain around 6%. Vale and the USW at Sudbury have agreed to extend their contract thru mid July, and considering the plant will be closed much of June and July, this move makes sense for both parties. We can't imagine the USW wants to spend an unplanned vacation standing on a picket line in front of an empty plant. Vale did advise they have no plans to extend the planned shutdown and the July 27th resumption of operations stands. We have posted some updated news on the racial tensions in Papua, that began a few weeks back at the Chinese run Ramu nickel mine that is under construction. No reports of any further problems at Ramu have surfaced, but based on the blogs we have read in the area, this could easily grow into a far more serious situation. In the US, the Commerce Department reported new home sales fell short of expectations, but rose 0.3% in April. The Mortgage Bankers Association reported mortgage delinquencies jumped to a record seasonally adjusted 9.12%, and new mortgage applications fell 14.2% from the prior week. Refinance applications also fell 18.9% from the prior week, although more than 12% of mortgages are classified as 'in distress'. Calculated Risk has a nice chart putting this mornings unemployment numbers in perspective (here). South Korea's POSCO accepted Rio's 33% reduction in iron ore pricing, following Japan's lead, and putting more pressure on China to follow suit. Speaking of China, their markets, as well as Taiwan markets, are closed today and tomorrow for the annual Dragon Boat Festival. Wall Street is presently higher after a see-saw morning, after the results of a 7-year Treasury note auction were released. This auction was the last of three this week, as the US government issues an unprecedented amount of debt to finance its multi-pronged bailout for the economy. Yesterday, the yield on the benchmark 10-year note surged above 3.7%, which helped drag Wall Street lower on fears that higher interest rates could slow down any recovery in housing. The Edison Electric Institute Weekly Power numbers show consumption slipped the week ending May 16th, down 6.4% from the same week the prior year (more). Natural gas flows into the industrial sector is running about 19% less than this month last year, while demand in the paperboard sector shows a near 6% increase. Flow into the mining & minerals sector is down near 30% from this time last year (more).

  Commodity/Economic Comments

  • Michael Jansen, JP Morgan analyst - "(While) we are not bullish nickel in a medium to long term context, restocking at both the stainless steel and stainless steel mill level are probable positives for the nickel price."  
  • (NYT) The United Nations downgraded its economic forecast for 2009, and said it anticipates the world economy will to shrink by 2.6% 2009, much worse than the “pessimistic scenario” of its January forecast which predicted a decline of 0.5%.
  • (MBiz) China Baosteel delays to announce new prices on HRC and cold-rolled coil based on uncertain market conditions. ... This reflects unpredictable situation in Chinese market now. Although the domestic consumption is active, oversupply in the local and overseas is still undeniable and can't be ignored.
  • Papua New Guinea vow to burn all Asian shops - more  (more on this - actual e-mail sent here)
  • Deal fails to quell iron ore pricing questions: John Kemp - more

  Sumitomo-led nickel venture to invest $3B - Japan's Sumitomo Metal Mining Co. Ltd. and local holding firm Nickel Asia Corp. will put up a $3-billion nickel ore processing plant in northeastern Mindanao next year. - more

  Vale Inco extends Sudbury labor contract deadline - Vale Inco and the union representing workers at its Sudbury, Ontario, nickel operations have agreed to extend their current labor contract by more than a month to July 12, giving the two sides more time to hammer out a new deal, the company said on Thursday. - more

  Import statistics for China in April

  • Imports of ferronickel - down over 40% from March. First 4 months are up over 30% YOY. For April, leading sources to China were - (1) Japan - 54%, (2) Colombia - 20.59%, (3) South Korea - 11.4%, and New Caledonia - 8%.
  • Imports of nickel ore - up over 87% from March. First 4 months up over 63% YOY. For April, leading sources to China were (1) Philippines - 52.5% (2) Indonesia - 41% (3) Spain - 2.2% (4) Russia - 1.7% (5) Australia - 1.7%
  • Imports of chromium ore - up nearly 16% from march. First 4 months up over 62% YOY. For april, leading sources were (1) South Africa - 57.6% (2) India - 9.7% (3) Turkey - 8.9%

  Salzgitter CEO says more optimistic for 2009 now - Salzgitter, Germany's second-largest steelmaker, is a little more optimistic for 2009 as business starts to pick up, Chief Executive Wolfgang Leese said on Wednesday. - more

  IBS: Local steel consumption will stoop to 18.7Mt in 2009 - Brazilian steel institute IBS said it expects the country's consumption to fall to 18.7Mt in 2009 from 24Mt last year. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.02/lb higher, with most base metals getting little support from the falling Dollar. The US Dollar is currently trading 3/10 of 1% lower against the Euro, while NYMEX crude is trading 2/10 of 1% higher, and over $63.50/barrel. Gold is slightly higher, while silver is up over 2/3 of 1%. In overnight trading, while China markets were closed, other Asian countries ended higher, while European markets are lower this morning. After US markets finally found some momentum late yesterday, which happened to be downward, futures show another morning may start without any clear direction. Durable good orders may give the market a boost however, with the Commerce Department reporting this morning that new orders for durable goods rose 1.9% in April, higher than expected. The US Labor Department also reported this morning that new claims for unemployment fell by 13,000 to 623,000 last week, while those receiving unemployment insurance checks for more than one week, rose to 6.79 million. President Obama, in a speech last evening in Beverly Hills, stated “It's safe to say we have stepped back from the brink.” 
  • And this just in from the CWEI network ... Military forces in Asian countries are on full alert after the North Korean government threatened to invade South Korea, yet again. Live from an undisclosed location somewhere deep in the jungles of Costa Rica, economist Will U. Bendover, has joined us on the phone. "Good morning Will, thanks for spending a few moments with us." "Always a pleasure, John. Just keep it under 3 minutes." "Will, this new development in North Korea. How do you feel it might affect the markets?" "Well, John, analysts generally feel that the market has already priced in full scale nuclear devastation of most American cities, so anything less than catastrophic extinction of the US population, should be good news for traders and more evidence of economic recovery." (TY C) 
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals ended up with only modest changes yesterday after earlier gains fizzled. A slightly stronger dollar, coupled with a sharp selloff in US stocks, both contributed to the uneventful performance. ... We are seeing a mixed session in metals as of this writing as well, with only modest changes showing. The dollar is not doing much of anything after strengthening slightly yesterday on remarks from an ECB policymaker suggesting that further interest rate cuts could not be ruled out. Furthermore, the in-line US existing homes sales number did not have much impact on the greenback either, as the data has yet to signal that we have turned the corner in the moribund housing sector. ... Chinese markets are closed both today and tomorrow, so it will be down to macro numbers out of the US to set the tone for the balance of the week. ... Nickel is at $13,505, up $105; an attempt to close above key resistance at $13,570 failed yesterday, suggesting that the topside of the trading range remains intact. On the fundamental side, stainless inventories are quite low (like most everything else at consumer works), and this could perhaps tilt the bias to the upside if some restocking materializes." (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) LME nickel is likely to drift lower in the coming months as the market enters the seasonally slower summer period and Chinese restocking comes to an end, says Societe Generale analyst David Wilson. Says he's skeptical end-user demand has picked up enough to build a base for prices, and attributes the decline in inventories and stronger imports by Asian countries to restocking. However, adds, prices are not likely to retrace to the lows seen in the past six months.
  • (Dow Jones) Chinese nickel production has rebounded strongly since March as prices recover and production costs rise, and may continue to increase medium-term, says Barclays Capital.
  • (JMB) Japanese steel export decreased by 30.2% to 2.133 million tonnes in April from a year earlier, announced by Ministry of Finance on Wednesday.
  • Ji Lin Ji En Nickel Industry Co Ltd has completed the acquisition of a 51% ownership of the common shares in Liberty Mines Inc and bought 186,994,510 convertible and redeemable preferred shares of the same company recently, according to Ji Lin Ji En Nickel's filing with the Shanghai Stock Exchange.
  • Asia Steel-China prices edge up in fifth weekly gain - more
  • Global steel demand tipped to drop - more
  • As automakers go, so do steel mills - more
  • China defends economic data - more
  • Zimbabwe: Steelmakers Increases Production - more

  Acerinox seen no big pick up in end-user demand - Stainless steel firm Acerinox has seen tentative interest from distributors to rebuild stocks but a clear strengthening in demand from end users had yet to occur, its chief executive said on Thursday. - more

  Mechel Announces Commissioning of the Shaft Furnace No. 8 At Its Southern Urals Nickel Plant Subsidiary - Mechel OAO, one of the leading Russian mining and metals companies, announces commissioning of the Shaft Furnace No. 8 after repair at its Southern Urals Nickel Plant subsidiary. - more

  Antam expects no early price recovery on horizon - State nickel producer PT Aneka Tambang (Antam) expects no sharp rebound in the near future in nickel prices, as the international market will still be oversupplied until the end of the year. - more

  Steel, Vale agree to contract extension - In an unprecedented agreement, contract talks between United Steelworkers Locals 6500 and 6200 and Vale Inco Ltd. have been extended until July 12 at midnight, as have the current collective agreements for the two union locals. - more

  Total Output of Molybdenum By 7 Major Mining Companies In Q1 / 09 Decreased By 20% = Increased Moly Imports By China Had Underpinned Decreased Moly Consumption In Western Countries - The total quantity of molybdenum in molybdenum concentrate produced by seven major molybdenum mining companies of the western world in January - March quarter of 2009 came to 55.90 million lbs., having decreased by approximately 20% compared with that (69.29 million lbs.) in the same quarter of 2008. - more

  ThyssenKrupp CEO Looking For Partners For Several Ops -Report - German industrial conglomerate ThyssenKrupp AG is looking for partners for several parts of its business to limit the impact of the economic downturn, weekly magazine Manager Magazine reports ahead of publication Friday, citing Chief Executive Ekkehard Schulz. - more

  BHP CEO Marius Kloppers sees slow global recovery - The top executive of global mining leader BHP Billiton has warned not to expect a sharp rebound in the world economy. - more

  MEPS - World Flat Products Steel Price Falls as US Market Stagnates - US mills continue to work at around 40/45 percent of production capacity with order intake extremely weak. - more

  Posco Accepts Rio’s Iron Ore Price Cut as Benchmark - Posco, Asia’s third-largest steel mill, agreed to a 33 percent cut in iron ore prices with Rio Tinto Group, the world’s second-biggest supplier, adding to pressure on Chinese mills to accept it as a benchmark. - more

  China demand aids Baltic Dry Index recovery - Rising demand for raw materials in China has led to a sharp recovery in the Baltic Dry Index, the benchmark for freight costs for dry bulk commodities such as iron ore, coal and grains. - 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

Wednesday, May 27

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 222 to 3,164. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) South Korean Won, Stocks Drop as North Threatens Strike Over Search Pact // World Economy Hasn't Bottomed, Crisis Still Spreading, China's PBOC Says // Malaysia Reports Economy Shrank 6.2% in First Quarter From Year Earlier // Asian Stocks Rise as U.S. Consumer Confidence Report Fuels Growth Optimism // EU Proposes Sweeping Overhaul of Financial Regulation After Banks' Losses // German Consumer Prices Unexpectedly Fell in May for First Time Since 1996 // European Stocks Advance as Tesco, ITV Rise; Dow Jones Stoxx 600 Gains 0.4% // GM Bankruptcy Is Considered `Inevitable' as Bondholders Reject Swap Offer // U.S. Government's Aaa Rating Stable Even With Increased Debt, Moody's Says // U.S. Recession Will Probably End by Third Quarter, Business Economists Say // Stocks in U.S. Fluctuate as Technology Rally Offsets Concern About Banks
  • The Euro continues to trade lower against the US Dollar, but off earlier lows and now 1/3 of 1% lower. NYMEX crude is trading nearly 1-1/2% higher, while gold has now moved higher by 1/3 of 1%, and silver is up over 1-3/4%. Base metals ended mostly lower, but not by much in most cases. Indicator charts show nickel had fallen from earlier highs to nearly flat during our morning update, spent the early afternoon in a small climb, which collapsed in late afternoon trading. Dow Jones reports three month nickel ended the day at $6.07/lb , down a penny from yesterday's close and only the fourth time this year we have ended above $6/lb. LME stored nickel inventories fell to the mid 108,000 tonne range, while cancelled warrants slipped back below 6%. The Baltic Dry Index jumped 222 points overnight, up over 500 points in the last week alone. Sucden's day old chart is working properly again, and shows yesterday's spike in trading (here). The Federal Deposit Insurance Corp.reported in a quarterly profile this morning, that the number of “problem” banks rose from 152 at the end of the fourth quarter to 205 at the end of the first quarter, and that the 21 bank failures in the first quarter is the most since the fourth quarter of 1992 . There have been 15 so far this quarter. Existing home sales increased 2.9% in April to 4.68 million units. Distressed properties accounted for 45% of all sales in April, and inventories of homes rose 8.8% to 3.97 million. We get new home figures tomorrow. General Motors appears to be on a bankruptcy countdown after the company reported not enough of its bondholders had agreed to swap their debt for company stock. Wall Street still has yet to decide which way it wants to move today, with the Dow down slightly as afternoon trading begins.

  Reports

  Commodity/Economic Comments

  • Deutsche Bank - Although we believe the current strength in nickel prices is fundamentally unjustified, we believe two important factors are conspiring to lend support to the global nickel market. First, the global nickel market surplus, which has been evident since March 2008, is falling rapidly as a result of the 18-month campaign from producers to cut output in response to the collapse in global demand. Second, after six quarters of negative demand growth, we think the global stainless steel market has adequately destocked and is primed to enter a restocking period, in our view. Throughout the rest of this quarter and into Q3, we expect nickel prices will ease in concert with the other industrial metals as part of a sector-wide “cooling off” period. However, we believe a gradual stainless steel market restocking cycle will exert pressure on the global nickel market heading into the fall.
  • (Reuters) Corporacion Financiera Alba CFA.MC considers a  20-25 percent stake in Spanish stainless steel tube manufacturer Acerinox as a reasonable level.
  • ArcelorMittal S Africa:Steel Unit Seen Shut 10-15 Days - more
  • The Seven Deadly Sins of Business - more

  European June stainless steel surcharges

  Work surges ahead for Ramu project - Work at the giant Ramu nickel project in Madang Province is surging ahead, with all previous issues between Chinese and Papua New Guinea mine workers resolved, it is claimed. - more

  World recovery slow and protracted: BHP Billiton - Mining giant BHP Billiton predicts the global economic recovery will be slow and protracted but is cautiously optimistic about signs of growth from China. - more

  • Mining boom blamed for homeless crisis - Beautiful one day, perfect the next. Unless you are homeless. The Sunshine State has more people sleeping rough than any other Australian state.  - more

  Asian steelmakers in disarray over Rio deal - China has rejected the 33 per cent cut in iron ore prices agreed a day ago by Japanese steelmakers, while No.4 global mill Posco prepared to accept the deal, highlighting the growing schism that has emerged in a single benchmark system. - more

  Courtesy AISI - In the week ending May 23, 2009, domestic raw steel production was 1,093,000 net tons while the capability utilization rate was 45.8 percent. Production was 2,173,000 tons in the week ending May 23, 2008, while the capability utilization then was 91.1 percent. The current week production represents a 49.7 percent decrease from the same period in the previous year. Production for the week ending May 23, 2009 is up 3.2 percent from the previous week ending May 16, 2009 when production was 1,060,000 tons and the rate of capability utilization was 44.4 percent.

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.01/lb higher, and off earlier highs, with most base metals lower. Dow Jones is reporting this morning " A Singapore-based physical nickel trader said some short covering was helping push nickel higher while cancelled warrants now accounted for 7% of the 109,596 tons of LME inventory, encouraging hopes that some re-stocking by stainless steel producers was emerging." This was written before today's LME inventory numbers were released, which show a large withdrawal. Nickel's pop yesterday may over extended the market and put it into an overbought situation, and while its down this morning, don't count out yesterday's gains quite yet. The US Dollar is trading adding pressure to metals trading, and is higher against the Euro for a second day, up nearly 1/2 of 1%. NYMEX crude is higher by 3/4 of 1%, and nearing $63/barrel. Gold is lower for a second day, down a little over 1/10 of 1%, while silver is down nearly 1/2 of 1%. In overnight trading, Asian markets ended higher on US consumer confidence numbers released yesterday, and European markets are slightly higher this morning. At the moment, US futures show Wall Street has yet to decide how it will open. ICSC-Goldman reports strength in the May 23 week, with same-store sales up 0.8% with year-on-year sales up 0.5%, both readings among the best of the year. The monthly existing home sales report will be released in a little over an hour.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "LME metals reversed course impressively yesterday, as all six of the metals we follow (except for aluminum) pared early losses and finished higher. The reason for the about-face was attributable to a booming US stock market, which took off after very strong consumer sentiment readings came out earlier in the day. ... Metals demand, for example, remains relatively weak, (apart from China), but by pushing prices higher, investors are betting that we could be in the final throes of the recession. With the tailwind of a weaker dollar behind us, and the trillions of dollars on the sidelines that could conceivably flow back into the financial markets, we very well could work higher over the summer months, especially since the Fed is committed to be on hold for a while, and may therefore not rescue the dollar by tightening on the first sign of a positive macroeconomic surprise in the data.  ... Nickel is at $13,455, up $55; two days of successive closes above key resistance of $13,570 could denote a breakout from the trading range that has been in place for the past six months, and we could see a rather sharp move higher result if technical systems kick in on the long side." (read Ed Meir's complete morning base metals report here)
  • (Yieh) China’s Taiyuan Iron & Steel (Tisco) has released their stainless steel price list for the 22th week. The company is adding RMB100~300/ton on its product prices. The price for 304 series will be increased by RMB300/ton, and RMB100/ton for 400 series.
  • (Interfax) Jinchuan Group Ltd., China's largest nickel producer, raised its ex-works nickel price on May 27 by RMB 5,000 ($731.81) per ton to RMB 106,000 ($15,514.31) per ton, according to Jinchuan Group's Web site.
  • (MFG) Global stainless steel consumption is expected to drop 20% this year to around 19.6 million tons, this according to the chairman of ELG Haniel, a stainless steel recycling company. "So far for 2009 we estimate a reduction in consumption of stainless steel of 30% to 40% year-on-year, but we do anticipate some improvement as the year progresses…” he said. Global production is expected to drop by around 30% this year to between 5.2-5.8 million tons. U.S. demand is expected to drop by 37% to 1.9 million tons, while China's demand is expected to decline 10.7% to 5.8 million tons.
  • (Dow Jones) Australian nickel miner Minara Resources Ltd. "would like to move into the nickel sulfide arena" and may be interested in acquiring one of Norilsk Nickel's Australian assets, Minara Chief Executive Peter Johnston said Wednesday.
  • (FT) Marius Kloppers, chief executive of the Anglo-Australian group, said although he expected the world to undergo a period of “stabilisation” in the next three to six months, the medium-term outlook remained uncertain. ”We do not expect a sharp rebound,” he said at a mining conference in Canberra Wednesday.
  • (JMB) Pacific Metals to Increase FeNi Sales by 24% for F2009
  • (MNP) Panoramic Resources can now claim full ownership of the Lanfranchi nickel project in Western Australia after buying Brilliant Mining’s 25% stake.
  • Ecuador media is reporting Ecuador and Venezuela, have agreed to form a metals & mining company that will be responsible for mining the resources of the three countries. Bolivia has apparently also expressed interest in joining the agreement.    

  Toledo Mining Corp's Nickel Ore Shipments Resume - Toledo Mining Corp. PLC said Wednesday it resumed shipping nickel laterite ore to BHP Billiton Ltd. this week from its stockpiles and is considering restarting mining operations later in the year. - more

  Nickel Consumption In Japan For Jan. - Mar. / 09 Quarter Decreased By 58% = Statistics By METI, Nickel Consumption By Special Steel Industry Had Considerable Decrease Of 63% - According to the statistics concerning nonferrous metals compiled and released by the Ministry of Economy, Trade and Industry (METI) of Japan, the total quantity of nickel metal consumed by the industries of Japan in the first quarter (January - March) of 2009 came to 5,920 tons, having had a considerable decrease of 58.4% compared with that (14,238 tons) in the same quarter of 2008, and this large decline of nickel consumption in Japan is thought to have reflected a depression of economic activities mainly in automobile industry. - more

  Mining Cos Cautious Despite Signs Of Improving Demand - Commodities demand has recovered after falling off a cliff in late 2008, but mining executives at the Minerals Council of Australia conference this week were cautious to project a sustained upward trajectory from here. - more

  Albidon in take over talks - Mines Minister Maxwell Mwale says Albidon Mining Company the owners of Munali Nickle Mine in Mazabuka are holding discussions with a Chinese company, Jin Chuan which is interested in taking over the mine. - more

  Samancor May Shut Ferrochrome Operations Restarted This Year - Samancor Chrome Ltd., the world’s second-biggest ferrochrome producer, may shut some of the South African operations it restarted earlier this year as costs rise. - more

  Canada's miners fall into three distinct camps: Ernst & Young  - Canada's mining industry has effectively been divided into three camps as a result of the global economic recession - the opportunists, the innovators and the survivors - according to a paper released by Ernst & Young today, Mining and metals opportunities in adversity. - more

  Global iron ore price cut seen impacting N. America - U.S. iron ore pellet producer Cliffs Natural Resources might have to drop prices following a settlement by mining leader Rio Tinto to cut its iron ore price by 33 percent for some Asian steelmakers, analysts said on Tuesday. - more

  China Steel Mills Likely to Follow Rio Ore Pact, Goldman Says - Steel mills in China, the world’s biggest buyers of iron ore, are likely to follow rivals in Japan in agreeing to a 33 percent cut in annual contract prices, according to Goldman Sachs JBWere Pty. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 26

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 156 to 2,942. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Rio, Nippon Steel Agree to 33% Cut in Iron-Ore Price, First in Seven Year // Yuan Drops Most in Four Months on Signs China Halting Gains to Aid Exports // Asian Stocks Fall on North Korea Missile Concern, Oil's Retreat; LG Drops // Lowest Libor Hides `Exceptionally Wide' Spreads by Banks Hoarding Deposits // EU Seeks Power for Its Finance Authorities to Overrule National Regulators // European Stocks Rise After U.S. Confidence Jumps; Tesco, Ahold Shares Gain // U.S. Consumer Confidence Jumps Most in Six Years on Recovery Speculation // Stocks in U.S. Climb as Confidence Gain Boosts Consumer, Technology Shares
  • The US Dollar continues to trade higher against the Euro, but now by only 1/4 of 1%. NYMEX crude oil is quiet, after falling early, bouncing into positive territory after the confidence report was released, but now returning to stalemate territory. Gold and silver are both trading down by 4/10 of 1%. Base metals did an about face when the US released its Consumer Confidence report, and followed equity markets higher. Most ended solidly in the green, but now performed as well as nickel did today. Indicator charts show nickel was quiet until the aforementioned report was issued, then it was off to the races, and when the market closed, it appeared traders still had steam left to run further. Dow Jones reports three month nickel ended at its highest close for 2009, at $6.08/lb , and only its third close this year above $6/lb. Inventories of nickel stored in LME warehouses remained below 110,000 tonnes overnight, while cancelled warrants closed in on the 7% range. The Baltic Dry Index had another big day, up 156 points. In nickel news, Norilsk announced its first loss in 11 years, while Sudbury United Steelworkers members gave their union the right to strike if negotiations with Vale fail. Not really sure how effective this will be, as they also voted to extend the present contract to June 6th. With Vale shutting down most operations in June for eight weeks, we see little motivation on either side to settle anything before late summer. Vale's Voisey's Bay union members have been working without a contract since late March, and with operations there closing down for a month in July, there has been little momentum for either negotiating party to be the first to blink. With worldwide demand in dismal shape, and prices running very low, these negotiations could prove to be very difficult. In other metals news, the agreement between Nippon Steel and Rio Tinto, helped steel makers worldwide start planning for at least a 33% cut in their iron ore bills for the near future. And while China insists this move will not deter them from their demand for a 40% cut in price, this will add additional pressure on them to settle. The metals and equity markets were in a holding pattern this morning until the CC report showed a huge jump in public confidence. MarketWatch reported "A reading on U.S. consumer confidence surged to 54.9 in May from an upwardly revised 40.8 in April as expectations for jobs improved, the Conference Board reported Tuesday. The gain is the fourth-largest in the 32-year history of the survey, and the index is at its highest level in eight months."  And while the markets apparently relished the report, with the Dow up over 200 recently, economists were mixed. Our belief remains that what we are seeing in these (and most other) data is a shift from “end of the world” readings to those that more closely approximate something seen in a regular economic slump. Joshua Shapiro, from MFR Inc. stated "We do not think that conditions are going to progress in a straight line up from here, and our forecast remains that the road to recovery will be a longer and more difficult journey than most believe at the moment.". Ian Shepherdson, of High Frequency Economics, stated "This is a much bigger jump than we expected… Even so, if the new level is maintained the Conference Board index is consistent with real spending growth of less than 1%, which is not much of a green shoot." Nomura Global Economics was hopeful "The improved mood of consumers is encouraging. If the job market stabilizes, the improvement in confidence could translate into more spending and make the better outlook a self-fulfilling prophecy.", while Stephen A. Wood of Insight Economics was dubious "The level of confidence still remains low. Much of the weakness is due to accelerating job losses, deepening house price declines, soaring foreclosures, tighter credit standards, and financial market volatility. Confidence is still mired in recessionary territory although consumers are not as depressed as they were earlier in the year." Consumer confidence tracks the public's perception of the economy, and while the bears may shake their heads in disbelief, the bulls look at this as yet another signal the economy has turned a corner. We hope the public is are right. The last time the we saw anywhere this big a jump in the CC numbers was in September of last year, when it jumped from 63 in August to 70.3. And we all remember what happened to the market in October.  

  Reports

  Commodity/Economic Comments

  • (Dow Jones) Nickel prices could fall back in the second and third quarters before the stainless steel restocking cycle starts to support the market, according to a Deutsche Bank report. The bank said the recent rally in nickel prices to a high of $13,550 a metric ton May 12 didn't reflect fundamentals, adding the metal's price was likely to ease further in the next few months. ... Deutsche Bank expects nickel will record a modest 6,400-ton market surplus in 2009 and a 32,500-ton market deficit in 2010.
  • (Dow Jones) The pace of global deal activity in the metals industry significantly declined in first quarter 2009 as falling end-market demand and weak commodity prices created a difficult operating environment, according to a report released today by PricewaterhouseCoopers LLP
  • (Dow Jones) Base metals have limited downside in the coming months, as further dollar weakness, fears of rising inflation and a recovery in market sentiment will likely provide a floor to prices, says Standard Bank.
  • ArcelorMittal S.Africa Reports Explosion at Saldanha Steel Plant - more
  • Sunday Night Economic Assessment - here "Overall, the recovery to me looks to remain intact, though fragile. It may be that industrial production may have to remain soft (with little in the way of rehiring) until excess inventories are worked off. If consumption can hold, perhaps the fragility of the economy will end once inventories are down to acceptable levels, and rehiring produces stimulus of its own."
  • Video - A Crude Awakening 2007 - video here (1-1/2 hour long documentary)

  Goldman Says ‘Worst Is Over,’ Recommends BHP Billiton - The “worst is over” for raw materials demand and investors should increase investment in companies including BHP Billiton Ltd. and Newcrest Mining Ltd., according to Goldman Sachs JBWere Pty. - more

  Prices of many metals and minerals could jump to new highs: study - A shortage of metal and mineral exploration will create a “severe supply constraint,” causing prices to jump to new highs, according to a paper released Tuesday by professional services firm Ernst & Young. - more

  Has a metals-related economic recovery actually begun? - A closer look at the metals-intensive manufacturing component of April’s Industrial Production report shows that while the overall index fell by the smallest amount in six months, providing evidence that the pace of the decline is slowing, it’s far from positive. - more

  Norilsk posts first full-year loss in 11 years - OAO GMK Norilsk Nickel, the world's biggest producer of the metal, posted its first full-year loss in at least 11 years after taking a US$4.7-billion writedown on assets including mines and plants outside Russia. - more

  China Will Insist On Deeper Iron Ore Price Cuts This Year Executive - Chinese steel industry officials late Tuesday said they won't go back on their demand for a minimum 40% cut in 2009-10 iron ore term prices despite Anglo-Australian miner Rio Tinto Plc reaching a deal with Japan's Nippon Steel Corp. - more

 Seamless Stainless Tube Imports From China Continue Growth - U.S. producers comprising the Stainless Steel Tube Trade Advancement Committee (SSTTAC) noted that, despite the significant recession in the United States, imports of stainless steel pipe and tube showed substantial growth in early 2009 over 2008. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around no change with other base metals trading very quiet this morning. The US Dollar is recouping some of last weeks losses, and is trading 3/4 of 1% higher against the Euro. Gold is lower by 8/10 of 1%, while silver is down over 1%. NYMEX crude is down 2-1/4% and nearly back to $60/barrel. In overnight trading, Asian markets ended lower. In Europe, markets are lower this morning, while futures show Wall Street has an uncertain open in store. Base metals traders appear to waiting to see what equity markets will do today for direction, and European equity markets seems to be waiting to see how Wall Street will open. Wall Street appears to be uncertain after a three day weekend. Consumer confidence readings come out at 10 am EST, and this may give the market some momentum.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals ended last week on a very strong note, pushing higher on the back of a weaker dollar, which plunged to fresh 2009 lows against the Euro ...  t will be a fairly busy week on the US macro front. We get the S&P home price index out later today (expected at -18.4% for March), as well as May consumer confidence readings (expected at 42, up from 39.2 in the month prior). April existing home sales comes out tomorrow (expected up 4.65 million units), while Wednesday brings us April durable goods readings (expected at +.5%). New home sales for April also come out on Wednesday (expected at 363,000 units), although the statistic will not be as important as the existing home sales indicator. Finally, we get the first revision to first-quarter GDP on Friday, where a decline of 5.5% is now expected versus the initial reading of -6.1%. We also get May Chicago PMI (expected at 42, and slightly higher than the previous reading), as well as Michigan consumer sentiment readings for May (expected at 68, and pretty much unchanged from the previous month). Elsewhere, it was reported yesterday that German business confidence rose for a second month in a row in May, with the Ifo institute saying that its business climate index increased to 84.2 from 83.7 in April. However, offsetting that somewhat, was a report out earlier saying that European industrial orders declined for an eighth month in March. Out of Asia, South Korean consumer confidence rose in May to its highest level in almost two years on optimism about government spending, tax cuts and interest-rate reductions.... Nickel is at $12,750, down $40. Prices had a good move higher on Friday, but are retracing slightly right now. Chart suggests that we could likely head back lower into the trading range." (read Ed Meir's complete morning base metals report here)
  • Platts - Natixis said it saw sharp gains in stainless steel output in Q4, so for nickel, given that pipeline inventories were low, the market would react quickly to an underlying improvement in demand. It forecast nickel to average at $11,250/mt in 2009 and tin at $11,500/mt.
  • SBB - China's stainless steel production is expected to fall 6% this year to 6.9m tonnes on production cuts, says Xu Aidong, chief analyst with Chinese research firm, Beijing Antaike Information Development Co
  • CM - Sources from China's state owned research institution Antaike said China's nickel production in 2009 will increase by 11% YoY to 230,000 tonnes and stainless steel production will drop 6% YoY.
  • (JMB) Japan Stainless Sheet Order Receipt Decreases by 26.5% in F2008
  • (excerpt) Earlier this year India had an incident in which high levels of radioactive metal were found in stainless steel elevator buttons which were exported to Germany. - more
  • China Nonferrous Metal Industry Stimulus Plan Goals - #4 Guarantee stable resource supply. - "By 2011, the industry will supply up to 40 percent of copper, 56 percent of aluminum and 38 percent of nickel to meet the needs of the country's manufacturing sector."
  • Federal Reserve Chairman Ben Bernanke - “Like weather forecasters, economic forecasters must deal with a system that is extraordinarily complex, that is subject to random shocks, and about which our data and understanding will always be imperfect. In some ways, predicting the economy is even more difficult than forecasting the weather, because an economy is not made up of molecules whose behavior is subject to the laws of physics, but rather of human beings, who are themselves thinking about the future and whose behavior may be influenced by the forecasts that they or others make.”
  • Hu Shuli - China is being forced to rebalance. It’s clear that, regardless of the angle from which we examine the situation, our economy is being squeezed by internal and external crises. Excessive consumption in the United States is a root cause of the global financial crisis. Instead of complaining about this fact, or even quietly congratulating ourselves, China must consider what to do if the United States learns its lesson and, for example, gradually raises its household savings rate. If external demand for Chinese goods is declining, how can internal demand rise?
  • Randall Forsyth - “So, why the attraction of green shoots? One can only speculate that they must be in some ways intoxicating. Perhaps not the shoots exactly, or the stems or seeds, but the leaves of a certain plant. Those might be smoked or otherwise ingested to bring about a euphoric effect. From what I’ve read, the current crop is far more potent than the commodity available in years past. How else to explain the mind-bending notion that an economy that is declining less quickly is somehow improving?”
  • China warns Federal Reserve over 'printing money' - more
  • China still buying record amounts of U.S. bonds: report - more

  POSCO cuts stainless steel prices by up to 19 pct - South Korea's POSCO said on Monday it had lowered prices of its stainless steel by up to 19 percent in its third such move since August last year, reflecting weak market conditions. - more

  Output Of Stainless Steel Products In Japan For March / 09 Decreased Largely In Cr-Mn Products = Produced Less Than 1,000 Tons Of Cr-Mn Series, Both Of Ni And Cr Based Products Increased - According to the steel statistics released on the 19th of May by the Ministry of Economy, Trade and Industry, the quantities of stainless steel products (hot-rolled products) produced at stainless steel companies of Japan in March of 2009 were as per the table attached hereto. - more

  Vale Inco Sudbury workers OK strike mandate - Unionized workers at Vale Inco's Sudbury, Ontario, nickel operations have voted to strike if labor negotiations with the company fail, a union spokesman said on Monday. - more

  Indonesian co Antam to go ahead with nickel smelter project - PT Aneka Tambang said it is set to go ahead with its nickel smelter and stainless steel project in Southeast Sulawesi despite the withdrawal of its strategic partner. - more

  • Indonesia's Inco revises down capex plans - PT International Nickel Indonesia has revised down its capital expenditure budget for this year by more than a quarter to adjust projects to reflect a slump in global demand, the company said on Tuesday. Inco -- in which Brazil's Vale Inco Ltd, one of the world's top nickel producers, has a 61.2 percent stake -- said it has revised down its spending for this year to $166.4 million from $228.8 million initially planned in February. - more

  Molybdenum Production By Grupo Mexico In Jan. - Mar. 2009 Quarter = Produced 4,056 Tons Of Moly In Concentrate As Increased Slightly - Grupo Mexico in Mexico released recently their settlement of accounts for the first quarter (January - March) of 2009. - more

   Tati Nickel Will Survive The Recession - Sebetlela - Tati Nickel Mining Company remains optimistic about surviving the credit crunch, its General Manager, Seb Sebetlela, said at a press conference on Friday at the company's clubhouse in Francistown. - more

  China's Ji'en says bid for Canada nickel deal gets go ahead - China's Ji'en Nickel Industry said Tuesday Chinese regulators had approved a partnership with Canadian mining company Goldbrook Ventures for nickel exploration in Canada. - more

  Norilsk trims '09 nickel, raises PGM output f'casts - Russian miner Norilsk Nickel trimmed its 2009 nickel output forecast to between 285,000 tonnes and 300,000 tonnes, the company said on Monday, from an earlier estimate of 290,000 tonnes to 305,000 tonnes. - more

  We're sunk if commodity prices fall - The spike in commodities prices in the past three months has been driven by speculation that, if not supported by fundamental forces over coming months, could have dire consequences for the Australian economy and the Government's budget. - more

  China April crude steel output falls 3.9% on year to 43.41 mil mt - China's crude steel production in April fell 3.9% year on year to 43.41 million mt, according to latest figures from the National Bureau of Statistics. - more

  Rio Agrees 33% Iron Ore Price Cut With Nippon Steel - Rio Tinto Group, the world’s second- largest iron ore exporter, agreed to a 33 percent cut in contract prices with Japanese steelmakers, the first decline in seven years as the global recession slashes demand. - 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

Friday, May 22
(US and London markets are closed on Monday)

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index -  plus 79 to 2,786. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Dollar Weakens to Four-Month Low Versus Euro on U.S. Credit Rating Concern // Bank of Japan Raises Economic View on Signs Worst Is Over, Keeps 0.1% Rate // Taiwan's Jobless Rate Climbs to Record High of 5.77% on Cut in Investments // Asian Stocks Fall as Lenovo Loss, U.S. Jobless Claims Damp Growth Optimism // Libor Posts Biggest Weekly Decline This Year on Signs Credit Crunch Easing // European Stocks Drop for Second Day; Nokia, British Airways Lead Declines // Geithner Pledges to Cut Deficit as Concern Grows Over U.S. AAA Debt Rating // AIG's Liddy Leaves `Terrible Job' of Repaying U.S. Bailout to Successor //Steinhardt Says U.S. Stock Rally Won't Last, Economy Still a `Scary Place' // Stocks in U.S. Rise as Sears Profit Overshadows Government-Funding Concern
  • The US Dollar continues to trade higher against the Euro, by nearly 1%. NYMEX crude is now trading slightly lower and under $61/barrel. Gold is higher by 1/3 of 1%, while silver is up by 2/3 of 1%. Base metals ended the session higher, except for aluminum, thanks primarily to a stronger dollar. Indicator charts show nickel jumped early and spent the rest of the session in a slower climb. Dow Jones reports three month nickel ended the day and week at $5.80/lb . For the week, three month nickel gained $.15/lb, and is up $.50/lb over last month's close. Cancelled warrants soared overnight, and are now flirting with the 6% level. Inventories of nickel gained, but remain under 110,000 tonnes. The Baltic Dry index was up 79 points, with a very strong Capesize overriding losses in both the Panamax and Supramax indexes. Nickel got a big bump from the falling US Dollar this morning, but news from China was also encouraging to traders. Imports of refined nickel increased 95% year on year in April, a big jump over the last few months. Considering the stainless steel market remains dismal, even in China, why the sudden jump? In our opinion, China is investing for the future. You have probably heard, and will more than likely hear, a lot more in the future, about the potential for higher inflation due to mounting deficits. China made it very clear early last month, that it was growing concerned about the security of its mammoth investments in US Treasury's. A quiet switch to investing in physical stock makes complete sense, as not only a hedge against future inflationary risks, but a savings account for their own reserves. China will need a lot of metals when world economy's gets back on track. And while we have heard market rumors since early March that they were stockpiling other base metals, most denied, not much was mentioned about nickel. There was too much supply, and not enough demand. Now the numbers tell a different story. According to the RNCOS report, “Nickel Market Outlook (2007)”, China’s domestic supply of nickel is limited as its nickel reserves aren’t very rich. With many predicting China will become the dominant worldwide economy in the next 20 to 30 years, China must begin to take steps to conserve their "limited natural resources", especially those that many countries classify as "strategic reserves". It appears that China may be doing so with nickel, albeit quietly. But that is just an opinion, so take it for what it is worth.
  • Have a safe and relaxing weekend. Here is the States, we will be on holiday Monday.

  Reports

  Commodity/Economic Comments

  • (The Australian) Laterite nickel might be as popular as a Phuket pub crawl at the moment, but surely Heron's assets have to be worth more than $10 million given that Mitsubishi shelled out $216 million for one-third of Indonesia's Weda Bay deposit.
  • (Bloomberg) BankUnited Financial Corp., the ailing Florida lender, was shut by federal regulators and its assets were sold to private-equity firms including WL Ross & Co. and Carlyle Group in the largest U.S. bank failure this year. The group’s purchase of the bank, deemed “critically undercapitalized” by the Office of Thrift Supervision, was the “least costly” resolution, the Federal Deposit Insurance Corp. said today in a statement. The closing will cost the insurance fund $4.9 billion, pushing the total cost of 34 seizures so far this year to more than $10 billion.
  • Gold visits old relationship with the US dollar - more
  • Federal Reserve Cannot Account for $9 Trillion - more
  • A Failure of Capitalism - Doing Too Much at Once - more

  China Nickel Figures for April

  • Imports of refined nickel increased 95.15% YOY in April, with monthly receipts totaling 21,031 tonnes. Year to date imports total 53,963 tonnes, a 16.14% increase YOY.
  • Exports of refined nickel decreased 8.16% YOY in April, with total shipments totaling 419 tonnes. Year to date exports total 1,608 tonnes, a 10.77% decrease YOY.

  Assmang to Cut Manganese, Chrome Output on Steelmaking Slump - Assmang Ltd., South Africa’s second- largest manganese producer, will cut output at all of its operations after demand for steelmaking raw materials plunged. - more

  Talvivaara Hedged for Any Nickel Price Drop, Chief Perae Says - Talvivaara Mining Co. Plc, the Finnish nickel producer that started mining in October, said it is hedged for potential declines in raw material prices. - more

  JSL scraps $1.2-bn JV project in Indonesia - Hit by the prevailing industrial downturn, the country's largest stainless steel producer, JSL, has shelved its USD 1.2-billion joint venture project with Indonesia's PT Antam TBK in the South East Asian country. - more

  45 days after the pollution, Vale Inco is a low profile - (excerpt) This will obviously delay the startup of the plant. Michel Sylvestre, technically, it could enter production as early as June. "But we'll take our time and the maximum security. Our goal is to start production before the end of the year. " - translated version here original French here

  China's major steel producers report losses in first 4 months - Twenty-nine large and medium-sized Chinese steel producers reported 5.18 billion yuan (762.46 million U.S. dollars) in aggregate losses in the first four months, the China Iron and Steel Association (CISA) said here Friday. - more

  Severstal says no plans to leave U.S. market - Russia's largest steelmaker Severstal said Friday it had no immediate plans to sell any of its loss-making U.S. assets and would seek to turn them into profitable ventures. - more

  Steel Braces For Impact - A large portion of the U.S. steel industry could be severely hurt under a carbon-emissions cap and trade system, with some companies indicating it could push operations overseas. - more

  Looters shot dead amid chaos of Papua New Guinea's anti-Chinese riots - Papua New Guinea is reeling from anti-Chinese riots involving tens of thousands of people, which left four people dead and closed down many of the country's major towns as Chinese-run stores were looted. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.22/lb higher this morning, with all base metals except aluminum trading solidly in the green. The US Dollar continues to slump against the Euro, continuing a big spike that came in afternoon trading yesterday, and is trading lower by 6/10 of 1%. This is helping boost metals, along with higher equity trading in Europe. NYMEX crude is up 1% to over $61.50/barrel. Gold is higher by 1/3 of 1% and silver is up nearly 1-/2%. Asian markets ended lower overnight, while European markets are slightly higher. Futures show US markets should open slightly higher, in what is expected to be a quiet day before a three day holiday break in the US. Reuters  reports "Strong Chinese prices also boosted imports of nickel 66.6 percent during April." MF Global's daily report has actual numbers listed (link below or side). Australian Financial Review newspaper is reporting Gladstone Pacific is in negotiation with BHP for the purchase of the Yabulu Refinery. It is beginning to appear that everything related to nickel in Australia is either on the market, or is rumored to be in the future.  This does not bode well for miner's long range expectations for nickel pricing. And Natixis updates its forecast for nickel to average $5.10/lb for all of 2009.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metal prices got thrashed yesterday, as a wobbly US stock market and uninspiring macro numbers out of the US took their toll.  ... We are seeing a decent rebound in all the metals today (except for ali) as another sharp drop in the dollar and continued declines in LME stocks are exerting influence on the group. The decline in the dollar is particularly notable, as the greenback is now zeroing in on the 1.40 mark against the euro. The surprising S&P downgrade of the UK yesterday has set off fears that ratings agencies could now set their sights on the dollar in the months ahead, thinning the ranks of the dollar bulls.  ... Nickel is at $12,550, up $425, and basically back where we were at this time yesterday. Prices are still trapped within a sideways trading range."  (read Ed Meir's complete morning base metals report here)
  • (Dow Jones)  LME nickel is unlikely to sustain the current rally above $13,000/ton in 2009, as the metal faces a "massive stock overhang" that will only slowly be eroded, says Natixis. Forecasts LME cash nickel to average around $11,600/ton in 2H 2009 and $11,250/ton for all of 2009.
  • (Yieh) Spanish Acerinox announced that they will increase stainless steel price by €100/ton for austenitic and ferritic grade due to the increasing requirements, effective immediately.
  • (JMB) Ni Oversupply to Narrow to 39,000T in 2009: Sumitomo Metal Mining
  • (MB) China's strong domestic market led to big increases in its nickel imports in April and is likely to keep imports high into May too, said market sources.
  • Chinese firms swap state cash for Africa's minerals - more
  • Miners' marriage proposal could be on the rocks - more
  • Chavez Takes Over Venezuelan Iron, Steel Producers - more
  • Yuan set to play bigger global role - more
  • Commodities: Best inflation hedges - more

  BHP seeks uranium mine permit, nickel plant may close - (excerpt) The Australian Financial Review newspaper reported BHP was holding talks with Australia's Gladstone Pacific Nickel to sell the refinery rather than close it. - more

  Recent Prices Of Ni-Ores Imported By China Fall To Lower Level Than Half Of Those In 2008 = Prices Of Nickel Ore Imported Into China In Early May Were CNY280 -300 Per Ton CIF - According to the customs-statistics released in China, this country imported 1,700,000 tons in material of nickel ores in January - March quarter of 2009, having decreased by 52% or fallen to a scale of half compared with that (3,550,000 tons) in the same quarter of 2008. - more

  Sherritt near Madagascar financing deal - Sherritt International Corp. says it is on the brink of securing a deal with its partners to help finance its share of the world's largest nickel project, the troubled Ambatovy venture in Madagascar. - more

  Vale's exit from Kalgoorlie nickel leaves Heron with full control news  - Brazil's Vale do Rio Doce has pulled out of the planned $1.5 billion Kalgoorlie nickel laterite project in Australia, which it had planned to undertake with another Australia miner, Heron.  - more

  PNG Govt Bends Employment Rules for Ramu Mine - Chinese nationals employed by the Ramu nickel mine were issued work permits despite not meeting Papua New Guinea's (PNG) labour laws, reports The National.  - more

  US ferrous scrap exports run ahead of generation - US exports of ferrous scrap accelerated in the first quarter at a time when scrap generation in the US slowed, according to some market observers. - more

  Russia starts antidumping investigation on imported fasteners from all countries - The Russian manufacturing association Rosmetiz has confirmed to Fastener+Fixing Magazine that the Ministry of Industry and Trade of the Russian Federation has initiated an investigation concerning imported steel bolts and steel nuts. The decision to commence a ‘special protective investigation reflects concern over the increase in imports of steel bolts and steel nuts to the Russian Federation customs territory and was made in response to representations from two Russian enterprises – MMK-Metiz and Severstal-metiz. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, May 21

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 42 to 2,707. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Taiwan's Economy Shrank by Record 10.24% on Declining Exports, Spending // Dollar Falls to 8-Week Low Versus Yen After Fed Projects Deeper Recession // Krugman Says Global Economy's `Free-Fall' May Be Ending, Dollar to Weaken // Asia Stocks Fall as Japan's Yen Strengthens, Fed Predicts Deeper Recession // Stocks, Gilts, Pound Slump on Lower Fed Forecast, U.K. Credit-Outlook Cut // U.K. May Lose AAA Rating at S&P as Government Debt Approaches 100% of GDP // European Services, Manufacturing Index Rose to Eight-Month High in April // Libor Declines 6 Basis Points, the Most in Two Months, to 0.66%, BBA Says //  European Stocks Drop for First Time in Six Days After S&P Cuts U.K. Credit Outlook // Fed Officials Are Unconvinced `Stabilization' of U.S. Economy Will Persist // Greenspan Warns Commercial Banks Have `Large' Unfunded Capital Requirement // Stimulus Spending, Budget Deficit Put U.S. Dollar at Risk, Says Windheim // Unemployment Claims in U.S. Fell Less Than Estimated to 631,000 Last Week //  U.S. Stocks Fall on Concern Job Losses Will Delay Recovery; Deere Retreats
  • The US Dollar and Euro traded positions for much of the morning, but now the Euro is soundly higher, by nearly 3/4 of 1%. NYMEX crude is lower by 2-1/2%, and at $60.50/barrel. On the back of worrisome economic news, safe haven gold is higher by 1-1/4% and silver is higher by nearly 1-1/2%. The Euro's move, coming in the last hour, came too late to help base metals today, which, on the back of an array of negative recovery news, all fell. Indicator charts show nickel fell hard early in the trading session, and gradually worked lower until stabilizing late in the day. Dow Jones reports three month nickel got whacked today, and ended the session at $5.50/lb . The decision by Vale to pull out of the Kalgoorlie nickel project in Australia, and news from Russia, that Norilsk may be interested in unloading two nickel mines, also in Australia, could not have sent a positive signal to markets on the long term recovery potential for nickel. Inventories of nickel stored in LME warehouses grew slightly overnight, while the Baltic Dry index increased yet again, up 42 points. The minutes from the last Fed meeting, released yesterday afternoon, sent a shudder thru the market late yesterday and into this morning, and after Former Federal Reserve Chairman Alan Greenspan expressed concern publicly that the financial crisis was not over, and Standard & Poors put the entire country of England on notice that they may loose their high credit rating, traders worldwide turned gloomy. The US Labor Department reported this morning that initial jobless claims fell 12,000 to a seasonally adjusted 631,000 for last week, while the previous week's figure was revised to 643,000 from 637,000. Continuing claims, those drawn by workers collecting benefits for more than one week in the week ending May 9, rose 75,000 to a new record 6,662,000. (graph here by Calculated Risk) Marketwatch reports "Standard & Poor's shocked investors world-wide with a formal warning that the United Kingdom must get its finances in order or lose its coveted triple-A credit rating, ..." The Philadelphia's business activity index came in little changed at -22.6 indicating steady month-to-month contraction for May, with the all important new orders reading, showing a further decline of -25.9 vs. April's -24.3. The sole "green shoot" for the morning, the index of leading economic indicators rose 1.0 percent in April, primarily on the back of a bullish stock market and growing confidence.

  Reports

  Commodity/Economic Comments

  • (MetalBiz) Indian JSW is considering shutting down a plate mill in Texas of America at the end of the month. Its annual production capacity is 1.2mln tons and the current capacity utilization rate is only 10%-15%. The company is scheduled to stop production for two or three months due to the weak demand.
  • (Business Day) The decision by Brazilian miner Vale to pull out of its joint venture with nickel laterite hopeful Heron Resources after four years of work and $34.5 million of spending on the Kalgoorlie Nickel Project understandably hurt the explorer's share price. As Xchange noted in February, the economics of the Kalgoorlie project looked rather dubious in the current market, with the pre-feasibility study showing it could produce 36,000 tonnes per year at a cash operating cost of $US4.42 a pound. When sulphide mines - which have material that is easier to process - are closing around the world, the idea of pumping $US1.5 billion into a new nickel mine doesn't look attractive. BHP Billiton learned that lesson the hard way, taking $US3.7 billion of write-downs on the Ravensthorpe operation, which is now closed. And Vale has delayed the start of production at its other new laterite mines around the world due to the low price and demand for the stainless steel material."
  • Kevin Rendino, who oversees $10 billion at New York-based BlackRock Inc. - “We need good numbers as opposed to less-bad numbers. When you look at 600,000 of jobless claims, no matter how you slice it, it’s a bad number.”
  • Leading measure of commercial real estate market heads south (courtesy Big Picture blog) - graph here
  • What the Credit Card Bill of Rights means for consumers - more

  Norilsk May Sell Australia Mines in ‘Year or So,’ Director Says - OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, may sell its Australian mines in a “year or so” after beginning to halt the operations last year as falling prices made output unviable. - more

  China Wants 45% Ore Price Cut From Rio; 40% From Vale-Xinhua - Chinese steel mills are seeking a 45% iron ore benchmark price cut from Rio Tinto PLC (RTP) and a 40% cut from Companhia Vale do Rio Doce (RIO), the official Xinhua news agency reported Thursday. - more

  Rio caught between a knot and a hard place on iron ore - We are in for a few fast rounds of shadow-boxing as real deadlines finally loom for the $US19.5 billion ($A25.2 billion) Rio-Chinalco deal. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.19/lb lower, with base metals and markets worldwide awash in red this morning. The US Dollar and Euro are nearly dead even this morning, while NYMEX crude is down 2% and under $61/barrel. Gold is down 1/10 of 1% and silver is down 4/10 of 1%. Asian markets ended lower overnight, European markets are trading lower this morning, and US futures are presently lower. All thanks to the minutes of the Fed April 28-29 Fed meeting released yesterday, revealing the Fed is not nearly as optimistic about the speed of the economic turnaround as it was three months prior. As a MarketWatch headline put it this morning, "Recovery picture darkens". In metals news, Vale has withdrawn from its partnership with Heron for the Kalgoorlie venture in Australia. And Eramet estimates that the global nickel stockpile, including stocks at the London Metal Exchange and held by producers, stood at 475,885 tons by the end of 2008, and would fall to 340,786 tons by the end of this year (about 15 weeks of consumption).  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "There is not much that is uneven in today's session, as we are lower across the board in all the metals. The selling is evident in other markets as well, with oil prices already giving up two thirds of yesterday's strong gains. All this is occurring despite the fact that the dollar is pretty much unchanged against the Euro, suggesting that participants may be sensing that some of the euphoria about an imminent recovery has perhaps gotten slightly ahead of itself. This is best illustrated in an article in today’s Wall Street Journal highlighting the fact that three of the US’s major trading partners -- Germany, Japan, and Mexico -- have all seen their first quarter growth rates drop by an annualized 14.4%, 15.5%, and 21.5%. These are stunning numbers, and of course have been out for some time now, but nevertheless are a stark reminder of the steep “recovery hill” that lies ahead. We think today's setback in metals will not lead to yet another "buy the dip" situation, and may, in fact, last for several more sessions, especially if US equity markets-- which are quite overbought-- also show signs of fraying. US stocks are called to open modestly lower today, with Dow Jones futures pointing to a 40-point opening decline.... Nickel is at $12,240, down $430. Prices are still trapped within a trading range, as LME stocks continue to rise. We expect somewhat more weakness ahead." (read Ed Meir's complete morning base metals report here)
  • (WSJ) There may be green shoots appearing for the economy, but to much of the Federal Reserve they appeared to be light green. Central bank officials in recent months grew more pessimistic about their prospects for the economy, expecting a worse 2009 and 2010 than they forecast in January. - Minutes of the Federal Open Market Committee April 28-29, 2009 - pdf here "The first-quarter data also offered a few tentative signs that the deceleration of economic activity in emerging markets might have started to abate."
  • (Yieh) According to the Korea Iron and Steel Association, the imports of cold-rolled stainless steel hit a record high of 16,700 tons in April, increased by 35.6 percent compared to the same month of last year. The average import price in the month was about US$2,575 /ton.
  • (Yieh) Japan's stainless steel output in March reached 123,804 tons, up by 6.2 percent compared with February's 116,542 tons.
  • (Interfax) China's net imports of primary nickel will decrease in 2009 as the country is becoming more reliant on domestically produced primary nickel, a Chinese analyst said at an industry conference in Shanghai on May 20.
  • (SG) Ufaleynikel a Russian nickel and cobalt producer, part of Industrial Metallurgical Holding Group, cut commercial nickel output by 28.4% in 2008 to 10,107.2 tonnes
  • Are Things Really Betting Better? - more
  • Just How Serious is the Credit Contraction? - more

  Vale withdraws from WA nickel project - Brazilian mining giant Vale has withdrawn from its Kalgoorlie nickel joint venture with Heron Resources in Western Australia. - more

  World nickel stocks to fall in 2009 -Eramet - Global nickel inventories are expected to fall significantly this year, as stockpiles that were built up over the past two years are being depleted by rising demand and lower production, an executive from Eramet, the world's sixth-largest nickel producer, said on Thursday. - more

  Market Tendency On Imports Of Ferro-Alloys At 15th May 2009 = Risen Prices Of Nickel, Chrome And Moly As Raw Materials Are Still Unable To Influence On Stainless Steel The market tendency by item on imports of ferro-alloys into Japan at the 15th May of 2009 is as follows ; - more

  Commodity prices have hit bottom, Scotiabank says. - April's 6.2 per cent plunge in Scotiabank's commodity index likely marks a bottom in the cycle, with prices expected to be well-supported during the seasonally slower summer months before rallying further in the fall, says analyst Patricia Mohr. - more

  Spain's Acerinox buys Malaysia's Yick Hoe Metals - Spanish stainless steel maker Acerinox Wednesday announced its purchase of the 75 percent of Malaysia's Yick Hoe Metals that it did not already own. - more

  Xstrata-Merafe May Cut Staff If Eskom Hikes By 34% - South Africa's Merafe Resources Ltd., which produces ferrochrome in partnership with Xstrata PLC (XTA.LN), may consider cutting staff if state-owned power utility Eskom Holdings Ltd.'s request for a nominal 34% tariffs increase is approved, Investor Relations Manager Lindiwe Montshiwagae told Dow Jones Newswires Wednesday. - more

  China and Russia in Steel Trade Clash - Russian steelmakers in Moscow have confirmed that their export surge towards China, on which the revival of Russian mill capacity is currently based, is now threatened by an anti-dumping (AD) inquiry launched by Beijing. - more

  • China largest source of India's imports, says RBI - China has emerged as the largest source of India's imports in the last two years forcing the Commerce and Finance Ministries to take recourse to safeguard and anti-dumping measures. - more

  Norilsk Nickel to sell 4% stake to units -sources - Russian miner Norilsk Nickel plans to sell 4 percent of its own shares, acquired during a buyback, to its two main production units, two sources close to the company's shareholders told Reuters on Thursday. - more

   Japan's crude steel output dives 43.6 pct in April - Japan's crude steel output in April plunged 43.6 percent from a year earlier to 5.72 million tonnes for the seventh straight month of decline, an industry body said, as the economic slump saps demand for cars and electronics. - more

  Mayhem Persists Throughout PNG - Two men were shot and injured in Mt Hagen as the police tried to control looting of shops run by people of Asian origin in the Highlands and Mamose in the last few days. - 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

Wednesday, May 20

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 21 to 2,665. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Japan Economy Shrank at Record 15.2% Pace in First Quarter on Export Slide // Yen, Dollar Strengthen on Speculation Global Recession Will Be Prolonged // Asian Stocks Rise, Led by Mitsubishi, Shipping Lines; Taiwan's HTC Climbs // Bank of England Votes 9-0 to Boost Bond-Purchase Plan, Keep Rate at 0.5% // European Stocks Rise for Fifth Day, Led by Oil Companies; Air France Gains // Geithner Says Bank Distressed-Asset Programs Will Get Under Way by July // VIX Falls to Lowest Level Since Before Lehman Bankruptcy as VStoxx Plunges  // Stocks in U.S. Pare Gains as Financial Companies Slump; Capital One Slides
  • The US Dollar is currently trading just under 1% lower against the Euro, while NYMEX crude is up over 2-1/2%, after peeking over $62/barrel earlier in the session. Gold is trading over 1% higher, while silver is up 4/10 of 1%. The faltering US Dollar didn't do much to help most of the base metals today, with the range of metals ending mixed and mostly lower. Indicator charts show nickel plunged early, jumped by about $350/tonne, and then staggered in between these two marks for the rest of the session. Dow Jones reports three month nickel ended the day at $5.74/lb , but showed further signs of faltering in after market trading. While inventories of nickel in LME authorized warehouses continue to slump, as they did again overnight, the inflow and mostly outflow activity over the last few weeks has been impressive. Cancelled warrants had fallen to around 2% yesterday, but Reuters noted today's readings "Cancelled warrants of nickel stood at 4,530 tonnes -- just over 4 percent of total LME stocks which dropped by 114 tonnes to 109,674 tonnes. One trader in Europe said that due to healthy Chinese demand his company had tagged for delivery about 4,500 tonnes of about 15,000 tonnes of nickel stocks in Singapore. "Chinese demand is still very good. Scrap is tight and imports from China are high," the trader said." The Baltic Dry Index increased again, up another 21 points today. Traders of nickel could not have been impressed with news that an analyst with the Chinese-owned research group, Antaike, forecast a slide in stainless steel production in that country from 7.34 million tonnes in 2008, to 6.9 million tonnes this year, while increasing its  nickel output by 11%. The president director of a subsidiary of China's top private stainless steel producer Tsingshan Holding Group, is quoted as saying that while production had improved in the first five months, there were concerns whether demand could hold thru the remainder of the year. The price trend for 300 series stainless steel is showing signs of improvement in China, based entirely on raw material costs, while 400 series prices are flat, and 200 series prices are down. If you missed the PBS Frontline episode called "The Meltdown", originally broadcast in February, it replayed last night and can be viewed online (here). Well worth a watch, even if it is historical now.

  Commodity/Economic Comments

  • Jiang Xinfang, president director at Shanghai Tsingshan Mineral Company Ltd, a subsidiary of China's top private stainless steel producer Tsingshan Holding Group - "Stainless steel production has been improving in the first five months, but there are concerns if downstream demand will be able to support the trend through the third and fourth quarters..... Nickel pig iron with low nickel content is not going away. At current the nickel price level, although most nickel pig iron plants have closed down, a number of them are still operating.... At the $12,000 price level, even producers of NPI with medium or high nickel content can start making a profit."
  • (Dow Jones) Base metal prices may recover faster than expected in 2010, though this will hinge on the U.S. returning to growth, U.K.-based metals consultancy CRU said Wednesday. ... "Although the reaction in the markets looks like it's running ahead of the pace and scale of the upturn in the real economy, CRU recognizes that the rally may be pointing to a faster recovery than it and the consensus is currently forecasting."
  • (Dow Jones) The global nickel industry will face further production cutbacks in the short term, as well as project deferrals, with limited scope for sustained price rises while stocks overhang persists, said John Barkas, director of Metalytics Pty Ltd., in an industry conference Wednesday.
  • (Reuters) In another dispute, involving zeroing in U.S. anti-dumping duties on imports of Mexican stainless steel, the two countries told the dispute body they had reached an agreement to negotiate further, following the expiry of a WTO deadline at the end of April for the United States to comply with rulings in the case.
  • (India) Pig iron producers in trouble again - more
  • The End Game Draws Nigh - The Future Evolution of the Debt-to-GDP Ratio - more
  • Wary of U.S. debt, China shifts gears on investment - more
  • ‘Tis Better to Have Bet and Lost - more
  • Industrial Metal Prices (Goldman Sachs Index) - graph here

  Higher prices put brake on commodity supply curbs - Production cuts and project delays have started to slow across a range of commodities as prices began to rally, but over-supply could still be a major issue for some metals. - more

  China Cutting Steel Capacity - According to Reuters and other Asian papers, China’s steel industry is heading for its first loss since 1995. - more

  Intl Ferro says demand remains very low, shares drop - International Ferro Metals Ltd said demand for ferrochrome continues to be very low and prices do not yet justify a resumption of production beyond July, sending its shares lower. - more

  • IFL ferrochrome sales still sliding - (excerpt) “There are signs of a bottoming out of the down cycle as global ferrochrome inventories decline, but prices have yet to firm to an attractive level and predicting the timing of the recovery is difficult.” - more

  China Stainless Steel Price Index

  No need for safeguard duty on steel, says official - The government is unlikely to levy any safeguard duty on steel imports as demanded by industry leaders, said P K Rastogi, secretary, ministry of steel, in the sideline of a steel seminar in Mumbai on Tuesday. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.03/lb higher, with other base metals mixed and quiet. The Euro is higher against the US Dollar, by nearly 4/10 of 1%, and growing, which could boost metals in afternoon London trading. NYMEX crude is up over 1% and over the $60/barrel level in what even OPEC agrees is speculation and not fundamentally driven. Gold is up 3/4 of 1%, while silver is up 1%. In overnight trading, Asian markets ended slightly higher, while European markets are squeaking out a small gain this morning.  US futures imply a positive opening this morning on Wall Street. Traders will be watching Treasury Secretary Timothy Geithner's testimony at 9:30 a.m. Eastern time, energy data due to be released at 10:30 a.m. and the Fed minutes will be issued at 2 p.m.     
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metals finished modestly higher yesterday and well off earlier highs, as a set of disappointing housing data tempered the initial gains. Both housing starts and permits unexpectedly fell to record lows in April, denting earlier hopes that the numbers would surprise to the upside. We were not surprised by these readings, as we think these indicators will perhaps be the last to improve given the glut of houses on the market. More important in our view, is the pace of housing sales, mortgage applications, and builder sentiment, all better indicators of the demand side of the housing equation. We are mixed in the metals complex as of this writing in quiet trading, with modest losses seen in ali, zinc and lead, while both copper and nickel are up slightly.... Nickel is at $12,525, up $45. Prices are still trapped within an uneventful trading range."  (read Ed Meir's complete morning base metals report here)
  • (Bloomberg) China’s amassing of commodities is “definitely happening,” Michael Gaylard, London-based strategic director at broker Freight Investor Services Ltd., said by phone today. “They are building up some stockpiles right across the commodity spectrum, from base metals to coal.” ... China’s imports of iron ore, used in steelmaking, jumped 33 percent in April, setting a record for a third month, the customs office said last week. The nation, the world’s biggest steel producer, is stockpiling commodities as part of a reallocation of its sovereign wealth, Brian Jackson, senior strategist at the Bank of Canada in Hong Kong, said yesterday. “This will continue for at least one year,” Nobu Su, founder of Taipei-based commodities shipping line TMT Co., said by phone from London today. “It’s a natural hedge, so they are buying commodities.”
  • (Dow Jones) The global nickel market was in a 56,600-metric-ton surplus in January to March, the World Bureau of Metal Statistics said Wednesday.  
  • Global steel output fell 23.6 percent in April to 89 million metric tons compared with the same month last year, the World Steel Association said Wednesday. Production in the first four months of the year came to 354 million metric tons, down 22.7 percent from the same period of 2008.
  • China Establishes Ferroalloys Exchange Center In Tianjin Scheduled To Inaugurate In This Summer = Under Name Of Tianjin Far-East Ferroalloys Exchange Center, With Consideration Of Trading In Futures - more
  • Spot iron ore price flat, transaction volumes drop - more
  • Speculators 'distort Chinese iron demand' - more
  • World Bank Says China Recovery Hopes May Be Premature - more
  • Japan Economy Shrinks Record 15.2% as Exports, Spending Plunge - more

  China nickel output to grow 11 pct in 2009 - Antaike - China's primary nickel output is is expected to grow 11 percent to 230,000 tonnes in 2009, while stainless steel output will fall 6 percent, a senior analyst at state-owned research group Antaike said on Wednesday. - more

  Inquiries Recover To Normal Level In Japan's Ni-Based Stainless Exports - Japan's stainless steel manufacturers see the recovery of inquiries to a normal level in their deals of nickel-based CR sheet exports to the rest of East Asia. The current inquiries originate from China, Hong Kong and Taiwan.  - more

  • Japanese Stainless steel prices rebound in May - Japanese mills said that 300 series stainless steel demands have come back to the level of last September before financial crisis - mora

  Posco Cuts Stainless Steel Prices by as Much as 19%  - Posco, South Korea’s largest steelmaker, cut prices of some stainless steel products for the second time in three months as demand weakened and raw material costs dropped. - more

  Widespread reports `advance' at Vietnam nickel mine - Investment company Widespread Portfolios has lifted its "don't sell" guidance to shareholders after developments at a Vietnamese nickel mine were reported. - more

  Spain's Acerinox says to raise steel prices - Spanish steel producer Acerinox said on Tuesday it was increasing prices for steel products due to signs of recovering demand. - more

  MEPS - EU Composite Steel Price Up In may As Market Sentient Improves - Market sentiment has visibly changed in the flat products sector. We can detect an air of mild optimism, albeit tempered with extreme caution. - more

  China Appeals For Calm After Papua New Guinea Attacks -China's embassy in Papua New Guinea has pleaded for calm and asked the government to restore order after a string of attacks on Chinese-owned shops in the impoverished country. - more

  • Total mayhem - Two men were shot and injured in Mt Hagen as the police tried to control looting of shops run by people of Asian origin in the Highlands and Mamose in the last few days. - more

  Finishing touches: New alloys offer alternative to chrome - Ever since the 1940s, chrome has been used to add a protective coating and shiny luster to a wide range of metal products, from bathroom fixtures to car bumpers. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 19

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 39 to 2,644. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Asian Stocks Climb as Oil, Libor Stoke Growth Optimism; BHP, Toyota Gain // German Investor Confidence Surges More Than Estimated to Three-Year High // Libor Has Biggest Two-Day Drop in Four Months Amid Banking Recovery Signs // European Stocks Gain for Fourth Day; Deutsche Bank, Anglo American Advance // Housing Starts in U.S. Unexpectedly Fall to Record-Low Pace; Permits Drop // Stocks in U.S. Rise as Utility, Commodity Shares Overcome Housing Report
  • The US Dollar continues to trade lower against the Euro, by about 1/3 of 1% and off session highs. NYMEx crude hasn't changed much from this morning, up 6/10 of 1% and hovering around the $59.50/barrel level. Gold is trading higher by 9/10 of 1%, and silver is up nearly 2-1/2%. Base metals ended mixed, with nickel the only traded base metal seeing much of a change. Indicator charts show nickel started higher, fell when the US housing report was issued, then steadied thru the remainder of the session; the days trading in an approximate $450/tonne range. Dow Jones reports three month nickel ended the day at $5.65/lb , erasing yesterday's loss and back to where it ended Friday. LME stored inventories fell overnight, with totals now under 110,000 tonnes. The Baltic Dry index continued its May winning streak, up 39 points. In an excerpt from a Yahoo article posted below, KeyBanc Capital Markets analyst Mark L. Parr is quoted as saying "Steel prices in China have begun rising, "despite some conflicting signals," he said. "That said, we remain cautious of other developments within the Chinese steel market that could lead to a repeat of the false start experienced earlier this year," Parr said. While Mr Parr was referring to the overall steel sector, as it relates to stainless steel, we could not agree more. Signals from China are very confusing, depending on which Chinese metals media outlet you follow. One site reports sales of stainless is stagnant, while another announces a particular stainless steel producer is gearing up production. The nuclear industry appears to be the bright spot for the Chinese stainless steel industry at the moment, with other sectors faltering badly in March. The price trend for 304 and 316 is up, but this is primarily due to the increase in nickel and molybdenum prices. Inventories are down according to some articles, still too high according to others. In our opinion, and this is purely amateur speculation, some of the 'gearing up' we are seeing reported, could very well due to the slow-down on expansion order issued from the Chinese government to the steel industry two weeks ago. A mill that is not running, might be politically easier to control, as far as output limit restrictions are concerned, than one that is actively producing. Again, this is strictly speculation on our part, and could be completely off base. Desjardins Securities analysts John Redstone and John Hughes stated in a note today "For the balance of 2009, prices should continue to improve, mainly because of a combination of curtailed mine supply, a lack of scrap and a slow but steady recovery in the stainless steel market." We will see. If history is any indicator, and as we reported last November and repeated last month, this month could prove to be the high point for nickel prices this year. Wall Street was rattled early this morning when new home starts were reported to have fallen unexpectedly in April, but the market currently trading higher as more evidence appears that the credit markets are loosening up, with the Libor rate falling for a second day and the TED Spread at its lowest since August 2007.  The volatility index fell below 30 today for the first time since September 2008, implying traders are becoming more and more at ease with the market.   

  Reports

  • Weekly Commodity Price Report - pdf here
  • Presentation to China Nickel Conference by Rusina - pdf here (interesting info on heap leaching)

  Commodity/Economic Comments

  • KeyBanc Capital Markets analyst Mark L. Parr - "The importance of improved credit markets is difficult to overstate, particularly in light of commentary made by virtually all of our companies that sales have been lost over the last several quarters due to difficulties encountered by customers obtaining financing for large projects, or in many cases, finding lines of credit to make ordinary purchases."
  • Stress map outlines recession's stories - interactive map here

  Nickel rally poised to continue - Ok, we're still a long way from 2007, when nickel prices hit ridiculous highs of close to US$25 a pound. - more

  Metal Center Steel, Aluminum Shipments Decline as Inventory Reduction Phase Continues in U.S., Canada - Shipments of steel and aluminum products from U.S. and Canadian metals service centers declined sharply from 2008 volume in April, and inventory reductions continued, the Metals Activity Report from the Metals Service Center Institute shows. - more

  • More steel mills shut as automakers slash production - ArcelorMittal has temporarily closed its Cleveland Works, a major steel plant, this week; ended galvanizing operations in Lackawanna, N.Y., and reduced ironmaking in East Chicago, Ind.--all in response to collapsed shipments to automotive and other flat-rolled consuming industries. - more

  Analyst sees improvement in 2nd-quarter for steel, metals sector - Second-quarter earnings in the steel and metals sector may improve as the industry benefits from better access to capital, higher prices for scrap metals and a possible recovery in China's markets, an analyst said Tuesday. - more

  Norilsk chairman says post-crisis merger possible - Norilsk Nickel Chairman Alexander Voloshin said on Tuesday it would make sense for the world's largest nickel miner to merge with other Russian metals companies after the financial crisis is over. - more

  Courtesy AISI - In the week ending May 16, 2009, domestic raw steel production was 1,060,000 net tons while the capability utilization rate was 44.4 percent. Production was 2,173,000 tons in the week ending May 16, 2008, while the capability utilization then was 91.1 percent. The current week production represents a 51.3 percent decrease from the same period in the previous year. Production for the week ending May 16, 2009 is up 3.7 percent from the previous week ending May 9, 2009 when production was 1,023,000 tons and the rate of capability utilization was 42.9 percent.

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

  • Indicators at 7:40 am CST show 3 month nickel trading around $.13/lb higher, with all base metals except for aluminum, trading in the green this morning. The Euro is helping metals, by trading 4/10 of 1% higher against the US Dollar this morning. NYMEX crude, coming off a big day yesterday, is up nearly 1% to the $59.50/barrel range. Gold is up nearly 7/10 of 1% and silver is higher by 1-3/4%. In overnight trading, Asian markets ended solidly higher, while European markets are up as well. US futures imply a stronger opening in Wall Street. This may not last, as the housing starts report was just made public, showing new housing starts fell 12.8% to 458,000, and a new record low. This is well below analyst estimates, but the market has a habit of dismissing weeds these days, in its hunt for "green shoots". The market is looking for signs of a "slowdown in the slowdown", and while this report does little to support that notion, the overall bullish spirit in the equity markets is alive and well. That said, this report will come a blow.     
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals finished higher yesterday, but for a while there, especially in the opening hours of the US trading session, the outcome was in doubt, as the complex struggled despite gains seen in the equity and energy markets. However, as the day worn on, the upside momentum in other markets was hard to ignore, and metals ultimately finished higher. US stocks rallied on the back of a strong performance by the financial sector, tacking on a 230-point gain on the day, while crude oil recouped all of Friday’s losses on renewed concerns about fighting in Nigeria. ... Despite firmer prices going into the US opening, markets are still vulnerable to setbacks, particularly if US macro data disappoints. The housing data out later today will therefore be somewhat instrumental in setting the tone for the balance of the week.  ... Nickel is at $12,625, up $275. Prices are still trapped within the trading range, and seem to be sitting out the rallies that are evident elsewhere.(read Ed Meir's complete morning base metals report here)
  • Nickel producer Mincor has reported a high-grade nickel sulfide intersection below its Mariners nickel mine near Kambalda, which extends beyond the known limit of mineralisation. - more
  • (Interfax) The recent rebound in shipping freight rates, which is partially due to China's growing iron ore imports, spell tougher times for Chinese steel mills that are negotiating iron ore benchmark prices with the world's largest iron ore miners, a Chinese industry analyst told Interfax on May 19.
  • Federal Reserve Bank of Minneapolis - interesting charts here 
  • From Recession to Recovery: Five Steps Under Strain - more
  • Complying with the Made In the USA Standard - more

  Metal prices recovering, says analyst - Chinese and United States lead indicators are pointing to an ongoing recovery in metal prices, Credit Suisse analysts say. - more

  Sino-Platinum Metals' Yunjiang Nickel To Resume Ops This Month - China's Sino-Platinum Metals Co. said in a statement Tuesday that it plans to restart nickel production at its unit Yunxi Yunjiang Nickel Co. later this month. - more

  Price of Moly Oxide May Enter Into Dangerous Water Level Of US$10 / Lb. = Being Encouraged By Chinese Movement To Replace Moly Sources, Actual Demand In 2009 Decreases By 20% - It is questioned whether the international price of molybdenum oxide will be able to reach soon the level of US$10 per lb. of Mo. - more

  Outokumpu issues sharp denial over Finnish Customs suspicions on exports to Russia - Steel manufacturer Outokumpu vehemently denies having done anything unlawful while selling stainless steel to Russia. - more

  China has closed half its iron ore mines, says Rio Tinto - China may have closed down half of its iron ore mines since prices collapsed, according to Anthony Loo, Rio Tinto's managing director for China. - more

  • Chinese Steelmakers Plan to Buy More Iron Ore on Spot  - Chinese steelmakers, the world’s biggest consumers of iron ore, will increase purchases in the spot market to pressure producers to give bigger discounts on contracts, the China Iron & Steel Association said. - more
  • China Assoc "No Longer Saying" Won't Accept 35% Ore Price Cut - A top Chinese steel industry official on Tuesday backed away from earlier comments he made that a 30%-35% cut in this year's iron ore term prices would be regarded as too shallow, suggesting a change in the Chinese position. - more

  Vale CEO Says Iron-Ore Price Talks Near Conclusion - Cia. Vale do Rio Doce Chief Executive Officer Roger Agnelli said iron-ore price talks are nearing a conclusion and that the company expects to spend less than previously expected this year because of lower costs. - more

  Madagascar's crisis of confidence - When investors returned to the African country after a political crisis ended in 2002, growth came rapidly. - more

  Recommended Reading - Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy (good critique of book 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, May 18

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 61 to 2,605.   (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) India Stocks Have Record Gain, Rupee, Bonds Surge on Congress Party Win // Toshiba Begins $3 Billion Sale of New Stock After Record Loss, E-Mail Says // Asian Shares Decline as Panasonic, Aozora, Mizuho Fuel Earnings Concerns // Libor Decline Accelerates as Central Banks Flood Credit Markets With Cash // Alliance Bank Kazakhstan Is in Default After Missing a Principal Payment // European Stocks Rise for Third Day; Lloyds, Thomas Cook, Kuoni Reisen Gain // Stocks in U.S. Advance on Lowe's Earnings; European Bonds, Crude Oil Climb
  • The US Dollar is trading 1/3 of 1% lower against the Euro, after starting ahead, then spending much of the morning nearly even. NYMEX crude is trading 3% higher and at $58/barrel. Gold is down a little over 1%, while silver is down about the same. Base metals ended mostly higher, getting a late afternoon push from the falling Dollar. Indicator charts show nickel fell early, then spent much of the day in a climb. For the day, Dow Jones reports three month nickel ended the day at $5.59/lb , but based on the charts, still had legs at the end of the day. LME nickel inventories didn't change much overnight, with a small loss recorded after a lot of in and out flow activity was reported. Cancelled warrants slipped under 3%, while total inventories register over 110,000 tonnes. The Baltic Dry Index continues to climb, adding another 61 points. Whether one blames stockpiling or demand, shipping activity of raw materials appears to be picking up. US markets are higher today, with traders betting on a bright Home Builder Confidence Index reading, which was just released and showed a reading of 16, two points better than last month. A reading below 50 mean home builders view market conditions as poor. The reading of 16 was also it highest in the last eight months. It will be interesting to see if this mornings bounce in US markets lasts with this report now public (so far it has). In other news, the fight that broke out at the Ramu Nickel Mine the Friday before last, appears to have been only the first incident in what has become some serious anti-China sentiment reeling its head in Papua New Guinea. The problem at Ramu has been rectified, but we will follow this closely, as the general unrest could have further implications on the mine's development. Lowe's put the US markets in a good mood early today when it lost less than anticipated in its quarterly earnings report. While Lowe admitted big ticket items typically sold to new homeowners was down, the outdoor projects division, saw growing sales. And while one report gave credit to sales of "tress and shrubs", we suspect vegetables, gardening, and fruit trees sales had a lot to do with it. We are seeing and hearing of a big increase in interest in gardens this year, as more Americans hunker down. If you had money in India markets overnight, there is a chance you made some money. The India stock index jumped 17% in one day, as elections ended and in a surprise, the centrist United Progressive Alliance won clear control of the government. Over 400 million citizens are believed to have voted in the election, according to preliminary reports.  To put that in perspective, the total population of the US, including every man, women and child, is 304 million. In the last US presidential election, 126 million Americans voted.

  Reports

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

  Commodity/Economic Comments

  • (Societe Generale) Markets have been swept up China based euphoria. Copper, nickel, zinc and tin price were pushed to 2009 highs in early May, while aluminium and lead pushed close to the year’s highs, as China’s apparent demand for metal provided support for those with a bullish perspective. However, we still remain to be convinced that what we are seeing is a broad based recovery. Crucially, exports have continued to contract in the year to date, with April exports falling by 23% year-on-year, a far steeper decline than was generally predicted. It should be re-emphasised that exports have been central to China’s economic growth in recent years, accounting for an estimated 30% of GDP. Can Chinese domestic consumption make up for the sustained fall off in exports?
  • (Reuters) Global resources company BHP Billiton is strategically reviewing its commitment to nickel production as traditional mining methods become increasingly uncompetitive. BHP has already temporarily closed its Leinster mine in Western Australia, and permanently closed its Ravensthorpe nickel project, writing it off at a cost of US$3.7 billion. The review is being driven by the emergence of cheap nickel pig iron producers supplying the lucrative Chinese market. Page 16.
  • The American Machine Tool Distributors Association estimates consumption is down 68.6% year to date 2009 compared to 2008.
  • Robert A. Niblock, Lowe's chairman and CEO - ""In recent weeks we have seen consumer confidence improve, housing turnover show signs of a bottom in certain markets, and home prices slow their decline. These are all positive signs for the stabilization and ultimate recovery of home improvement industry sales, but since many of these variables remain at or near historic lows, we will continue to plan conservatively and manage expenses appropriately.
  • Byron King: Buckle Your Seat Belts - “Investment Earthquake in the Energy Sector” Ahead - more

    Metals Insider: In uncertain times, watch inventories not stocks - Last week's trading in the LME industrial metals complex resembled not so much a random walk as a drunken stagger with sentiment and prices gyrating to the contradictory good-news/bad-news pulse of the economic news flow. - more

  PNG riots hit Chinese businesses - Asian-owned firms have been looted in Papua New Guinea's two largest cities, amid simmering anti-Chinese sentiment. - more

  • PNG police protect Chinese shops from looters - Papua New Guinea has sent police reinforcements to several highland towns to protect Chinese-run businesses after a wave of looting in recent days, police said on Monday. - more

  Steel import license applications into EU-27 collapse in April - Total applications for licenses to import steel products in the EU-27 fell to just 1.185 million mt in April, down 22% on March, and 56% less than in April 2008, according to data from the European Commission obtained by Platts. - more

  Knuckle down - The abrupt end of the building boom in Europe wreaked havoc on the knuckleboom industry: order intake, and then sales, both dropped dramatically. - more

  Few papers

  • (2007) Efforts to Save Nickel in Austenitic Stainless Steels - pdf here
  • (2005) Overview of Creep Strength and Oxidation of Heat-Resistant Alloy Sheets and Foils for Compact Heat Exchangers - pdf here
  • Recrystallization and Texture Formation in High Speed Hot Rolling of Austenitic Stainless Steel - pdf here

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.16/lb   lower, with all base metals except zinc currently lower. The US Dollar is trading nearly even with the Euro at the moment, and is off earlier highs, which hurt metals trading earlier. NYMEX crude is nearly 2% higher, while gold is down 1/3 of 1%, and silver is down 1-1/3%. In overnight trading, Asian markets ended higher, with European market following suit this morning. And US futures show Wall Street will open in a better mood this morning. Three reports worth noting that some traders follow, but don't get a lot of publicity. China is reporting electricity consumption is down 4.3% so far in April, worse than the slump seen in April. And the America Forest & Paper Association report container board production in April fell 1% from March, and was down 15.7% from April last year. And natural gas demand in the paperboard sector shows a slight increase in April consumption figures, but still lower than March numbers. You can decide if these reports imply the world is at the bottom of the economic crisis yet.    
  • MSN morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metals ended Friday’s session with modest changes, this despite better-than-expected US industrial production data, which failed to provide any notable support, as the number was only fractionally better than what was expected. More importantly, the March figure was revised lower, suggesting that we have yet to turn the corner in terms of a US recovery. ... As of this writing, metal prices are trading lower, but unlike Friday, they seem to be decoupling from both energy and US equity futures, both of which are trading higher.  ... Nickel is at $12,000, down $450. Prices are continuing to push lower inside the trading range, and the downward move could accelerate if the short-term channel (darker line) is taken out below $11,500."(read Ed Meir's complete morning base metals report here)
  • (SBB) Prices of East Asian-origin stainless 304 cold rolled sheets for delivery in one-to-two months rose another $50/t to $2,000-2,100/t cfr China in the 11 May week as producers continued to raise prices following an increase in nickel prices.
  • (SMM) Jinchuan Group Limited, which is the largest nickel producer in China, announced to reduce their ex-factory price of nickel to 101,000 CNY/t from 108,000 CNY/t on Monday May 18, 2009.
  • (China) The power consumption of China in the first ten days of May slid 4.3 percent, slump worsen than the 3.6 percent in the late Apr, data from National Power Dispatching Center on Thursday.
  • (AFPA) According to the American Forest & Paper Association's April 2009 U. S. Containerboard Statistics Report released today, total containerboard paper production decreased 15.7% in April compared to April 2008. However, total containerboard paper production was down 1.0% when compared to March 2009.
  • (JMB) Takasago Tekko announced on Friday the firm is withdrawing from stainless cold rolling business by the end of 2009
  • (Yieh) Japanese mills said that 300 series stainless steel demands have come back to the level of last September before financial crisis. Currently, it's said that inquiries are mostly from China, Taiwan, and Hong Kong. In far eastern market, stainless steel current prices have increased by US$300/ton compared with April, and predicted to increase by US$50/ton in June.
  • On the other hand, stainless steel makers in China, such as TISCO, Baosteel, and Posco, resumed full operations.
  • Minmetals gets NDRC approval for purchase of OZ Minerals assets - more
  • (excerpt) Over the past decade, China and the United States have developed a deeply symbiotic, and dangerous, relationship. China discovered that an economy built on cheap exports would allow it to grow faster than it ever had and to create enough jobs to mollify its impoverished population. American consumers snapped up these cheap exports — shoes, toys, electronics and the like — and China soon found itself owning a huge pile of American dollars. Governments don’t like to hold too much cash, because it pays no return, so the Chinese bought many, many Treasury bonds with their dollars. This additional demand for Treasuries was one big reason (though not the only reason) that interest rates fell so low in recent years. Thanks to those low interest rates, Americans were able to go on a shopping spree and buy some things, like houses, they couldn’t really afford. China kept lending and exporting, and we kept borrowing and consuming. It all worked very nicely, until it didn’t. - more
  • Rio Says China Steel Users May Be Building Stockpiles - more
  • Global crisis far from over - more
  • Story Time for the Economy - more

  Lundin Mining CEO says production at Spanish nickel mine could be suspended - The CEO of Lundin Mining Corp says production at the Aguablanca nickel and copper mine in Spain could be suspended later this year if there isn't a "substantial improvement" in nickel prices. - more

  Commodities contango, a licence to print money-John Kemp - The current contango structure in crude oil futures and most other commodity markets -- with future prices significantly above the spot market -- is providing a strong incentive to buy and store record quantities of raw materials, with most of the cost borne by retail investors in exchange-traded funds and institutional investors in long-only commodity indices. - more

  Commodity Mutual Funds Draw Most Money Since March, EPFR Says - Inflows into commodity mutual funds were $352.6 million in the week ended May 13, the largest in seven weeks, researcher EPFR Global said.- more

  China’s Stockpiles Are New Sovereign Wealth Strategy, RBC Says  - China is stockpiling commodities such as copper and iron ore as part of a reallocation of its sovereign wealth amid concern that the value of its dollar assets may decline, according to the Royal Bank of Canada. - more

  Steel cos want anti-dumping duty, more infra spend - Indian steel firms want the next government to control cheap imports of the alloy into the country to support the local industry and step-up investment in infrastructure to boost demand, officials 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)
  • 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, May 15

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 112 to 2,544. (chart) (article - BDI keeps on rallying, up 267% from 2008 lows - more)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Grapples With Bigger Role in World Order, Central Bank's Zhou Says // Europe's Economic Contraction Accelerates; GDP Slumps by Most Since 1995 // European Stocks Climb, Trim Weekly Decline; Barclays Advances, Fiat Drops // GM Starts Notifying 1,100 Dealers of Closings as Automaker Shrinks Network // U.S. Industrial Output Shrinks Less Than Forecast in Sign of Stabilization //
  • The Dollar is trading nearly 1/4 of 1% higher against the Euro at the moment, while NYMEX crude is down nearly 3% and $57/barrel. Gold is now 1/2 of 1% higher, while silver is down 1/4 of 1%. Base metals, except for tin, ended lower. Indicator charts show nickel had a choppy day, but traded within a $300/tonne range. For the day and week, Dow jones reports three month nickel ended at $5.65/lb , down two cents a pound on the day but down $.28/lb for the week.  LME nickel inventories took another whack last night, and Norilsk announced it may be shutting down shipments on May 22nd due to annual flooding. It is worth noting that we have not seen the flood of nickel shipments coming into Rotterdam like we did this time last year, presumably Norilsk shipping all they could before their annual freeze on shipments. And since we live in a day where bad news is sugar coated into sweetness, we will fail to mention that LME stockpiles of nickel are well over double what they were this last time last year, but instead will say LME inventories are 3-1/2% lower than they were at the first of the month. Ok, we aren't as good as the economists, but you get the lipstick on a pig point we are trying to make. The Baltic Dry Index gained another 112 points overnight, and you can see the BDI headline we posted above as another example of deciding which side of the coin you want to start at. We may be up 267% from 2008 lows, but considering the BDI was a s high as 11,792 in May of last year, and 2,544 this year.... whoops, did we slip back into reality again? 
  • And in today's market news, here is how Bloomberg put it "Industrial Output Shrinks Less Than Forecast in Sign of Stabilization". The Globe and Mail said, "The Federal Reserve says the nation's industrial production fell in April by the smallest amount in six months, evidence that the pace of the economy's decline is slowing. The Fed says output by the nation's factories, mines and utilities fell 0.5 per cent last month, after revised declines of 1.7 per cent in March and 1 per cent in February.... Industrial production has fallen in 15 of the 17 months since the recession began in December 2007, and is down 16 per cent since then." Well at least the Canadian author told the complete story. Your life insurance company, the ones that you trust to manage your financial affairs, secure your future, and that of those you will leave behind, apparently needs some future securing of their own, with TARP money being made available for some of the biggest today. This should really aggravate the public, in our opinion, but we suppose the public is no numb at this point with seemingly everyone already feeding from the taxpayer trough, that another jackass or two won't make much difference. The week ends with many angry, confused and hurting people around the world, so we thought we would leave you with something "touchy feel good" for the weekend. Have a safe and restful one.

  Reports

  • China Commodities Weekly  - more

  Commodity/Economic Comments

  • (Credit Suisse) Nickel witnessed some very good buying into yesterday's close and post the close. For further support we look at the long term down trend from 9-May-07, the $51800 high across 6-Mar-08 high of $35150, which broke up through it on the 6-May-09. The market is coming down to test the support it now provides around $11750. Also take note of the 30 day MA which comes in around $11720. The 100 day MA comes in around $10,930 and the 29-Apr-09 low is at $10750.
  • (Reuters) ) FNX processes its ore at Vale facilities, but Vale will shut its Sudbury operations on June 1 for eight weeks to trim nickel output.
  • (Dow Jones) Brazil's April crude steel output fell 40.4% from the same period last year as demand was affected by the global economic crisis, the Brazilian Steel Institute, IBS, said Friday.

  Norilsk Nickel to Suspend Dudinka Operations as Early as May 22 - OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, said it will suspend operations at the port of Dudinka as early as May 22 in preparation for seasonal flooding. - more

  FNX Mining plans depend on Vale labor talks -CEO - FNX Mining will likely keep its Sudbury, Ontario, copper and precious metal mines running if Vale Inco reaches a labor agreement at its Sudbury operations before the May 31 expiration of the union contract, FNX's chief executive said on Thursday. - more

  CISA: speculators and small mills push up China's iron ore imports - The head of the China Iron and Steel Association on Thursday blamed speculators and strong demand from the small steel mills for pushing iron ore imports to a record high in April. - more

  China continues to drive the commodities market - Latest Chinese trade data for April pretty much confirms that China, for now, remains the driving force for the global economy in general and, in turn, several key commodities in particular, subsequently pulling along other raw materials and infusing the marketplace with a degree of optimism that some warn cannot be sustained. - more

  Bulgarian steel workers rally over plant shutdown - Hundreds of workers at Bulgaria's troubled steelmaker Kremikovtzi hurled stones and clashed with police in Sofia on Friday after natural gas supplies to the mill were cut off, prompting its effective shutdown. - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.11/lb lower, with all base metals trading in the red this morning, and nickel off earlier lows. The US Dollar is trading 3/4 of 1% higher against the Euro, but off earlier highs, after Germany reported its worst quarter since 1970. NYMEX crude is nearly 1-3/4% lower this morning. Gold is slightly lower, and silver is down over 1-1/4%. In overnight trading, Asian markets ended higher, while European markets  are slightly lower. US futures show a potential lower opening on Wall Street.   In reports this morning, the consumer price index declined 0.1 percent in March, following a 0.4 percent gain the month before. U.S. retail prices drop at fastest annual rate in 54 years. And the Empire State manufacturing index showed improvement in April, with the general business conditions index jumping nearly 25 points to a minus 14.7, its highest since August. Industrial production and consumer confidence numbers will be released later today. Papau New Guinea media reports natives have presented pigs to Chinese workers at the Ramu nickel project as a peace offering following a fight last Friday. They also report one man was hacked to death in another part of that island, after a mob attacked and looted Chinese shop and their owners. Chinese media is reporting Chinese officials are taking very aggressive measures to curb the growth in steel production in that country, including freezing bank loans.   
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Yesterday's trading session was quite deceptive, as the day started off with an impression that the various markets were going to work lower given the number of bearish elements arrayed against them. On the US equity side of things, initial claims readings came in somewhat worse than expected, with the mood already fragile after three days of straight declines. On the commodity side, base metals were down after a sluggish session in the Far East, while oil markets also opened weaker after another downward revision in global demand prospects was put forth, this time by the International Energy Agency. However, a surprising contrarian bounce in the US stock market set in over the course of the day, and managed to turn the tide in the commodity markets as well. As we start today's US session in the metals, it seems that yesterday's reversal did not lay enough of a groundwork for the advance to continue. Metals are sharply lower, and are now trading at roughly the levels we were at this time yesterday. Shanghai markets have set the weaker tone, falling on a set of bearish stock reports, (see our table above), as well as increased misgivings about whether the recent Chinese stockpiling program will be enough to sustain the advance. A stronger dollar is not helping matters much either, and oil prices are also off, giving up most of yesterday's advance. ... Nickel is at $12,250, down $300. Things are very uneventful in nickel, with prices still trapped within a broad trading range. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) South Africa's Hernic Ferrochrome (Pty) Ltd. is likely to cut production if state-owned electricity company Eskom Holdings Ltd.'s request to increase its tariffs a nominal 34% is approved, operations director Jasper Pieters told Dow Jones Newswires Friday.
  • (Yieh) Taiwan’s Yieh United Steel Corp. (Yusco) has announced to raise both domestic and export prices on 300 series stainless steel products. Yusco decided to raise domestic price by NT$3,000/ton and US$100/ton for export customers, effective from 16 May.
  • (CRU) HC ferrochrome spot prices have ended their decline in most regions. While demand appears to have started to firm, higher prices are attracting marginal production.
  • (JMB) NSSC Raises Ni Series Stainless Sheet, Reduces Cr Series in May / NSSC/ To raise price of Ni steel sheets for first time in 1 year/ By 5 thousand yen for May store sales
  • All Products Carbon Steel Price Forecast - April 2009 - more
  • Bulgaria's biggest steel maker shuts down: company official - more
  • German, Italy Economies Shrank at Record Pace in First Quarter - more
  • China's yuan 'set to usurp US dollar' as world's reserve currency - more
  • UBS sees POSCO cutting steel price again in Q3 - more
  • (China) FDI decline 'not cause for concern' - more

  Xinhuanet is reporting the Chinese Ministry of Industry and Information has issued an urgent notice requiring the iron and steel industry curb their growth in production capacity immediately, irregardless of perceived market demand, due to serious oversupply concerns. The notice also threatens to curb or stop bank loans to ensure compliance. Statistics show China's crude steel production increased 1.39% in the first quarter of 2009, while worldwide production fell by 22.8%.

  • China cuts loans to curb steel overproduction: reports - China has told banks to curb loans to steel makers that are increasing production despite falling demand and falling prices, state media reported Thursday. - more
  • Shaanxi to integrate three iron and steel firms - China's northwestern Shaanxi Province will integrate three iron and steel firms to form an industry giant, to be called Shaanxi Iron and Steel Group, to improve the competitive strength of the local iron and steel industry, sources reported. - more
  • Molymet Plans To Construct Plant For Molybdenum Processing In Inner Mongolia = At Hohhot City, To Invest US$80 Million - It was recently known that Molymet, a major producer of molybdenum in Chile, has planned to construct a plant for molybdenum processing at Hohhot City, the capital of Inner Mongolia Aut. Region in China. - more

  PNG Ramu nickel mine work resumes after dispute - Construction of Papua New Guinea's Ramu nickel mine and processing plant has resumed a week after a a fight involving around 70 Papua New Guinean and Chinese workers shut operations, 8.56 percent owner Highlands Pacific Ltd said on Friday. - more (quote) Papua New Guinea nationals involved in the incident this week presented several pigs to Chinese co-workers, a traditional peace offering in the island nation.

  Outokumpu ready to be active in M&A -CEO - Finnish stainless steel maker Outokumpu is ready to be an active player in the consolidation of the industry, but is not looking beyond Europe in the next few years, its chief executive 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)
  • 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, May 14

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 100 to 2,432. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Sony Forecasts Second Straight Annual Loss as TV, Camera Prices Decline // Tokyo Electron Predicts First Loss in 6 Years as Chipmakers Delay Spending // Krugman Says Global Economy Faces Japan-Style `Lost Decade' on Weak Demand // Japan's Economy Probably Shrank at a Record Pace, Hit Bottom Last Quarter // Asian Stocks Slump as U.S. Retail Sales Fuel Growth Concerns; Rio Tumbles // BT to Eliminate 15,000 More Jobs, Cuts Dividend After Fourth-Quarter Loss // Natixis Tumbles Most in Seven Months After $2.5 Billion First-Quarter Loss // European Stocks Gain; Stada, Aegon, Portugal Telecom Advance, Shell Drops // Wal-Mart May Open Stores in Russia on Lack of Big-Box Rivals, Holley Says // Wal-Mart May Open Stores in Russia on Lack of Big-Box Rivals, Holley Says // Chrysler Seeks to Break 789 Dealership Contracts in Fiat-Led Restructuring // Stocks Gain as CA Spurs Tech Rally, Overshadowing Jump in Jobless Claims
  • The US Dollar is now trading lower against the Euro, by about 2/10 of 1%, after weaker than expected employment figures were released in the States. NYMEX crude oil is down 1/2 of 1%, and off earlier lows, as equity markets trade higher. Gold is trading slightly lower now, while silver is higher by less than 3/10 of 1%. With US equity markets opening higher, and the Dollar slumping, base metals jumped off earlier lows and ended mostly higher. Indicator charts show nickel was struggling early, but jumped in late afternoon trading. Dow Jones reports three month nickel ended the day at $5.67/lb , higher than yesterday's close of $5.65/lb. LME stored inventories of nickel fell again overnight and according to Reuters "Nickel stocks at above 111,000 tonnes are more than twice the level they were at a year ago." Dow Jones quoted a London-based trader as saying "As the Dow (recovered), I think a couple of shorts covered.". More short-covering is likely Friday if U.S. manufacturing figures are bullish and copper inventories on the Shanghai Futures Exchange and the LME decline, analysts said. "If they're both down, you may see shorts take profit ahead of the weekend," said Leon Westgate, a base metals analyst at Standard Bank." Sucden's day old chart shows nickel trading thru yesterday's drop (here). The Baltic Dry Index grew by an even 100 points overnight. The Labor Department reported that initial claims for state jobless benefits increased 32,000 to 637,000 in the week ended May 9, while the total number of unemployed drawing jobless benefits climbed to a record 6.56 million. When the report showed a fall last week, Wall Street pointed to it as another example that the bottom was in sight and markets rallied. Now that the numbers unexpectedly rose again, the market is dismissing it as due to the auto producer shut down's, and Wall Street is once again trading higher. In our humble opinion, you can't have it both ways and we feel the market appears to be entering a denial stage. While it is generally accepted by most economists that employment numbers will trail any actual economic recovery, there are few analysts who do not accept that the US market will see at least 10% unemployment before this is all over. Standing at 8.9% now, that means a whole lot more workers are going to lose their jobs. And that means more people trying to make ends meet on savings and state checks. Retail sales released yesterday showed us the difficulty many people are having. With inventories of stuff to sell, and fewer people looking to buy, profit margins will likely get tighter. Tighter margins mean more volume to compensate just to keep profits were they were. And with fewer buyers, that is a cycle that is being seriously stretched, and one that shouldn't necessarily be exciting investors about potential profit's down the road. But for now, the bull is in complete control of the markets these days, and there is no use trying to understand it.   

  Commodity/Economic Comments

  • Andrey Kryuchenkov, an analyst at VTB Capital - "Nickel should come off a little bit as stocks are still high."
  • ThyssenKrupp: Mobile mill start might be delayed - more
  • China Steel Sector to Cut Output on Ministry Order, Herald Says - more
  • AK Steel likely to idle Kentucky plant through 2009 - more
  • UBS says BHP may offer Rio alternative to Chinalco - more
  • Suburban Housing Markets Are Unsustainable - more
  • Is U.S. government-data being “massaged”? - more
  • Recent Bloomberg and CNBC Nouriel Roubini Interviews - more

  ENRC pours cold water on mining recovery hopes - Eurasian Natural Resources Corporation, the Kazakh mining company, has poured cold water on hopes of recovery in the mining sector after cutting production of ferrochrome and iron ore in the first three months of the year to reflect lower demand. - more

  Heap leaching of laterites – have European Nickel found the Holy Grail? - Nickel laterites are a problem. Whilst they hold approximately 70% of the world’s current nickel resources, and by their very nature are a surface-exploitable mineral ore, they are difficult and expensive to process - more

  Mining venture seeking Chinese financing - A joint venture between a European and an Australian miner is negotiating with a state-led Chinese mining company to finance a nickel plant in central Luzon, company officials said yesterday. - more

  India emerges as world's 3rd largest steel producer - India has emerged as the third largest steel producer in the world, leaving behind Russia and the US, in the first quarter of 2009. - more

  FTC rejects Yieh United, Tang Eng merger application - The Fair Trade Commission (FTC) yesterday rejected Yieh United Steel Corp’s proposal to take a more than 34 percent stake in Tang Eng Iron Works Co on concerns that the merger would undermine market competition, the Central News Agency reported yesterday. - more

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

  • Indicators at 7:30am CST show 3 month nickel trading around  $.11/lb , with all LME traded base metals experiencing a second day of selling off. Yesterday, three month nickel closed at $5.65/lb according to Dow Jones. Inventories also reported another loss yesterday, and combined with today's, which we will report this afternoon, reflect another two day loss of nearly 1000 tonnes. Yesterday's reading on the BDI showed a gain of 79 points. Today, the US Dollar is trading 1/3 of 1% higher against the Euro, while NYMEX crude is down 1-2/3% and trading around $57/barrel. Gold is up 1/2 of 1% at $921.50/ounce, and silver is up over 1% at $13.81/ounce. In overnight trading, Asian markets were down steeply, the S & P Asia 50 index down 3-1/3%. European markets are down slightly this morning, and US futures show Wall Street may open lower. Yesterday's fall in world markets was caused, in part, by an unexpected drop in US retail sales, with a decline of 0.4 per cent. This morning, initial job claims for last week came in at 637,000, higher than expected on the back of auto maker lay-off's. And U.S. producer prices rose 0.3% in April thanks mainly to higher food costs.

  Nickel Drops Most in Two Weeks as Stainless-Steel Demand Slumps - Nickel fell the most in two weeks in London on reduced demand from stainless-steel makers. Copper and aluminum also declined as the dollar rebounded against the euro. - more

  • Nickel price run downplayed by analysts - The recent run-up in spot nickel prices on the London Metal Exchange (LME) to a month-to-date average of $5.83/lb comes from speculative investments rather than from an increase in nickel demand, according to analysts at Macquarie Bank. - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "Metal prices got bashed yesterday in the wake of a withering sell-off in the US stock market. Stocks lost about 185 points on the day amid continued profit-taking and after a disappointing April US retail sales number left little reason to “buy the dip”-- in practically any market. ... Things are not much better as we start today’s trading, with metals weaker across the board. The recent declines are putting some of the metals in a position where they could shortly take out their most recent upchannels, resulting in a marked deterioration in their charts.  ... Nickel is at $12,105, down $345. Not surprisingly, after failing to take out the upper band of the trading range, around $13,500, we are turning inward towards the trading range, with $11,400 looking to be the next downside target, with $10,600 below that. (read Ed Meir's complete morning base metals report here)
  • (Yieh) JMB reported that Japan sought to remain the purchasing price of nickel based stainless steel scrap unchanged for May 2009, but the export prices of scrap has rose to USD 1,300 per tonne as LME nickel prices rebound. It is predicted that the nickel based stainless steel scrap prices in May will soar as well. Japan' stainless steelmakers now are running at over 50% capacity.
  • (Yieh) Taiwan’s stainless steel mills are expected to announce their second price list in a month tomorrow with the price poised to edge up because nickel prices are remaining high, in the range of US$12,000~13,000/ton
  • (Interfax) TISCO may cut stainless steel ex-works prices in short term
  • China Daily - China's industrial output grew 7.3 percent in April from a year ago, slower than the 8.3 percent in March, the National Bureau of Statistics said on Wednesday.... The iron and steel industry's output contracted 1.7 percent.
  • Commodities upside worth the risk: UBS - more
  • Italy 2009 steel, non-ferrous metal output to fall - more
  • Japan Economy Probably Shrank by Record Last Quarter - more

  Xstrata Says $3.8 Billion Koniambo Nickel Mine Stays on Budget - Xstrata Plc, the world’s fourth- biggest nickel producer, said the cost of developing the $3.8 billion Koniambo mine in New Caledonia remains unchanged after first production was delayed to 2012 from 2011. - more

  • DJ Eramet Expects Significant 1H Op Loss, To Delay Projects - French mining company Eramet SA (ERA.FR) said Thursday it will likely post a significant operating loss for the first half of 2009, and may delay development of major projects. - more

  Kagara to begin feeding Cosmic Boy nickel concentrator and Kalgoorlie nickel smelter - Kagara says that first production of nickel from Australia's Lounge Lizard deposit will start in three months, with the ore to be treated at Western Areas' Cosmic Boy nickel concentrator. - more

  Molybdenum Prices Have Risen Continuously For 2 Weeks With Approaching US$9 / Lb. = Extraordinary Moly Imports By China May Shock To Its Supply Situation - Molybdenum prices have risen continuously for the last 2 weeks. Dealers' price of molybdenum oxide has risen to a level of US$8.80 per lb. of Mo as its higher side and approached US$9.00. The market prices of molybdenum have turned to a basic tone to recover. - more

  Anglo, Rio wary about commodities recovery - Mining groups Anglo American Plc and Rio Tinto are wary about when hard-hit commodity markets might recover, but are confident about the long-term health of the sector, they said on Tuesday. - more

  POSCO, miners still split over ore price - POSCO is still wrangling with three major overseas miners over the price of ore for this year which should have ended in April, industry sources said yesterday. - more

  • Posco Sales May Drop by $2.1 Billion After Steel Price Cuts - Posco, Asia’s third-largest steelmaker, said annual sales may be pared by 2.7 trillion won ($2.1 billion) following price cuts of as much as 20 percent amid weakening demand. - more

  Exports drive US ferrous scrap market; domestic demand still soft - Exports continued to drive the US ferrous scrap market while domestic demand remained weak as prices stayed stronger in Eastern markets due to export sales and competition for material. - more

  Turning slag into energy - Old mine sites and tailings ponds often earn a bad environmental reputation. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 12

  There will be no update for Wednesday, May 13, as we will not have access to the internet the entire day. We apologize for the inconvenience, and will return on Thursday.

  Daily Nickel/Stainless Wrap-up

  • Baltic Dry Index - plus 38 to 2,253. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Australia Embarks on Record Building Plan as Recession Fuels Unemployment // Nissan Forecasts Narrower Annual Loss as Job Cuts Offset Slumping Demand // Asian Stocks Fall From 7-Month High on Valuation Concerns; Sony Declines // European Union to Conduct Confidential Stress Tests of Banks by September // U.K. Housing Drop Eases, Manufacturing Falls Least in Year as Slump Abates // European Stocks Retreat for Second Day; ThyssenKrupp, EADS Pace Declines // Home Prices in U.S. Fell Most on Record in First Quarter Amid Foreclosures // Bank of America Said to Raise $7.3 Billion From Sale of China Construction // Stocks in U.S. Fall as Share Sales Raise Dilution Concern; Ford Declines
  • The Euro continues to trade higher against the US Dollar, but off session highs and up .13%. NYMEX crude is trading 4/10 of 1% lower, while gold is trading 9/10 of 1% higher. Silver is up by 1.8%. Base metals were looking very healthy this morning, but lower equity trading and the Euro losing some of its earlier footing, brought the market back to earth, with final numbers coming in at the ho-hum level, and mixed. Indicator charts show nickel tore out of the starting blocks this morning and rose to a nearly $600+ tonne spike in the early afternoon, before surrendering most of the day's gains. Dow Jones reports three month nickel ended the day at $5.92/lb , but was still fading in after hours trading. Inventories of nickel in LME approved warehouses fell again, with a two day loss of over 1000 tonnes. Total inventory numbers now sit just under 112,000 tonnes. The Baltic Dry index had slid the last few days, and based on yesterday's numbers, they looked to go negative today. Instead, they gained 38 points. Sucden's day old chart shows yesterday's set back (here) in nickel prices. Brenda Sullivan show minor resistance at 13,150/tonne and major resistance at $13,500/tonne. Indicator charts show both of these were punched thru in today's trading, but the market was unsuccessful in holding above either. The Commerce Department reported that exports of goods and services fell 2.4% in March, the lowest level since August 2006. Imports declined 1% to their lowest level since September 2004. Ian Shepherdson, High Frequency Economics noted , "The post-Lehman collapse has certainly ended. A sustained rebound in exports is another story but for now this is another case of the data turning a good deal less bad. Core imports are still falling, but at a slower pace." Paul Dales of Capital Economics stated "Similarly, the 1.0% fall in imports was more modest than the average fall of 6% seen in the previous three months, suggesting that the pace at which domestic demand is plunging has also eased." Joshua Shapiro of MFR Inc. added "Mathematically, a narrower trade deficit will cushion the blow to U.S. GDP, but it will not represent good news to trading partners who have much spare capacity that had been used to produce mountains of products for the U.S. consumer." The IBD/TIPP Economic Optimism Index edged down 0.5 points, or 1.0% in May, reaching 48.6 vs. 49.1 in April, and is seen as a fair precursor to the confidence indicators put out later each month by the University of Michigan and The Conference Board. Lot of pent up tension in the metals world exposing itself this week. Yesterday we reported a fight between natives and Chinese officials at the Ramu mine had shut down construction at that facility over the weekend. Today, thousands of ThyssenKrupp AG employees protested against planned job cuts, at numerous locations throughout Germany. Over a thousand union members from Bulgaria's Kremikovtzi steel mill have been protesting the impending shutdown of their local mill, and were told today the town would allow no more protests. And in Luxembourg, laid off steel workers attacked ArcelorMittal's headquarters during the annual shareholders' meeting, throwing smoke bombs and tearing down the front door. The economists keep talking about green shoots and how the economy is getting worse "but not as fast", yet the trail of destruction it has, and is still taking, is leaving a lot of people hurting in its wake.

  Commodity/Economic Comments

  • (Dow Jones) U.S. nickel imports rose 3.3% in March from last month, and was up 27.1% from the previous year, the Commerce Department reported Tuesday.
  • (Dow Jones) U.S. nickel exports rose 56.9% in March from the previous month, but was down -4.9% from the previous year, the Commerce Department reported Tuesday.
  • (Credit Suisse) In commodities specifically, it is worth noting that May-June has traditionally marked a slowing of corporate and industrial demand for commodities as plants run down stocks and move into a northern hemisphere summer slow down. However, this year may give us some abnormal seasonal signals. Given the quantum of destocking that has already taken place it is unlikely any further incremental destocking will occur. A seasonal slowdown from current low production is also unlikely in our view as we have received some positive expectations from a number of European steel mills in recent weeks (as an example).
  • China Commodities Weekly - more
  • Commodities boom over, but will lead a recovery - more
  • (Iris) Indian Metals & Ferro Alloys today announced that the board of directors of the company at its meeting held on May 11, 2009, has considered and approved a scheme for acquisition of the Ferro Alloys Division (FAD) of Utkal Manufacturing & Services (UMSL), one of the associate companies.
  • (USAP) Universal Stainless & Alloy Products Inc. increased by 5 percent its price for all steel plate manufactured at its Bridgeville plant, due to increased costs caused by lower mill operating levels.
  • Is Inflation Inevitable? - more
  • Was It a Sucker's Rally? - more
  • Jim Rogers talks to Larry Kudlow - more
  • S & P Swings Up Without a 10% Correction - graph 
  • The $33,000,000,000,000 Question - more

  ThyssenKrupp in the 1st half 2008/2009 - Business significantly impacted by economic collapse / Order intake and sales lower / Group earnings before taxes EUR (215) million / Negative full-year earnings expected - The economic fundamentals have deteriorated significantly in recent months. The collapse in demand and sharply falling prices on the markets for carbon and stainless steel and international materials services as well as declines on the international auto markets and in civil shipbuilding impacted ThyssenKrupp heavily. In the 1st half 2008/2009 ThyssenKrupp's sales were down by 16% and orders by 25% year-on-year. The decline was particularly severe in the 2nd fiscal quarter. The Group's 1st half earnings before taxes also fell sharply to a loss of EUR 215 million.

  • ThyssenKrupp workers protest against looming job cuts - At ThyssenKrupp, thousands of workers are already on short-time work schemes. But the company plans to slash jobs in its steel sector: in Germany, production is down by more than 50 percent. - more

  China reports stocks of laterite nickel ore at shipping ports stood little changed at the end of last month, and around 8.1 million tons, with the vast majority of March's imports coming from Indonesia, with the Philippines the second largest source. Imports of nickel ore declined 16% from February, to 700,000 tons in March.

  • One Chinese source places China's apparent consumption of nickel, including all inventories, at 121,619 tonnes during the 1st quarter of 2009. This compares to a consumption rate of 99,105 tonnes in the 1st quarter of 2008. If true, the figure for the first quarter of 2009 stands at 1/3 of all of 2008 consumption.
  • Import of high carbon ferrochrome into China rose by over 75% in March, when compared to February. Leading suppliers include South Africa (35%), Kazakhstan at 28.7%, India (26.8%) and Mozambique (5.8%).
  • Import of chrome ore into China rose by over 137% in March, compared to February. Leading suppliers include South Africa (36.1%), Turkey (15.7%), Mozambique (9.9%), and Brazil (8.1%).

  Some 1,000 steel workers protest ArcelorMittal output freeze - Steel workers attacked ArcelorMittal's Luxembourg headquarters Tuesday during the company's annual shareholders meeting, setting off smoke bombs and breaking through the front door to protest temporary layoffs during the economic slump. - more

  Infrastructure spending good for miners - West coast mining companies stand to be big winners from $22 billion of infrastructure spending contained in the federal government's 2009/10 budget. - more

  • Ravensthorpe locals rally to revive town after BHP exit - A West Australian town devastated by the closure of the local BHP Billiton mine earlier this year, wants the mining giant to give the community a stimulus package of its own. - more

  Courtesy  AISI - In the week ending May 9, 2009, domestic raw steel production was 1,023,000 net tons while the capability utilization rate was 42.9 percent. Production was 2,173,000 tons in the week ending May 9, 2008, while the capability utilization then was 91.1 percent. The current week production represents a 53.0 percent decrease from the same period in the previous year. Production for the week ending May 9, 2009 is up 1.9 percent from the previous week ending May 2, 2009 when production was 1,004,000 tons and the rate of capability utilization was 42.1 percent.

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

  • Indicators at 7:40 am CST show 3 month nickel trading around $.25/lb , with all base metals trading higher this morning, and still climbing. The Euro is trading 3/4 of 1% higher against the US Dollar, while NYMEX crude futures show a nearly 2% gain, and nearing $60/barrel. Gold is higher by 1%, and silver by 2%. In overnight trading, Asian markets ended slightly lower, while European markets are trading a little higher at the moment. US futures hint at a slightly higher opening for Wall Street, but fluctuating. Base metals are getting a boost from the surging Euro this morning, with nickel getting an extra boost from news of another nickel mine closure in Australia.   
  • Bloomberg morning base metal news - more

  Reports

  • Commodities Daily - pdf here
  • Daily Market Report - pdf here
  • Daily Resource Plus - here
  • Metals Fundamental Report - pdf here
  • Morning Montra - pdf here
  • Metals & Energy - pdf here
  • Weekly Commodity Price Report - pdf here
  • Global Mining News - pdf here
  • Commodity Markets Review - pdf here
  • U.S. Imports for Consumption of Steel Products Final Report  March 2009 - here

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "A wobble in the US stock market over the coming weeks could indeed send metal prices lower given the high degree of correlation we have noted between the two complexes of late. ... Another issue that remains unresolved is whether the massive Chinese stockpiling/buying program will be enough to keep the metals rally going. We have expressed doubts on this in previous commentary, as government buying programs -- and “buffer stock” types of operation in general-- have an inauspicious history. More often than not, they have a limited shelf life, and cannot indefinitely replace export markets or private sector demand. This is the predicament the Chinese government could find itself in down the road, especially if markets sense that other demand sources are not materializing. Having said that, short-term prospects on metals do not look negative just yet, at least chart-wise.  ... Nickel is at $13,360, up $450, and hovering just under $13,570-$14000 resistance. A breakout above this level could lead to significantly higher prices, as buy-stops and fresh buying will likely be set off." (read Ed Meir's complete morning base metals report here)
  • (BW) Oriental Peninsula Resources Group, Inc.’s net losses widened to P108.574 million last year from P56.06 million in 2007 due to development costs. "The operation of the subsidiary [Citinickel Mines and Development Corp.] covers pre-production activities of Pulot Mine project that involve construction of the mine site project," the company told the stock exchange. The miner has also deferred commercial operations of its 1,408-hectare Pulot mine in Palawan given low metal prices, saying prices should be above $6 per pound to make the project profitable.
  • (Reuters) ArcelorMittal CEO says sees world steel demand down 15-20 percent this year
  • (China Daily) Jien Nickel, one of China's leading nickel producers, said in a filing to the Shanghai Stock Exchange that it is now the largest shareholder of Australia's Metallica Minerals, after buying 19.95 percent of the company with A$5.16 million ($3.93 million).
  • (Reuters) South Korea's POSCO said on Tuesday it had agreed to buy a 65 percent stake of Taihan ST Co. to boost its stake in the stainless steel maker to 85 percent, as it seeks to tighten supplies in an oversupplied domestic market. "The deal would help stabilise domestic stainless steel market, as we plan to maintain flexibility in operating its plants," POSCO said in a statement.
  • (CM) With steelworks restraining output again, China's daily output of crude steel in April slipped down by 3.1 percent from March, but it is a little still higher than the average level of last year.
  • Federal stimulus program isn’t boosting steel demand - more
  • Govt. Stimulus Masks Long-Term Economic Decline And Leads To Loss Of U.S. Sovereignty - more
  • Westsound Bank in Bremerton, Washington, was seized by a state regulator Friday, bringing the tally of failed U.S. banks to 33 this year.
  • (Niblets) An offer you can't refuse - more  //  Four Bad Bear Markets - graph here // Banks Brace for Credit Card Write-Offs - more  //  Sound Advice suspects new 'supercycle' starting - more // More AAII Sentiment - more  // 'Protectionism run amok' - more
  • (excerpts) Hope for Homeowners program... It was an attempt to help 400,000 troubled borrowers by getting them into fixed-rate government-insured mortgages. But thanks to overly strict guidelines and weak incentives, the program foundered, producing just 51 closed loans in six months. ... Senior federal housing officials say that of 51 loans made under the program, 50 were made by Melville, N.Y.-based Lend America, and those 50 loans are being held up pending ongoing federal investigations. - more (comment - after 6 months, this federal program has made "ONE" good loan out of 400,000 planned.)

  BHP to Shutter Australian Nickel Mine on Prices  - BHP Billiton Ltd., the world’s biggest mining company, will shutter the Rocky’s Reward open-pit nickel mine, part of its Leinster operations in Western Australia, after prices plunged. - more

  • Hundreds Affected as BHP Moves to Mothball WA Nickel Mine - Global miner BHP Billiton Ltd has announced another round of likely redundancies, with 240 people affected by plans to mothball part of its Leinster nickel operation in Western Australia. - more

  Chines, PNG Workers Fight At Nickel Mine - A fight between Chinese and Papua New Guinean workers at the Ramu nickel project in Madang has left three Chinese seriously injured and properties extensively damaged. - more

  • Rumbling in Ramu jungle - The Government has to jump into the affray at Basamuk with the Ramu nickel workers or risk losing an investment of major proportions. - more
  • Rapu-Rapu mining resumes under Korean operators - As mining operations resume in Rapu-Rapu, Albay, a fact-finding mission commissioned by various environment groups is now verifying reports of marine pollution and degradation in one of the country’s richest marine habitats and diving sites. - more

  Time ripe to buy base-metals stocks: - CIBC Stopping just short of declaring the dawn of a new multi-year bull market, CIBC World Markets told investors Monday to load up on base-metals stocks to position themselves for an economic recovery. - more

  Canadian miners poised to lead recovery - Canada still stands above the pack as a global mining leader, according to Ian Pearce, the head of Toronto-based Xstrata Nickel. - more

  YTD, Machine Tool Consumption Off 68.6% in 2009 - March U.S. manufacturing technology consumption was $162.94 million, according to the American Machine Tool Distributors’ Association, and the Association For Manufacturing Technology. - more

  A steel famine on the horizon - The steel secretary to the government of India is on record as saying, in a press conference in Kolkata in 2007, that India would reach a capacity of 124 million tonnes by 2012 -- excluding POSCO and Mittal -- up from an earlier projection of 80 million tonnes. - more

  China April Iron Ore Imports Rise 33% to Record Level - China, the world’s biggest iron ore buyer, boosted imports to a record in April for a third month. - more

  Anti-Dumping Activity Increases - India leads those requesting investigations, China most frequently investigated - 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, May 11

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 1 to 2,215. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg)  China's New Lending Cools, Easing Bad-Debt Risk; Money Supply Surges 26% // India Needs to Cut Rates `Massively' to Revive Economy, BJP's Sinha Says // Asian Stocks Rise as Orix Forecasts Higher Earnings; Toyota Drops on Loss // HSBC Says 2009 to Be `Tough' as Bad-Debt Provisions Rise, Economy Worsens // Stocks in Europe Decline, Paced by Metal, Oil Companies; Rio Tinto Falls // GM Says Probability of Bankruptcy Filing Is Growing as Deadline Approaches // Analysts Turning Bearish on S&P 500 in Biggest Earnings Rally Since 2002 // Stocks in U.S. Retreat as Valuations Reach Seven-Month High; BB&T Tumble //
  • The US Dollar continues to trade higher against the Euro, by 1/3 of 1%, while NYMEX crude is off earlier lows, and is trading down by 1-1/4%. Gold is trading nearly 1/2 of 1% lower, while silver is down 8/10 of 1%. Indicator charts show nickel opened lower, got an afternoon bump, which mostly dissipated before the close. Dow Jones reports three month nickel ended the day at $5.86/lb . LME stored inventory numbers fell over night, while the Baltic Dry Index rose by a single point, with the Cape Index going negative. Wall Street is lower today after two things apparently shifted the market's mood from positive to guarded. First, a Wall Street Journal article on Saturday titled "Banks Won Concessions on Tests" cast doubt on the legitimacy of the whole 'bank stress" results of last week. Secondly, last week's employment figures, that appeared to reflect a potential bottoming, were analyzed more deeply over the weekend, and many who posted their findings, questioned the potential of any perceived positive aspect. Whatever the reason, the market is down so far today. If we were to look at the market as a proverbial bull versus bear struggle, it would appear, in our opinion, the bull knows it has stretched its limits and needs to rest, but is so afraid the bear, who is still convinced the recent market action is no more than a bear market rally, is hungering for any opportunity to kill this rally. Thus the bull refuses to give up any of its momentum, afraid the bear would be hard to stop if fully unleashed. We expect the market will continue to act like a starving gardener, down on its knees with a magnifying glass, looking for further evidence of green sprouts. And like a garden, it sometimes takes a few days before the green sprouts identify themselves, as either a vegetable to nurture, or just another weed to pull. Metals traders, in the mean time, stand in their parched garden with binoculars, and look east for any signs of rain.

  Reports

  • Weekly Forecast by SMM Specialist - more

  Commodity/Economic Comments

  • (Dow Jones) LME nickel is down in quiet trade but the market is still vulnerable to more upside moves as shorts remain exposed and inventory declines are "starting to show a trend," says a broker.
  • RBC Capital Markets' Alex Heath - "In short, the market remains skeptical that this is no more than the beginning of a pain-ridden and potholed road back to macro-economic normality."
  • SG - The rally in nickel prices presents somewhat of a mystery. LME stocks remain at their highest levels since May 1995. It should be remembered that Nickel cash prices in May 1995 averaged $7,232/t. Nickel producers continue to report limited interest from the Stainless Steel sector, while other end-use sectors such as super alloys and plating remain in the doldrums.
  • Composite Leading Indicators continue to indicate strong slowdown in the OECD area but the pace of the deterioration is easing - more
  • (MBiz) -During Q1 this year, China has seen its trading value of non-ferrous metals plunge 46.93% to U.S.$12.8bln, according to the latest statistics released by China Ministry of Industry and Information Technology.
  • IMF Regional Economic Outlook  Asia & Pacific - pdf here
  • IMF Regional Economic Outlook Western Hemisphere - pdf here
  • IMF Regional Economic Outlook Central Asia & Middle East - pdf here
  • Note the annual changes (middle chart, Private Payroll). It is approaching 6 million job losses per year. This is uncharted territory, an annual rate of change unprecedented for as long as the data has been tracked, going back to 1939: - more
  • Consumer spending may have hit bottom, but America’s mountain of debt means the climb back up will be slow and painful - more
  • True Confessions of the Crisis: Up-Close and Top-Down - more
  • Guest Post: The "W" Recovery? - more
  • Guest Post: "Why I'm Freaking Out" - more
  • Govt. Stimulus Masks Long-Term Economic Decline And Leads To Loss Of U.S. Sovereignty - more

  Government to encourage consolidation, restructuring - (excerpt) The government said by 2011, producers should be 40% self-sufficient in raw materials in copper production, 56% in aluminum production, and 38% in nickel. - more

  China's rising industrial activity not enough to justify metals prices - Base metals prices have appreciated strongly on signs of a steady pickup in industrial activity in China in the first quarter of 2009 and further evidence that the U. S. economic recession is reaching a trough. - more

  Local 598 gets brief meeting with Industry Minister - Dwight Harper, president of Local 598 Mine Mill/CAW, was able to talk to federal Industry minister Tony Clement May 6 about the layoffs at Xstrata Nickel. - more

  • Some Vale Inco jobs will move to Toronto - A spokesperson with Vale Inco says the company is expecting to move some jobs out of Greater Sudbury to offices in Toronto in the near future in the areas of human resources, finance and procurement. - more

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

  • Indicators at 7:45 am CST show 3 month nickel trading around  $.09/lb lower, with all base metals trading lower this morning.  The US Dollar is trading nearly 1/2 of % higher against the Euro, while NYMEX crude oil futures show nearly a 3% decrease. Gold is down 3/4 of 1% while silver is down 1-3/4%. In overnight trading, Asian markets ended slightly higher, while European markets are trading higher  (Bloomberg site incorrect - was lower) this morning. US futures show Wall Street could open in a sour mood. Construction at the Chinese Ramu nickel mine on the island of Papau New Guinea is temporarily halted after a brawl between Chinese and native workers injured numerous. New Caledonia had elections over the weekend and it appears pro-independence candidates did poorly.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "In a surprisingly subdued performance, the metals complex sat out a strong rally in the US equity and energy markets on Friday, as if to say that it did not subscribe to the underlying reasons that were behind the advance in those two particular markets. ... Whatever misgiving the metal markets had on Friday, seems to be spreading elsewhere as we start Monday’s session. US equities are called lower, with the Dow Futures showing a fall of some 90 points. ... Nickel is at $12,869, down $231, and was unable to take out the trading range between $13,570-$14000, as shown in our charts. The complex could now retrace back lower inside the trading range." (read Ed Meir's complete morning base metals report here)
  • (Yieh) Japan sought to remain the purchasing price of nickel-based stainless steel scrap unchanged for May, but the export prices of scrap has rose to US$1,300/ton as LME nickel prices rebound.
  • (China Daily) China issues plan to support nonferrous metal industry  - China released a detailed three-year plan to stimulate its nonferrous metal industry, the State Council, or the country's Cabinet, said in Beijing on Monday. The nonferrous metal sector should keep a steady operation in 2009, and achieve a sustainable development by 2011, according to the plan. Three to five nonferrous metal corporation would be formed out of industrial reconstructing by 2011 with advanced production capacity and technology innovation capability, the plan said.
  • (CM) A central Queensland nickel project that would create up to 2,600 new construction jobs has cleared a federal government hurdle. The environmental impact statement (EIS) for the Gladstone Pacific Nickel project has been approved.
  • (RTT) Monday, Germany's Federal Statistical Office announced that the raw steel production in metallurgical plants declined 53.1% year-over-year to 1.88 million tones in April, compared with a 49.8% fall in the previous month.
  • (JMB) Japan Major Stainless Steels Post 97.3 Billion Yen Recurring Loss
  • How Can Stocks Rally When the News Is So Bad? - more
  • The Real Memo Out Of The Bureau Of Lies And Statistics - more
  • Green Shoots or Dandelion Weeds? - more
  • Unemployment Grows More Painful - more

  Time to 'sell in May and go away'? - Spring is here and after the collective near-death experience of late 2008 global markets are in euphoric mood. - more

  Australia's Kagara sees nickel mine start in 3 months - First production of nickel from Australia's Lounge Lizard deposit will start in three months, owner Kagara Ltd said on Monday after it reached a cooperation agreement with neighbouring miner Western Areas NL . - more

  Skirmish halts PNG's Ramu nickel mine construction - A December 2009 target to complete the $1.7 billion Ramu nickel mine in Papua New Guinea was still achievable despite a halt to construction due to fighting among workers, an Australia partner said on Monday.. - more

  • Madang Governor says cultural differences a key factor in tensions at PNG nickel mine - The Governor of Papua New Guinea’s Madang province says cultural differences between local workers and Chinese at the Ramu nickel mine continue to present a major issue for the massive project. - more
  • Fight closes Ramu mine - The multi-million-kina Ramu nickel and cobalt mine in Madang has shut down following a fight among the workers at the Basamuk refinery last Friday that resulted in 21 injuries — 14 Chinese and at least three nationals, police and the company said late last night. - more

  Market Tendency On Imports Of Ferro-Alloys At 30th April 2009 = Owing To Reduced FeSi Production In China, Anxiety For Its Future Supply Is Arising - The market tendency by item on imports of ferro-alloys into Japan at the 30th April of 2009 is as follows - more

  Inco needs more time to review $1.8b project - The country's biggest nickel producer, publicly listed PT International Nickel Indonesia (Inco), has asked the government for another two years to review once more the feasibility of a US$1.8 billion nickel smelter project in Pomalaa, Southeast Sulawesi. - more

  China Nickel Major Jilin Jien Nickel Industry Co. Ltd. Moves To 19.95% Stake In Metallica Minerals Limited - Metallica Minerals Limited s pleased to announce that China's second largest nickel producer, Jilin HOROC Nonferrous Metal Group Co., Ltd (Jilin), has increased its holding in the diversified Australian resource company to 19.95 % (from 15.1%, see ASX Release dated 16 April 2009). - 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

Friday, May 8

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 20 to  2,214. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Sorry for the delay in updating. We lost power due to storm this morning and just got it back. Dow Jones reports three month nickel ended the day and week at $5.93/lb , after an afternoon sell-off. The US Dollar had a rough day, down nearly 2% against the Euro. NYMEX crude ended over 3% higher, while gold ended 1/2 of 1% higher and silver ended up 1-1/3%. Dow ended up 165 points, as market responded favorably to last nights release of the bank stress test results. We hope you all have a safe and relaxing weekend!!

  2,000 jobs at risk as Corus mothballs largest UK steel plant - Corus, the steel group owned by Indian firm Tata, warned today it will halt work at one of its largest steel plants in the UK, putting 2,000 jobs at risk. - more

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

  • Indicators at 7:40 am CST show 3 month nickel trading around $.02/lb higher, with other base metals mixed. The US Dollar is trading 1/3 of 1% lower against the Euro, supporting metals trading. NYMEX crude futures are up 2-1/4% and at $58/barrel. Gold is up 3/4 of 1% and silver 1-1/4% higher. In overnight trading, Asian markets ended slightly higher, while European markets are solidly higher this morning. Futures called it wrong yesterday, with futures showing a strong opening, but that lasted only minutes before the market went south. Today, futures show another strong opening on Wall Street is likely, but this mornings report could add some doubt. Another 539,000 jobs were lost in the US last month, according to a report released this morning, and the overall US jobless rate jumped to a 26 year high of 8.9%. February and March numbers were revised by an additional 66,000 jobs lost. A separate gauge of unemployment that includes discouraged workers and workers who can find only part-time work rose from 15.6% to a record 15.8%. Wholesale trade numbers will be released later this morning.   
  • Bloomberg morning base metal news - more

  Note metals distributors - We have a reader in Pennsylvania looking for a competitive source to buy bulk quantities of 1-½” Square Tube – Wall thickness .065 – 180 grit finish in 304 or 316 Stainless steel for use in a recreational application. If you think you can be of assistance to him, please contact us and we will forward your contact information.

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metals ended lower yesterday, as a modest reversal set in on most of the group, except for nickel and tin, both of which eked out modest gains. After having advanced quite nicely this week in the run-up to the stress tests, it was not surprising to see some length come off the table in the various markets, particularly in US equities.  ... Later on today, we get nonfarm payrolls for April (expected at 600,000). The ADP number, of course, surprised to the upside on Wednesday, but as we mentioned in yesterday’s note, the two do not always track one another. Unless the payroll number delivers another substantial positive surprise, we suspect that we will likely see another flattish day in the equity markets, resulting in corresponding pressure on metals. One factor that could be an increasing negative for equities heading into next week, is the recent run-up in long-term interest rates. In this regard, yesterday’s $14B 30-yr auction was not very reassuring, as investors took rates to a 4.288%, the highest level seen since mid-November. The 10-year auction was slammed as well, with yields hitting a multi-month high of 3.3%. ... Nickel is at $13,260, down $35, and still being hemmed in by the trading range high of $13,570."  (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) Alex Heath, head of base metals at RBC Capital Markets, said that while "not one to stand in front of a freight train," the current move "does seem a little premature." This is especially true given "previous observations from the macro analytical community of there being little proof yet of any real pickup in demand in the second half of 2009," Heath added.
  • (Yieh) As nickel price climbed and demands recovered recently, TISCO raised its new list price for early May. The price of 304 stainless steel increased by RMB400/ ton from last week. However, the price of 430 stainless steel remained unchanged.
  • (Russia) South African producer ferrochrome Hernic Ferrochrome Ltd announced the resumption of production to create stockpiles as Asian demand is showing signs of improvement.
  • (Russia) The range of prices for Chinese ferrochrome in the first week of May in the domestic market has shrunk to 6000-6300 yuan ($ 880-924) per tonne, because the steel companies increased purchases due to lack of supply in the spot market and higher prices for imports.
  • (Asia Pulse) PT International Nickel Indonesia Inco ...  sold only 16,200 tons of nickel matte in the first three months of this year from 20,100 tons in the same period last year.  
  • (JMB) Japanese carbon steel export decreased by 11.1% to 23.435 million tonnes in fiscal 2008 ended March 2009 from fiscal 2007, which was the first decrease in 3 years, announced by Japan Iron and Steel Federation on Thursday.
  • Severstal: "Long-term Idling" - more
  • The Bank Stress Test (The Supervisory Capital Assessment Program: Overview of Results) - pdf here

  Vale CEO Agnelli says Q1 bottom for metals market - The chief executive of the world's largest iron ore miner, Vale, said Thursday he thought the first quarter was the bottom for the overall world metals market. - more

  • Vale Predicts Drop in Mining Spending as Profit Falls - Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, said global investment in the mining industry may fall by $60 billion this year after the company posted its third straight decline in quarterly profit. - more

  Cutback Of FeCr Production Is Still Continuing With Opaque Prospect For Future = Only 7 - 9 Electric Furnaces In Total Are Currently Being Operated In South Africa - The matter in question of how long does the structure to reduce production of ferro-chrome continue is still unable to foresee its exit at present. While nickel is also raw material for production of stainless steel, being stimulated by a recovery of copper price, nickel price has rebounded by 11 - 15% from the bottom but this rise of nickel price is due to the scalping by funds and does not connect with the case to release cutback of nickel production. - more

  Indonesia's Inco seeks delay of new nickel plant project - PT International Nickel Indonesia has asked the government for more time to assess plans for a new plant after a study showed the $1.8 billion project may not be feasible, the company's chief said on Friday. - more

  Australia sees risk of China iron ore oversupply - Australian exporters of iron ore and coal are enjoying healthy sales to China thanks to Beijing's economic stimulus plan, but they could create oversupply if the economy slows, Australia's Trade Minister Simon Crean told reporters on Friday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 129 to 2,194. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Roubini Says Asia's Recovery May Be Slow Because of `Broken' Export Mode // Taiwan's Exports Fell at Slower Pace in April as Chinese Demand Improved // Asian Stocks Climb on U.S. Jobs Report, Stress Tests Results; BHP Advances // ECB Cuts Key Interest Rate to Record Low 1%, May Offer Longer-Term Loans // Stocks in Europe, Asia Gain, UBS Rises; MSCI World Climbs for Seventh Day // Initial Jobless Claims in U.S. Unexpectedly Fall to Lowest in Three Months // Wal-Mart, U.S. Retailers Beat Sales Estimates as Promotions Spur Spending //
  • The US Dollar is trading 1/2 if 1% lower against the Euro, after the European Central Bank cut interest rates. NYMEX crude is trading 2% higher, around $57.50/barrel. Gold is up 2/3 of 1%, while silver is up nearly 2%. LME metals ended mixed, with slumping US equities weighing on traders in the afternoon. OZ Minerals Chief Executive Andrew Michelmore told Reuters on Tuesday "It will take a price of at $6 a pound on a sustainable long term basis to consider reopening Avebury." Traders apparently are calling his bluff. Three month nickel averaged $5.10/lb in April, and today it traded around $6/lb early and then again, late in the afternoon. After climbing early, then stalling for much of mid-day, nickel took a jolt when US markets headed lower, but rebounded before the close. Dow Jones reports three month nickel ended the day at $6.03/lb . January 6th was the only other day this year that three month nickel has closed about $6/lb. The call by Michelmore for 'sustainable long term' pricing could prove more challenging. LME inventories have yet to have a gain day this month, and today was no exception. Inventories of nickel stored in LME approved warehouse are now down over 2400 tonnes this month, with a little over 112,000 on hand. We haven't seen any reports out of Russia reporting the seasonal floods on the Yenisei River have begun, but mid-May is the time of year the flood forces Norilsk to shut down shipping from its port of Dudinka for at least two weeks. Last year shipping was halted on May 20th, on May 15th in 2007. Still over a week away, but the lack of shipping could add more support to nickel, especially if inventories continue to fall in the man time. The Baltic Dry Index added another 129 points overnight for its fifth straight day of gains. A Thomson Reuters index of retail sales for last month would have been down 2.7%, except Wal-Mart's 5% gain, brought the index at +1.2%. Wal-Mart also announced it would no longer publish monthly sales reports, and had sales of $29.85 billion for April, more than the GDP of most countries. The long awaited bank stress test is due to be released after the close of market today, at 5 pm Eastern time, but so much of it has been leaked to the market in little drips and drabs, it is doubtful it will hold any surprises. Dow is lower at the moment, and Ben Bernanke's call this morning for more regulation's on the banking industry, is being blamed. On Tuesday , we said we were set-up for a potential 'battle of the titans' between Fed Chairman Ben Bernanke and Bank of America CEO Kenneth Lewis. Apparently Congress wants to know who is lying and the Wall Street Journal reports today "Bank of America Corp. Chief Executive Kenneth Lewis and top federal officials will be asked to testify under oath by a U.S. House panel next month, as congressional investigators probe claims the bank was pressured by the government into completing its deal with Merrill Lynch & Co., a person familiar with the investigation said Wednesday." It is worth noting that former Treasury Secretary Henry Paulson has reportedly collaborated 'some' of Lewis' claims. A review of the accusations can be found in an earlier WSJ article here. Not directly applicable to metals, but concerning. This action, taken under the former administration, and the recent refusal by some hedge fund managers to bow to our current President's demands in the Chrysler situation, has many scratching their heads and asking what happened to the free market rules. Is 'systemic risk' just another political phrase our government will use when it feels the need to justify 'stretching' the rules? Or, when the dust from this whole economic mess finally settles, will there be any rules left? Then again, we live in a day when 'not-so-bad' news has become 'wonderful' news. So, who knows?

  Reports

  • Eurometal Business report April 2009 - ppt here
  • Foreign Investment in the Mining Sector of Latin America: A Risk Assessment - pdf here
  • Steel & Scrap Recap - pdf here

  Commodity/Economic Comments

  • (Dow Jones) European Union steel stocks were still high in February despite sharp production cutbacks as customers remained reluctant to buy steel, the latest figures from Eurometal, the European stockholders and distributors' association showed. E.U. steel inventories in terms of how many days it takes to deplete the inventories was at 103.8 days in February, broadly flat with January but 63% higher than in February 2008, Eurometal figures showed. The figure takes into account how long it would take to deplete existing steel inventories given the current pace of business activity.
  • (Bloomberg) 1st quarter - Vale’s quarterly nickel output rose 7.3 percent to 65,200 tons, as the company continued some planned expansions and partially started up its Goro mine in New Caledonia.
  • Cliff Asness - "Let’s be clear, it is the job and obligation of all investment managers, including hedge fund managers, to get their clients the most return they can. They are allowed to be charitable with their own money, and many are spectacularly so, but if they give away their clients’ money to share in the “sacrifice”, they are stealing." - more and a counter article here
  • Rupert Murdoch - "There are emerging signs in some of our businesses that the days of precipitous declines are done and that revenues are beginning to look healthier."
  • Where Is China’s Surge In Bank Credit Going? - more

  Halmahera to have $4.6b nickel smelter - A consortium of the Indonesian state-owned PT Aneka Tambang (Antam) and three foreign companies will develop a US$4.6 billion nickel smelting plant in Weda Bay, Halmahera, North Maluku. - more

  New Caledonia to face economic crisis late, says study - There is a warning in New Caledonia that the economic crisis may strike the territory with some delay and spill over into social unrest. - more

  China decoupling pushes base metals prices higher - Base metals prices have appreciated strongly on signs of a steady pickup in industrial activity in China in the first quarter of 2009 and further evidence that the U.S. economic recession is reaching a trough. - more

  A nickel nugget in the spotlight - Could Australia's Western Areas be "the next" LionOre and/or Jubilee Mines, bought in 2007 by Norilsk and Xstrata for $5.5bn and AUD2.7bn, respectively? - more

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

  • Indicators at 7:35 am CST show 3 month nickel trading around $.22/lb higher, with all LME traded base metals firmly trading in the green. The US Dollar and Euro are fairly quiet this morning, with the Euro slightly stronger. NYMEX crude futures are up 2-3/4%, nearing $58/barrel. Gold is up 1-1/4 % as inflation concerns begin to creep back into the market, and silver is up 2-1/3%. In overnight trading, Asian markets ended higher, the S & P Asia 50 index up 1.17%. European markets are also trading higher this morning, and futures show Wall Street should continue its running of the bulls. In reports this morning, US weekly initial jobless claims fell 34,000 to 601,000 last week, while ongoing claims rose 56,000 to record 6.35 million. 1st quarter manufacturing productivity fell 3.4%, while real hourly compensation was up 6.6%. Sucden's day old chart shows yesterday's climb (here), and even though technicals show the market is heavily overbought, traders are apparently dismissing this and jumping on the bull. Indicator charts show nickel off earlier highs, and the trend for the last few hours has been negative. Metals news was light today.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments -  "A positive surprise in the ADP payroll number jolted the markets yesterday, fuelling a substantial surge in practically all of them over the course of the day. In this regard, ADP reported that 491,000 jobs were lost in April, substantially better than the 645,000 expected, and well off the 742,000 jobs shed last month. The impact of this release was immediate-- US equity futures, which were in negative territory earlier, rallied sharply, while energy and metal prices, which were up only slightly pre-report, both followed suit. .. We wonder if the markets will experience a mild sell-off once the findings are formally released and totally discounted. More worrisome, is the fact that the markets seem to be teeing off on US statistics that appear to be "less bad" than expected, but which are nevertheless still bad. As a result, we could be vulnerable to a selloff in the event of a real negative surprise. In this respect, tomorrow's nonfarm payroll data will loom heavily over the markets, and we should warn that the ADP has not necessarily been a good predictor of the more important national payroll numbers. ... Nickel is at $13,250, up $550. Nickel still looks fairly restrained to us given what has been happening in the other metals. As a result, we would not be surprised to see some of the “restless money” move into the complex at some stage, particularly if we break above nickel's trading range high of $13,570." (read Ed Meir's complete morning base metals report here)
  • (Asia Pulse) A consortium of Eramet SA from France and Mitsubishi Corp from Japan will cooperate with PT Aneka Tambang to build a US$4.6 billion nickel smelter in Halmahera, North Maluku this year. Antam and the consortium would mine nickel ore to be processed into nickel concentrate, Alwinsyah Loebis, the president of the state mining company said
  • (Interfax) Jinchuan Group Ltd., China's largest nickel producer, raised its ex-works nickel price on May 7 by RMB 5,000 ($732.79) per ton to RMB 108,000 ($15,828.35) per ton, according to Jinchuan Group's Web site.
  • (Reuters) South Korea seeks 300 tonnes of nickel cathode
  • Goldman Sachs JBWere downgrades 2009 nickel price forecast 9% to $4.94/lb, 2010 call 10% to $5.40.
  • Commodities Rise to Six-Month High as Jobs Report Buoys Demand - more
  • China iron ore binge raises some hope, many eyebrows - more
  • Power generation in China down 3.55% in April  - more
  • U.S. Steel to idle Fairfield plant - more

  Plate Mill Plate Stainless Price Increase - Effective with plate shipments on Monday, May 18, 2009, ATI Allegheny Ludlum Specialty Plate is increasing prices on stainless plate mill plate products. This increase is achieved by reducing the functional discount by two percentage points. - pdf notice

  World Demand For Nickel In CY 2009 Is Estimated At 1.18 Million Tons With Decrease Of 8.5% = At General Meeting Held In Last Week By INSG At Lisbon, Oversupply Continues A General Meeting by The International Nickel Study Group (INSG) was held on the 23rd and 24th of April at Lisbon of Portugal. - more

  Indonesia Inco Q1 net profit plunges 87.7 pct - PT International Nickel Indonesia Tbk, a unit of one of the world's top nickel producers, on Thursday said its net profit fell 87.7 percent in the first quarter because of significantly lower nickel prices. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 168 to 2,065. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China Central Bank Pledges `Ample' Liquidity to Cement Economic Recovery  // Asian Stocks Advance as Singaporean Bank Earnings Beat Analysts' Estimates // Dollar Declines Against Euro as Company Jobs Report Reduces Safety Demand // European Retail Sales Fell by Record in March as Consumers Curbed Spending // European Stocks Advance, Led by BNP Paribas, BMW; U.S. Index Futures Drop // Bank of America Said to Need $34 Billion in New Capital After Stress Tests // Companies in U.S. Cut Payrolls by 491,000, Fewer Than Estimated, ADP Says // Homeowners With Negative Equity in U.S. Increase to 22% in First Quarter // U.S. Stocks Gain as Employers Cut Fewer Jobs Than Forecast; Disney Climbs
  • The US Dollar erased earlier losses and is trading 1/5 of 1higher against the Euro, after S & P cut ratings on 5 German banks and a US employment report came in better than expected. With the European Central Bank meeting tomorrow and the US release of the bank stress test report, tomorrow's forex trading could get interesting. And despite the ninth straight increase in crude oil inventories in the US, NYMEX crude is up nearly 4% and nearing $56/barrel. And while the industry will tell you the price of oil has little to do with local gas prices, especially when the price of oil is dropping and the price at the pump isn't, you might consider fueling up tonight. Gold is trading 1/4% higher, while poor man's gold, silver, is up 3%. After missing out on the equity markets big day on Monday due to a bank holiday in England, London traders floundered yesterday, but decided today, they were not going to miss the boat. After the ADP report was issued in the US, and equity markets began to move higher, even the suddenly rising Dollar could not hold back metals traders, and LME traded metals had a big afternoon.  Indicator charts show nickel was up slightly in morning trading, but the afternoon was nothing but up, increasing by more than 7% at one point. Dow Jones reports three month nickel ended the day at $5.76/lb , its highest close since January 6th. LME stored nickel inventories took another whack last night, and now sit under 112,000 tonnes. Still a lot of stock, but after three straight days of losses totaling nearly 1700 tonnes, traders are hopeful the worst may be behind them. The Baltic Dry Index had another big day, up 168 points. The Mortgage Bankers Association revealed that its market index of mortgage application volume rose 2 percent on a seasonally adjusted basis for the week of May 1st. Zillow.com reported today "U.S. home values continued to slide for the ninth consecutive quarter, declining 14.2 percent from a year ago, and falling 21.8 percent since the market peak in 2006. Additionally, one-fifth (21.9%) of all homeowners in the United States is in negative equity, and one in five homes sold in the past 12 months was a foreclosure. (source)" Ian Shepherdson of High Frequency Economic reported “We remain profoundly skeptical of the idea that the economy is now on a smooth path to recovery. Those parts which took the biggest pounding after Lehman are rebounding to some degree but the overarching problem of massive household leverage remains." Barry Ritholtz noted in his blog, The Big Picture, the Zillow number and government reports are skewed by the fact that 1/3 of American homeowners owe no money on their house, and own them outright. By his calculations, deducting these homes from the overall figures, of those who owe mortgages on their homes, 1/3 of mortgage holders nationally now owe more than their homes are worth.  The ADP report kick started the US market into positive territory this morning, but we did note an ominous sentence in the report "Employment in the ..  manufacturing sector dropping 159,000, its thirty-eighth consecutive monthly decline." 38 consecutive months! That should be an ugly wake up call to our politicians. Not sure if many of our American readers remember the days when you walked into a Wal-Mart and saw a big banner over the front door claiming how many 'American' jobs their chain of stores had created that month. Then again that might have been during the early period, when Wal-Mart stores were fairly limited to the American midwest. Apparently marketing has decided placing banners in their stores showing how many Chinese manufacturing jobs they create each month these days, is not nearly as effective a marketing tool. We point the finger at Wal-Mart, because they are by far the biggest, but nearly all must do it these days to survive. The ADP report also shows, less the 491,000 jobs lost in April, there are still 110,303,000 non farm private active jobs in the US (here). Considering Wal-Mart employed 1,400,000 'associates' in the US in 2008, according to the Huffington Post, more than 1 out of every 100 workers in the US, work for Wal-Mart, at an average wage of  $10.68 per hour.     

  Commodity/Economic Comments

  • (PI) Demand for chrome – for which there is as yet no commercially viable substitute - is largely driven by producers of ferrochrome for stainless steel production worldwide, who consume some 90% of mine output. Other industrial uses include superalloys, leather tanning, castings and metal finishing. South Africa accounts for 40% of world production of chromite – the only ore from which chromium is extracted commercially - and hosts around 70% of the current chromite resource base.
  • Peru Department of Mineral Resources - Molybdenum production in March fell 41.50% YOY to 910 tons
  • (MetBiz) The Riva group, the largest Italian steel producer, announced that they will close down the No.4 blast furnace in Taranto plant on May10th due to the downstream industries automobiles and home appliances shrinkage demand.
  • (TBP)  "Less bad is the new good, and as Doug Kass noted yesterday, greed has now replaced fear."

  Xstrata's Chrome Production Falls Sharply - Global minerals group Xstrata produced a quarter of the amount of chrome in the three months to March that it did a year ago but continued to increase output of platinum, it said yesterday. - more

  Buyers, suppliers battle over stainless steel prices - Purchasing of stainless steel sheet dropped by 18% last year and is showing no signs of life so far this year. - more

  As quoted in Chinese media, CRU reported stainless steel production during the first quarter of 2009, fell 33.5% from the same period last year. The report advises the world has seen a fall from 7,526,000 tons in the first quarter of 2008, to 5,003,000 during the same period this year. Worst hit countries include England, with a drop of 57.5%, Japan, with a drop of 56.4%, and Finland, who saw a fall of 48.9%. Least hurt was China, who witnessed a fall of 18.7%. The US experienced a drop of 31.9%, while European countries on the whole, saw production drop 42.2%.

  Global crisis seen taking toll on Vale profit - The economic crisis will deliver a heavy blow to first-quarter net profits at the world's largest iron ore miner, Brazil's Vale, analysts polled this week said. - more

  • Vale increasing spot iron ore sales to China: sources - The world's largest iron ore miner, Brazil's Vale, has substantially increased the volume of iron ore sold to China on a spot basis, several traders and Chinese steel mills told Platts. - more

  China fears disastrous steel oversupply - China's steelmakers are facing low demand and potentially disastrous oversupply, supporting their insistence on a 40 percent cut in benchmark iron ore prices, an industry group executive said on Tuesday. - more

  Illegal import of Chinese boron steel under control - The illegal import of Chinese construction steel that contains boron has been put under control, said Nguyen Tien Nghi, vice chairman of the Vietnam Steel Association (VSA). - more

  Ottawa tells U.S. Steel to keep output commitments - Canada is formally demanding that U.S. Steel Corp. stick to production commitments it made when it bought Canadian steel firm Stelco, Industry Minister Tony Clement said Wednesday. - more

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

  • Indicators at 7:40 am CST show 3 month nickel trading around $.09/lb higher, with all base metals trading higher at this moment. The Euro is trading 1/4 of 1% higher against the US Dollar, while NYMEX crude is 3/4 of 1% higher, and over $54/barrel. Gold is over 1% higher, while silver is trading nearly 3% higher. In overnight trading, Asian markets ended higher, while this morning shows European markets doing much the same. US futures show Wall Street should open higher this morning, but at the moment, it doesn't reflect much of a gain. THE ADP Employment report was issued this morning, and while reporting 491,000 private-sector jobs were lost in April, this is far less than the 742,000 reportedly lost in March. While the market welcomes this news, Reuters and Wall Street Journal are reporting Bank of America will need another $35 billion in fresh capital, which has the market wary. And in a regulatory filing late yesterday, GM reports the Treasury Department, ie the taxpayer, could end up owning 1/2 of General Motors under a restructuring deal being considered.    
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "We had a very slow day in most commodity complexes yesterday despite favorable macroeconomic readings and upbeat remarks by the Fed Chairman Bernanke about the US economy. In his remarks, the Fed chairman projected that the current recession would end later this year, and even forecast growth of 2% for next year and 4% for 2011. These forecasts will no doubt come back to haunt him if the economy takes a detour from its anticipated U-shaped recovery.  ... Commodity markets are higher today, with base metals up across the board, except for nickel and ali, which continue to struggle. ... Nickel is at $11,900, down $95, and very quiet; prices have been trapped within a $300 trading range for most of the day."  (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) Strategic base metal reserve buying by countries like China combined with a slow recovery in industrial and consumer demand could continue to lead LME metal prices higher, says Fairfax IS.
  • Gianni Kovacevic: Copper Supply and Demand - New Rule Book Still Being Written - more (discusses molybdenum)
  • (Macquarie) "While the downside from here appears to be limited, ferrochrome continues to look like a fundamentally challenged market. There are a number of positive price catalysts out there, but readily available spare production capacity is likely to limit the scale and sustainability of any price rally."
  • (SBB) Chinese stainless steel mills are now running at utilisation rates of above 90% due to a strong increase in orders, says Macquarie Research in a 1 May report. This compares with 75-80% in March.
  • (CM) China's iron ore imports rose to a new high of 53.5 million tonnes in April, up 24.2 percent from a year earlier, the Ministry of Transport said in a report on its website citing preliminary statistics.
  • (JMB) Japan Major Special Steel Makers Expect Low Demand in F2009
  • (Russia) Nikopol ferroalloy plant (Dnipropetrovsk Oblast) has restarted smelting furnace # 1.
  • Nearctic Nickel Mines Inc. is pleased to announce that litigation in Quebec against four individuals who were sued in respect of a trespass onto the Company's property in 1998, has been settled on terms agreeable to the Company.
  • China’s Major Ports Unload 24% More Iron Ore Imports in April - more
  • (SG) It’s reported that both ferromolybdenum and molybdenum prices in the European market have kept its uptrend last week due to strong demand from China.
  • ADB president: China's economy may have bottomed out - more
  • Is China leading a global rebound? - more
  • Federal Reserve - April 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices - pdf here
  • (MarketWatch) Two years ago, before the same congressional committee he testified to on Tuesday, Bernanke famously said that the problems of subprime mortgages were "likely to be contained." As poor predictions go, that ranks up there with "you'll love the play, Mr. Lincoln."
  • (The Onion, a satirical site) "I know when he's telling the truth, and it bothers me," recently laid-off schoolteacher Mary Hanover said of Obama. "He gets this serious expression on his face and says things like, 'This is the worst economic crisis since the Great Depression.' Who needs to hear that? For Christ's sake, smile a bit and say we just found a diamond mine under Montana that's going to pay for everything. I'll believe you." more

  Samancor Chrome Says It’s Restarted Some Operations  - Samancor Chrome Ltd., the world’s second-largest ferrochrome producer, restarted output from some furnaces that were suspended last year because of weak demand. - more

  Western Areas in Sales Talks With Chinese Smelters - Western Areas NL, an Australian nickel producer that supplies BHP Billiton Ltd., said it’s in talks to sign sales agreements with Chinese buyers. - more

  Inco: construction of nickel plant in Pomalaa not feasible  - PT International Nickel Indonesia (PT Inco) Tbk said the construction of a nickel processing plant in Pomalaa, Southeast Sulawesi had been declared economically unfeasible. - more

  China steel market analysts see demand recovery as temporary - China's domestic steel markets have seen a long-awaited uptick in demand in the past week but do not expect it continue, local analysts said Tuesday. - more

  Morning Nickel Inventory and Price Statistics & Figures

  • London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
  • Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
  • Shanghai Jinchuan nickel price - available here   (charts)
  • 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, May 5

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 91 to 1,897. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Australia Keeps Benchmark Interest Rate at 3% to Gauge Economic Recovery // Asian Stocks Advance on Economic Growth Optimism; Fisher & Paykel Surges // Three-Month Dollar Libor Drops Below 1% for First Time; OIS Spread Narrows // Stock Valuations Highest in Europe Since 2004 After April's Record Rally // European Stocks Rise for Fourth Day; Rio Tinto, UBS, Wolseley Shares Gain // Bernanke Warns `Relapse' in Banking System Would Stall Economic Recovery // U.S. Service Industries Contract at Slower Pace in Sign Recession Easing //
  • The US Dollar is trading 1/3 of 1% higher against the Euro, after a dismal performance yesterday. NYMEX crude is down over 1%, and just slightly under $54/barrel. Gold has just fallen into the red, while silver is higher by 3%. Base metals ended mixed but mostly higher. We broke our own golden rule of not forecasting yesterday and ended our wrap-up with the statement "Unless something dramatically bad happens this afternoon or overnight, we expect base metals and nickel to have another positive day tomorrow." We thought about deleting it, because we really try to refrain from making forecasts, but by the time we realized what we had posted, we had already had a few hundred views. So we let it stay. Nothing dramatic did happen overnight, and while the market spent much of the day in positive , yet choppy territory, it took a dive late in the day, and had us looking for a can of stewed crow, until it rebounded before the close. Dow Jones reports three month nickel ended the day at $5.44/lb ,  but sagged again in after market trading. We dodged a bullet and will try to live up to our rule better in the future.  The whole section on May potentially being the high point for 2009 nickel was not a forecast, but an observation based on historical precendence. Inventories of nickel stored in LME warehouses took a large hit overnight, and now measure half way between 113 and 114,000 tonnes. And if the Baltic Dry Index is back to giving solid hints about economic activity, then last evening's gain of 91 points has to be seen as a positive. In US economic news, the ISM non-manufacturing index improved to 43.7% from 40.8% in March, while reflecting a 7th straight month of decline. Fed Chairman Ben Bernanke, the proverbial , yet guarded optimist, told a Congressional committee that the economy was bottoming out and we could see a turn around as soon as the end of the year. The markets, while fairly docile at the moment, fell during the early part of his testimony. While the likely reason for this was his "turn around" was forecast to be out farther than bullish investors had hoped, his denial "I absolutely did not in any way ask Mr. Lewis to obscure any disclosures or fail to report information he should be reporting." when asked about Bank of America CEO Ken Lewis sworn testimony that Bernanke had urged him to withhold any disclosure of the true extent of Merrill Lynch's fourth-quarter losses, had to have sent a shudder thru the market. In an environment already racked with a high level of mis-trust toward banks and government, with conspiracy theorists under every rock, this denial, made under oath, now sets up what could be a battle of the titans, over who is telling the truth.  Then again, maybe it won't.   

  Reports

  Commodity/Economic Comments

  • (Mineweb) Technically nickel looked positive, analysts said. Chartist Daryl Guppy, CEO of Guppytraders.com, said his initial price target was around $12,850, close to the 200-day moving average, with a second target near $13,200. "The rebound retest shows a sustainable trend breakout with consolidation between $12,850 and $13,200. Look for rally and retreat activity within the context of a rising trend."
  • (AK Steel) With the reduction in anticipated shipments for the quarter, AK Steel anticipates its average per-ton selling price for the second quarter will decrease by approximately 3% to 4% compared to the first quarter.
  • (MB) Outokumpu’s base price increase of €50-60 ($66-79) for May is part of the company’s overall strategy of raising stainless prices €100 by the end of June, a company spokeswoman said.
  • (Dow Jones) Investors who were fully invested in the broad S&P 500 index at its 2007 heights still that index to rally another 72% just to recoup their losses, according to Standard & Poor's.
  • Richard Russell, editor of Dow Theory Letters - "I've lived through a lot of bear markets, and I must say I've never seen sentiment change so quickly after an horrendous drop in the market."
  • Where Home Prices Crashed Early, Signs of a Rebound - more
  • Blame the recession? Bank robbers cite economic slump - more
  • Global Pension Tension - more
  • Road rage? No, just Wall Street dealmaking - more
  • 401(k)s Hit by Withdrawal Freezes - more

  China cites steel glut, low demand in iron ore talks - China's steelmakers are facing low demand and potentially disastrous oversupply, supporting their insistence on a 40 percent cut in benchmark iron ore prices, an industry group executive said on Tuesday. - more

  More low-priced steel imports may be coming - AISI members concerned about foreign mills dumping steel on U.S. market - more

  Courtesy AISI - In the week ending May 2, 2009, domestic raw steel production was 1,004,000 net tons while the capability utilization rate was 41.2 percent. Production was 2,154,000 tons in the week ending May 2, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 53.4 percent decrease from the same period in the previous year. Production for the week ending May 2, 2009 is up 2.1 percent from the previous week ending April 25, 2009 when production was 984,000 tons and the rate of capability utilization was 41.2 percent.

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

  • Indicators at 7:30 am CST show 3 month nickel trading around  $.02/lb higher, with all base metals slightly higher, but most fading. It appears that LME traded metals have missed out on yesterday's exuberance, as equity markets back off from yesterday's dramatic increase. The US Dollar, which fell hard yesterday, is trading less than 1/10 of 1% higher against the Euro. NYMEX crude futures are down nearly 1%. Gold is up nearly 1% and silver is up over 2-1/2%. In overnight trading, Asian markets ended slightly higher, while European markets are trading much the same this morning. Futures reflect US markets will open in an uncertain mood. The International Council of Shopping Centers and Goldman Sachs reported chain-store sales for the week ended May 2 fell 0.8% from the year-earlier period. Data on the services sector also will be released later (ISM non-manufacturing survey), and Fed Chairman Ben Bernanke is scheduled to testify before Congress at 10:00 am EST.
  • Bloomberg morning base metal news - more

  Reports

  Interview with Roger Agnelli about future of New Caledonia's Goro nickel project in Brazil media - translated article here (original Portuguese here

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metal prices finished sharply higher on the two metal markets that were not closed yesterday; ... The across-the-board rally we saw yesterday is attributable to buying momentum (and lots of short covering) that is setting in on the back of favorable macro news coming out from practically all corners of the globe.  ... After yesterday sharp gains, most markets appear to be taking a breather this morning. ... Nickel is at $12,000, up $100, and despite the recent gains, prices are still trading within a sideways band; our charts show resistance along the $13,000 channel that goes back to October of last year." (read Ed Meir's complete morning base metals report here)
  • (MB) US nickel scrap exports rose sharply in February thanks to a huge-but questionable-shipment to Mexico.
  • (MetalBiz) Rio Tinto said in the analyst meeting on May 1 that it would not succumb to steel manufactures who proposed that the benchmark contract price of 2009-2010 is to cut 40% on a basis of the current spot price.
  • (Dow Jones) China nickel pig iron cost pressures ease due to rise in LME nickel prices, falling coking coal prices, says Macquarie. "We hear some of the nickel pig iron producers using electric arc furnaces and producing pig iron with above-10% nickel content are contemplating restarting production," Macquarie says; adds 2-3 nickel pig iron producers in Shandong said to have restarted output in past two weeks.
  • (Asia Pulse) PT International Nickel Indonesia, one of the world's top nickel producers, said it has cancelled its plan to build a nickel smelter in Pomalaa, Southeast Sulawesi, as preliminary studies show the smelter may not be profitable.
  • (SBB) Chinese stainless mills running at 90+% capacity: Macquarie
  • (MNP) Mirabela Nickel is galloping towards the commissioning of its massive Santa Rita nickel mine in Brazil with construction at the project around 90% complete.
  • (Merafe) Shareholders of the Company are advised that ferrochrome production for the Xstrata-Merafe Chrome Venture for the first quarter of 2009 was 76% lower compared to the same period in 2008. Seventeen out of twenty furnaces, equivalent to some 80% of annual production capacity, remained suspended during the first quarter as destocking continued in response to weak demand.
  • Minerals scarcity: A call for managed austerity and the elements of hope - more
  • Thomas Jefferson to JOhn Taylor 1816 - "And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."
  • Steel Stocks Set Up To Stumble - more

  Acerinox sees stainless steel pickup in Q3 - The world's biggest stainless steel producer, Acerinox, said on Monday it saw the market recovering in the third quarter after poor sales and weak prices pushed the Spanish firm into a first quarter loss. - more

  New Caledonia’s SLN makes massive losses, says new study - A report has found that New Caledonia’s biggest private sector employer, the SLN nickel company, is losing 850,000 US dollars a day. - more

  Nickel price too low to restart Avebury mine-OZ - A world nickel price of at least $6 a pound will be required before China's Minmetals will consider restarting the Avebury nickel mine in Australia, current owner OZ Minerals said on Tuesday.  - more

  Ferrochrome Market ‘Fundamentally Challenged,’ Macquarie Says - The market for ferrochrome, used to prevent corrosion in stainless steel, is “fundamentally challenged” by idled output capacity and Chinese ore stockpiles, Macquarie Group Ltd. said. - more

  Merafe Says First-Quarter Ferrochrome Output Fell 76% - Merafe Resources Ltd., Xstrata Plc’s partner in a ferrochrome production venture, said first-quarter output declined 76 percent as smelters were idled in response to weak demand for the stainless-steel ingredient. - more

  Metals Insider: How do you like your recovery? Hot or cold? - Global equity markets were on a charge last week, officially entering bull territory, defined as a 20-percent rise from the lows, with risk appetite surging anew. - more

  Steel market in US has not hit bottom yet: DiMicco - Dan DiMicco, chairman, president and CEO of Nucor, said Monday that the steel market in the US has not hit bottom yet and warned recovery could be slow. - more

  Global Steel Production - Global Crude Steel Production over January-March 2009 down 23% on the same 2008 period. China production up 1% takes 48% global share. World output in March at 92 million tonnes highest since October. - more

  • World Steel Statistics Monthly Commentary - more

  Steel prices steady as demand improves in Q1 - "China's steel producers have so far reported a combined loss of 3.308 billion yuan, in sharp contrast to the 47.16 billion yuan profit made during the same period last year. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, May 4

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - closed for May Bank Holiday (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Asia Plans $120 Billion Currency Reserve Fund to Boost Investor Confidence // Mobius Says Emerging Stocks May `Break Out' Into a Bull Market by Year-End // Chinese Manufacturing Expands for First Time in Nine Months on Investment // Euro-Area GDP to Shrink 4% This Year, Jobless Rate to Soar, EU Forecasts // Stocks in Europe Rise on Chinese Manufacturing; ArcelorMittal, Fiat Climb // Pending Home Resales, Construction Spending Rise in Sign Recession Easing // Obama Seeks to End Tax-Haven Strategies That Save Companies $190 Billion // U.S. Stocks Gain as S&P 500 Almost Erases Decline for Year; Alcoa Advances
  • The US Dollar faltered soon after our morning report and the Euro is now trading over 3/4 of 1% higher. NYMEX crude is trading 2/3 of 1% higher, and is over $53/barrel. Gold is higher by 2% and silver is nearly 5% higher. While base metals did not trade on the London Metal exchange today, there is little reason not to believe they would have had a big day. With a lower US Dollar, positive economic news from China, and very positive equity markets today, nickel should have done well, had it traded. Sucden's nickel graph hasn't been updated since it measured activity thru the end of April, but even with technicals showing it was in a seriously overbought condition, it managed another increase on Friday. Is the increase in nickel sound? Depends on what you mean. Fundamentally, no. If we were to forecast nickel prices thru the end of the year based strictly on fundamentals, our forecast would be depressing to already battered and bruised nickel miners. Yes there are lots of miners out of work because demand is lax, but when demand picks up, those miners, and many more at new mega mines just waiting to open, will easily cover any surge in demand. That is, after we begin to use the 114,000 plus tonnes already stored in LME warehouses. Technicals are another story. We didn't graduate college with a BS degrees in economics, so we don't know exactly all what goes into the 'technicals' picture. But we have been told in the past we have a degree in BS, and for that, we feel honored.... we think. And that degree tells us that fund speculation drove the last bull market, and when fund managers start pouring speculative money back into commodities, which they have already started doing, there is really no telling what the market could do. Based on the estainlesssteel elementary analysis of 'history repeating itself', we feel we could potentially see 2009 mirror 2001, or 1998. The high point for 2000 was March and the low point for that year was in December. This was followed by a high point of May 2001, followed by a drop to the lowest month this century in October 2001. In 2008 we saw the high point in March followed by the low point in December. And much like 2001, we have seen January having the best numbers so far this year entering May. So what could possibly be good by May being the best month of 2009, followed by a rout that could bottom in October. Well, if this whole hypothetical picture did work out to copy 2001, then November 2009 would be the beginning for the next bull cycle. The cycle that started in November 2001 took some time to become obviously bullish, but it didn't peak until May of 2008. The only other year with similar parallel's is 1997-1998. In 1997, the monthly high average came in March followed by a low average price in December. This was followed by a high point in January in 1998, with a low coming later that year in October - again. The only difference is 2001 saw a high point in May, and in 1998, it came in January, which once again, is our current high month for this year so far.  The other major difference, is 1998 did not see the beginning of a bull market. Instead prices floundered for a few years, until they bottomed in October 2001. There are as many reasons why 2009 shouldn't copy 2001, or 1998, than there are why it could. But we throw it out there for your consideration, none the less. In economic news, China got some good news when the CLSA China Purchasing Managers’ Index rose to a seasonally adjusted 50.1 in April from 44.8 in March, CLSA Asia- Pacific Markets reported today. It was the first time in 9 months the index showed growth. The US Commerce Department reported construction spending increased 0.3 per cent in March, the best showing since a similar rise last September. And the National Association of Realtors says pending U.S. home sales rose 3.2% to 84.6 in March, and 1.1% higher than March 2008. And the bulls ran with the news, already pumped over the weekend by some encouraging words from Warren Buffett. Last month the Dow spent much of the month hovering around the 8000 level, and the S & P around 850. Today traders are toying with 8400 and 900. Unless something dramatically bad happens this afternoon or overnight, we expect base metals and nickel to have another positive day tomorrow.

  Reports

  • Commodities Daily - pdf here
  • Weekly Forecast by SMM Specialist - here
  • Weekly Commodity Price Report - pdf here

  Commodity/Economic Comments

  • (MB) China's largest stainless mill, Shanxi Taigang Stainless Steel, reported a net loss of 714 million yuan ($105 million) in the first quarter.
  • Many investors, market watchers, and those involved in business are more interested than ever, during this unusually harsh recession, to analyze clues to what the economy is doing below the radar screen over potentially 'biased' government reports. We have the luxury of being in one of these industries, fastener distribution, but there is no published index of fastener pricing. Another industry is the corrugated / box industry. They publish an monthly index, but it is an expensive report and we will start carrying news articles about the index when they are available. Another report that might be helpful, is one we linked to last week, ie natural gas sector demand. The individual that makes this information public has his own blog, where he comments on weekly developments. The actual numbers are published on the Investor Village CWEI board here and his blog is here. Not exactly sure what gems can be scrapped from this info, as natural gas flow to steel makers, down 75%, does reflect the trouble the metals industry is having, a gain year on year in natural gas flow into automakers is confusing considering the current state they are in.
  • Society at a Glance reveals evolving social trends in OECD countries - more
  • Banks Are Prevailing in a Tug of War - more

  Mining carnage revealed - A new report has revealed more than half the value of Australia's mid-tier mining companies was wiped out within six months last year. - more

   Japan eyes Botswana's Mining Sector - The arrival this week of three engineering experts from a university in Japan signalled the stepping up of the Asian giant's public and private sectors' efforts to get a foothold in Botswana. - more

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

  • Indicators at 7:35 am CST show 3 month nickel not trading as the London Metal Exchange is closed for a holiday. Will re-open on Tuesday. The US Dollar is trading 4/10 of 1% higher against the Euro after European Central Bank Governing Council member Axel Webel forecast the German economy would not return to growth until the second half of 2010. NYMEX crude futures show down by 8/10 of 1% and dipping under $53/barrel. Gold shows up 1/3 of 1%, and silver is up over 1-1/2%. In overnight trading, Asian markets ended much higher after Asian countries announced a plan to build a $120 billion currency reserve fund. The S & P Asia 50 index ended 5.23% higher. Those European markets that are open are higher this morning, and futures show Wall Street should open stronger. In government reports, we get construction spending and pending home sales later this morning. With London markets closed for May Bank Holiday, metals news will be lean pickings today.     

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - next report tomorrow when LME markets re-open
  • (Yieh) After Yieh United Steel Corp. (Yusco) announced its new benchmark price which will remain the same in May, Taiwanese stainless steel wire rod makers decide to raise the price by NT$5,000-6,000/ton as to compensate for profit lost. It is predicted that the future price would reach NT$69,000-70,000/ton on stainless steel wire rod.
  • (Interfax) Domestic steel product prices are expected to rise amid slight fluctuations in May, due to falling trader stockpiles and expected improvements in demand, a Chinese industry analyst told Interfax on May 4
  • China Manufacturing Rebounds as Stimulus Plan Spurs Investment - more
  • China Shipping to Order Dry-Bulk Ships as Prices Fall - more

  DJ Zambia To Select New Munali Nickel Mine Investor By End 2009 - The Zambian government expects to select a new investor to reopen Munali Nickel Mine before the end of the year, a government official told Dow Jones Newswires Monday. - more

  • Traditional leader cheered by the possible re-opening of Albidon Nickel Mine - Chief Naluama of Mazabuka says he is ready to support the Chinese investor who has shown interest to run the closed Albidon Munali Nickel Mine in his Chiefdom. - more

  PT International Nickel Indonesia Tbk Provides A Report on Pomalaa -  PT International Nickel Indonesia Tbk ("PT Inco", or the "Company") today announced that the Company has submitted its report on the economic and technical feasibility of a processing facility at Pomalaa to Indonesia's Department of Energy and Mineral Resources ("DEMR"). - more

  Modest decline in nickel production - First quarter production figures from Norilsk Nickel’s regional subsidiary Kolskaya GMK show a three percent decline year on year and a 13 percent decline from fourth quarter 2008. - more

  Iron Ore Spot Prices to Bottom This Quarter, Goldman Sachs Says - Cash prices for iron ore will bottom this quarter as demand from China rebounds, boosting forecast earnings for BHP Billiton Ltd. and Rio Tinto Group, Goldman Sachs JBWere Pty 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)
  • 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, May 1

  Daily Nickel/Stainless Wrap-up
  • Baltic Dry Index - plus 20 to 1,806. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Yen Declines as Signs of Chinese, U.S. Recovery Stoke Higher-Yield Demand // China Manufacturing Expands for Second Month, Adding to Signs of Recovery // U.K. Manufacturing Rises to Eight-Month High, Adding to Recovery Optimism // Stress-Tests Results Said to Be Delayed to May 7 as Banks Debate Findings // Swine Flu Spreads to 11 Countries, Shutting Schools, Spurring Vaccine Hunt // Stocks in U.S. Fluctuate as Earnings Offset Jump in Consumer Confidence
  • The US dollar is trading lower against the Euro, but only by 1/4 of 1%. NYMEX crude is over 3-1/2%, and near $53/barrel. Gold has reversed course and is up 1/4 of 1%, and silver is higher by 1-1/2%. Base metals ended higher to start the month, as fresh fund money flowed in and a lower Dollar gave a boost. Indicator charts show nickel spent much of the day on a choppy rise, and Dow Jones reports three month nickel ended the day at $5.40/lb , but slipped in after market trading. The London Metal Exchange is closed on Monday. LME stored inventories of nickel slipped back some, while the Baltic Dry Index rose 20 points. In governmental reports today, the Institute for Supply Management index rose to 40.1% from 36.3% in March, its highest since September. University of Michigan and Reuters consumer sentiment index rose to 65.1 from 57.3 in March. Factory orders for March declined 0.9%, which is worse than the 0.6% decline that was widely expected. So far, the Dow has reacted as we suspected this morning, and has gone no where yet. We believe that sympathy lies with the bears , but no reason to count out the bulls to make a statement by trying to pull the market higher on the first day of May. Wall Street bulls and bears have split the first four months of the year, so the tug of war this month could be intense. Market looking for some good news was heartened by the consumer confidence number rising again. We wonder what these numbers really mean during difficult times. Are Americans more confident of their current situation, or are they more confident of the future? If their current situation, is it because they have taken steps to cut back, get their credit under control, put some money in the bank they didn't have before, or survived lay-off's at their business? If so, does any of this help the economy? If they are more confident of the future, are they spending money? Not according to consumer spending numbers that have been released lately. We understand confidence is important, for without it there is no hope. But we get a little nervous when the market, saddled with so much bad reality, decides to hitch its horse to the stump of hope. With headlines like this "Consumer insolvencies to skyrocket: TD" in today's Canadian press, we fear there could be much more pain to come. Either way, we survived another week and 1/3 of the year, and we wish all of our readers a safe and restful weekend, and we invite you all back next week.  

  Reports

  • Monthly Scoreboard - pdf here
  • World Purchasing Manager Indexes updated - here

  AK Steel Announces June 2009 Surcharges for Electrical and Stainless Steels - AK Steel has advised its customers that a $10 per ton surcharge will be added to invoices for electrical steel products shipped in June 2009. - more.

  • To compare June surcharges on 304 and 316 against prior months for Allegheny and AK Steel, see here

  Commodity/Economic Comments

  • (Dow Jones) "The world nickel market was in a 73,000-metric-ton surplus in 2008, the World Bureau of Metal Statistics said Friday in its annual metal statistics yearbook. World refined nickel production in 2008 fell 6% on the year to 1.37 million tons. Consumption dropped by 4.3% to 1.3 million tons. World mine output fell 1.73% to 1.532 million tons."
  • China's gold buy raises eyebrows for all the right reasons - more
  • Government nervous about stress test results - more
  • Analysis of First Quarter 2009 Real GDP - pdf here
  • Barry Ritholtz - The Big Picture - "Today is May Day, and while International Workers’ Day (Labour Day in the UK), means little in the USA, its a big holiday in Europe. Banks and markets are closed on the continent, (England celebrates on Monday). Speaking with Mike Panzner this morning (his clients are mostly Europeans) made me think about this: Which region is the true Socialist state? -Europe has cradle to grave health care plans, generous unemployment benefits, and free or subsidized college costs. -The US gives away public assets (oil, gas, mineral rights) for pennies on the dollar, has huge subsidies and tax breaks, and bails out reckless speculators. It turns out that both regions are welfare states — only in Europe, the natural population (i.e., people) is the recipient, while in the US, the corporate population is the beneficiary. Food for thought."

  A user on the Investor Village CWEI board regularly posts natural gas flows in the US, and among the reports, is one that breaks down monthly natural gas flows to industrial sectors. Here are some stats that may be of interest to some of our readers. Note - we do not follow this sector so it is possible there are variables outside of economic factors that affect these numbers. For more readings, including various metals sectors, paperboard, refining, building materials, etc  visit here (you might bookmark this forum if you are interested in following this regularly here. Site may require free registration. If site is pay site only, please advise and we will remove link.)

Industrial

.......2006....2007....2008....2009
......1.420...1.678...1.813...1.592
......1.401...1.708...1.830...1.594
......1.362...1.698...1.829...1.579
......1.401...1.773...1.759...1.513i
......1.488...1.671...1.765.............
.....1.428...1.634...1.740............
.....1.428...1.716...1.716............
.....1.568...1.669...1.689............
.....1.563...1.717...1.788............
.....1.587...1.766...1.644............
.....1.549...1.804...1.652............
.....1.645...1.831...1.640............

Mining & Minerals (Experimental Sampling )

2006....2007....2008....2009
.0697.. .0811.. .0719.. .0586
.0671.. .0737.. .0713.. .0617
.0697.. .0661.. .0767.. .0613
.0713.. .0774.. .0692.. .0463i
.0712.. .0726.. .0662.. ..........
.0710.. .0742.. .0685.. ..........
.0712.. .0757.. .0679.. ..........
.0668.. .0728.. .0656.. ..........
.0768.. .0738.. .0624.. ..........
.0876.. .0731.. .0639.. ..........
.0714.. .0719.. .0614.. ..........
.0667.. .0714.. .0669.. ..........

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

  • Indicators at 7:30 am CST show 3 month nickel trading around  $.03/lb higher, with other base metals higher, but quiet with most of Europe closed for a holiday. The US Dollar is trading lower against the Euro by nearly 1/2 of 1%, giving base metal pricing a boost. NYMEX crude future are slightly lower this morning, with gold slightly lower, and silver down nearly 1%. In overnight trading, those few Asian markets that were trading ended slightly higher, and in Europe, London markets are slightly higher, the others closed for May Day. US futures show a slightly higher opening is possible on Wall Street. While the government will issue a rash of reports today, unless there is a major surprise in one of them, markets could remain fairly docile as the new trading month begins on a Friday. Bloomberg just reported "The Federal Reserve is postponing the release of stress tests on the biggest U.S. banks while executives debate preliminary findings with examiners, according to government and industry officials." With the financial section setting the tone for markets on many days, this news could unsettle the market early.  
  • Bloomberg morning base metal news - more

  Reports

  • Daily Resource Plus - here

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - "Metal prices pushed higher on Thursday, with copper climbing to its highest level in a week, as steady equity markets and further declines in inventories both helped sustain the advance. However, many of the metals closed well off their earlier highs after US stocks lost most of their gains over the course of the afternoon. ... Conditions are very quiet today, as a holiday in parts of Europe and Asia have thinned out participation.  ... Nickel is at $11,750, up $70, and fairly restrained."  (read Ed Meir's complete morning base metals report here)
  • China - PMI of manufacturing sector rises for 5th straight month - more
  • Analysts see economic recovery looming, debate length of downturn - more

  World Stainless Steel Output to fall by 20% this year -MEPS forecasts global stainless steel production at 20.8 million tonnes in 2009. The Western world figure (excluding China and Russia), at 13.5 million tonnes, would be the lowest since 1994 and the third consecutive annual decline in stainless steel output. - more

  Total Output Of Ferro-Alloys By China In Q1 / 09 Had Decrease Of 7% = Zone To Produce Silicon Alloys Had Considerable Decline In Its Output, Causing Tight Supply - The production activities of ferro-alloys in China for the first quarter (January - March) of 2009 were known. Namely, China produced 3,928,900 tons in total of ferro-alloys in January - March quarter of 2009, having decreased by 7.10% compared with that (4,227,900 tons) in the same quarter of 2008. - more

  Antam's net profit plunges 87 percent in Q1 - State mining company publicly listed PT Aneka Tambang (Antam) said on Friday that its first quarter profit plunged 87 percent on the back of lower prices and sales volume. - more

  Condor Nickel drops Chinese merger - Perth-based Condor Nickel says it will not merge with Chinese company Chihong International Mining despite receiving foreign investment approval. - more

  China Steel Cuts Prices 9.4 Percent as Sales Tumble  - China Steel Corp., Taiwan’s largest maker of the metal, cut prices by an average of 9.4 percent for domestic customers as sales fell because of the global recession, and an executive said no additional reductions were possible. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Previous day / April Archives


Chart Info Delayed 1 Day

Chart temporarily down

Chart temporarily down


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


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

Site Sponsors

Advertise here

Your banner here

Daily Reports

Platt's
UBS Daily
MF Global
BNP Paribas
Macquarie Bank
Commonwealth Bank

4/29 Market Prices
not official prices

Moly Oxide (>51%)
$8.00/lb
 
Source

Ferrochrome(60-65%)(HC)
$.71/lb
 

Ferrochrome (LC)
$2.35/lb
 

4/29 US Scrap Price

Stainless Steel (LTL/ton)
$.39/lb
 

Stainless Steel MEPS Price Index

Global 304 SS Index

North America 304 Index

Europe 304 SS Index

Asia 304 SS Index

Media

Bloomberg TV
Bloomberg Asia
CNBC TV18
CNBC Metals
CNN News
Resource Radio
Korelin Economics

Other Sites

US Stainless Scrap Prices
Baltic Dry Bulk Index
Nickel Mining Stock
Stainless Steel Videos
USGS Mineral Reports
Industrial Metals Index
Nonferrous Metals Index
China Commodities Index
World Disaster Info
Investor Guide
Recession Recovery
Rasmussen Reports

Today's Market

USA Economic Calendar
World Economic Calendar
World Economic Calendar
Live Commodity Prices
World Stock Markets
North/South America
Europe Markets
Asia/Pacific
TED Spread
LMEX Index
VIX Index
US Futures

Blogs

Nickel Mine Closures
China FerroMolybdenum
China Financial
EconMagic
Econompic Data
Baseline Scenario
Worldwide PMI


LME Margins
LME Calendar
LME Ring Times
Metals MSDS
Nickel Toxicology
Stainless Steel MSDS
USGS Molybdenum Info
USGS Nickel Information
USGS Chromium Information
Tariff Codes (many countries)


Price of Nickel

Nickel Graph Temporarily Down

1 and 5 year nickel chart

Sempra Delayed Price
Daily Commodity Prices

Sucden's Evening Base Metals Report

Site Pages

Nickel Price Charts/Forecasts
Stainless Steel Graph/Charts
Stainless Steel Surcharge
Nickel/Stainless Research
Stainless Steel Literature
Make your own charts
Nickel Price Archives
Ferrochrome Facts

Prices/Analysis


Shanghai
Shida Morning Post
Shanghai Metal Price Index


India MCX
India Infoline

Central Japan

Archives

2014
January February March
April May June July August
September October
November
2013
January February March
April May June July August
September October
November December
2012
January February March
April May June July August
September October
November December
2011
January February March
April May June July August
September October
November December
2010 and prior

2014
January February March
April May June July August
September October
November
2013
January February March
April May June July August
September October
November December
2012
January February March
April May June July August
September October
November December
2011
January February March
April May June July August
September October
November December
2010 and prior






Stainless Steel MSDS
USGS Nickel Information
USGS Chromium Information
USGS Molybdenum Info
Tariff Codes (many countries)

Nickel Publications at Amazon

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

Contact author  /   EStainlessSteel Home Page

Your free daily news source for nickel, molybdenum, ferrochrome, chromium, iron ore and stainless steel market prices and news.

Any reproduction in whole, or in part, without permission from the author is prohibited.
© 2003-2014