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Daily Nickel Market News & Stainless Steel Prices

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Friday, May 28

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 78 to 4,078. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg)  Prudential Discussing Price Cut for AIG Asia Unit After Slump Soured Deal // Hon Hai May Lift China Wages 20% After Spate of Suicides at Apple Supplier // China IPOs Post World's Biggest Gains of 2010 as Stocks Suffer Bear Market // Standard Chartered's $500 Million India Sale Garners Orders for 2.2 Times // Asian Stocks Gain for Third Day Following U.S. Rally; Cnooc, Nintendo Rise // Geithner Downplays Differences With Germany Over Ban on Naked Short Sales // Bond Sales Drop to Lowest Level Since 2000 as Spreads Soar: Credit Markets // Euro's Volatility Won't Stop China Diversifying Reserves, Yu Yongding Says // European Shares Fall, Trimming Weekly Gain; BP Leads Energy Stocks Lower // Bernanke `Extended Period' Resolve May Be Eroded as Delinquencies Decline // Consumer Spending Expansion in U.S. Pauses as Households Rebuild Savings  // Business Activity in U.S. Expands for Eighth Month, Chicago Index Shows
  • The Euro has suddenly fallen against the US Dollar on news that Fitch has downgraded Spain, and is trading 1/3 of 1% lower. NYMEX crude is down over 1% and under $74/barrel. Gold is down nearly 1/2 of 1% and silver is off 1.4%. Base metals ended the session lower. Indicator charts show nickel was fairly docile until late in the session as the Euro began to fall, nickel followed. Dow Jones reports three month nickel ended the day, week and month at $9.68/lb, exactly where it ended last week. It ended last month at $11.93/lb. The downgrade by Fitch was announced after the market closed, and nickel has fallen further in after market trading. Inventory stockpiles of nickel stored in LME approved warehouses fell overnight and now sit just over the 138,500 tonne level. Sucden's day old nickel chart shows LME trading thru yesterday (chart here). Cancelled warrants remain hovering in the 3-1/2 to 4% range. For a Friday and the last working day for the US markets, there were noteworthy events going on in the nickel industry. A protest by the Keweenaw Bay Indian Community at a planned nickel mine in Michigan ended with two protesters being arrested. Vale Inco has decided to drop the Inco brand from its nickel operations and the nickel wing of the company will become Vale only. The timing of this change could lead one to believe Vale is sending a signal to either the Canadian USW members currently on strike at its Ontario operations, or to Canadian officials, who might be pressuring the company to make an agreement, that it is in charge and will make its own decisions. Vale's Steve Ball denied any such claims and advised Vale has been planning this name change since it acquired Inco's assets in 2006. This may be true but how they got here is a rather interesting trip. Just in the last two years, this company has had 4 names and seen three name changes. Inco, then CVRD Inco, the Vale Inco, now Vale. Must be keeping the stationery people in the Sudbury area busy. The transport strike in South Africa is ending which means ferrochrome and chrome ore will again flow freely from that country. In other news, tension is building on the Korean peninsula as North Korea accuses the South of faking the sinking and advises the area is on the brink of war. In US economic news, consumer spending was flat but their sentiment was up, and the Chicago PMI slipped. London markets are closed on Monday for  Spring Bank Holiday, and US markets are closed for Memorial Day. We wish all of you a safe and enjoyable long weekend, and hope to see you back here on Tuesday.  

  Reports

  Commodity/Economic Articles and Comments

  • (MW) ASX-listed Breakaway Resources plans to sell its Scotia and Kambalda West nickel projects in Western Australia, to focus on exploration projects in the Leinster district, the company said on Friday.
  • IMF Economist Argues Home Prices Still Have Far To Fall - more
  • Consumer Loan-Backed Market Succumbs To Slump - more
  • Treasury’s Five-Point Wish List for Financial Overhaul - more
  • Too Pig to Fail - more
  • Unemployment Claims Go Unmentioned - more
  • “Are workers motivated by the greater good?” - more

  BHP Oil Spill Live Cam

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

  • Indicators at 7:20 am CST show 3 month nickel trading around  $.06/lb lower, with other base metals trading mixed. The Euro is trading nearly 3/10 of 1% higher against the US Dollar at the moment, and off session highs. NYMEX crude futures are up 9/10 of 1% and back over $75/barrel. Gold opened slightly over 1/10 of 1% higher, while silver is down slightly. In overnight trading, Asian markets ended higher, with China falling 1/3 of 1%. European markets are slightly higher this morning, while US futures show Wall Street could open higher. Nickel inventories returned to their falling pattern overnight.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Copper prices rose for a second day in a row on Thursday to their highest level in over a week, pulling the rest of the group in tow, as a strong finish on Wall Street, where stocks uncharacteristically did not buckle by the close, kept the gains firmly in place. Much of the strength was built early on in the day on the important Chinese repudiation of a story claiming that a Euro-based review of investment holdings was going on. The impact of the denial was immediate, with the Euro soaring to just under $1.24 from the $1.2150 level low reached on Wednesday. Macro numbers out of the US were neutral to slightly bearish, but did not derail the advance in metals; first quarter GDP numbers were revised to show the economy growing at a somewhat slower pace than the initial estimate, (3% versus 3.2%), while initial claims data also came in slightly higher than expected. Later today, we get May Chicago PMI, personal income and spending figures, and Michigan sentiment readings. We are higher once again in metals right now, as the euro has pushed slightly above the $1.24 mark, while firmer equity markets in both Europe and Asia are also helping the constructive tone. Crude oil markets are up by about $.75 a barrel after two days of very impressive gains. US stocks are called to open roughly unchanged. We believe the action over the next few days will be critical, particularly in the US and European equity markets, which given Thursday's rallies, could set the underpinnings for a more sustained advance, and pull the commodity markets further along. Of course, such a scenario assumes that the credit markets will breathe somewhat easier about the Euro's prospects, and that investors will shift their focus away from currency and towards a growing belief that the global recovery will remain on track despite the problems in Europe. Having said that, we have seen how fickle sentiment has been over the last few weeks, and so we would rather watch the action from the sidelines for at least another few days to see whether the current bounce is indeed being led by a change of perceptions, or is merely another ill-fated short-covering rally.  .... We are $21,605 on nickel, down $195, and basically where we were at this time yesterday. Nickel’s trading ranges have narrowed significantly of late, and we are not seeing the big intraday moves we were seeing a week ago. The $23,300 target looks to be next resistance.  (read Ed Meir's complete morning base metals report here)
  • (SO) The largest ferronickel production line in China has commenced trial production operations in Fengzhen city in the northern Chinese province of Inner Mongolia. Dongfeng Ship Co., Ltd, based in the eastern Chinese city of Taizhou, is the investor behind the project. The project includes phase 1 construction of a 0.16 million mt annual ferronickel output capacity, and phase 2 construction of 1 million mt special steel annual output capacity. The No.1 submerged arc furnace of phase 1 started trial production recently.
  • (MDM) The Chicago Fed Midwest Manufacturing Index (CFMMI) increased 1.2 percent in April, to a seasonally adjusted level of 85.2 (2002 = 100). Revised data show the index rose 1.5 percent in March to 84.2.
  • (Yieh) China’s Baosteel has announced to cut its stainless steel price by RMB1,000~3,800/ton for June. Baosteel’s stainless steel cold rolled price of 304/2B has cut by RMB3,800/ton and as for stainless steel cold rolled price of 430/2B has been cut by RMB1,000/ton. Meanwhile, the stainless steel hot rolled price of 304 /NO.1 has down by RMB3,300/ton.
  • Nickel Vs. Aluminum: Which Shines Brighter? - more
  • ( SSY) According to World Steel Dynamics, the world hot-rolled band price fell by $34/t (-5%) month-on-month to $684/t end-May, the lowest level since end-March. The decline in the global price was led by a monthly fall of $39/t (-7%) in China to $535/t. Meanwhile, the HRB price in the USA and the EU both slipped, down by $12/t and $14/t, respectively, to $760/t and $728/t. Despite the latest downward pressure, the world HRB price is still $288/t (+73%) above the year-ago level.

  Global Stainless Steel Cycle Exemplifies China's Rise to Metal Dominance - The use of stainless steel has been characterized for 51 countries and the world for the years 2000 and 2005. We find that the global stainless steel flow-into-use increased by more than 30% in that 5 year period, as did additions to in-use stocks. - pdf here

  Surging price of nickel impacts on price of nickel-containing grades of stainless steel - The past two years have seen some frenetic activity in all commodities with speculation, supply interruptions, surges in demand, currency fluctuations and ballooning stocks having all contributed to an unpredictable market and often inexplicable price movements, says Durban-based manufacturer and distributor of stainless steel products Euro Steel, which is also a member of the Southern Africa Stainless Steel Development Association. - more

  Vale Inco announces name change to Vale - Vale Inco announced the natural next step in the company's evolution today by changing its name to Vale - a milestone that aligns it more fully with other Vale operations worldwide and reflects it position as part of the world's second largest mining company. - more

  • Striking Vale workers in Sudbury to head back to bargaining table June 4 - Striking Vale workers in Sudbury, Ont., will head back to the bargaining table next week, almost 11 months after they walked off the job. - more

  2 protesters arrested at nickel mine site in U.P. - Authorities say two protesters have been arrested at the entrance of a planned nickel mine in Michigan's Upper Peninsula. - more

  Poseidon Nickel Is in China Talks to Fund Australian Project  - Poseidon Nickel Ltd., an Australian exploration company chaired by billionaire Andrew Forrest, is in talks with a number of potential Chinese investors to fund restart of mine production within two years. - more

  Dinagat nickel find affirmed - Two studies have found significant nickel resources at Century Peak Corp.’s Casiguran and Rapid City Parcel II mines on Dinagat Island, Surigao del Norte. - more

  South Africa transport strike to end after new deal - South African logistics group Transnet reached a deal with striking workers on Thursday to end a long-running dispute, but a labor federation threatened fresh industrial action during the soccer World Cup. - more

  MEPS North American average steel prices set to decline in second half of 2010 - Although US transaction prices have started to erode this month, some mills are still claiming full order books. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, May 27

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 53 to 4,156. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Malaysia Said to Raise $1 Billion in First Global Sukuk Sale for 8 Years  // China Is Long-Term Investor in Euro Assets, Foreign-Exchange Agency Says // Mobius Says South Korean Policies May Accelerate Change in Communist North // Asian Shares Gain as Global Sell-Off Eases; Won, Kiwi Advance Against Yen // European Stocks Extend Gain as China Says It Will Maintain Euro Holdings // Euro `Not In Danger,' Slide May Be Contained, Ex-Bundesbank President Says  // Mobius Is Buying BRIC Stocks on View Slump Was Correction in a Bull Market // Euro Strengthens as Sovereign Risk Diminishes, China Denies Assets Review // Barton Biggs Says U.S. Stock Markets Oversold, Set for `Big Pop' in Days // Lehman Sues JPMorgan to Recover Collateral Demanded Before Its '08 Failure // Europe Debt Crisis Likely to Be Contained as U.S., Asia Grow, Bullard Says // Loomis' Fuss Cuts Treasuries on `Awful Fundamentals,' Echoes Gross Warning // U.S. Economy Expands Less Than First Estimated, Highlighting Europe Risks // Mortgage Rates on 30-Year U.S. Loans Retreat to 4.78%, Freddie Mac Says // Stocks Rally on China Commitment to European Investment; Euro Strengthens
  • The Euro is trading 1-6/10 of 1% higher against the US Dollar, after China, a major trading partner, gave it a big present by affirming it was backing the Euro. NYMEX crude oil is up nearly 3.9% and over $74/barrel. Gold is just a tad higher, while silver is up 2%. Base metals all ended the session higher, thanks to the Euro's growth. Indicator charts show nickel jumped early, fell back as the Euro lost some ground, and then when the Euro bounced higher, nickel followed. Dow Jones reports three month nickel ended the day at $9.87/lb . Inventories of nickel stored in LME approved warehouses rose for a second consecutive day overnight, and that is the first time we have seen that since Feb 26-March 1st. The total of the two gains combined is still rather small, and total inventory listings now sit just under the 138,800 tonne level. Sucden's day old chart shows nickel trading remains rangebound (chart here). While nickel traded within an approximate $500 tonne range and ended strong, it is obvious traders are less than confidence of its staying power, as the Euro and nickel were up up the same percentile for much of the trading day. Most other metals, especially lead,. fared better. Vale announced it would start negotiations with the USW next week. And as can be seen below in the live cam shot, the oil appears to have stopped flowing into the Gulf. Meteorologists announced today the hurricane season would be active to very active in the Atlantic. New claims for unemployment fell but not as low as expected. The US GDP grew at an annual rate of 3% in the first quarter according to government figures released today. Positive but not nearly as high as expected. But none of that mattered today, as China announced it was committed to its $600 billion Euro investment and was convinced the Euro would overcome its difficulties. With those words of re-assurement, markets breathed a sigh of relief and rose. A skeptic might ask what choice did China have and that their statement was more for show than any change in policy, but the other side would just say that is cynical. So for today, the markets are up as optimists snap up bargains, and pessimists rush to cover their short bets. And for the time, nickel remains rangebound.

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) Vale Inco, a subsidiary of Brazilian miner Vale SA, will restart negotiations with striking workers at its nickel operations in Ontario, Canada, on June 4, a company spokesman said Thursday.
  • Australia: A Tug of War between China and ‘the GFC’ - more
  • Ignore Cassandra at Your Own Risk - more
  • The (Macro) World at Your Fingertips - more
  • Wray: The Great Depression and the Revolution of 2017 - more
  • TED spread - chart here
  • Calming Words From China Push Shares Higher - more

  Putin puts Russian steel firms on notice over price - Russian Prime Minister Vladimir Putin's description of steel price hikes as "inexplicable" served notice to local mills that raising prices further threatens the nascent recovery in domestic manufacturing. - more

  MEPS expects its Global steel price to have peaked in May - Although US mills continue to boost output, service centres report a minor softening in demand as they head into the summer. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.24/lb higher, with all London traded base metals higher this morning. The Euro is trading nearly 7/10 of 1% higher against the US Dollar, and at $1.2264 at the moment. Denials by the Chinese government that they were considering dumping some of their Eurozone bonds is helping boost the Euro - and equity markets worldwide. NYMEX crude futures are trading nearly 2-1/2% higher and over $73.25/barrel. Gold is trading lower by 2/10 of 1% and silver is higher by 1%. In overnight trading Asian markets ended higher, with China up 1-2/3%. European markets are trading higher this morning, and US futures show Wall Street will open much higher. Nickel inventories rose slightly overnight.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - LME metals pushed higher yesterday, as rising US equity markets (at least early on) as well as robust macro data, both helped drive prices higher. On the US macro side, April durable goods readings and new home sales came in substantially ahead of estimates, but the gains in equities fizzled late in the day on unconfirmed reports that the Chinese were reviewing their Euro holdings. The rumor was enough to send the Euro tumbling, with the currency losing almost 2 full points to hit 1.2150, just a hair above its 2010 low of 1.2143. We did see a slight easing in commodity prices as well (particularly in energy) that coincided with the equity sell-off. The Chinese came out overnight and said that the Euro review story was “groundless”, and this is leading to a sharp bounce in the Euro, which is now trading at $1.2250, but off from the $1.2340 level reached earlier in Asian trading. In fact, the Chinese denial makes sense given the little we know about how the country handles its foreign exchange investments. For one thing, the actual size of China’s foreign exchange reserves is a state secret, and the Chinese do not tinker with its composition much either. During the dollar's free-fall in 2008 for example, we had the same type of reports suggesting the Chinese were bailing out of the greenback, but that story never proved to be correct either. Given the massive size of their reserves, the Chinese realize that any overt signal to favor one currency over another would result in an immediate depreciation of their existing holdings in the currency they do not favor. As a result, we suspect any diversification that takes place will be very gradual process and will certainly not be advertised in advance. The recovery in the Euro today is insuring that yesterday’s commodity gains remain on track. Metals are up sharply, as are crude oil prices, which are up by another $1.70/brl after a very strong advance yesterday, their largest one-day gain in some eight months. Despite the current gains, we still expect further turbulence here, as markets come to grips with how much the Euro crisis will hurt growth through the austerity measures being imposed. We have written in previous commentary that we have our doubts the growth story in Europe will be as bad as it is currently being portrayed given what we suspect will be an export-led revival to offset the expected retrenchment in domestic demand. Some of this export boost may already be occurring, but the European authorities should welcome an even weaker Euro in order to insure that the bounce gains traction. Markets, however, may feel otherwise, and will likely breathe easier once they suspect the Euro has bottomed. No one knows where the actual bottom will be, but we suspect that for at least over the next two to four weeks, we will see a breach of the 1.20 mark. .... We are $21,650 on nickel, up $535, and fairly steady, but like many of the other metals, trading ranges have been compressed, with no real clarity showing on the short-term charts. (read Ed Meir's complete morning base metals report here)
  • (Yieh) Russian Special Steel and Alloys Consumers and Suppliers Association reported that Russian stainless steel rolled products has increased to 26,139 tons in the first quarter of 2010, up by 108.3 percent compared with the same period of last year. However, according to the data, the volume is still much lower than 2007 and 2008. In fact, Russian stainless steel consumption has decreased by 36.2 percent in 2009.
  • (Reuters) POSCO to lower stainless steel prices for June
  • (MP) Global crude stainless steel production is poised to grow 21.4% this year to more than 31.53 million tonnes, but the rate of annual increase in China will be slower than last year and below that of more mature producers whose output dropped sharply last year, according to a forecast by leading analyst Heinz H. Pariser.
  • (JMB) Nippon Steel to Raise Steel Sheet Price by 10,000 Yen/t in July
  • What recession? Mining equipment is sold out until next year - more
  • (MDM) New orders for manufactured durable goods in April increased $5.6 billion or 2.9 percent to $193.9 billion, according to the U.S. Census Bureau. This was the fourth increase in the last five months and followed a slight March decrease. Excluding transportation, new orders decreased 1.0 percent. Excluding defense, new orders increased 3.4 percent.
  • Molybdenum exploration licence extended to 2016 - more
  • More Workers Start to Quit - more

  Nickel Production In Japan In Q1 / 2010 Increased Considerably From That In Same Quarter / 2009 = Output Of Ferro-Nickel Increased By 57%, That Of Nickel Metal Also Increased By 61% - According to the monthly statistics concerning steels and nonferrous metals released in last week by the Ministry of Economy, Trade and Industry, during the first quarter (January - March) of 2010, Japan produced 10,009 tons of nickel metal, having increased by 60.9% compared with that (6,222 tons) in the same quarter of 2009, and 17,742 tons (including an estimation) of nickel in ferro-nickel, which also increased by 57.0% compared to that (11,303 tons) in the same quarter of 2009. - more

  SAfrica transport strike may end after new deal - A South African transport strike that has crippled rail and port infrastructure two weeks before the World Cup is likely to come to an end on Thursday after a revised wage offer by logistics group Transnet. - more

  Taiwan's China Steel to raise prices by avg 6.8 pct - China Steel, Taiwan's top steel maker, will raise domestic prices by an average of 6.8 percent for July-August over June, it said on Thursday, reflecting higher iron ore prices and stronger demand. - more

  Chinese ban to hit Indian iron ore exports - Nearly half of India's iron ore exports to China are in serious danger of being wiped out. - more

  BHP, Rio Gain After Report of Compromise on Tax  - BHP Billiton Ltd., the world’s largest mining company, and Rio Tinto Group rose in Sydney trading after the Australian said the nation may change the rate at which the proposed mining profit tax takes effect. - more

  Iron Ore Prices May Jump 25% Next Year, Ferrexpo’s Zhevago Says - Iron ore prices may jump as much as 25 percent next year after weakening through the rest of 2010 on slower Chinese demand, said Kostyantin Zhevago, head of Ferrexpo Plc and developer of Europe’s biggest reserves of the material. - more

  • Guest column: Spot iron ore price to rise soon - Since mid April, the global stock and commodities markets have been falling sharply as a direct result of the Greek debt crisis. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, May 26

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 22 to 4,209. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) BHP, Xstrata Group Offers $4 Billion for Australian Coal Railroad Network // Mumbai Land Sold for $849 Million in First Successful Auction in Two Years // South Korea's Won Halts Slide as Intervention Risk Counters North Threat // Yuan Cedes Spotlight as U.S.-China Talks Focus on North Korea, Europe Debt // Asian Stocks Climb, Commodities Rally on Renewed Growth Prospects; Euro Weakens // OECD Raises 2010, 2011 Global Forecasts as Emerging Economies Drive Growth // Spain's Rush to Fix Ailing Savings Banks Risks Leaving the Job Half Done // Euro Drops for Third Day on Concern Europe's Debt Crisis Will Damp Growth // Italy Adopts $30 Billion of Budget Cuts in European Push to Tame Deficits // European Stocks Rally From Eight-Month Low on Speculation Slump Overdone // Home Sales, Durable Orders Signal U.S. Economy May Withstand Europe Crisis // Geithner Says Governments Must Respond Quickly `and With Force' to Crises // High-Yield Bond Spreads Widen to Most Since December After Forced Sales // Stocks in U.S. Pare Gain as Crude Oil Retreats From High, Euro Declines
  • The Euro is trading 1% lower against the US Dollar at the moment, having fallen thru much of the day. NYMEX crude refuses to yield to the falling Euro and is up by 3.2%.  Gold is higher by 1% and silver is trading higher by nearly 1-3/4%. Base metals ended the session mostly higher, but none made any noticeable moves. Indicator charts show nickel slightly higher for much of the morning, before falling into the red in afternoon trading, only to start crawling back late. Dow Jones reports three month nickel ended the day at $9.58/lb . Stockpiles of nickel stored in LME approved warehouses rose slightly overnight and now rest just over the 138,600 tonne level. Cancelled warrants returned to the 4% level. Sucden's day old chart shows nickel trading thru yesterday (chart here), and while the steep drop, we referred to the days trading as rangebound. Considering the drop the Euro took today, nickel held up well even if it did end lower. It appears traders were more in a wound licking mood, than any aggressive action either way. Standard Bank wrote "If the metals can detach themselves from the turmoil in the financial markets and instead focus on the real economy, the outlook for the base metals remains positive."

  Reports

  Commodity/Economic Articles and Comments

  • OECD Sees Euro-Zone Recovery Fraught With Risk - more
  • Warning: Crash dead ahead. Sell. Get liquid. Now. - more
  • Fed’s Bullard: Europe Woes Unlikely to Trigger Another Recession - more
  • I decided to look at the Scott Sumner blog post that Mike wrote a couple of days ago and again today. - more
  • Positive Sign: Worker Mobility - more
  • Cousteau Jr.: 'This Is a Nightmare... a Nightmare' - video here
  • Chronicle of a Currency Crisis Foretold - more
  • US Durable Goods Orders Surge in April on Aircraft - more
  • Dollar Primed for Collapse by End June: Charts - more

  Zimasco targets 30 percent output boost - Chinese firm Sinosteel Corp says it has ramped up production at its Zimbabwe subsidiary ZIMASCO to full capacity and is now working on expanding annualized output by a about 30 percent. - more

  CISA denies report of China cutting steel rebates - Reports that China will cut export tax rebates on flat steel products is "rubbish", a senior official at the China Iron and Steel Association told Reuters on Wednesday. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.12/lb higher, with  all base metals trading higher this morning, but most off session highs. The Euro is trading 2/10 of 1% lower against the US Dollar  and off earlier highs.  NYMEX crude futures are up nearly 3% and near $71/barrel. Gold opened 1% higher, while silver is trading over 1.7% higher. In overnight trading Asian markets ended higher, with China flat for the day. European markets are trading higher this morning as the Organization for Economic Cooperation and Development raised its growth forecasts for the year, with US futures showing a possible bullish start in store. Nickel inventories ticked slightly higher overnight.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - LME metals fell sharply yesterday, with copper leading the rest of the group lower. In fact, practically all the markets - with the exception of the safe-haven US treasury market - were engulfed in a wave of selling amid intense volatility. Crude oil markets shed almost $3 a barrel at one point, while the Dow was down a massive 300 points before coming back to close with only a minor loss. Precious metals also closed lower on the day. Although a late-day reversal in the battered US equity markets and a recovery in the Euro helped pare losses, the recovery was due largely to short-covering as opposed to anything fundamentally new, meaning that shorts will likely circle back and attack the markets again. We are up sharply this morning in a number of markets in what by now is becoming a familiar pattern. Copper is back up to $6860, and recouping a good portion of yesterday’s losses. Crude oil prices are also up, tacking on $2/brl and now trading at just under $71. The Euro is steady, trading at $1.2315, but not far off its recent lows. There was a good rebound in the Asian stock markets, which in turn has boosted European markets and is setting the stage for a firmer US opening. Despite the impressive reversals, there is very little indication that the bearish market psychology is about to change any time soon and we would not rule out another dizzying sell-off going into next week. We think the commodity and equity markets need to see the growth picture reassert itself before we can stabilize here, but the jury is still out in this regard given that the European crisis has not yet had a chance to truly get reflected in the numbers. Yesterday, for example, it was reported that European industrial orders for March increased by its greatest amount in almost three years led by surging demand for capital goods, but we suspect the April and May number will likely be of more interest when they get released in the weeks ahead. .... We are $21,600 on nickel, up $405, and making up barely half of yesterday’s decline. Fro now, nickel has done a good job protecting its upchannel marked by support at $20,000. (read Ed Meir's complete morning base metals report here)
  • (Yieh) Because there appeared more supply in the Chinese domestic market, the Chinese imports of stainless steel went down in April. China imported 81,132 tons of stainless steel in April, down by 23 percent compared with the previous month.
  • (Yieh) According to Taiwan’s Yieh United Steel Corp. (Yusco), the company would sign an agreement with an Indonesian nickel ore enterprise, probably by the end of the year, to exploit nickel mines and produce ferro-nickel in the southeast of Sulawesi island.
  • (Interfax) Demand for scrap steel by China's steel industry is expected to reach 90 million tons in 2010, up 8 percent year-on-year, a senior official with the China Association of Metalscrap Utilization (CAMU) said at a May 26 conference.
  • (VOCM) Vale Inco and the United Steelworkers Union are back at the table today in an attempt to see if the lengthy strike at Voisey’s Bay can be resolved.
  • (AP) The Indonesian government supports the various efforts made by state-owned nickel mining firm PT Antam to intensify its explorations and increase its production, the company's spokesman said. "However, the central government's support lacks backing up by local governments who have the authority to issue licenses in the local sector," PT Antam Corporate Secretary Bimo Budi Satriyo said on Tuesday.
  • (SMR) China Nonferrous Metal Mining Group Co. will start operations at its nickel mining project at Tagaung Taung, Myanmar in mid- 2011. "The operation consists of mining and smelting facilities, and (the project) is expected to produce 85,000 tons of ferronickel and 22,000 tons of pure nickel content each year," said the Company official.
  • (AISI) Based on preliminary Census Bureau data, the American Iron and Steel Institute (AISI) reported today that the U.S. imported a total of 2,072 ,000 net tons (NT) of steel in April, including 1,672,000 NT of finished steel (each up 1% respectively, vs. March final data).
  • (MP) Chinese spot chrome ore prices have extended their downtrend in the past week, dragged down by thinner demand from the ferro-alloy sector and signs of lower offers for imports made by overseas miners.
  • (Reuters) Foreign entities cannot trade on SHFE unless they are in a joint venture with a local company, which has to have a majority stake. There are no official numbers for how many foreign firms can trade on SHFE. Chinese metal consumers and producers are not normally allowed to trade on the LME. China Securities Regulatory Commission allotted the right to trade futures overseas to 31 state-owned Chinese firms between 2001 and 2005.
  • ENSO Wrap-Up: Tropical Pacific neutral; chance of La Niña increases - more

  China stainless steel use seen up 5 pct in 2010 - China's apparent consumption of stainless steel, the main driver of the country's nickel demand, is expected to rise by 5 percent in 2010, Lou Dingbo, president of Baosteel's Stainless Steel Business Unit, said on Wednesday. - more

  Baoshan ‘Not Optimistic’ on Stainless Demand in China  - Baoshan Iron & Steel Co. is “not very optimistic” that stainless steel consumption growth in China will match last year’s rate, prompting increased use of cheaper materials to make the corrosion-proof steel. - more

  Jinchuan starts maintenance work on nickel furnace - Jinchuan Group, China's largest nickel producer, began maintenance work on a nickel production furnace with an annual refined nickel production capacity of around 70,000 tons on May 25, a Jinchuan employee told Interfax on May 26. - more

  Nickel Output to Rise 9.3% in 2011, Metalytics Says  - Global production of primary nickel may climb 9.3 percent to 1.53 million metric tons in 2011, pushing the market into surplus, said John Barkas, director of Metalytics Ltd. - more

  Transactions To Trade Molybdenum Oxide For Cash Payment At LME Commence = Quoted At US$17.01 Per Lb. Of Mo For Selling, How Extent Does LME Moly Price For Cash Stabilize Is Question - The transactions to trade actual cargoes of molybdenum oxide for cash payment at LME commenced from the 19th May of 2010. The transactions to trade molybdenum oxide at LME for deliveries for 3-month and 15-month futures already started from the 22nd February of 2010. Therefore, as the trading on actual cargoes for cash payment has been added, the transactions to trade molybdenum oxide at LME have resulted in a balance. - more

  Lawsuit could delay nickel project: HPL - Highlands Pacific Ltd (HPL) has expressed concern that the current court injunction taken by landowners against the Ramu nickel project over possible environmental damage from deep-sea tailing placement system would delay the project. - more

  China Studies Cutting Steel Product Export Rebates - China, the world’s largest steel producer, is studying cutting export rebates for the metal as it faces increasing tariffs imposed by the U.S. and European Union. - more

  • Largest Steel Merger in China Approved - Northeastern China's Angang will merge with Pangang, based in Panzhihua, the southwestern resource-rich region, to create China's largest steel company - more

  Russia govt to mediate higher metal prices row - Top Russian officials will question leading metals firms on price rises amid complaints from oil and car firms the move is killing their margins and could put ambitious inflation targets at risk. - more

  Miners criticize Canberra's mining tax plan as "destructive" - Canberra's plan to hike taxes on mining companies 'has the potential to destroy Australia's hitherto excellent reputation in the global community,' resources giant Rio Tinto Ltd said Wednesday.  - more

  SAfrica striking union says weighing new pay offer - Striking South African transport workers said on Wednesday they may accept a new pay offer that could end their 3-week-old work stoppage, a day after a court order barred industrial action by electricity workers. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 25

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 244 to 4,187. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Geithner Confident of Case for Yuan Gain, Welcomes Hu's Pledge for Change // Korean Won, Stocks Drop on Report Kim Ordered Combat Readiness Last Week // China Software Piracy Makes India a Better Bet, Microsoft's Ballmer Says // Asian Stocks, Won Slump on Report North Korea Ordered to Ready for Combat  // Euro Falls on Concern Spain's Bank Woes Signal Crisis Spreading; Won Drops // Libor for Dollars Climbs for 11th Day as Banks Question Creditworthiness // Credit Risk Soars to 10-Month High as Korea, Euro Decline Spook Investors // Spanish Savings Banks Plan Four-Way Merger Combining $167 Billion Assets // Germany's Unilateral Short-Selling Ban Drops `Bomb' on Regulators, Lawyers // Stocks in Europe Plunge to Eight-Month Low on Debt Crisis, Korean Tension // Carney Ready to Raise Rates as Asian Boom Drives Canadian Split With U.S. // Options Traders' Ranks Swell as Amateur Investors Embrace `Iron Condors' // U.S. Consumer Confidence Rises to Highest Level Since 2008 on Job Optimism // Home Prices in U.S. Cities Climbed 2.3% in March, Case-Shiller Index Shows // Stocks in U.S. Decline, Sending S&P 500 to Six-Month Low on Lending Rates
  • The Euro is now trading over 7/10 of 1% lower against the US Dollar, but well off session lows. NYMEX crude is down 2-3/4% and at $68.28/barrel. Gold is up over 4/10 of 1%, while silver is down 1%. Base metals ended their trading day lower, but off session lows. Indicator charts show nickel started lower, slid lower thru much of the session, before retracing a little late. Dow Jones reports three month nickel ended the day at $9.61/lb . Inventories of nickel slipped overnight, but not nearly to the degree they have been lately, and now sit just under the 138,600 tonne level. Cancelled warrants remain over the 3% level, after swelling to near 4% yesterday.  Sucden's day old chart shows LME nickel trading thru yesterday (chart here). Today's trading was lower but rangebound and light as traders wait for some positive shift in the overall mood. As Standard Bank wrote this morning "For the time being participants are simply not confident enough about the state of the wider global markets and general economic conditions to be proactive or to take a longer-term view.". The market really wants to drive nickel above the $10/lb level, but every time it makes it there, something outside of the metals market spooks the market, and drags nickel back with it. As long as we remain in a situation where outside forces continue to make the overall market nervous, nickel prices will continue to flounder. One of the factors you don't hear much about in mainstream media but traders watch closely is the 3 month LIBOR rate. This is also known as the "do banks trust other banks?" gauge and this has been rising (chart here). The one month LIBOR rate looks even worse (chart here). For the little guy, the one who is the last to find out what is really going on behind closed doors, the question begs to be asked, "if the all powerful banks are losing faith in each other, why should we trust them?" This became very clear after the last debacle, where secret weekend meetings in Washington, revealed to the public months later, just how close the world financial system came to collapse. Faith in the system has been shaken and sufficient time has not passed for people to have forgotten. And so the market continues to wallow in a fearful correction, fueled by a cynical disbelief in what they are being told, guided instead by a sincere desire not to be the last passenger off a leaking ship. The economic news that we do know continues to be positive, for the most part. The Baltic Dry Index continues to gain, up another 244 points overnight. US consumer confidence rose. And while home prices fell 1/2 of 1% in March, they remain 2.3% higher than this time last year. Unitl tomorrow.

  Reports

  Commodity/Economic Articles and Comments

  • Fed Actions Lead to More Money in U.S. Coffers - more
  • Economists React: ‘Who Knows Where We Go From Here’ on Housing - more
  • Summers: The Fiscal Questions Don’t Change, The Answers Do - more
  • CajaSur nationalization shows weakness of Spain’s banks - more
  • America’s amazing success since 1980: Why Krugman is wrong - more
  • Lies, Damned Lies, and Growth - more
  • To Our Lack Of Historical And Critical Perspective -  more
  • Double Dip Recession Now Assured? - more

  Courtesy AISI - In the week ending May 22, 2010, domestic raw steel production was 1,787,000 net tons while the capability utilization rate was 73.9 percent. Production was 1,026,000 tons in the week ending May 22, 2009, while the capability utilization then was 42.8 percent. The current week production represents a 74.2 percent increase from the same period in the previous year. Production for the week ending May 22, 2010 is down 0.6 percent from the previous week ending May 15, 2010 when production was 1,797,000 tons and the rate of capability utilization was 74.3 percent.

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.48/lb lower, with base metals following world equity markets lower. The Euro is trading 1.2% lower against the US Dollar at the moment as European banking concerns plague the market. NYMEX crude futures are down nearly 3-1/2% and under $68/barrel. Gold opened over 1/10 of 1% higher, while silver is down over 1%. In overnight trading, economic concerns and the possibility of a Korean conflict brewing drove Asian markets lower, the S & P Asian 50 Index down 3.85% and China off more than 2%. European markets are taking a beating this morning and US futures are down over 200 points at the moment. Nickel inventories slipped overnight. Looks like another ugly day in store for investors.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Copper prices hit a 10-day high on Monday, this despite the fact that both the Euro and US stocks struggled for most of the day before finally ending lower. In previous commentary, we acknowledged that ultimately, some decoupling could set in between currencies and commodities, as focus shifts away from the Euro and more towards growth prospects. However, we did not view yesterday’s session as being the start of such a divergence, and so are not surprised to see prices losing ground going as we head into today’s session. Simply put, there are still too many imponderables to allow the commodity markets to refocus on positive macro readings, like the better-than-expected US existing home sales data released yesterday. Instead, investors are still fretting about the Euro, which is down sharply again today after the Spanish government took control of a struggling savings bank over the weekend. This morning, we have reports that four more Spanish banks will merge, as regulators push wobbly institutions into the arms of stronger partners. In the meantime, the Italian government will announce public sector spending cuts in a bid to convince markets that the country can handle its high debt load. In the European bond markets, the 10-year yield difference between Spanish and German paper widened to 153 bps, with Italian/German differentials at 136 bps, the widest since the rescue plan was put in place. While all this is going on, geopolitical tensions in the Korean peninsula also have to be viewed with increasing alarm given how unpredictable and paranoid the North Koreans can be. There are unconfirmed reports today that North Korean leader Kim Jong Il told the country’s military to be combat-ready after North Korea was officially blamed for the sinking of a South Korean warship last week. Proposed naval maneuvers between the South Korean and US navies are also being planned, which given the lingering tensions, has the potential to trigger skirmishes. All this is weighing heavily on the Asian equity markets, particularly South Korea’s, where prices were down by almost 5% at one point before closing 2.8% lower. Not surprisingly, commodities have been unable to shrug off the equity-related weakness this time around, with crude off by more than $2/brl and joining metals on the downside. The Euro is trading at $1.2210, close to its recent lows, and US stocks are due to open sharply lower, with opening indications on the Dow futures showing a decline of 200 points. We have been neutral on the metal markets for more than a week now, but are starting to favor the short side once again. For one thing, the inability of the markets to string together any decent gains from generally oversold conditions does not bode well. Neither does the fact that potential buyers are not displaying much confidence in the European stabilization package. In addition, we suspect the Euro has not fallen enough (or has not been allowed to fall far enough) so that it could be in a position to potentially reinvigorate Europe’s export sector. As a result, with the currency’s bottom perceived to be some ways off, markets are not yet in a position to decouple from the falling Euro. ... We are $21,189 on nickel, down $1011. We continue to watch the $20,000 mark, which lies along a key upchannel, and is likely the next level to be tested. (read Ed Meir's complete morning base metals report here)
  • (SMM) Jinchuan Group raised ex-works nickel prices by RMB 2,000/mt to RMB 168,000/mt on May 25th.
  • Chicago Fed National Activity Index Increases in April - more

  Is global nickel market driven by LME stocks? - Nickel prices have remained relatively strong despite the jitters in broader markets in early May, as demand returns from the stainless steel sector and supply disruptions continue. - more

  Imports And Exports Of Nickels By China In March 2010 = Imports Of Nickel Oxide Decreased To Half Of That In February, Exports Of Nickel Metal Reached High Level - According to the customs-statistics released in China, the quantities (on material base) of nickels (nickel metal, ferro-nickel, nickel oxide, nickel matte, nickel powder, and so on) imported and exported by China in March of 2010 were as per the table shown below. - more

  Govt probes steel dumping by EU, US - The government has initiated a probe into the alleged dumping of certain stainless steel products consumed by auto-component, building and fabrication industries, by the EU, Korea, South Africa, Taiwan and USA. - more

  Minara Will Look Offshore Because Of Australia Mining Tax - Nickel producer Minara Resources Ltd. on Tuesday raised the possibility of looking overseas for its new projects because of increased risks in Australia from the Government's proposed mining tax. - more

  • Australia miners suffer setback in anti-tax campaign - Australian miners suffered a setback in their campaign against the nation's proposed new mining tax on Tuesday, with two constitutional experts saying that a threatened court challenge was likely to fail. - more
  • China will prosper under mining tax, says Fortescue Metals boss Andrew Forrest - Chinese mining copies will gobble up Australian assets as a result of the Rudd Government's super-profits tax, Fortescue Metals boss Andrew Forrest says. - more

  POSCO signs preliminary deal to buy Daewoo Int'l - - South Korea's POSCO said on Tuesday it had signed a preliminary agreement to buy Daewoo International (047050.KS), in what could become its biggest acquisition to date as the steelmaker looks to secure raw materials and boost overseas sales. - more

  Ansteel to bring Pangang under its umbrella - Anshan Iron and Steel Group (Ansteel) has received approval from the State-owned Asset Supervision and Administration Commission to bring Pangang Group under its fold, a source familiar with the matter said on Monday. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, May 24

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 99 to 3,943. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Hu Tells U.S. China Will Move Gradually, Independently on Changes to Yuan // Reliance Stocks Surge in Mumbai After Billionaire Ambanis Seek `Harmony' // Selling Euros for Kiwis Enables Traders to Find Yield at Merkel's Backdoor // Hong Kong Sells Fanling Area Land Site for Less Than Analysts Had Expected // Libor Shows Strains, Sales Evaporate, Yield Premiums Soar: Credit Markets // Euro Falls Against Higher-Yielding Currencies on Renewed Growth Concerns // Britons' Pessimism on Personal Finances Deepens as U.K. Budget Cuts Loom // HSBC Shares Suffer Euro Collapse as Greek Debts Roil Bank Stock Valuations // European Stocks Rebound From Six-Month Low; Rio Tinto Leads Mining Rally // Recovery in U.S. Accelerates as Revised Estimates Signal 3.2% Growth Rate // Strippers Declare Inflation Dead as Dealers Revive Zero-Coupon Treasuries // Whitworth Says Volatility at One-Year High Shows Stocks `Not Out of Woods' // Existing-Home Purchases in U.S. Gain; Inventory Growth May Pressure Prices // Fed Tells Congress Asset Sales Will Come Only After Interest Rates Raised // U.S. Stocks Fluctuate as Concern Over Europe Debt Tempered by Apple Rally
  • The US Dollar is trading 1-1/4% higher against the Euro. NYMEX crude is trading over 4/10 of 1% higher and oil is back over $70/barrel. Gold is trading over 1/5% higher with silver up 2-1/3%. Base metals shrugged off the lower Euro today, with traders in a bargain hunting mood. Indicator charts show nickel started higher, fell as the Euro's fall pressured, then went on a positive run. The Dow Jones reports three month nickel ended the day at $10.07/lb . Inventories of nickel resumed their declining ways over the weekend and now sit just under the 138,600 tonne level. Sucden finally updated their day old nickel trading chart which shows LME trading thru Friday (chart here). The Russian port of Dudinka, the only port Norilsk uses to export nickel thru, has been shutdown for annual flooding, so we could see nickel's consistently dropping inventory numbers continue to do so. China's largest nickel producer Jinchuan, announced it is shutting down its nickel flash smelter for the next four and half months for repairs. This could prove beneficial to pig nickel producers, as well as importers of refined nickel. In another piece of positive news for traders, the China Times reported over the weekend, that the National Development and Reform Commission (NDRC), would not be unveiling any tougher new rules or increasing interest rates in the immediate future. This is seen as China backing off from making further attempts at slowing down their economy, with the crisis in Europe apparently raising those concerns already.

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) Russia produced 26,139 metric tons of stainless steel roll in January to March, up 108.3% on the year, the national association of special steels producers, Spetsstal, said Monday.
  • (Macquarie Research) - While we acknowledge that sentiment has turned down, we have not heard anything that fundamentally changes our view on China steel. A slowdown in construction activity was already built in to our numbers and a clean out of inventory and potential for a slow down in production into Q3 should help to set the market up for a recovery towards the back of this year.
  •  Number of the Week: 75% Chance of Greek Default - more
  • The Fissures Are Widening in the Spanish Banking System - more
  • Low Quality Rally Unwind - more
  • Unemployment Rates, by State: Most Regions Register Improvement - more
  • Government Spending and Economic Expansions - more
  • The Old Enemies - more

  Russia's Norilsk halts port for seasonal flood - Russian miner Norilsk Nickel said on Monday it had suspended shipments from its Arctic port of Dudinka ahead of an annual flooding of the port. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.15/lb higher, with other base metals mixed but nearly all slipping. The Euro is getting hammered again today, trading over 1-1/2% lower against the US Dollar. NYMEX crude futures are down 1/3 of 1% and under $70/barrel again. Gold is trading over 1/2 of 1% higher while silver is higher by the same. In overnight trading, Asian markets ended higher, with China up over 3-3/4%. European markets are trading lower this morning, those that are opened, and US futures are lower at the moment. Nickel inventories fell. Norilsk announced the port of Dudinka has been closed for the annual spring flooding, and Jinchuan, China's biggest nickel producer, announced it will shut down its flash smelter for 4-1/2 months for repairs. Considering the serious drop in the Euro this morning, these two tidbits of news are helping nickel show strength.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Copper rallied sharply on Friday, as a rebound in US equities and further gains in the Euro helped stabilize the metals complex. However, the underlying bearish sentiment was still very much on display, as a number of intraday rallies were rolled back before the last one stuck. With regard to today's action, we continued to build on Friday's gains early in the day, with copper even getting to a high of $6935 in early Asian trading. However, prices have since turned, with both copper and ali now modestly lower, while the rest of the group is up a tad. The mixed tone has come about on account of a weaker Euro, which receded sharply from an intraday high of just under $1.26 to currently trade at $1.2370. Investors remain concerned about the fragility of the European currency, this after the Spanish government took control of CajaSur, a struggling savings bank over the weekend. In addition, there is talk by Spanish unions that they may call a general strike to protest government budget cuts. More of a concern, is whether the Euro crisis will result in substantially slower European growth which, in turn, could affect prospects in both the US and China. Although we have our doubts that this will occur given what we expect to be a substantial rise in European exports in the months ahead, markets do not seem to be coming around to this view, focusing instead on the possibility of a serious retrenchment in European demand amid tight fiscal conditions. We continue to advocate a neutral trading stance for the time being in the metal markets. Granted, most markets are due for a bounce from oversold conditions, and despite the Euro's weakness today, the currency is far more stable than it has been in some time given the stabilization package that is now in place. However, we would not necessarily want to test these notions by going long just yet, as we have yet to see prices maintaining rallies longer than a day or so. Moreover, given how nervous investors are, the possibility of a negative surprise could easily reignite the selling. ..... We are $21,718 on nickel, up $368. Our longer- term charts show that nickel is the only metal (along with tin) that has managed to hold on to its upchannel marked by the solid red line without suffering a breach (as copper has). The $20,000 mark is key support. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) The Russian port of Dudinka, OAO Norilsk Nickels' only export outlet, closed its winter navigation May 21, with the opening of the summer navigation is expected on June 25-27, the port authority said Monday.
  • (Dow Jones) Jinchuan Group Co., the world's fourth-largest nickel producer by output, is suspending its nickel flash smelter for 140 days from Tuesday for repair, the company said on its website Sunday. The company still intends to produce 130,000 metric tons of nickel this year despite the relatively lengthy suspension, it said.
  • (Interfax) China's imports of refined lead, zinc and tin dropped on an annual basis, while imports of refined nickel rose, in the first four months of 2010, according to figures released by the General Administration of Customs (GAC) on May 21.
  • (JC) JSL Limited has filed an application before the Designated Authority in accordance with the Customs Tariff Act, 1975 as amended in 1995 and Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on dumped articles and for determination of injury) Rules, 1995 for initiation of anti dumping investigation concerning alleged dumping of Hot Rolled Flat Products of Stainless Steel of ASTM Grade 304 with all its variants originating in or exported from European Union, Korea, South Africa, Taiwan and USA.
  • China's stocks rise most in six months as economy concern wanes - more
  • Fed Declares U.S. Economic Slack To Be 'Quite Elevated' - more

  Price Of Ni-Based Stainless Scrap In Japan Has Weakened And May Break Level Of Yen 200,000 / Ton = Rebounded On 2nd Half Last Week, Various Movements Are Seen As A Further Fall Will Be Inevitable - Domestic price of nickel-based stainless steel scrap (new clippings) in Japan are being shaken by a fall of nickel price. An atmosphere of the scrap market in this week has completely changed in comparison with that in last week. - more

  China's Imports of Nickel Ore Increase Significantly in April - According to data from China Customs, China's imports of nickel ore in April were 1.85 million mt, up 12.94% MoM, and up 72.11% YoY. - more

  China's ten biggest steel producers - China's steel industry is the biggest in the world, producing 45.7 percent of global output from January to April and importing a record 210 million tonnes of iron ore over the same period. - more

  Manitoba nickel miners enjoy bonus cheques - Nickel miner Vale Inco is giving bonus cheques to workers at its Thompson Manitoba operation, while unionized workers remain on strike in Sudbury. - more

  S.Africa transport strike enters 3rd week, hits ports - Members of the biggest trade union at South African logistics group Transnet ended a strike on Monday, but the stoppage which has hit ports and railways dragged on after a smaller union rejected a revised pay deal. - more

  Mining tax uncertainty hit Australian dollar, says Albanese - Rio Tinto chief executive Tom Albanese said today the Rudd government's proposed super tax on mining profits was its biggest sovereign risk and the uncertainty over the tax had hurt the Australian dollar. - more

  • Australian treasurer rebuts mining tax "myths" - Australian Treasurer Wayne Swan on Sunday described as "myths" claims a planned new 40 percent tax on mining profits would hit investment or push up domestic prices. - more

   The Specialty Steel Industry of North America (“SSINA”) has released statistical data on imports, U.S. consumption, and import penetration for January 2010. - pdf here

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, May 21

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 41 to 3,844. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Asian Stocks, Oil Drop on U.S. Growth Concern, Europe Debt Crisis; Euro Rallies // U.K. Posts Record April Deficit of $14.4 Billion as Emergency Budget Looms // Euro Touches One-Week High Before European Union Meets to Fix Debt Crisis // Spain Approves First Public Wage Cuts Since 1970s to Cut Budget Deficit //
  • Senate Passes Reforms Designed to Prevent Worst U.S. Collapse Since 1930s // U.S., Europe Equity Funds Lose $12 Billion in Week Amid Crisis, EPFR Says // Wells Fargo Bailout Warrants Said to Bring $849 Million at U.S. Auction // European Stocks Drop to Six-Month Low; TrygVesta, BP, Porsche Lead Slide // Global Stock Rout Halts as U.S. Banks, Euro Climb on View Selloff Overdone // Employment Increased in 38 U.S. States in April, Led by Ohio, Pennsylvania // David Rosenberg Sees S&P 500 Dropping Below 950 in Fibonacci Retracement // DLJ Holds a Reunion as Blackstone's James Lashes Out at `Individual Greed'
  • The Euro is trading nearly 6/10 of 1% higher against the US Dollar at the moment. NYMEX crude is down 2/3 0f 1% and back over $780/barrel. Gold is down 1/2 of 1% and silver is higher by nearly;y 1/4 of 1%. Base metals ended the session higher, thanks to some strength in the Euro. Indicator chart show nickel fell early, but rose steadily as the Euro strengthened, and quieted as the Euro did the same. Dow Jones reports three month nickel ended the day and week at $9.68/lb , down 1% for the week. For the first time in 13 trading sessions, and only the second time this month, inventories of nickel stored in LME approved warehouses rose overnight and now sit just over the 139,500 tonne level. Cancelled warrants rose over 3%. After falling four consecutive days, the Baltic Dry Index rose 41 points overnight. Wall Street is higher at the moment, but at this point it is hard to tell if it's a bottoming of a bear market, a mid-correction retracement, or just a dead cat bounce. Thankfully, it's Friday once again and we wish all of our readers a restful and safe weekend!

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) A strike that has paralyzed South Africa's ports and freight rail network is set to drag on into a third week after a labor union Friday rejected a revised pay offer that has been accepted by members of a larger union.
  • A Look Inside the Fed’s Balance Sheet - more
  • Gross Federal Debt as % of GDP - graph here
  • Europe Events Create New Uncertainties For Fed Outlook - more
  • Fed’s Tarullo: Europe’s Debt Crisis Poses Risks To U.S. - more
  • Lost Decade Looming? - more
  • "More on the European Impact" - more
  • Should we get rid of deposit insurance? - more

  Time to sink your pennies into nickel? - Fundamentals behind soaring prices - If you lived through the Great Depression, you’d likely remember the song: “Brother, Can You Spare a Dime?” - more

  Global steel output hit record in Jan-April - Global crude steel production jumped by 31.8% year-on-year in the first four months of the year to 467.8 million tonne, figures from the World Steel Association showed on Thursday. - more

  China's Shagang cuts steel prices by 6 pct for late May - The Jiangsu Shagang Group, China's biggest private steel mill, has slashed steel prices by over 6 percent for late May, market traders said. - more

  Heavy metal inputs polluting Ganga river: Study - Atmospheric deposition of heavy metals emitted from vehicles and presence of industrial units adjoining the Ganges is adding to the pollution load on the river, researchers have found. - more

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

  • Indicators at 7:15 am CST show 3 month nickel trading around $.05/lb higher but volatile, with other base metals also trading in the green this morning. The Euro is presently trading 1/3 of 1% higher against the US Dollar, giving commodity trading some upward momentum for a change. NYMEX crude futures are down more than 1% and just over the $70/barrel level. Gold is down nearly 1/10 of 1% and silver is trading higher by nearly 3/10 of 1%. Asian markets ended slightly lower overnight with China up nearly 1/6%. European markets are trading lower, and US futures show Wall Street might also open lower. Nickel inventories actually rose overnight.    
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Copper managed to hold on to a modest gain yesterday, while other metals finished mixed in what had to be considered a fairly respectable performance given that both the oil and global equity markets ended sharply lower. The US stock market had a particularly bad day, with the Dow losing almost 376 points, while the Standard & Poor's 500 index is now down almost 12% from its 2010 high; another 8% drop from here would formally push it into bear market territory. Other commodity markets also took it on the chin on Thursday, with the Reuters-Jefferies CRB index slumping to an 8-1/2 month low. For a change, the Euro did not figure prominently in Thursday's weaker tone, as it strengthened on the day and even got to a high of $1.2598 at one point on rumors of central bank intervention by the Swiss, who are desperately trying to reign in a soaring Swiss franc. However, the future direction of the euro -- and even its viability -- remains an open question, and continues to weigh on the markets even when the currency has a good day.  Metals are generally higher as of this writing, but crude oil markets have given up earlier gains and are now off by about $1.40 a barrel. Asian stock markets finished weaker, and European bourses are slightly higher after a key German vote on the massive EU rescue package just passed. US stock futures are showing slight gains as of this writing, but in light of yesterday’s steep drop, the mood remains tentative. In fact, the US equity market seems to be ignoring any relatively good news (likely the stabilizing euro), while focusing on intangibles, such as the possibility of slowing growth or expanding contagion out of Europe. Some equity technicians are saying that with major indices approaching last week's lows, we could be in store for a temporary bounce off the bottom of the trading range. If this were to happen, we could easily see spillover buying come into the commodity space. However, if we plow through these support levels, we see no reason why the sell-off in commodities will not intensify even further from here given how interlinked everything seems to be these days. ... We are $21,200 on nickel, unchanged, and very quiet today; the $20,000 psychological support level seems to be holding for now.  (read Ed Meir's complete morning base metals report here)
  • (Interfax) China's crude steel output in April stood at 55.4 million tons, accounting for 45.54 percent of the world's total, according to a World Steel Association (WSA) announcement on May 20. This is a slight drop from February's figure of 46.83 percent.
  • Sovereign funds flirt with commodities - more
  • (SBB) Chinese stainless prices dive but nobody's buying
  • Conference Board Leading Economic Index Slides in April - more
  • Cass Freight Index - April's freight expenditures and shipments both increased from the previous month's activity. This is the third month in a row that both indices have increased over the previous month?s activity.

  Sherritt sees Jan 2011 Ambatovy completion - Sherritt International will have its 40 percent-owned Ambatovy nickel mine in Madagascar completed by early January 2011, despite problems completing the operations's power plant, the company's chief executive said on Thursday. - more

  Price Of Chrome Ore For China In 2nd Half 2010 Is Inevitable To Rise = A Leading Chrome Mine In Turkey Puts Brake On Sales To China - A major chrome mine in Turkey has decided to put the brake on their sales of chrome ore for shipments in the second half (July - December) of 2010 and, therefore, the price of chrome ore for China is anticipated to rise. - more

  SAfrica transport unions seem split over wage deal - A South African transport strike that has crippled rail and port operations may drag on after unions appeared to diverge over whether to accept a proposed wage deal by logistics group Transnet. - more

  Resource tax revamp soon - China is planning to alter the taxation structure on the profits that companies make from energy products on a trial basis in Xinjiang, participants at the Xinjiang work conference said on Thursday. - more

  POSCO's Chung likes to talk, now he's listening, too - Chung Joon-yang, CEO of POSCO, the world's fourth-largest steelmaker, likes to talk -- to employees, clients and, unusually for corporate South Korea, to rivals. - more

  Northern European steel prices to peak soon - Flat products prices in Northern Europe continue to soar but are still being driven by raw material costs rather than by underlying demand. - more

  London Olympics mascots: formed from droplets of steel - The two mascots of the 2012 London Olympics were fashioned from droplets of steel, according to the story of their beginnings.  - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  • About 3,050 hourly rated production and maintenance workers, members of United Steelworkers Local 6500, have been on strike since July 13. Another 130 USW Local 6200 members in Port Colborne are also on strike. About 450 members of USW Local 9508 in Voisey's Bay have been on strike since Aug. 1.
  • Sudbury Star // Northern Life.ca
  • Vale/Inco offer // Vale/Inco Company Site
  • Union Strike Site //  USW  Local 6500
  • Sudbury Northern Life Videos
  • Mediator, Steelworkers ready to for talks, union says - Talks between United Steelworkers Local 6500 and Vale Inco have been tentatively scheduled for June 4 to 7 in Toronto with mediator Kevin Burkett, the union says. - more
  • Vale-Inco strike now longest in Sudbury Basin history - The longest industrial dispute in over 100 years of mining operations in the Sudbury Basin, Canada, is still underway. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, May 20

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 29 to 3,803. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Japan Economy Grows Less Than Estimated, Putting Pressure on Central Bank // `Bubble' in Taipei Home Prices Raises Risks for Investors After 29% Rally // Bangkok Fire Ravages Central Pattana's $280 Million Mall After Crackdown // Taiwan Outpaces China as Growth Reaches Fastest Pace in More Than 30 Years // Asia Stocks, Euro Drop on Japan Economy, Europe Debt; Commodities Rebound // Europe Crisis in Rescue for Greece Bringing Euro to a New Normal of $1.10 // Euro Nears `Historical Milestone,' May Drop to $1.16, Bank of America Says // U.K. Retail Sales Rose for a Third Month in April, Led by Clothing Demand // `Complex Prime' Is The New Subprime for Struggling U.K. Mortgage Borrowers // Euro Declines on Concern Europe Divided in Wake of German Short-Sale Ban // Stocks in Europe Dive Amid Split Over Response to Crisis; Rio Tinto Slides // Idle Capacity in U.S. Economy Keeps Fed From Rushing to Sell Mortgage Debt // Sweet Spot Found in Longest Maturities as Inflation Falls: Credit Markets // Leading Indicators Decline in Sign U.S. Recovery May Cool in Second Half // U.S. Stocks Drop as Jobless Claims Rise; S&P 500 Falls 10% From 2010 High
  • The Euro is currently trading nearly 6/10 of 1% lower against the US Dollar. NYMEX crude oil is down 5% and under $66.50/barrel. Gold is down more than 1/2 of 1% as investors race for cash, and silver is off 3%. And while copper actually pulled off a slight gain today, the rest of the base metals got hit. Indicator charts show nickel started off higher and in the green this morning, but fell hard with the Euro. The range of today's trading was over $.50/lb. Dow Jones reports three month nickel ended the day at $9.60/lb and fell further in after hours trading.  Inventories of nickel stored in LME approved warehouses continue to recede, and now show just under the 138,900 tonne level. Cancelled warrants remain under 3%. Sucden has not updated their nickel chart in a week now, which explains why we are not linking to it. Our analysis of Chinese online media reports tell us not that only is nickel pricing falling in China, but that sales of ferrochrome and molybdenum are weak, and that stainless steel prices have fallen dramatically. The China stainless steel index we follow, shows stainless steel prices peaked on April 21st at 118.92, and today are reading 105.64. That is a level we have not seen since mid January. Some, if not much of this, will be caused by the sudden slowdown in purchasing we typically see when nickel prices get volatile and make a major move downwards. No one likes to get stuck with overpriced nickel - or stainless steel. But this also could be a reflection of the rumors of an overall slowdown there that we keep hearing about. World markets are entering one of those extremely nervous stages that comes periodically after a recovery begins. Not everyone is convinced a bed of roses lays ahead, and after an especially nasty downturn, even the bulls are walking lightly. Equity markets are in a correction, pushed that way by the financial situation in Europe. Initially markets were worried the sovereign debt problem would become contagious and spread like the flu, now they are concerned of any economic slowdown in Europe spreading. And while most official and unofficial reports show the economy is struggling to its feet again, there are those firmly in the bear camp that will not be convinced. One of these, Richard Russell, the editor of the Dow Theory Letters reportedly wrote this past weekend "Do your friends a favor. Tell them to 'batten down the hatches' because there's a hard rain coming. Tell them to get out of debt and sell anything they can sell (and don't need) in order to get liquid. Tell them that Richard Russell says that by the end of this year they won't recognize the country." Wall Street was already in trouble this morning with futures showing a negative opening, but the nail in the day's coffin appeared to be sealed when the Labor Department reported weekly jobless claims jumped by 25,000. Ian Shepherdson of High Frequency Economics probably said it best when he wrote "This is horrible". Dow is down 286 points at the moment, but off session lows. Very ugly day.

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) The Baltic Exchange is developing a new multiple parties trading platform for dry bulk forward freight agreements as it strives to keep one step ahead of its rivals and keep regulatory and consumer pressures at bay, its Chief Executive said Thursday.
  • Mindoro Agata Project Drilling Intersects Thick, High-Grade Nickel Laterite - more
  • China's cookie is finally crumbling - more
  • China: Time to Admit To, Then Douse, Our Inflation Fire - more
  • Financial lobbying: attacking public interest - more
  • Germany’s Short Selling Bans: Prudence, Populism or Bank Protection? - more
  • Bangkok Now, Who's Next? - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.13/lb lower, with most base metals trading lower at the moment. Nickel was trading higher this morning, but the Euro has recently taken another dive, now trading 7/10 of 1% lower against the US Dollar, and nickel has followed. NYMEX crude futures are down 2.2% and at $68.33/barrel. Gold is trading nearly 1% lower, and silver is down over 2.6%. In overnight trading, Asian markets ended lower, with China off 1.3%. European markets are trading lower this morning, and US futures are showing over 100 points lower at the moment. Nickel inventories fell overnight.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Metals fell again on Wednesday, but losses were rolled back as the euro rebounded from a four-year low against the dollar. There was not much new in the other markets either, as the selling continued in both US equities and in crude oil, although the intensity of the declines seems to be leveling off. We are seeing mixed signals today; copper is up, but the rest of the metals are flat on the day. However, crude oil markets are struggling, off by about $1/brl, and the Euro is slightly weaker again, now trading at $.12370 after getting over $1.24 at one point yesterday. We do not have much to add to what we have been writing in previous commentary. Although metals look battered on the charts, they are quite oversold, and have yet to stage a long overdue technical bounce. The problem is that as long as the market defers such a move, the more likely it will be that we could see another leg lower. The next few days should be key. ... We are $21,100 on nickel, down $200, and very quiet today, with only a $300 trading range in place. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) Vale Inco and the United Steelworkers Union will meet May 25-26 to try and bring an end to the strikes at the primarily nickel operations in Newfoundland and Labrador, Canada, Vale said late Wednesday.
  • (Bloomberg) Jindal Steel & Power Ltd. said it will buy Shadeed Iron & Steel Co. of Oman for $464 million, including debt, in the third-biggest global purchase by an Indian steelmaker.
  • (Yieh) According to the statistics, Japan imported 12,667 tons of stainless steel scrap in March, dropping by 21.6 percent than 16,167 tons in February.
  • (CM) China - The State Bureau of Materials Reserve plans to hold an auction on May 20 to sell 27,000 tons of steel products as national reserves sourced from the overseas market in the 1980-90s. Analysts are a little surprised by the decision because steel prices are falling and there is still room for the prices to further dip. They note producers are reacting to the present lacklustre market by lowering their prices. Some small mills are either running in losses or being pulled out of their businesses.
  • (MP) Today was the first day of cash trading for the new exchange minor metals, cobalt and molybdenum, on the London Metal Exchange, with the first prompt date on 21 May. The move to cash trading is seen as a big step for the exchange, which should bring it more in relevance with the physical spot market.
  • (CRU) China's stainless steel prices plunge sharply - Japanese steel consumption returns to pre-crisis levels
  • (MW) Russian coal miner Raspadskaya declared on Wednesday force-majeure to main customers and said coking coal concentrate sales would plunge after a mine blast that killed at least 66 miners earlier this month.
  • Cargo throughput rises for China's large ports - more
  • (SM) According to the American Forest & Paper Association's April 2010 U.S. Paperboard Report released Tuesday, total Boxboard production was 846.5 thousand tons, an increase of 8.3% over April 2009, and 1.1% from last month.

  Market Tendency On Imports Of Ferro-Alloys At 14th May 2010 = Strikes In South Africa Gone On By Unions Of Railway And Harbors Cause To Shake FeCr Supply - The market tendency by item on imports of ferro-alloys into Japan at the 14th May of 2010 is as follows - more

  Mining Tax ‘Contagion’ Set to Spread From Australia - Australia’s planned 40 percent tax on mining profits has set a benchmark for other countries weighing higher levies, reducing earnings forecasts for BHP Billiton Ltd. and Rio Tinto Group and the attraction of mining stocks. - more

  China Nonferrous To Start Myanmar Nickel Project Operations Mid-2011 - China Nonferrous Metal Mining Group Co. will start operations at its nickel mining project at Tagaung Taung, Myanmar in mid-2011, a company official said Thursday. - more

  Visa Steel plans unit in Chhattisgarh - Visa Steel, which has a joint venture with BaoSteel Resources of China for setting up a ferrochrome project in Orissa, is exploring other opportunities also, Chairman V. Saran said. - more

  EU average steel price up €55 per tonne but close to peak - The mills are talking up third quarter prices for strip mill products but firm negotiations are not yet underway. - more

  S.African transport union says strike may end Thurs - The biggest union at South African logistics group Transnet said most of its members favoured a proposed pay deal, and an agreement may be signed on Thursday ending a strike that paralysed rail and port traffic. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, May 19

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 50 to 3,832. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Japan's Economic Recovery May Offer Hatoyama Room to Rein in Biggest Debt // Treasuries, Australian, Japanese Bonds Advance as Euro Drives Safety Bid // Australia Consumer Confidence Falls Most in 19 Months After Rate Increases // Thai Turmoil May Drive Out Foreign Investors, Weakening Baht, Fitch Says // Stocks, Commodities Fall as Euro Hits Four-Year Low on German Trading Ban // Germany Fails to Get Other Nations to Join in Its Naked Short Selling Ban // Sovereign Debt Crisis Triggers `Lehman II' Speculation for Europe's Banks // Brevan Howard Opens Its $200 Million Commodities Fund to Outside Investors // European Stocks Tumble as Germany Introduces Unilateral Short-Selling Ban // Goldman Sachs Hands Clients Losses as Seven of Nine `Top' Trade Ideas Flop // Roubini Says U.S. May Fall Victim to Bond `Vigilantes' Within Three Years // Deere Profit Beats Analysts' Estimates on Growing Demand for Farm Machines // Mortgage Foreclosures in U.S. Rise to Record as Job Losses Strain Budgets  // U.S. Stocks Drop on Record Mortgage Foreclosures, Germany's Trading Limits
  • The Euro did spike this morning, and is now trading over 1% higher against the US Dollar, but off session highs. NYMEX crude oil is trading over 1.1% lower and at $68.63/barrel. Gold is off 2-1/2% and silver is down nearly 4-1/2%. Base metals ended lower. Indicator charts show nickel opened much lower, headed down, then back to about where it started, albeit much lower. Even the Euro strength could not seem to help nickel today. Dow Jones reports three month nickel ended the day at $9.66/lb , lower than yesterday but still higher than Monday's close. Inventories of nickel stored in LME warehouses fell for the ninth consecutive time overnight, and now sit just over the 139,300 tonne level. The Baltic Dry Index, after rising 8 straight day from 3352 to 3929, has now fallen 3 consecutive day to 3832. Standard Chartered wrote today "The correction in commodity prices over the past two weeks is a timely reminder of the role sentiment and currency moves have in driving commodity markets." BMO Capital Markets wrote "Evidence of decent and sustainable economic performance in the U.S., China and Europe will be the needed catalyst to move base metals materially higher, if this sovereign debt crisis does not evolve into a  full-blown financial crisis." And with that cheery prospect, we leave you.

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) Several Chinese metals and mining companies have submitted objections to China's economic planner and the Ministry of Commerce against Australia's proposed "super tax," the 21st Century Business Herald reported Wednesday, citing unnamed sources.
  • (FT) That Cuba is no longer a one-crop economy deserves applause. The export of medical and other technical services accounts for more revenues than all other sources combined, followed by tourism, nickel, refined oil products and pharmaceuticals. But the near destruction of the sugar industry was never part of the plan.
  • (TMT) Port queues grew longer in China last week - counted 49 Capesizes in the main iron ore and coal ports, up by 10 from a week earlier. .... we now expect to head into a softer period, with queues expected to come off as a result of reduced activity level.
  • Manufacturers' group sees 2010-2011 U.S. economic growth - more
  • Home Defaults Decline in April; Credit-Card Defaults Up - more
  • Politicians ignore Keynes at their peril - more
  • Fed’s Pianalto: No Need to Raise Rates Soon - more
  • Study: Bonuses Entice Cheating - more
  • The Shape of Things to Come - more
  • Fighting the wrong enemy - more
  • CDS update; May 18th - more
  • Asia: The Challenge of Capital Inflows - more
  • AIA: Architecture Billings Index shows less Contraction in April - more

   Carlo Tassara will not sell Eramet stake - Eramet shareholder Carlo Tassara France rules out a sale of its stake in the French mining company despite an ongoing conflict with its board, chairman Jean-Francois Saglio said on Tuesday. - more

  Metals rises aid Glencore's "solid start" to year - Glencore International AG , the trading and mining giant that is Xstrata Plc's biggest shareholder, said it enjoyed a solid start to the year, as it sold copper, zinc and nickel at higher prices. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.41/lb , but gaining back earlier losses, with all base metals trading lower. Base metals are reacting to the deep drop the Euro took late yesterday after Germany announced a ban on naked short selling. This action hit the US markets yesterday, but European markets were already closed, and are thus reacting today. The Euro is currently trading 1/10 of 1% higher against the US Dollar. NYMEX crude futures are down 1-3/4% and at $68.21/barrel. Gold opened 1-1/2% lower and silver opened over 2-1/2% lower. In overnight trading Asian markets ended lower with China off 1/3 of 1%. European markets are trading lower at teh moment, and US futures show Wall Street might open lower. Nickel inventories continued their fall overnight. Looks like another volatile day.    
  • Bloomberg morning base metal news - more

  Oil, Metals Slump After Germany Imposes Naked Short-Selling Ban - Commodity prices dropped to a 10- month low, led by energy and metals, as Germany’s ban on some speculative sales heightened concerns that debts in Europe will slow economic growth and curb demand for raw materials. - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - We had a relatively predictable technical bounce in the metals markets early on Tuesday, with copper recouping more than half its previous day’s losses and leading the rest of the metals higher. A brief rise in the euro allowed some buying to take hold early on, but the advance was short-lived once the Euro reversed course and faded to a fresh four-year low of $1.2160. Moves by Germany to ban naked short-selling of some securities, including the stocks of its 10 most important financial institutions and some credit swaps, was also said to have contributed to the unease yesterday (although we should recall that the US authorities did the same thing in 2008 with some notable effect). Equity markets also fell yesterday, as did crude oil prices, which shed more than $2/brl in gains to finish lower. Metals did not retreat as much yesterday, but prices are catching up today, with the group broadly lower following another modest sell-off in Shanghai. In other markets right now, the Euro is actually up slightly, trading at just under $1.22, but crude oil markets are off by about $.80, while US stocks are expected to open slightly lower. From the looks of things, we should have another volatile day in store for us. A few comments on the Euro: The ECB has been watching the euro’s decline rather indifferently, and we think this has been the right thing to do so far. The sooner the euro finds its new equilibrium level (likely between $1.10-$1.17) the more effective any intervention by the ECB would be --should it choose to undertake it. Moreover, at lower Euro valuations, shorts would be looking to cover positions more readily after what has undoubtedly been a spectacular run. Most importantly, the weaker Euro does have its benefits, although that does not seem to be readily apparent given the recent bloodbath in the markets. For one thing, a lower Euro has the potential to turbo-charge exports out of Europe, particularly out of Germany, long the world’s powerhouse in this regard. Some investors are already coming around to that notion. We note, for example, that Daimler’s stock has actually gained value over the last week likely on perceptions that the Euro’s decline could be beneficial to the company. Despite the weaker tone seen in metals today, we reiterate our view expressed in earlier commentary, namely that the markets are extremely volatile here, and do not lend themselves to directional position taking. (However, given the big price swings, day trading-- for those who are so inclined-- may be another story). Neither are we comfortable staying outright short, as many markets are extremely oversold, and vulnerable to a rather sharp snap-back. We suspect such a reversal could set in once investors move away from the notion of equating a weaker Euro with slower growth, or worse, a double-dip global recession. However, as we wait for perceptions on the Euro to turn, one wild card remains China; should we see any signs of decelerating growth here, commodity prices could start another second leg lower. For all these reasons, it is best to watch the action from the sidelines for now...... We are $21,150 on nickel, down $1000, and getting close to key $20,000 support. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) The world nickel market was in a surplus of 11,000 metric tons in January to March, the World Bureau of Metal Statistics said Wednesday. World nickel production was 339,400 tons, and consumption was 328,800 tons, up 22% compared with the same period a year ago.   The WBMS said it had rounded up the actual surplus of 10,600 tons to 11,000 tons in its report.
  • (Dow Jones) China Jinchuan Cuts Refined Nickel Price By 6% To CNY166,000/Ton
  • (Interfax) China Minmetals Corp., the country's largest metals trader, has entered an agreement with Hunan Province's Chenzhou municipal government to jointly explore and develop nonferrous metals resources in Chenzhou City, Hunan Province.
  • Soaring Base Metals Stockpiles - more
  • US National Debt as % of GDP - graph here

  U.S. Nickel Premiums Rise to at Least 14-Year High, CRU Says - U.S. steelmakers are paying the highest premium for nickel in at least 14 years as a strike by Vale SA workers in Canada curbs supply, according to CRU Group. - more

  April Service Center Metal Shipments Maintain Momentum -  Shipments of steel and aluminum from metals service centers in the United States and Canada in April maintained the upward momentum that has been building this year, the Metals Activity Report from the Metals Service Center Institute shows. - more

  S.Africa transport union reaches deal with Transnet - A South African transport union has reached a deal over wages with logistics group Transnet, which if accepted by members will end a strike that paralysed rail and port traffic, an official said on Wednesday. - more

  Urals Nickel to Build First Russian Plant Since Soviet Collapse - OOO Urals Nickel, a closely held Russian mining company, plans to build the country’s first new nickel plant since the collapse of the Soviet Union in 1991, putting in equipment that may cut output costs by two-thirds. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 18

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 40 to 3,882. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Mitsubishi UFJ Fourth-Quarter Profit Beats Estimates on Investment Gains // Thai Riots Empty Bangkok Luxury Hotels, Ravaging Nation's Tourist Industry // China Sees Inflation Quickening This Month to 3% `Trigger' Point for Rates // Asian Stocks, U.S. Futures, Copper Advance; Euro Trades Close to Four-Year Low // Inflation in U.K. Accelerates Faster Than Forecast to Reach 17-Month High // Euro Crisis Isn't Over as Greece Is Still `Tip of Iceberg,' Roubini Says // Finance Chiefs Back Tougher European Regulations for Hedge-Fund Managers // German Investor Confidence Declined in May as Debt, Euro Crisis Deepened // Papaconstantinou Sees Greek Borrowing as Deficit Reduced, Aid Cash Arrives //  European Stocks Climb; British Land, Electrolux, Delhaize Shares Advance // Junk Bonds' Weakest Creditor Protection Since '07 Doesn't Deter New Issues // Housing Starts in U.S. Jump, Wholesale Prices Fall as Recovery Strengthens // U.S. Bond Sales Revive as Europe Contagion Concern Recedes: Credit Markets
  • The Euro in now trading nearly 3/10 of 1% lower against the US Dollar. NYMEX crude is up 2% and at $71.50/barrel, slipping in price as the Euro did. Gold is down 3/4 of 1% and correcting while silver is up 1/4 of 1%. Base metals ended the session higher, the Euro's turnaround coming too late to damper metals sentiment. Indicator charts show nickel rose throughout the day, with setbacks only lasting momentarily, and even shrugged of the sudden turnaround in the Euro. It did not show losing any gas until it rose over the $10/lb mark late in the session. Dow Jones reports three month nickel ended the day at $10.04/lb . Inventories of nickel stored in LME approved warehouses continue to fall daily, and now register just under the 140,000 tonne level.  Cancelled warrants remain under 3%. Numerous reports out this morning, but the one we found to be most interesting was Wal-Mart's report that its same store sales were down 1.1% excluding fuel.  Considering these same sales rose 3.7% in 2009, it would be interesting to know if this is being caused by any general slowdown in consumer spending, or wealthier clients returning to more up scale stores. New housing starts rose and new housing permits fell, telling us the uncertain housing picture will remain so for some time longer. The International Stainless Steel Forum  reported world stainless steel output rose to 7.47 million metric tonnes in the first quarter, 55 per cent more than a year ago and “almost the highest ever volume for the first three months of a year.” (see report below) Nickel proved today that it has no intentions of rolling over and dying, and while traders appear to be reluctant to surrender the $10/lb mark, a lot will depend on factors outside of the industry, less to do with metals and and more to do with the financial perception of Europe and others. There are signs that some aspects of the Chinese economy may be slowing ever so slightly, but we doubt many people would accuse a Formula One driver, who is gearing down to take a curve, of giving up on a world record run.  

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) Russian miner Norilsk Nickel said Tuesday it may divest some of its Australian laterite operations while it seeks improved technology to restart others.
  • (Reuters) Crisis-hit Ufaleynikel, Russia's third largest producer of nickel, cut its output by 36 percent to 6,656 tonnes last year from 10,107 tonnes in 2008, a company report seen by Reuters on Monday said.
  • (Interfax - Norilsk) In 2009, revenue of the Group from nickel sales amounted to $4.212 billion. Europe remained the main destination for nickel sales, where the Group sold nickel for $2.212 billion (or 53% of all nickel sales). The Group managed to significantly increase the share of Asian region up to 30% of all nickel sales. Other markets contributed additional $729 million of revenue from nickel sales.
  • Commodities May Rebound 17%, Tiberius Says: Technical Analysis - more
  • Pioneer Resources hits significant nickel sulphide mineralisation at Acra - more
  • Fear of a Double Dip Could Cause One - more
  • Return to the Abyss - Roubini - more
  • GM acknowledges slower growth in China - more
  • Is the European Crisis a Net Positive for the US? - more
  • 12 ways to cash in on the 'collapse of Earth' - more
  • Europe’s Debt Crisis Casts a Shadow Over China - more
  • 1987 Redux: Impossible or Likely? - more

  MinesMin suggests I-T type slabs for levy of windfall tax - Intensifying its pitch for imposing a Windfall Tax to curb profiteering among the mining community, the union Mines Ministry has suggested to the Finance Ministry a slab system of taxation similar to the Income Tax to net the surplus profits earned by merchant miners. - more

  No connection between nickel exposure and the health of newborns in the Kola Peninsula - Women exposed to nickel show no elevated risk of delivering newborns with certain birth defects or small size at birth,' says Arild Vaktskjold at the Nordic School of Public Health. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.34/lb higher, and showing signs of peaking, with other base metals mostly higher. The Euro is trading over 1/10 of 1% higher against the US Dollar at the moment. NYMEX crude futures are up nearly 3% and over $72/barrel. Gold opened 1.3% lower, while silver is trading nearly 1.2% lower as safe haven buying dwindles. In overnight trading Asian markets ended higher with China up over 2%. European markets are trading higher this morning as optimism returns to world markets and US futures show Wall Street should open in a bullish mood. Nickel inventories fell overnight.   
  • Bloomberg morning base metal news - more
  • Reuters metals report - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - We had an unprecedented day in metals yesterday, as the bottom literally fell out of a number of complexes. Selling was heavy, and stops were triggered all around, as a number of critical support levels were taken out. Incredibly, copper had its steepest one-day decline on record, while lead lost a whopping 10% of its value in just one day. Ali, lead, and zinc plunged to fresh 2010 lows. There were broad-based losses in a host of other markets, including crude, grains and stocks. Once again, the Euro was behind most of the damage, as it tumbled to four year-lows. Interestingly though, we did see signs of decoupling between it and at least some of the markets, just as we suggested we might in yesterday's note. In this regard, the Euro rallied to roughly unchanged by the close of the New York session, after bouncing off an intraday low of $1.2230. Its rebound helped pare earlier losses in both the energy and equities, and in fact, US stocks even closed with a modest gain on the day. Metals, on the other hand, hardly responded, finishing sharply lower, as focus seemed to shift from the plight of the Euro to concern about growth prospects in China. So if we arguably did have some decoupling going on, it was a wrong kind for the beleaguered metal bulls, who now are seeing China replace the Euro as the new source of “angst”. Speaking of China, there was no particular news out of the country that could have prompted yesterday’s selling, although a UBS study suggesting that China’s growth may have peaked, did cause some jitters. However, macro reports from elsewhere were largely constructive. For example, Japan's core machinery orders for March rose sharply, while in the US, homebuilder sentiment increased to its highest level in more than two years. And although the New York Federal Reserve said its gauge of manufacturing in New York State slowed in May, falling to 19.11 in May from 31.86 in April, the jobs index component rose to its highest level in six years, auguring well for job prospects. It is hard to say exactly when the current sell-off in metals will end. We wrote in yesterday’s commentary that we could see some buying coming in around key support levels in a number of complexes, but this was not the case, and we were too early in taking a long view. However, RSI readings in copper, zinc, and lead are now in extremely oversold territory, (in the high 20’s), suggesting that some sort of technical bottom is near. Indeed, today’s much firmer tone seems to bear this out, and we may have further to go given the extent of the downside damage incurred. However, don’t expect a V-shaped bounce to anywhere near the old highs for 2010. At best, the markets are in the process of carving out a trading range for the balance of the year, with the high already defined, while the bottom end of the range is still a work-in-progress. Sad as this may be for some producers, many of whom were basking in ever-higher prices, the new trading range markets will be a much healthier state of affairs overall, as it will bring consumers to the table, many of whom are now going to be attracted by more enticing valuations. On the hand, it will force producers to keep output in check in order to prevent a much more protracted price decline. ..... We are $21,200 on nickel, up $500. Although nickel has broken its short-term up channel, its longer trend line is still intact, and won’t be taken out until we get to $20,000.(read Ed Meir's complete morning base metals report here)
  • (Interfax) Jinchuan Group Ltd., China's largest nickel producer, has cut its ex-works refined nickel price for the third time in May to RMB 166,000 ($24,313.08) per ton, a reduction of RMB 10,000 ($1,464.64), according to May 18 information on Jinchuan Group's Web site.
  • (Interfax) Brazilian iron ore giant Vale intends to increase its third quarter iron ore cost and freight (CFR) price for Chinese steel mills by roughly 23 percent to $160 per ton, a Chinese steel mill employee told Interfax on May 18.
  • (CV) China's has almost no ability to set prices in international trade, including commodity prices, reports Beijing Business Today citing Yao Jian, spokesman from the Ministry of Commerce, on Sunday. Yao said China has little negotiating power with overseas commodities suppliers due to the fact that China has a large numbers of relatively small scale businesses.
  • (MDM) Builder confidence in the market for newly built, single-family homes rose for a second consecutive month in May to its highest level in more than two years, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI gained three points to 22 in May, its highest point since August of 2007.
  • (SM) The American Forest & Paper Association released its April 2010 U. S. Containerboard Statistics Report today. For the sixth straight month, containerboard paper production has risen sharply when compared to last year. Current total production saw an increase of 351,500 tons or 14.6% over April 2009. Although, total production amounts decreased compared to March 2010, average daily production was up 1.6% due to the number of days in April. Year-to-date 2010 production has increased 13.5% over 2009. The containerboard operating rate for April 2010 rose 16.2 points over April 2009 to 95.0%.

  Q1 2010 Stainless Production returns to historical levels - Just under 7.5 mmt of stainless steel was produced during the first quarter of 2010, almost the highest ever volume for the first three months of a year. - more (pdf report here)

  Asian Stainless Export Market To Reopen Next Week - The Asian stainless steel export market is expected to reopen once Taiwan's Yieh United Steel Corp (Yusco) reveals its domestic sales prices of stainless CR sheets early next week for the first half of May. - more

  Norilsk Nickel posts $2.6 bln profit for '09 - Norilsk Nickel, the world's largest producer of nickel, said Tuesday that it posted a profit of $2.6 billion last year — largely due to a major cost-reduction program - despite a 27 percent dip in revenue. - more

  Courtesy AISI - In the week ending May 15, 2010, domestic raw steel production was 1,797,000 net tons while the capability utilization rate was 74.3 percent. Production was 1,026,000 tons in the week ending May 15, 2009, while the capability utilization then was 42.8 percent. The current week production represents a 75.2 percent increase from the same period in the previous year. Production for the week ending May 15, 2010 is up 1.2 percent from the previous week ending May 8, 2010 when production was 1,776,000 tons and the rate of capability utilization was 73.4 percent.

  • The American Iron and Steel Institute (AISI) reported today that for the month of March 2010, U.S. steel mills shipped 7,646,938 net tons, a 21.2percent increase from the 6,311,076 net tons shipped in the previous month, February 2010, and a 82.0 percent increase from the 4,138,449 net tons shipped in March 2009.

  Unions eye wider strike as Transnet talks stall  - A breakdown in mediation between Transnet and unions at the weekend over a wage deal may spark secondary strikes in associated industries as union members' attitudes harden over what they say is Transnet's unwillingness to concede an inch. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, May 17

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 7 to 3,922. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Thai Growth May Falter as Violence Saps Confidence, Drives Away Tourists // Korea Vulnerable to Escalation of Europe Debt Crisis, Ex-Minister Lim Says // Japan Machine Orders Gain as Export-Led Rebound Eases Producer-Price Slump // Asian Stocks Fall as Weaker Euro Fuels Growth Concern; HSBC, Esprit Slump // Euro Swaps Corner Trichet in Currency Tumble Showing No Signs of Slowing // London House Prices Drop in May For First Time This Year on Excess Supply // Euro, Dollar Will Be on Par `Sooner Or Later' as Crisis Worsens, CLSA Says // Euro Touches Lowest Level Versus Dollar Since 2006 on Europe's Debt Crisis // European Stocks Decline, Led by Rio Tinto, Miners as Commodity Prices Drop // Treasury Bears Retreat From Rate Rise Forecasts as Europe Demands Dollars // Recovery Rewards U.S. Investors With Unemployed Denying Historical Rebound // Lowe's Declines as Home-Improvement Retailer's Forecast Trails Estimates // Global Demand for Long-Term U.S. Assets Rises to Record, Led by Treasuries // U.S. Stocks Retreat on Manufacturing Slowdown, Concern Over European Debt //
  • The Euro is now trading down 1/3 of 1% against the US Dollar and at 1.2315. NYMEX crude oil is down nearly 2-1/2% and under $70/barrel. Gold is down 1/4 of 1% and silver is off nearly 2-1/4%. Base metals all ended lower. Indicator charts show nickel opened much lower, slowly climbed until the Euro took a turn for the worse in mid afternoon, and it was downhill from there. Dow Jones reports three month nickel ended the day at $9.39/lb . Inventories of nickel stored in LME warehouses took a big hit over the weekend, and now sit just under the 140,900 tonne level. Cancelled warrants slipped under 3%. Nickel inventories have fallen 15.22% since hitting their all time record high on February 8th of this year. Since that date we have only had 10 days where LME approved warehouses received more nickel than they shipped, and we have only seen three of these days in the last two months.  We estimate the average price of cash nickel for May has fallen $.33/lb so far compared to April's average. Vale Inco and the USW have been ordered back into negotiations by The Ontario Labour Relations Board, with the USW being told to set aside their main stumbling block, the firing of 9 members, until negotiations have completed. We see this as the first positive move in a very long time, and could be the beginning of the end of this very long strike. Europe was on everyone's mind again today, with the weekend comments by German Chancellor Angela Merkel in a speech where she stated "We've done no more than buy time for ourselves to clear up the differences in competitiveness and in budget deficits of individual euro zone countries." not sending the market the message it exactly wanted to hear. The markets are in correction, and sentiment rules. Just a few months ago, euphoric markets soared on any news that wasn't as bad as last year, and now in correction, markets tumble when positive reports are published.

  Reports

  • Commodities Daily - pdf here
  • MF Global Commodities Monthly Round-up - pdf here

  Commodity/Economic Articles and Comments

  • Number of the Week: 0% Growth Without Temporary Factors - more
  • Is the Consumer Back From the Dead or Just a Zombie? - more
  • Forecasters Lower Double-Dip Odds - more
  • Kregel/Parenteau: No Sidestepping the Eurozone Implosion? - more
  • German Households Owe More Than Greece’s Do - more
  • Cumulative Bank Failures by FDIC - graph here
  • More homeowners choose to default on loans - more

  Labour relations board sends sides back to bargaining - The Ontario Labour Relations Board has ordered both sides in the 10-month strike at Vale Inco back to the bargaining table. - more

  Nine injured in clash over Posco India project - At least nine people, including six policemen, were injured in a clash on Saturday as violence flared over a planned steel plant of South Korea's POSCO in Orissa. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.20/lb lower, but recovering, with tin the only metal trading positive this morning. The Euro os well off session lows and trading 1/10 of 1% lower against the US Dollar. NYMEX crude futures are up 4/10 of 1% and nearing $72/barrel. Gold opened 1/3 of 1% lower while silver is down nearly 1-1/2%. In overnight trading, Asian markets ended sharply lower with China off more than 5%. European markets are trading higher this morning, and US futures show Wall Street may open higher. Nickel inventories took another hit over the weekend.     
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Metals fell sharply on Friday, as concerns about the European debt crisis pushed the Euro to an eighteen-month low of $1.2350. The complex held up fairly well on Thursday when the Euro was also weaker, but the group simply could not withstand Friday’s more brutal fall in the currency. Crude oil prices also tumbled for their fourth straight fall on Friday, while more broadly, the Reuters-Jefferies CRB index fell to its lowest level since February. US equities also finished down, although they still managed to close up for the week.We are seeing an equally fierce sell-offs this as of this writing, with the weakness in copper leading the rest of the metals lower. Nickel is particularly weak, as it approaches the $20,000 mark. Other markets are mixed; the Euro is at fresh lows, now trading at $1.2350, but getting to $1.2230 at one point earlier in the day, but crude oil prices are up a bit. US stocks are expected to open slightly higher, as European bourses have recovered somewhat. However, the Chinese equity market continues to slump, down 5.1% in the overnight session, the largest daily decline since August 2009.  ....  China remains the wild card going forward, and any sign of a slow-down here could cause more protracted damage to the metal markets. Damage could also come about if the authorities lose patience waiting for a slow-down, and instead move preemptively to tighten monetary conditions, or failing that, nudge interest rates higher. However, before they undertake either step, we would not be surprised to see them revalue the Yuan, providing them an easier way out to fight inflation without fully resorting to either tighter money or higher rates. If such a revaluation takes place, we could see a sharp rally in most markets, as it would signal a bias towards higher Chinese consumption. More importantly, it could help unblock capital flows that now are naturally being driven eastward, but which are being partially bottled up in the form of reserves by the increasingly untenable 6.83 Yuan/dollar peg. For now, we would still want to watch the action from the sidelines, since we may be approaching a decoupling point as far as the Euro-commodity relationship is concerned. Moreover, after the persistent declines of the last few weeks, some metal prices are becoming much better aligned with underlying fundamentals, something that was not evident for much of the last few months.... We are $20,950 on nickel, down $605, and now matching the late April intraday low. Although nickel has broken its short-term up channel, its longer trend line is still intact (see red line below) and won’t be taken out until we get to $20,000, likely the next downside target. read Ed Meir's complete morning base metals report here)
  • (Yieh) Taiwan’s Yieh United Steel Corp. (Yusco) and Tang Eng have announced to decrease their domestic stainless steel price by NT$6,000/ton for the second half of May.
  • (Yieh) It is reported that Venezuelan President Hugo Chavez announced on Saturday that Venezuelan government will nationalize Metal companies including iron briquettes makers Matesi and aluminum-maker Norpro.
  • (PRP) Sumitomo Metal Industries has begun negotiations to raise pricing of seamless stainless steel pipes for all domestic customers May 17, 2010
  • (ATI) Effective with orders acknowledged after May 14, 2010, ATI Allegheny Ludlum is increasing base prices by 3 to 5% for nickel-based alloys and high nickel bearing stainless steels in the sheet, plate and Precision Rolled Strip® product forms - more
  • (JMB) Japan Stainless Steel Export Declines by 2.9% in Fiscal 2009 - Japan Stainless Sheet Order Receipts Increase by 12% in F2009
  • (SO) The US International Trade Commission (ITC) Friday determined that revoking the existing antidumping duty orders on stainless steel wire rod from Italy, Japan, Korea, Spain, and Taiwan would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
  • Rogers says bailout is 'nail in the euro's coffin' - more
  • March Business Inventories rose by .4%, in line with expectations and up for the 5th month in the past 6 after 13 months in a row of declines but because sales rose 2.3%, the inventory to sales ratio fell to 1.24 months, matching the lowest level on record dating back to 1980.
  • Material Cost Net Rising Index, April 2010 NABE Industry Survey - more

  SAfrica transport strike seen widening, talks fail - Talks between striking South African transport workers and logistics group Transnet have failed to end a dispute, threatening to widen action that has crippled the country's rail and port operations. - more

  European Nickel's forestry permits revoked - European Nickel says that a legal technicality means that it will have to reapply for forestry permits for the Çaldag( nickel project in Turkey. - more

  BHP, Rio iron venture plan might be reconsidered: report - BHP Billiton and Rio Tinto might re-evaluate plans to merge their Western Australian iron ore operations if an agreement is not reached by year end, the Wall Street Journal said on Saturday. - more

  Appeals of Rio Tinto case defendants rejected - A Shanghai court Monday upheld the convictions and sentences of three men jailed on corruption and commercial espionage charges involving the Rio Tinto mining company. - more

  Chromex takes Stellite ore processing in-house - Southern Africa focused Chromex Mining PLC (AIM: CHX) said it has made the strategic decision to move away from the contractor based model for the processing of its chrome ore and developing its own in-house skills. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, May 14

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 15 to  3,929. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Sumitomo Mitsui Financial Posts Profit of $3 Billion After Earlier Loss // Hong Kong's Growth Tops 8% as Asian Economies `Swagger' Back From Crisis // Asian Stocks Drop on Sony Forecast, Commodities Decline on Europe Concern // Euro Falls to Lowest Level Since Lehman Collapse as Breakup Concern Grows // Euro Breakup Talk Increases as Germany Sees Greece Becoming Currency Proxy // IMF Urges Nations to Reduce Debt as Higher Interest Rates Threaten Growth // Sarkozy, Merkel, Zapatero Aides Deny El Pais Report on Threat to Quit Euro // European Shares Tumble as Banks, Mining Companies Slump on Debt Concerns // U.S. Retail Sales, Industrial Output Exceed Forecasts as Recovery Quickens // Insurers Drag Bonds Down to Worst Month Since December '09: Credit Markets // Stocks in U.S. Slump on European Debt Concern; Citigroup, Alcoa, Visa Drop
  • The US Dollar is currently trading over 1.1% lower against the US Dollar. NYMEX crude is down nearly 4% and trading near $71.50/barrel. Even safe haven purchased gold got hit today, but only down 1/3 of 1% at the moment. Silver is trading down 1-1/2%. Base metals got hit as well, all trading in the red. Indicator charts show nickel fell early and spent much of the day on the slide. Dow Jones reports three month nickel ended the day and week at $9.78/lb . Inventories of nickel stored in LME approved warehouses fell overnight, not exactly a surprise, and now stand just over the 142,000 tonne level. Sucden's day old chart shows nickel holding onto the $10.25/lb level (chart here)  thru yesterday. The Euro got creamed again today, and some are wondering if the currency even as a future. The stress was far too great for any London traded base metal to handle and longs bailed as fast as Democrats up for re-election. Now rumors are flying the France may be downgraded. If this pans out to be true, and we have no reason to believe it is anything more than a market rumor, it could have a very negative effect on the market, and Euro, and thus, base metal prices. With world markets way down today, and volatility up, you can be assured there will be many meetings this weekend in Europe as leaders there grapple with what it will take to calm markets and assure the world their future is solid. Nickel once again fell victim to the panic in the market, and dropped below the $10/lb level. Stainless steel producers must be beating their heads on their desks wondering what will happen next week. Shipments of nickel made this week will arrive at the customers dock most likely way overpriced, unless nickel bounces back over $10/lb next week. Purchases made this week, which resembles the closest thing we have seen to stability in quite some time, are now overpriced. Pity the poor nickel buyer, who doesn't buy nickel just to play the system, but buys for actual use in production. The long walk to the CFO's office this poor soul must make to explain why the 120 tonnes of nickel he just bought lost 5% of its value before it was even loaded on the boat. And wondering how the $150,000 plus loss his company just took might reflect on his annual bonus. Pity the poor nickel miner, who arising from a shift in the mine, rubs his back only to find out his labor, equal to yesterday's toil, was worth less today. Or the old school metals analyst, who must explain how this volatility all fits into the "market guided strictly by its fundamentals" theory. Ok, everyone took a beating this week. But it's Friday. So enjoy your weekend because we have breaking news. It all starts again next week.     

  Commodity/Economic Articles and Comments

  • (Dow Jones) LCH.Clearnet, which clears trades for the London Metal Exchange, said Friday it will increase initial margins on contracts for aluminum, nickel and steel.  .... Nickel initial margins will be increased to $3,000/ton from $2,100/ton....

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

  • Indicators at 7:15 am CST show 3 month nickel trading around $.28/lb lower, with all base metals trading lower. The Euro is trading 1/3 of 1% lower against the US Dollar at the moment. NYMEX crude futures are trading nearly 1-3/4% lower and at $73.12/barrel. Gold is up over 1.1% on safe haven buying and silver is up over 8/10 of 1%. In overnight trading, Asian markets ended lower with China off 2/3 of 1%. European markets are trading sharply lower this morning on continuing concerns that the European debt crisis will stifle economic growth. US futures show Wall Street may open lower. Nickel inventories slipped overnight. And for those of you who may be questioning our last comment yesterday "Not much news today, but with the Euro trading lower and nickel poking thru the $10.25/lb level, the future for nickel prices look to be leaning to the upside again." the little voice in our head this morning is asking "How's that comment working out for you?!"  Our afternoon update may be delayed.  
  • Bloomberg morning base metal news - more
  • Reuters morning news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Metals finished higher on Thursday, but the session showed an odd disconnect from some of the other markets we were watching, such as oil, which fell for a fourth straight day. The stronger tone in metals also defied a somewhat weaker Euro, which sold off to the $1.25 level. Things are moving much more in lockstep in today’s trading, with practically all the markets down. Metals are off sharply, with copper leading the decline and trading below the $7000 mark. The main story of the day is the euro, which has sunk to new 14-month lows, (now at $1.2470), handing the ECB its first “stabilization” challenge. We expect the ECB to allow the euro to fall further from here before intervening, and suspect the central bank would like the currency to eventually settle between $1.15-$1.30. By “managing” it lower, the Euro could give Europe's export sector a shot in the arm, and contribute to the region’s very sluggish growth prospects. Whether metals follow the euro down or not remains an open question. Although the complex is clearly doing so today, it may eventually shift its focus away from the plight of the Euro and more towards growth prospects, particularly out of China. Today’s selloff in metals is also partly attributable to the stock data released out of Shanghai. Although copper stocks fell over the course of the week, there were sizable gains in both aluminum and zinc, which more than offset the declines seen on the LME. For now, our trading advice remains unchanged in that we believe markets are still rather directionless and difficult to trade. Copper for example, has had a $300 trading range this week, but is up an insignificant $50 on the week thus far. Aluminum's trading range has been $130, but at the current price level, the complex will end the week basically flat. .... We are $22,140 on nickel, down $175, and not too far from key support at $21,450. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) South Korea's Public Procurement Service, a state agency that stockpiles strategic commodities.... is also seeking 200 tons of more than 99.8% purity nickel for melting, and 100 tons of more than 99.95% purity nickel for plating, for delivery to Incheon by June 30, also on freight-and-insurance basis.
  • (Yieh) Taiwan’s Yieh United Steel Corp. (Yusco) will announce its new price for the second half of May today. The domestic price is expected to drop by NT$5,000/ton due to the falling prices of nickel.
  • DLA has announced starting June 1st, ferrochrome will be offered monthly rather than weekly
  • No end in sight for commodity bull market: Jim Rogers - more
  • Sumitomo to Boost Overseas Commodity Staff on Demand - more
  • (Yieh) After European Union imposed high anti dumping duty on Chinese fasteners, Russian MMK and Severstal Group has asked the government to initiate a safeguard Investigation against Chinese fasteners.
  • (CD) China's electricity consumption rose 23.1 percent year-on-year to 339.4 billion kilowatt-hours (KWhs) in April, the National Energy Administration (NEA) said in a statement on its website Friday.

  SSINA Says Lack of Enforcement of Cuban Embargo Hurts U.S. Domestic Industry - In a written statement submitted to the Committee on Ways and Means of the U.S. House of Representatives, the Specialty Steel Industry of North America (SSINA) today encouraged stricter enforcement of the U.S. regulations on trade with Cuba, particularly with respect to China. - more

  • On Cuba’s Nickel - Washington-based trade group Specialty Steel Industry of North America (“SSINA”) marched up to Capitol Hill today to gripe to the House Ways and Means Committee about Cuban nickel being surreptitiously imported into the United States in violation of the U.S. embargo against Cuba after a detour to China. - more

  Mirabela posts Q1 $25.17m loss - Brazil-focused miner Mirabela Nickel Ltd has posted a $25.17 million net loss for the three months to March 31, its first full quarter of financial reporting since it began producing nickel. - more

  Rohit Ferro Tech plans stainless steel plant at Bishnupur - Rohit Ferro Tech plans stainless steel plant at Bishnupur in Dwarika in Bankura district of West Bengal. - more

  • Visa Bao Ltd plans ferro alloy plant in Kalinganagar - Visa Bao Ltd plans to set up a ferro alloy plant in Kalinganagar in Jajpur district of Orissa. The project involves setting up of ferro chrome plant (1,00,000 MTPA, 4x16.5 MVA SAF). - more

  Zimbabwean Miners Begin Strike in Dispute Over Wages - About 25,000 Zimbabwean miners began a nationwide strike to demand higher wages, the Associated Mineworkers Union of Zimbabwe said. - more

  Unions, Transnet meet to end SA transport strike - Striking South African transport unions are meeting logistics group Transnet at this hour in a bid to resolve a wage dispute that has paralysed the country’s port and rail operations - more

  Orissa to revive Kalarangi Chromite mine - The Orissa government today decided to revive the Kalarangi Chromite Mine in Sukinda area of Jajpur district. - more

 Local miner urged to begin development in nickel project - The regional office of the Mines and Geosciences Bureau (MGB), as well as local officials and business leaders in Davao Oriental, want Asiaticus Management Corp. to start developing its Pujada nickel deposits in the city of Mati within the near term. - more

  Papua New Guinea Crawling With Mining Companies - Papua New Guinea (PNG) remains attractive to the mining world despite the sentiments held by many critics as being "one of the worst countries to invest in". - more

  POSCO nears $3 bln Daewoo Int'l buy; but high premium - South Korea's POSCO moved closer to buying Daewoo International for $3 billion in its biggest acquisition to date, as the world No.4 steelmaker looks to secure raw materials and boost overseas sales. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, May 13

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 26 to 3,914. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Sony Predicts First Annual Profit in Three Years; Forecasts Miss Estimates // Malaysia Raises Interest Rate a Second Time After Fastest Growth in Decade // Wen Says Sovereign-Debt Crisis Is `Deepening,' Global Recovery Isn't Solid // Asian Stocks Rise as Sainsbury, BT Earnings Beat Estimates; U.S. Futures Advance // Euro Drops for Third Day on Deficit, Debt Concern; Crude Oil, Gold Decline // European Austerity Drive Shifts Gear as EU Message Sparks `Social Tension' // U.K. Consumer Confidence Fails to Recover From Drop on Budget-Cut Concerns // ECB Indicates It Has No Intention of Raising `Appropriate' Interest Rates  // European Stocks Erase Advance Amid Retreat by Banks, Real Estate Companies // Home Repossessions in U.S. Rise to Record, Foreclosures Fall Amid Backlog // Europe Shows World Won't Skirt `New Normal' of Slower Growth, Pimco Says // Banks, Ratings Agencies Said to Have Been Subpoenaed by New York's Cuomo // Unemployment Claims in U.S. Decline for a Fourth Straight Week to 444,000 // U.S. Stocks Retreat, Led by Banks, Cisco; Sybase Surges on SAP's Purchase
  • The Euro is currently trading 3/10 of 1% lower against the US Dollar. NYMEX crude oil is down 4/10 of 1% and at $75.35/barrel. Gold is trading down 2/3 of 1% and silver is down 8?10 of 1%. Base metals ended the day mixed. Indicator charts show nickel had another day bouncing around the $10.25/lb level, starting above it, falling below it, rising over, falling below, before finally climbing well over it it late afternoon trading, only to see much of the late gains dwindle by closing. Foe the day, three month nickel ended the day at $10.32/lb . Inventories of nickel stored in LME approved warehouses took another hit overnight, and now rest just over the 142,600 tonne level. Sucden's day old chart shows nickel having trouble breaking thru the $10.25/lb barrier (chart here). Not much news today, but with the Euro trading lower and nickel poking thru the $10.25/lb level, the future for nickel prices look to be leaning to the upside again.

  Reports

  Commodity/Economic Articles and Comments

  • Fastenal being sued ‘for millions' - more
  • Fed’s Aggressive Campaign Pays Off - more
  • Morning Rant: ‘What ARE [U.S. Economists] Looking At?’- more
  • The Coming Financial Tsunami - more
  • Public Debt to GDP: Fastest Jump Since WWII - more
  • What Was the Chicago Fed Thinking? - more

  Asia Steel-Chinese prices dip on demand worries - Chinese steel prices fell this week after some of China's biggest mills kept product prices stable for June and at least one mill cut prices on concerns about demand prospects in the second half. - more

  German steelmakers warn rising costs a threat - German steelmakers ThyssenKrupp and Salzgitter warned that a continued rise in raw material prices posed a threat to a sustainable economic recovery after posting contrasting quarterly results. - more

  'Fired 9' at issue - Striking Steelworker Pat Digby said he experienced real optimism after 10 months on a picket line upon leaving the first of three members' information meetings held Wednesday. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around  $.14/lb and rebounding from earlier losses, with other base metals trading mixed. The Euro is trading lower against the US Dollar, down less than 1/10 of 1% at the moment. NYMEX crude futures are down nearly 9/10 of 1% and at $75/barrel. Gold opened 1/10 of 1% lower and silver is down 2/10 of 1%. In overnight trading, Asian markets ended higher with China up nearly 2-1/2%. European markets are trading slightly higher this morning and US futures imply Wall Street could open on the positive side. Nickel inventories fell overnight.    
  • Bloomberg morning base metal news - more

  Reports

  • Daily Market Report - pdf here
  • Commodities Report - pdf here
  • Morning Montra - pdf here
  • Metals & Energy - pdf here
  • Metals Insight - pdf here
  • The March 2010 Casteel Reporter - pdf here
  • US Imports of Steel Mill Products - more (stainless steel at bottom of page)

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Metals lost modest ground yesterday in very choppy trading, and at one point, had even given up all of Monday's gains (and then some). It seems markets are continuing to digest the implications of the European stabilization package, and the fact that the Euro is still struggling, is certainly not an encouraging sign. China has also reemerged as another source of potential concern. Should the authorities not get the slow-down they are hoping for, they very well could next move on the interest rate front, and in fact, there were some rumblings to this effect from Chinese officials this morning. An interest rate move could be the next "shoe to drop" for metals going into the second half of the year, and could generate downside damage that could equal, if not surpass, what we saw emanate from the Euro crisis last week. We are modestly higher across the board as of this writing, with the Euro holding steady, and now trading at 1.2670. However, we were down at one point in Asian trading, so the mood remains jittery. We still prefer the sidelines for the time being, as we think the lingering uncertainty out of Europe is contributing to intense volatility, which in turn makes directional trading all the more difficult. However, the fact that the Euro is under pressure and not responding to the large European initiative, suggests that we could see another bout of selling, although it is unlikely it will approach the same scale as to what we saw last week. ... We are $23,000 on nickel, up $410. Prices need to climb back over the $24,800 mark before some of the chart damage is repaired. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) Copper, nickel and aluminum are cheaply priced given the recovery outside of China and the ongoing growth in China, says Macquarie analyst Max Layton. "We recommend people accumulate (long positions) into this weakness."
  • (Yieh) South Korea’s stainless steel price continues to fall due to the decreasing nickel price. Currently the price of 300 series has dropped by around 100,000~200,000 won/ton.
  • (Interfax) Zhejiang Province-based Huaguang Smelting Group will cooperate with Jiangxi Province-based Zhegan Real Estate Development Co. Ltd. to jointly developing a 300,000-ton nickel-chromium alloy project in Jiangxi Province's Ruichang City with an aggregate investment of RMB 3 billion ($439.42 million), according to a May 12 Jiangxi municipal government report.
  • (AFX) Canadian Arrow mulls re-starting nickel production at Timmins deposits
  • (SBB) China FeCr prices ease on weak demand, stainless price drop
  • FNX Mining posts profit on higher metal prices - more
  • (PR) The Freight Transportation Services Index (TSI) rose 0.9 percent in March from its February level, rising for the third consecutive month, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today . The March Freight TSI rose 2.6 percent from March 2009, the first year-to-year increase in the freight index since July 2008. - more

  Samancor declares force majeure on SA ferrochrome-trade - Privately owned ferrochrome producer Samancor has declared a force majeure on shipments of the steel ingredient from South Africa due to the transport strike in the country, traders said on Wednesday. - more

  China Shows Tendency To Revise Moly Trade From Absolute Imports To Increasing Exports = Moly Exports From China In Jan. - Mar. 2010 Increased By 8 Times From That In Same Quarter / 09 - Reflecting a strong trend to import more molybdenum into China, the international prices of molybdenum turned to rise from the second half of 2009. In this meaning, the movements on the international prices of molybdenum in 2010 have been still grasped by China. - more

  ENRC Q1 ferrochrome output jumps, warns on costs - Kazakh miner ENRC posted a strong rebound in first-quarter output and said on Thursday revenue growth this year would outrun rising costs. - more

  Mazabuka rebounds as Munali Nickel Mine opens - Since the re-opening of the Munali Nickel Mine in Southern Province two months ago, the economic prospects of the people in Mazabuka District are beginning to brighten up. - more

  Big Stink in New Caledonia Over Nickel Mine - The operators of New Caledonia’s nickel smelter have been asked to stop producing the foul smelling emissions which upset residents in Noumea. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, May 12

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 66 to 3,888. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) India's Industrial Production Expands 13.5%, Adding to Inflation Pressure // Hong Kong Pledges to Boost Land Supply Even After Auction Misses Estimates // Most Asian Stocks Rise on Earnings Forecasts, Gold Price; Toyota Advances // King Says He's `Very Pleased' With Cameron Plan to Accelerate Deficit Cuts // Zapatero Cuts Public Salaries, Suspends Pensions Increase to Fight Deficit // Europe's Economy Grows at Faster Pace Than Economists Forecast on Exports // Spain, Portugal Telecom Bonds to Show Resilience From Slowing Economies // European Stocks Gain on Maersk, ING Groep Earnings, Spanish Spending Cuts // Morgan Stanley Denies Allegations It Misled Mortgage-Derivatives Investors // `Perfect Quarter' for Four Banks Shows Fed-Linked Revival on Wall Street // Trade Deficit in the U.S. Widens to a One-Year High on Imports Led by Oil // Small-Bank Authority of Federal Reserve Is Preserved in U.S. Senate Vote // Stocks Rise, S&P 500 Index Recovers Losses From May 6; Treasuries Decline
  • The Euro gave up earlier gains and is now trading around 1/10 of 1% lower against the US Dollar. NYMEX crude oil is trading over 8/10 of 1% lower, as US inventory numbers rise. Gold continues to trade in record territory, up 8/10 of 1% and at $1241.30/ounce. Silver is higher by nearly 1-1/2%. Base metals ended the day subdued and mixed, most hurt in late trading by a sudden turnaround in the Euro. Indicator charts show nickel was off to the races early and continued to climb thru most of the day, until the Euro came under fire late, and nickel fell nearly $800 tonne in less than an hour. Dow Jones reports three month nickel ended the day at $10.23/lb , only 2 cents lower than yesterday. Inventories of nickel stored in LME approved warehouses slipped again overnight, and now sit just under the 143,500 tonne level. Sucden's day old chart shows nickel trading thru yesterday (chart here). The blockade's at Vale Inco's Clarabelle and Coleman Mine's by the USW, have ended, with USW members disbanding under threat of a court order. Xstrata declared force majeure on shipments of ferrochrome and chrome ore from South Africa, after a transportation strike there. In February 2008, Xstrata had to take similar measures after power shortages shut down its mills. Gold continues to rise, on safe haven buying and those who are taking advantage of the recent uptrend. Nickel is having some difficulty staying above the $10.25/lb level, but is giving no hint that it wants to dip further than it did last week. Norilsk should be announcing any day now that their shipments will cease for about a month due to seasonal flooding, and with the decline in inventory numbers, no matter how large they might be, staying steady, traders are not having a hard time finding support.

  Reports

  Commodity/Economic Articles and Comments

  • (Dow Jones) U.S. nickel imports rose 91.4% in March from last month, and was up 30.9% from the previous year, the Commerce Department reported Wednesday.
  • (Dow Jones) U.S. nickel exports fell 15.4% in March from the previous month, but was up 143.2% from the previous year, the Commerce Department reported Wednesday.
  • (Yieh) It is reported that Taiwanese domestic stainless steel scrap price decreased by TWD 10 per kilogram as nickel price on the LME has dropped by 20% within 3 days.
  • (Société Générale) From a commodity angle, the likely implication of the EU-IMF package involves the net balance between bullish factors - reduced fears of a systemic risk, higher inflation expectations, lower real interest rates and a weaker euro - and bearish factors - lower EU GDP and a stronger USD. For the short-term outlook, we think the net result of these factors is mildly bearish for gold, neutral for agri-commodities and globally bullish for oil and base metals. As for the long term, we see the impact as reinforcing our bullish call on all commodities, including gold.
  • Liberty Mines loses $2.42-million in Q1 - more
  • Young Adults: Recession Won’t Cause Lasting Damage - more
  • MBA: Mortgage Purchase Applications Decrease - more
  • Goldman On What The Neverending [Private|Public|Global|Galactic] Bailout Means For Market Indicators - more
  • JPMorgan Chase Warns Investors About Underwater Homeowners Walking Away - more
  • Chinese Hawks Appear: PBoC Advisor Says Time For Rate Hike Is Now - more
  • In Greek Crisis, Some See Parallels to U.S. Debt Woes - more
  • `Perfect Quarter' at Four U.S. Banks Shows Fed-Fueled Revival - more
  • The Deficit Problem Is Not “We, the People,” It is “You, the Incompetent Elite” - more
  • Thumbcharts - more (cool site)

  Xstrata Declares Force Majeure on Ferrochrome Shipments - Xstrata Plc declared force majeure on shipments of ferrochrome and chrome ore after a strike by workers at South African state transport company Transnet Ltd. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.17/lb higher, with all base metals trading higher this morning. The Euro is trading 1/4 of 1% higher against the US Dollar, giving commodities a sentimental boost. NYMEX crude futures are up slightly over 1/10 of 1% and  near $76.50/barrel. Gold opened 2/3 of 1% higher, as it continues to smash its all time record high. Silver is up nearly 9/10 of 1%. In overnight trading, Asian markets ended slightly lower, with China finishing up 2/3 of 1%. European markets are trading higher this morning as gross domestic product in the 16 euro nations rose 0.2 percent from the fourth quarter. US futures show Wall Street should open in a bullish mood. Nickel inventories fell overnight. Will be interesting to see what happens at the Coleman and Clarabelle mines in Sudbury today. Courts have ordered USW striking protesters to stop blocking entrance to the mines, and USW has refused to stop their blockade.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - We are modestly higher across the board as of this writing, with the Euro holding steady, and now trading at 1.2670. However, we were down at one point in Asian trading, so the mood remains jittery. We still prefer the sidelines for the time being, as we think the lingering uncertainty out of Europe is contributing to intense volatility, which in turn makes directional trading all the more difficult. However, the fact that the Euro is under pressure and not responding to the large European initiative, suggests that we could see another bout of selling, although it is unlikely it will approach the same scale as to what we saw last week...... We are $23,000 on nickel, up $410. Prices need to climb back over the $24,800 mark before some of the chart damage is repaired. (read Ed Meir's complete morning base metals report here)
  • (Dow Jones) Vale Inco, a subsidiary of Brazilian miner Vale SA (VALE), has shut its Copper Cliff nickel refinery in Sudbury, Ontario, following a partial collapse of a chimney stack, a company spokesman said Tuesday.   The upper portion of one of the plant's stacks had some pieces fall, spokesman Cory McPhee told Dow Jones Newswires. .... The Copper Cliff smelter was operating at 50% of its capacity, he added. He said the smelter will be shut for at least a week until repairs are completed.
  • (Interfax) China produced 254.43 million tons of steel products in the first four months of 2010, up 29.3 percent year-on-year, according to figures released by Shanghai-based Mysteel Information on May 12.
  • (JMB) Japan 4 Major Stainless Makers Post Recurring Losses in F2009
  • (SMM) The National Bureau of Statistics released on May 11th that China's nickel output was 16,825.9 mt, up 21.8% YoY
  • (SM) The American Forest & Paper Association released its March 2010 U.S. Paperboard Statistics Report today. The capacity figures for the March release are based on AF&PA’s 50th Annual Survey of Paper, Paperboard and Pulp Capacity.  According to this report, total boxboard production increased from March 2009 totals by 64,000 tons or 6.0%. The production of boxboard increased by 7.5% in March 2010 compared to last month, however the average daily production was down 2.5%
  • ENSO Wrap-Up: El Niño finishes - more
  • (NFIB) The Index of Small Business Optimism gained 3.8 points, rising to 90.6, barely passing the "90 barrier." Pessimism persists but the Index is finally out of the 80s, at least for one month.
  • UCLA - The Ceridian-UCLA Pulse of Commerce Index™ (PCI) by UCLA Anderson School of Management, adjusted for seasonality and for monthly workdays, fell 0.3% in April, returning to its level of three months ago. The recovery optimism created by a very strong PCI in December of last year has slowly eroded. The three month growth of the PCI illustrated below has fallen each subsequent month from the exceptional December 2009 rate of 16% per year and in April has fallen to zero.

  Output Of Ni-Contained Pig Iron In China For March 2010 Increased = Produced 17,400 Tons On Nickel Content Base As Increased By About 3 Times From That In Same Month / 09 - According to an information from China, this country produced 362,500 tons in material (corresponding to 17,400 tons on nickel content base) of nickel-contained pig iron (including low grade ferro-nickel) in March of 2010, having increased by 46.7% compared with that in the previous month of February and also by 111% compared to that in the same month of 2009, both of which were on material base. - more

  Sumitomo pushes Coral Bay, Taganito projects - Sumitomo Metal Mining Ltd is advancing the Taganito nickel-cobalt project in Surigao del Norte and the Coral Bay HPAL project in Palawan to jack up mineral production. - more

  New Caledonia’s SLN upsets residents with foul smell - The operators of New Caledonia’s nickel smelter have been asked to stop producing the foul smelling emissions which upset residents in Noumea. - more

  South Africa strike halts rail and port operations - Thousands of South African transport workers joined a national strike on Wednesday, paralyzing rail and port operations in Africa's biggest economy. - more

  Moly turns the corner - Molybdenum was all the rage a few years back. And it had a great story: apart from its use in steel, it was particularly in demand for making oil and gas pipelines because with moly?s strengthening attributes the overall pipe weight could be much lighter. - more

  Steel at the Shanghai World Expo - Steel plays a prominent role at the 2010 Shanghai World Expo. Many countries use steel as a design feature in the construction of their pavilions. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  • About 3,050 hourly rated production and maintenance workers, members of United Steelworkers Local 6500, have been on strike since July 13. Another 130 USW Local 6200 members in Port Colborne are also on strike. About 450 members of USW Local 9508 in Voisey's Bay have been on strike since Aug. 1.
  • Sudbury Star // Northern Life.ca
  • Vale/Inco offer // Vale/Inco Company Site
  • Union Strike Site //  USW  Local 6500
  • Sudbury Northern Life Videos
  • Why are protesters blockading FNX? - I am the wife of an FNX miner and would like some answers. My husband is just getting back to work after being off since 2008. - more
  • Court orders Vale Sudbury mine blockades removed - more
  • Hell no! We won't go!' UPDATED - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 11

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 115 to 3,822. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Euro Erases Gains as Debt Concern Revives; Mining Stocks, Copper Decline // China Inflation Accelerates as Loans Surge, Property Prices Rise by Record // Toyota Forecasts Higher Profit as U.S. Sales Recover After Record Recalls  // Europe Debt Crisis Leads Australia to Seek `Buffer' With Return to Surplus // European Financial Companies Hold $78 Billion in Greek, Portuguese Bonds // Nobel Economics Laureate Aumann Says European Plan Encourages Overspending // Bank Swaps, Libor Spreads Show Doubts Over Europe Bailout: Credit Markets // Stocks Retreat in Europe on Concern $1 Trillion Aid Plan Won't End Crisis // Recovery in U.S. Gains Traction on Improved Outlook for Consumer Spending // Barton Biggs Says U.S. Stocks May Advance 20% as Global Economy Rebounds // Home Prices Rise in 91 U.S. Cities Led by Gains in Worst Foreclosure Areas // Fed's Lacker Sees Evidence U.S. Employment Is on Path Toward Steady Growth // U.S. Stocks Climb on Speculation Incoming U.K. Government Will Cut Deficit
  • The Euro and Dollar have been trading all over the place this morning, but at the moment, the Euro is trading a little over 1/3 of 1% lower. NYMEX crude is now trading over 6/10 of 1% higher and over $77/barrel. Gold is up over 1-1/3% and silver is higher by nearly 401/4%. Base metals ended the day all lower, as early morning drops could not be offset by afternoon gains. Indicator charts show nickel opened lower this morning, fell and then started to climb by early afternoon, but had a problem breaking thru the $10.31/lb mark. Dow Jones reports three month nickel ended the day at $10.25/lb . Considering the volatility in Euro/Dollar trading today, nickel held up fairly well today. Inventory levels of nickel stored in LME warehouses continue to slip and now sit just under the 143,900 tonne level. Sucden's day old chart shows nickel appearing to be building a floor over the last few days, (chart here). The volatility in the nickel market and the effect it is having on stainless steel purchasing carry some long term complications. Buyers of stainless steel product and other down stream buyers, are pausing purchases until the price of stainless steel settles down.  This increases the risk of shortages, especially on those items that are primarily imported into the US, such as stainless steel fasteners. Even before the price dropped, importers of fasteners were hesitant to make large buys in the face of sky rocketing prices during April, and now with the sudden fall, buyers are once again hesitant, not knowing how far the price may fall. This is setting us up for some potentially extreme shortages come late summer and early fall. Importers are already seeing protection buying from distributors, who are gambling that paying higher prices now is necessary to ensure inventory is available months forward. Overseas manufacturers, who weeks ago, were having trouble getting material fast enough from the economic recovery, are now seeing orders dry up as buyers wait for lower pricing. The actions of a few metal traders in London not only effects what price a nickel producer will bring in each day, or the price a stainless steel producer will pay on a daily basis, it has far reaching effects on the way thousands upon thousands of sellers and buyers transact around the world. And that is just referring to nickel volatility in stainless steel fasteners, a microscopic fragment of the overall nickel market. And for those of you who may be having a bad day, consider the plight of poor Zhao Zuohai (story here).  

  Reports

  • Commodities Daily - pdf here
  • Macquarie reviews China and recommends raising exposures to such commodities as copper and hard coking coal - more

  Commodity/Economic Articles and Comments

  • (Reuters) Cuba and Venezuela have broken ground on a joint venture ferronickel plant in eastern Holguin province, according to local television reports showing heavy earth-moving equipment at work.
  • (Reuters) The European Commission has requested the mediation of the World Trade Organisation's dispute settlement body over China's decision to impose provisional anti-dumping duties on steel fasteners from the EU. The EU's executive said in a statement on Monday it considered the duties incompatible with WTO rules. China imposed provisional anti-dumping duties of up 24.6 percent on EU exporters last December.
  • A Primer on the Fed’s Swap Lines With Europe - more
  • Optimism Rises Among Small Business Owners - more
  • Migration Data Suggest Homeowners Becoming Renters - more
  • European Banks Now Feverishly Betting Against Euro, As Bailout Fails, Gold Surges - more
  • Alford: EU Shock and Awe Violates Powell Doctrine - more
  • It Appears the Market Is Calling the Europeans Bluff – It’s Now Put Up Or Get Put Down - more
  • China analyst sees beginnings of unfolding credit bust  - more
  • Executives Plan Moderate Spending - more
  • Roubini: Next Bubble to Burst in Next 2-3 Years - more
  • Shock and Uh? - more

  Second Union Joins South African Transport Strike - A strike at South African ports and railroads entered its second day as workers in another union joined the action that threatens to slow exports of coal, ferrochrome and fruit.- more

  Vale to take strikers back to court over protests - Vale Inco Ltd. is taking striking Steelworkers and their union back to court Tuesday in an attempt to have dozens of protesters removed from the entrances to two of the nickel company's plants. - more

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

  • Indicators at 7:15 am CST show 3 month nickel trading around $.35/lb lower, but appears to have possibly bottomed, with other base metals also lower this morning. The euphoria from the European bailout package has ended and the US Dollar is trading 2/3 of 1% higher against the Euro at the moment. NYMEX crude futures are trading nearly 1-1/2% lower and at $75.70/barrel. Gold opened nearly 1.1% higher on safe haven buying, and silver opened over 4/10 of 1% higher. In overnight trading, Asian markets ended lower, with China off 2% after reports show inflation is growing at an alarming rate in that country. European markets are trading lower this morning, and US futures show Wall Street may open lower. Nickel inventories fell again overnight. Commerzbank in their Commodities Daily (linked below) said it best  in their lead title "Disillusion after yesterday’s euphoria"
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Ed's reports will be posted as soon as we receive (read Ed Meir's complete morning base metals report here)
  • (Yieh) China’s Taiyuan Iron and Steel Company (Tisco) has announced new price for the 20th week (May 11 to May 17) which decreased by RMB1,000/ton for both hot rolled and cold rolled 304 coils and the price for 430 cold rolled coils keeps unchanged.
  • (Yieh) According to data, South Korea’s sales volume of cold rolled stainless steel fell in April compared to March, 2010. Posco, Hyundai Steel and BNG Steel’s domestic sales increased, but their export quantity all decreased.  
  • (Interfax) Baosteel Resources Co. Ltd., the wholly-owned subsidiary of China's top steel mill, Shanghai Baosteel Group Corp., will keep its ex-works prices for major steel products unchanged from May, Baosteel announced on May 10.
  • (Interfax) China's daily crude steel output reached an average of 1.85 million tons in April, up 4.52 percent month-on-month and a record-breaking high, according to a May 11 National Bureau of Statistics (NBS) report.
  • China's inflation accelerated in April and housing prices rose at a record pace, but analysts said Beijing is likely to avoid an immediate interest hike that might slow the recovery of the world's third-largest economy. - more
  • Fox doubles Radio Hill mine life - more
  • (MP) According to Russian exports, a 56,000 tonnes nickel deficit may occur on the Russian market in 2010. There are signs of a recovery in demand for nickel from the industrial sector.
  • (AMTD) March U.S. manufacturing technology consumption totaled $258.00 million, according to the American Machine Tool Distributors’ Association, and the Association For Manufacturing Technology.
  • The NAM/IndustryWeek Manufacturing Index -- 1st Quarter 2010 - more
  • America to face bigger catastrophe than Greece - more

  Nickel Falls for First Time in Four Days as Dollar Strengthens - Nickel, this year’s best performer on the London Metal Exchange, dropped for the first time in four days as the dollar strengthened and on concern that China, the biggest consumer, will seek to curb economic growth. - more

  China steel output hits new record - Chinese crude steel production hit a fresh all-time high of 55.4 million tonnes in April thanks to strong prices, although high inventories and lower prices may curb further production rises in coming months. - more

  • Market Tendency On Imports Of Ferro-Alloys At 30th April 2010= Action To Rise Price Of Silico-Manganese Has Made A Pause And Turned To Watch Further Movements The market tendency by item on imports of ferro-alloys into Japan at the 30th April of 2010 is as follows - more

  Xstrata Reviewing Australian Projects on Tax Plan  - Xstrata Plc, the world’s largest exporter of thermal coal, placed all its projects in Australia under review, adding pressure on the government to change its proposed 40 percent tax on mine profits. - more

  • Government open negotiation on Henry mining tax, says Ferguson - The federal government has hinted it is willing to negotiate over the details of its controversial resources rent tax. - more

  CAW sees lost opportunities - If provincial and federal laws don‘t get tougher on mining companies, the Ring of Fire‘s chromite could be processed overseas. - more

  World average carbon steel prices - Latest forecasts from MEPS - A substantial increase of $US80 per tonne was noted in the MEPS – Global All Products Composite price in April. - more

  Courtesy AISI - In the week ending May 8, 2010, domestic raw steel production was 1,776,000 net tons while the capability utilization rate was 73.4 percent. Production was 1,026,000 tons in the week ending May 8, 2009, while the capability utilization then was 42.8 percent. The current week production represents a 73.1 percent increase from the same period in the previous year. Production for the week ending May 8, 2010 is up 1.3 percent from the previous week ending May 1, 2010 when production was 1,754,000 tons and the rate of capability utilization was 72.5 percent.

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, May 10

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 99 to 3,707. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) LaHood Says U.S. Won't Rule Out Second Fine on Toyota Over Safety Flaws // Sony Earnings Beat Forecast, Citing Cost Cuts, Gains From Insurance Unit // Indonesian Economy Expands at Fastest Pace Since 2008 on Spending, Exports // U.S., German, Japanese Bonds Tumble as Euro Leaders Craft Lending Package // China Trade Surplus Shrinks on Import Surge, Easing Pressure for Yuan Gain // Euro Strengthens Most in 18 Months on Aid Plan; Stocks, Greek Bonds Rally // EU Crafts $962 Billion Show of Force to Halt Global Crisis, Support Euro // European Central Banks Buying Government Bonds as Part of Euro Aid Package // Taleb Says Nations Must Grapple With Debt Cuts to Overcome Credit Crisis // BP Shareholder Sues Directors for Safety Lapses Over Gulf of Mexico Spill // BOE Maintains Bond Plan as Coalition Talks Continue, EU Sets Euro Package // Trichet Says ECB Wasn't Pressured Into Buying Government Bonds Amid Crisis // Euro, Global Stocks, Oil Rally on European Loan Plan; Treasuries Retreat  // Fed Hinting of Mortgage Bond Sales Brings Bernanke to Brink of Tightening // Goldman Sachs Has First Perfect Quarter Without Any Daily Trading Losses // U.S. Stocks Advance, S&P 500 Jumps Most in a Year on EU's Rescue Package
  • The Euro continues to trade higher against the US Dollar, but some of the initial euphoria has waned and it is only a little over 1/2 of 1% higher. NYMEX crude oil is now trading under 2% higher and at 76.53/barrel. Gold is trading down 2/3 of 1% while silver remains positive by 2/3. Base metals all ended higher, but off session highs. Indicator charts show nickel jumped early, then spent the rest of the day in a slow decline of around $750/tonne. Dow Jones reports three month nickel ended the day at $10.44/lb . Nickel inventories stockpiled in LME approved warehouses fell over the weekend, and now sit just under the 144,200 tonne level. Cancelled warrants remain above the 4% level. Sucden's day old charts shows nickel finding a bottom of Friday (chart here). It is interesting to note that, according to Sucden's chart, the market technicals show nickel was seriously overbought starting this morning based on the SStoch reading, and overbought under the RSI reading. Nickel traders benefitted from the euphoric buying spree that the world saw today in response to the European bailout package announced prior to markets opening. Goldman Sachs responded to last weeks tumble by lowering its nickel forecast for 2010 to $17,140/ton from $17,150/ton. Leon Westgate, an analyst at Standard Bank, remains pessimistic that today's rally is only based on Europe's action and will doubtfully stick "Metals like nickel were overdone on the upside..... Nickel is quite a small market and it found it harder to absorb that kind of (investor) demand." Andrew Cole, a senior metals analyst with Metal Bulletin Research in London, was less pessimistic "Nothing has changed in the nickel market fundamentals, as such. This sort of price level we have now (around $22,000 per metric ton) feels much more sustainable than where we were a few weeks ago, testing $28,000." We agree with Robin Bhar, analyst at Credit Agricole, who wrote "The package has helped, it looks promising and the news about the ECB buying bonds is a key factor because it now means there is a buyer of last resort. But we will have to wait and see if it has any lasting effect." Daniel Rohr, an analyst at Morningstar, gave an interesting analogy to what is going on in China. "The metals markets are like a guy with a broken leg who's put a whole lot of weight on a crutch over the past year. The risk is that some jerk comes along and kicks the crutch." Without China, he noted further, base metals would be trading at a fraction of the cost they currently are.

  Reports

  Commodity/Economic Articles and Comments

  • German industrial output in March rose 4% on the month, its biggest rise since last May.
  • 10 May 2010 - ECB decides on measures to address severe tensions in financial markets - more
  • A Reminder of How Bank Contagion Spreads - more
  • Plosser Sees ‘Hazy’ Outlook, Says Fed Must Eye Inflation - more
  • EU to Dump a $Trillion Dollars into Eurozone - more
  • Eurozone: The Kitchen Sink Goes In – Now It’s All About Solvency - more
  • Summary Of The Biggest Bail Out Ever: Even Keynes Is Spinning In His Grave - more
  • Unclear if E.U. 'shock and awe' will provide lasting relief - more
  • How the Big Banks and Federal Reserve Maintained Their Death Grip Over the United States - more

  Transport Strike Threatens South African Exports  - Workers at South Africa’s state-owned transport company, Transnet Ltd., started an indefinite strike that may halt shipments of iron ore, ferrochrome, fruit and the coal that fires many European power plants. - more

  German April crude steel output more than doubles - Crude steel output in Germany more than doubled to 3.88 million tonnes in April from 1.87 million tonnes in the year-earlier month, when the financial crisis was at its worst, the German Steel Federation said. - more

  Shire backs nickel mine reopening - The Shire of Coolgardie has welcomed the reopening of Mincor Resources' Miitel nickel mine near Kambalda. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.25/lb higher and showing signs of potentially topping, with all London traded base metals trading higher this morning. Why? The Euro is trading over 1-3/4% higher against the US Dollar after European policy makers unveiled a $960 billion loan plan to end the region’s sovereign-debt crisis. NYMEX crude futures are up nearly 4% and over $78/barrel. Gold opened down nearly 9/10 of 1% as safe haven buying evaporates, and silver is up over 1/2 of 1%. In overnight trading Asian markets ended higher, with China up 3/4 of 1%. European markets are trading way up this morning as European traders bet the worst if over. US futures are showing up 385 points at the moment, implying the bear market of last week is over. Nickel inventories fell over the weekend. The European finance ministers and central banks were looking to shock and awe the world markets with a show of solidarity to save the Euro, and it appears they have accomplished their mission. Today, we are seeing the euphoric response from traders who have been decimated in recent days, as fund money rolls back in and shorts betting the price of nickel would drop further this week, now are forced to cover.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - Prior to a crisis setting in, markets give policy makers only a limited time to get things right. When they do not see the proper responses coming through to stabilize problems, if not necessarily fix them, orderly markets can rapidly disintegrate into disorderly ones. This seems to have been on vivid display last week, where the steady drip-feed of missteps in the Greek crisis finally culminated into a full-scale selling rout, characterized by steep losses in the Euro, global equities, bond markets, and staggering declines in commodities. In the case of metals, the downside pressures was accentuated further by ongoing concerns about China, where the economy could potentially show signs of slowing as incremental steps to tighten monetary and banking policy take hold. If there is some good news in all this, it is that the financial authorities have "seen this movie before" and the European authorities may have finally, if somewhat belatedly, heeded the lessons from September of 2008. Late on Friday, officials announced a "stabilization fund" to defend the Euro, and over the weekend, more details emerged, which surpassed even the most optimistic forecasts. Finance ministers have apparently agreed on an unprecedented loan package worth at least €750 billion. The plan would consist of €440 billion of loans from Euro-zone governments, €60 billion from an EU emergency fund, and €250 billion from the IMF.  ....  Technically, most metals are very oversold, so today’s bounce will likely last at least through to mid-week. However, volatility will remain high, and intraday trends will be treacherous. We are not sure if it is time to turn long just yet, remembering that markets continued to sell off for several months after the September 2008 stabilization measures were put in place. The sidelines remains the best option for now until the dust settles, but there is no disputing the fact that metal prices are now at much more reasonable valuations than was the case only two weeks ago. There is no macro data out of the US today; we will release the upcoming schedule for the balance of the week in tomorrow’s note. .... We are $23,074 on nickel, up $524, but last week’s sell-off has taken out the recent upchannel, and so the complex has incurred significant technical damage. We see $24,800 as the next upside target, with support at last week’s low of $21,450.  (read Ed Meir's complete morning base metals report here)
  • Interfax - Shanxi Province-based Pinglu Changsheng Stainless Steel Burden Material Co. Ltd., a Chinese ferrochrome producer, has signed an agreement with Jiangsu Nikekafu Co. Ltd. and Shanghai Puzhili Metallurgy Equipment Co. Ltd. to collaborate on a 100,000-ton stainless steel project in Pinglu County, Shanxi Province, state media reported on May 10.
  • Reuters - China's Baosteel has left prices unchanged for June delivery of key steel products, it said in a statement on its website www.bsteel.com.cn on Monday.
  • (AP) PT International Nickel Indonesia made an unaudited net profit of US$76.2 million in the first quarter this year, up from US$60 million in the fourth quarter of 2009.
  • (SO) Taiyuan Steel’s stainless output rises by 45.47 percent in Q1
  • (SMM) Jinchuan Group cut ex-works nickel prices by RMB 9,000/mt to RMB 176,000/mt on May 10th.
  • Will Nickel-Free Nickels Make a Dime's Worth of Difference? - more

  Vale Inco Blockade: Company vows to reopen facilities - The fight between striking Steelworkers and Vale Inco has literally taken to the streets of Greater Sudbury. - more

  • Not a lot' of progress made during talks - The bargaining committee for striking Steelworkers was to meet with its executive board today to put a plan in place to inform members next week about why the union didn't return from Toronto with a new contract. - more

  Date for New Caledonia’s Vale Inco nickel plant launch still uncertain - New Caledonia’s Vale Inco nickel company says it is still too early to say when its operations can be launched amid technical problems that are yet to be resolved. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, May 7

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 140 to 3,608. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Kan Says G-7 Will Discuss Greece in Conference Call, Sees No Intervention // Australia Warns on Fallout From Greek Crisis as Japan Pumps Cash to Market // Yen Slashes Yesterday's Gain Versus Euro on G-7 Greece Talks; Pound Slumps // Swire Properties Pulls $2.7 Billion Hong Kong Offer as IPO Slump Deepens // Asian Stocks Tumble Following U.S. Rout on Concern Over Europe Debt Crisis // Royal Bank Is Alone Among British Rivals as It Posts a First-Quarter Loss // Greek Bonds Tumble, Bunds Advance, Before Leaders Discuss Market Turmoil // EU Leaders Under Pressure to Broaden Greek Crisis Fight as G-7 Start Talks // European Equity Outflows Exceed $2 Billion on Greece Concerns, EPFR Says // European Stocks Sink Most in 14 Months as U.S. Shares Drop on Debt Concern // Jim Rogers Says U.S. Stock Slump Is `Normal Correction,' Not Panic-Driven // Bull Market Intact for Biggest U.S. Fund Managers After Drop; Birinyi Buys // Stock Market Fragmentation May Get Regulatory Review as SEC Begins Probe // Credit Buckles in `Whiff of 2008' as ECB Lets Athens Burn: Credit Markets  // U.S. Payrolls Rise 290,000, Beating Forecasts; Jobless Rate Climbs to 9.9% //
  • After slumping earlier, the Euro is once again trading higher against the US Dollar, up 7/10 of 1% at the moment. NYMEX crude oil is down over 2% and at $75.50/barrel. Gold is up 1/4 of 1% and silver is higher by more than 5%. Base metals ended the session mixed, after taking a beating for much of the week. Indicator charts show nickel started climbing out of the gutter early, only to have the US markets surprising tumble knock it down. Then as US markets appeared not to be heading into a second day of panic selling, the Euro stopped falling , and nickel was off to the races. Dow Jones reports three month nickel ended the day and week at $10.23/lb . For the week, three month nickel fell $3750/tonne, and w had to go clear back to May 2008 to find an entire month that proved as bad as this weeks fall was. Inventories of nickel stored in LME warehouses fell overnight and now sit just under the 145,000 tonne level. Sucden's day old chart shows nickel looking for a bottom yesterday (chart here). Cancelled warrants rose back above 4%. RBS analyst Nick Moore told Dow Jones "Despite the price declines, I still expect more downside, notably zinc and nickel." European stock markets are closed, after suffering their worst week in 18 months. US markets still have half a day's trading to go, but earlier trading saw all of the gains made in 2010 so far, disappear. US markets are trading lower at the moment, but well off the lows of the session. The volatility index is around 35, after sinking to 15 a few weeks ago.  
  • It's been a long week for many in the industry. Nickel producers saw future profit potential plunge in a matter of days. Stainless steel producers will appreciate the drop in a key ingredient later, after they get thru the frustrating period of using the over priced nickel they thought they were lucky to get the prior week. And down the chain, stockists and distributors have no idea what to do, with price volatility compounding the great unknowns of the reported economic recovery. We all deserve a break this weekend. And we hope each of you has a long, safe and restful one.

  Reports

  Commodity/Economic Articles and Comments

  • Global Deflation, Global Inflation & Australia’s Gold Tax Grab - more
  • The 1,000-point plunge - more
  • Yesterday Was an Aberration, Sort of - more
  • Audit-the-Fed: What’s Next for the Central Bank? - more
  • Bernanke Letter to Dodd Opposing Amendments to Audit the Fed - more
  • Andy Xie: China Asset Bubble Triggered By Long-term Low Interest Rate - more
  • 'Very real' threat that Greek contagion could spread to Britain - more
  • On the Fat Fingered Trade and Market Freakout - more
  • The Day The Market Almost Died - more
  • Dissecting The Crash - more
  • A Money Too Far - more
  • A tax break that is breaking us - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.14/lb higher, with most other base metals lower . The Euro is trading higher against the US Dollar by 9/10 of 1% at the moment, but at 1.2736. The Euro was helped by Germany's parliament voting overwhelmingly to assist Greece. NYMEX crude futures are up 1/3 of 1% but under $77.50/barrel. Gold opened nearly 1% lower this morning, while silver opened down 1/10 of 1%. Asian markets fell in overnight trading, with China off another 2%. European markets are trading lower this morning, and US futures show Wall Street may open higher. Nickel inventories fell overnight. Markets appear stunned by yesterday's nearly 1000 point rise on the Dow, and the nearly 700 point rebound, all happening in the period of less than an hour late yesterday. Governments seem very nervous about the degree and violence of the Greece riots. And Britain woke up this with a government without a majority, for the first time in over 30 years. And nickel producers and stainless steel users are stunned by the fall in the price of nickel this week. All in all - a stunning week so far.   
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - next report Monday, Ed traveling this week
  • (Reuters) ) - Australian nickel miner Mincor Resources will reactivate its Miitel nickel mine in west Australia due to a recovery in metals prices, the firm said on Friday. The mine was closed in December 2008 due to low prices and a dismal outlook for demand.
  • (PT) Customs: Russia’s nickel exports flat on year in January–March
  • (AP) PT International Nickel Indonesia (Inco) reported US$76.2 million in net profit in the first quarter of this year, up 27.2 per cent from US$60 million in the last quarter of 2009. The increase in net profit was attributable to 8.9 per cent rise in the sales of nickel to US$255.6 million in the same period, Inco President Tony Wenas said.
  • (JMB) NSSC Increases Stainless Sheet and Plate Prices by 55,000 y/t in May
  • (SBB) Nickel crash sparks small dip in China stainless prices

  China Stockpiling Moly For Nuclear Plant Construction? - Over the past few articles, the story of China hoarding moly has been laid out in detail. The loans to and buyouts of moly producing firms have totaled in the billions of dollars. - more

  Scrap Usage Increase Will Bring Negative Prospects For Nickel - Nickel has declined in the day trades, as continuous decline in the markets have been hitting the metal hard. Scrap usage has also increased in China, US and Japan, which is a negative trigger for Nickel prices in coming days. - more

  DJ Brazil Miner Vale: Nickel Output Should Rise In 2Q - Brazilian mining giant Vale SA expects to boost nickel production in the second quarter as the company ramps up output at its strike-riddled Vale Inco unit, director of non-ferrous mining Tito Martins said Thursday. - more

  Rudd denies Abbott's claim that Henry mining tax will "kill boom" - Kevin Rudd is playing down concern about his government's proposed resources tax as Tony Abbott said it threatened to "kill the mining boom". - more

  The steel industry repeats alarm over recent developments in raw materials markets. - At today’s meeting of the intergovernmental OECD Steel Committee held in Paris, Ian Christmas, Director General, of the World Steel Association (worldsteel) reiterated the industry’s alarm at the potential negative impact on steel and its customers from recent developments in the market for iron ore and metallurgical coal. - more

  Present Situation And Future Map Of Molybdenum Industry In Chile = Survey Compiled By JOGMEC, Moly Output In 2010 Is Expected To Recover To 40,000 Tons - JOGMEC (Japan Oil, Gas and Metals National Corporation) compiled recently a survey concerning productions of copper and molybdenum in Chile for 2009 and the outlines are summarized as follows. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, May 6

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 89 to 3,468. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China's Stocks Plunge to Eight-Month Low on Europe, Property Curb Concerns // Wen Conflicted as Yuan Advance Moving Chinese Teddy-Bear Jobs to Vietnam // Nintendo Forecasts Annual Profit Will Drop to Lowest Level in Four Years // Chinese Developers Turn to Hong Kong as Wen Curbs Lending to Avert Bubble // Asian Stocks Drop for Fourth Day, Bond Risk Climbs on Europe Debt Concerns // Trichet May Be Forced Into Crisis Mode as ECB Keeps Benchmark Rate at 1% // Spain Pays Highest Yield Since 2008 in $3 Billion Five-Year Bond Auction // Czech Central Bank Unexpectedly Lowers Benchmark Rate to Record-Low 0.75% // Euro Declines Against Dollar After ECB Leaves Key Interest Rate Unchanged // Trichet Resists Calls to Consider Purchasing Bonds, Urges Cuts in Deficits // European Stocks Plunge for Third Day on Sovereign Debt Concern; HSBC Falls // SEC Didn't Act After Spotting Wall Street Risks in 2006, Documents Show // Productivity Rises as Jobless Claims Drop in Sign of Labor Market Recovery // U.S. Stocks Drop as Concerns Over European Debt Offset Bernanke Optimism
  • The US Dollar is trading nearly 8/10 of 1% higher against the Euro at the moment. NYMEX crude is down 1-1/2% and under $79/barrel. Gold is trading 1-1/2% higher and silver is up nearly 2/10 of 1%. Base metals ended today's session mixed, with no major movers in either direction, as traders enjoy a day of calm. Indicator chars show nickel started out with a big loss, but spent the day in a choppy but upward trend, finishing in the green for the day. Dow Jones reports three month nickel ended the day at $10.00/lb . Inventories of nickel registered no change in quantity overnight, not entirely surprising considering the sudden volatility in the price. We post nickel prices in pounds, because it is easier for our readers to follow. Nickel buyers and traders deal in the tonnes, so a drop of $2750 per tonne with a six tonne minimum purchase from the LME, makes a huge difference in a buyer's bottom line. Inventories remain just under the 145,450 tonne level. Sucden's day old chart shows the last two days of trading, although with out putting it into context of March and April, it doesn't look as extreme as it really was (chart here). Still beggars cant be choosy so we thank Sucden for posting this daily chart. To show just how dramatic the drop was, we post our own chart below. The second chart shows the Euro against the US Dollar since the first of the year, just in case anyone else believes that nickel's trading has been dictated by the Euro since the first of the year, as did one reader yesterday, who took exception to our cynical swipe at the fundamentals faithful. Leon Westgate, a Standard Bank Plc analyst in London, told Bloomberg by phone today "The price was overdone .. .this year’s rally was driven by technical buying." Oh yes, my friends. The dark side of disbelief grows stronger. Some of today's hesitation in market activity was also caused most likely by the election going on in Great Britain. The British are going to the polls today to decide what course their government will take, and we could see tomorrow's moves dictated in part by the vote tally. Nothing out of Canada on the USW - Vale mediation talks. The mere fact they are still talking a second day is a positive sign.Looking at the nickel ticker today, you would have to give the nod to the nickel bulls for fighting a hard fight and pulling it off today. The Euro did them no favors and the bears put up a fight, but the bulls fought off constant attacks and came out ahead. Have they got any steam left - or did they fight too hard to maintain the $10/lb level? We will see tomorrow.

  Reports

  Commodity/Economic Articles and Comments

  • Euro Zone Economy Largely Shrugs Off Greece Crisis - more
  • Fed’s Rosengren: Current Policy Is ‘Appropriate’ - more
  • Western States Lead in Personal Bankruptcies - more
  • Moody's Sees Contagion Risk For European Banking System - more
  • Goldman Out In Full EURUSD Destruction Mode - more
  • Gulf Coast expands oil spill emergency defenses - more

  Bet on Gold’s Advance, Sell Nickel, Zinc, Hedge Fund H3 Says - H3 Global Advisors, a Sydney-based commodities and hedge-fund manager, is banking on gold’s advance to $1,500 an ounce in the next year and reducing its exposure to industrial metals such as nickel. - more

  Merafe Resources: Output quadruples as demand revives  - Output at Merafe Resources' joint venture with Xstrata increased 316 percent year on year to 79 000 tons in the first quarter as demand recovered, the JSE-listed ferrochrome producer said yesterday. - more

  AK Steel Sets World Casting Record / Company Produces More Than 100 Miles of Slabs in 59 Days - AK Steel said today that employees at its Middleton, Ohio steel plant have set a world record for consecutive heats of carbon steel continuously cast on either a single-strand or double-strand caster. - more

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

  • Indicators at 7:25 am CST show 3 month nickel trading around  $.10/lb lower, with other base metals trading mixed. The Euro is trading over 6/10 of 1% lower against the US Dollar, keeping the pressure on commodity trading. The Euro is at 1.2718 at the moment. NYMEX crude futures are trading under $80/barrel and down 1/4 of 1%. Gold has opened 1/3 of 1% higher, as has silver. Asian markets ended lower overnight, with China off 4.6% and trading at an eight month low. European markets are trading higher this morning, and US futures show Wall Street has yet to decide where it wants to go for the day. Unconfirmed reports are that there was no activity in LME warehouses yesterday with nickel inventories stalled.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - no report this week as Ed is traveling
  • (AMM) Nickel consumers are seeking out large volumes on the spot market after London Metal Exchange prices corrected Wednesday, but spot premiums remain firm as buyers are finding some difficulty in filling their sizable orders.
  • (MF) Ferrochrome prices in the U.S. spot market inched higher over the past week on strong demand from stainless steel makers, although high prices and end-user stocks are limiting buying interest in other ferroalloys, market participants said.
  • (SMM) Jinchuan Group cut ex-works nickel prices by RMB 10,000/mt to RMB 185,000/mt on May 5th.
  • (Dow Jones) Finnish nickel miner Talvivaara Mining Co. PLC Thursday cut its production target for 2010 following further technical problems at its mine. Talvivaara said it expects to produce between 15,000 and 25,000 metric tons of nickel in 2010, compared with a previous target of up to 30,000 tons.
  • (MB) South Korean stainless re-roller BNG Steel has raised its May list prices by up to 352,000 won ($315) per tonne on higher nickel prices, despite sluggish demand.
  • (CD) Chinese equities dropped to an eight-month low Thursday, led by energy and banking shares.
  • (Reuters) Russian forces freed a hijacked Russian oil tanker and rescued its crew in a helicopter-backed operation on Thursday that killed a Somali pirate, authorities said. Russian investigators said 10 captured pirates, who seized the China-bound MV Moscow University in the Gulf of Aden, will be brought to Moscow for prosecution.
  • Standard & Poor’s Starts Non-U.S. Commodity Index - more

  Nickel loses momentum after April rally - Nickel may lose its steam after a rally in April as China's latest monetary measure to cool the economy and crack down on sizzling property market could slash demand for the metal. - more

  Vale Inco VP steps down - After 15 years, Mike MacFarlane, vice-president of mining for the Canadian/UK operations at Vale Inco, is stepping down - more

  Mega drought forecast for PNG - Papau New Guinea faces a “mega drought” in 2012 and the Government is being called on to start preparing the nation on ways to deal with it. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, May 5

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - plus 27 to 3,379. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Goldman Sachs, Morgan Stanley Among Banks Vying to Manage Coal India IPO // Indonesia's Sri Mulyani Named Top Adviser to World Bank President Zoellick // Australia Signals Higher Bar for Interest-Rate Gains After Leading World // Stocks Plunge, Euro Drops Below $1.30 on Concern Over European Debt Woes // Weber Sees Threat of `Grave Contagion' From Greece to Rest of Euro Region // Greek Quarantine Tested as Spain Vows to Combat Euro Contagion `Madness'  // Rehn Rules Out Spain Bailout, Says Greek Debt Crisis Was an Isolated Case // Weber Says Greek Crisis Doesn't Justify Using Every Weapon in ECB Arsenal // Portugal Rating May Be Cut by Moody's as Budget Woes Hurt Growth Prospects // European Stocks Slide for Second Day as Government Debt Concern Increases // Announced U.S. Job Cuts Plunge to Lowest Level Since 2006, Challenger Says // Meredith Whitney Expects Consumer Credit to Decline, Hurting Biggest Banks // Service Industries Data Show Manufacturers to Drive U.S. Economic Growth // U.S. Executives Become More Confident in Economic Recovery, Survey Shows //
  • The US Dollar is presently trading over 8/10 of 1% higher against the Euro, but off session highs. NYMEX crude oil is down 2.8% and at $80.42/barrel. Gold is only slightly higher and off session lows, while silver is trading 2.35% lower at the moment. Base metals all ended lower. Indicator charts show nickel declined much of the day, dive might be a better term to use, until late when it bounced around the $9.40/lb level. Dow Jones reports three month nickel ended the day, after falling $2750/tonne during the day and $440/tonne off April's close, at $9.93/lb . It did bounce nearly $.25/lb and back over $10/lb in after market trading. This is the market's first close below $10/lb since March 15th. Inventories of nickel stored in LME warehouses fell overnight, and now sit just under the 145,450 tonne mark. Sucden finally updated their day old nickel chart and it shows day one of the plunge (chart here). This is one of those days when those of us who feel the volatile nature of nickel prices is driven primarily by speculative fund money investment and has little to do with the actual fundamentals, sit back with our big cynical smirks, and challenge those of the old doctrine of supply and demand, to dispute the evidence. The 'panic' that is driving this decline is as emotion based as the 'exuberant' buying binge was that drove nickel prices much higher in April. Let's see what the analysts wrote today. Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt told Bloomberg “Fears are growing that the Greek government cannot control its people and the debt crisis. As long as the uncertainty persists on the markets and risk aversion is still increasing, there will be pressure on commodity prices." Hey Dan. This whole Greece deal isn't an overnight development. In fact, if you track nickel prices with the news since January when the whole Greece crisis news began, commodity prices have been going steadily higher. Nice try. Who's next. Neil Buxton, managing director of London-based researcher GFMS Metals Consulting Ltd. is reported to have said “The metals were at inflated levels and we analysts are struggling to justify the levels we’ve seen in the first quarter." Join the crow Neil, join the crowd. Ruy Ribeiro, global commodity strategist at JPMorgan Chase & Co. in London reported “Commodities in my view are overreacting to Greece’s sovereign debt issue and fears of contagion.....The risk of contagion should be monitored closely, but fundamentals are now a lot more positive."  while Deutsche Bank AG analyst Daniel Brebner wrote “Fundamentals for nickel are looking less promising, with more evidence of a big ramp-up in nickel pig iron." VTB Capital wrote "Overall, risk sentiment at the moment is dictating the correction and until euro-zone jitters settle, we could track the broader market with rising volatility across the complex." And our personal favorite for not mincing words, Citi analyst David Thurtell wrote, "It's a massive withdrawal of risk. It's hard to see where the bottom will be."  

  Reports

  Commodity/Economic Articles and Comments

  • (Bloomberg) Merafe Resources Ltd. said first- quarter ferrochrome production from its venture with Xstrata Plc increased more than fourfold from a year ago.
  • Lessons For Euro Zone From Fed’s Aggressive Actions - more
  • Market Changes Tone During Correction - more
  • With Europe's First Real Test of Contagion Quarantine Failing, One Should Doubt the Existence of a Vaccination - more
  • Still Unbalanced - more
  • Greek crisis: clashes across Greece as thousands protest against cuts - more

  Common ground? - Arbitrator Kevin Burkett has asked to meet with representatives of striking Steelworkers and Vale Inco in Toronto today to look for a way to end their almost 10-month labour standoff. - more

  Nickel’s race may be halted - Till recently there were reports that if you invest in garlic, turmeric and Nickel you are all set to reap a fortune. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.95/lb , as speculators bail, with other base metals also lower. The US Dollar is trading over 1/3 of 1% higher against the Euro. NYMEX crude futures are trading nearly 2% lower and at $81.15/barrel. Gold opened slightly lower while silver is off nearly 8/10 of 1%. In overnight trading, Asian markets ended lower with China up 1/2 of 1%. European markets are trading lower this morning as the threat of contagion grows stronger, while US futures show Wall Street could also open lower. Nickel inventories fell overnight.
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - no report for rest of week
  • (Dow Jones) Exploratory talks between representatives of the union and Vale Inco will conclude Wednesday and a decision will be made if there is a way forward to end the 10-month long strike at the Canadian operations, arbitrator Kevin Burkett said late Tuesday.
  • (MB) Jinchuan cuts nickel prices by 5%
  • (JC) The European Industrial Fasteners Institute (EIFI) has decided to cancel the anti-dumping and countervailing duty investigation of stainless steel fastener from India and Malaysia.

  Vale in talks with striking Sudbury union -  Brazilian miner Vale has resumed talks with union leaders in the hope of resolving a nearly 10-month strike at its Sudbury mining operations in Canada, a media report said on Tuesday. - more

  Mining firm denies getting permit for Palawan operations - A local mining company has denied that it obtained a government permit illegally to operate in Narra, Palawan. - more

  Nickel quarrying in Pacific drives Antwerp heavy lift project traffic - May 4 – The first of nine shipments of some “spectacular” project cargo, out-of-gauge cranes and rolling stock, have moved over the port of Antwerp destined for a major quarrying operation in the South Pacific. - more

  Baoshan Steel Seeks ‘New Way’ in Iron Ore Price Talks  - Baoshan Iron & Steel Co., China’s biggest publicly listed steelmaker, is seeking a “new way” into iron ore price talks after suppliers pressed buyers to abandon annual contracts for shorter-term sales. - more

  • Metal recycling may ease steel makers' import dependence - Recycling scrap metals is a way to reduce Chinese steel mills' dependence on imported ore and ease pressures from the surging iron ore prices, industry experts said. - more

  EU April stainless prices up 74 percent, year on year - Stainless steel transaction prices have climbed steeply over the past twelve months. Although improvement in demand since the darkest days of the recession has been a contributing factor, the major influence on the selling value of stainless steel has been the cost of raw materials - most notably, nickel. - more

  Merged Xstrata-Glencore would rival Billiton - Speculation of a merger between Swiss miner Xstrata and its majority shareholder, Glencore, resurfaced yesterday, with both said to be positioning themselves for such a move. - more

  • Xstrata Q1 coal output up 9 pct, copper up 3 pc - more

  Australia PM stands firm on tax as miners fight back - Australian Prime Minister Kevin Rudd told miners on Wednesday he would stand firm behind his planned 40 percent tax on resource profits as the industry intensified its campaign to overturn the election-year move. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, May 4

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - minus 2 to 3,352. (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) Australia Raises Key Interest Rate to 4.5% in Sixth Increase Since October // China Manufacturing Growth Slows, Easing Overheating Risks, HSBC PMI Shows // `Super' Tax on BHP, Rio, Xstrata May Stall Mining Takeovers in Australia // Agricultural Bank of China May Sell Up to 18% of Stock in Initial Offer // Asian Stocks Decline on Chinese Manufacturing Index, Australian Mining Tax // Trichet May Need to `Break The Rule Book' to Defuse Greek Threat to Euro // UBS Posts Biggest Quarterly Profit in Almost Three Years, Beats Estimates // Zapatero Describes Speculation Spain Needs a Bailout as `Complete Madness' // European Stocks Erase 2010 Gain Amid Debt Contagion; BP Drops on Oil Spill //  Fed Says Most Banks Didn't Tighten Lending Standards During First Quarter  // Emerson Boosts Profit Forecast for Year as Cost Reductions Improve Margins // Gains in U.S. Factory Orders, Pending Home Sales Show Recovery Quickening // Stocks in U.S. Retreat on China Manufacturing, European Contagion Concerns
  • The US Dollar is now trading 1-1/4% higher against the Euro as speculation in Europe runs rampant on if the Greece crisis is over, or who might be next. NYMEX crude futures are down 3-1/2% and just over the $83/barrel level. Gold is down over 1% and silver is off 5%. Base metals did not fare any better, with all ending lower. Indicator charts show nickel spent the day in a long drawn out slide that only began to show signs of slowing in after market trading. Dow Jones reports three month nickel fell $.75/lb from Friday to $11.18/lb . Inventories of nickel started May much like they did April, with a gainer, and now sit just under the 145,800 tonne level. April only saw two days of gains however, the first day and the second to last. For the first time in many days, there were no outbound shipments from any of the LME approved warehouses recorded. Pig nickel is back in the mainstream news media headlines, but is not new to readers of this site. Production of pig nickel in China began picking up when nickel hit $8/lb and has been rising as prices rose. The Stainless Steel Council of China Special Steel Enterprise Association or CSSC had a small blurb on their site that stated sales of stainless steel products rose 23.17% during the first quarter, with output increasing 17.70%. Bloomberg reported this morning "According to analysts polled by Bloomberg, the nickel price is expected to decline by 19% to $21,250 a ton by the third quarter of 2010. This prediction is based upon excess supply that is likely to hit the market." Worldwide markets are bearish today, with the Dow down over 200 points.

  Reports

  Commodity/Economic Articles and Comments

  • Cumulative Bank Failures to Date - graph here
  • Personal Bankruptcies Dip, Still Outpace Last Year - more
  • Data Show Low Inflation, but Deflation Redux Odds Low - more
  • The “real” causes of China’s trade surplus - more
  • World-Wide Factory Activity by Country - more
  • The Fed Thumbs Its Nose at the Public - more
  • The Saving Rate Does Not Have to Rise to 7% in the Near Term - more
  • The Great Reflation - more
  • This Picture Tells the Story - more
  • Feds offer $5b to shore up early retiree coverage - more
  • Fire In The Gulf: New Pictures Of The Deepwater Horizon - more
  • Europe's Web of Debt - more

  April North American benchmark Hot Rolled steel price up 58 percent, year on year - An 11.4 percent, month on month, transaction price advance for hot rolled coil has been noted in the US in April. - more

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

  • Indicators at 7:20 am CST show 3 month nickel trading around $.27/lb lower, with all base metals trading lower this morning. The US Dollar is trading over 3/4 of 1% higher against the Euro this morning, adding pressure to commodity trading, with the Euro trading at its lowest in a year. NYMEX crude oil is trading over 1-1/2% lower and at $84.63/barrel. Gold opened 1/2 of 1% higher while silver is down more than 4/10 of 1%. In overnight trading, Asian markets ended lower, with Shanghai off nearly 1%. European markets are trading lower this morning on sovereign debt concerns and US futures show Wall Street could also open lower. Nickel inventories start the month of May by gaining over the weekend.  
  • Bloomberg morning base metal news - more

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - After yesterday's holiday in the UK, we are retracing very sharply as of this writing, as LME markets catch up with Monday's weakness seen both in Asia and on COMEX. Several developments have set in since last Friday to pressure values lower. Of course, we already mentioned the ICSG report, which we think should have caused some damage in its own right last week, but investors have also had a chance to digest the weekend announcement by the EU unveiling its rescue package for Greece. In this regard, both the EU and the IMF will now lend approximately $147 billion to the Greeks, with the first funds being made available by May 19 when Athens has an 8.5 billion Euro-bond maturing. The package needs to be approved by each of the member EU countries, and German Chancellor Merkel said that Germany could give its go-ahead by Friday. In the meantime, waves of protests are sweeping the Greek streets, with a nationwide strike set for tomorrow .... Another negative item out this weekend, was the story that China's central bank will be raising bank reserve requirements by 50 basis points for a third time this year in an attempt to cool the economy down. In the meantime, a purchasing managers’ index out today (released by HSBC and Markit Economics) shows Chinese manufacturing activity falling to a six-month low of 55.4. However, we still think that the incremental tinkering by the Chinese will not yield much in the way of results, and it is a matter of time before the government raises interest rates. .... We are $25,735 on nickel, down $565, and holding up relatively well today all things considered. However, we are rapidly approaching $25,200 support, which rests along the intermediate up channel. If this level is if taken out, we could see a much sharper breakdown. (read Ed Meir's complete morning base metals report here)
  • (AP) China's output of ten major nonferrous metals totaled 7.4177 million metric tons (tonnes) in the first three months of this year, up 38.66 per cent year on year, according to the Ministry of Industry and Information Technology. .... nickel output climbed up 9.86 per cent to 40,100 tonnes
  • CSSC -  (China) The stainless steel daily products sales increased by 23.17% in the first quarter. The output of daily products is 479 thousand tons, increased by 17.70%.

  Nickel Peaking as China Prefers Pig Iron Over 2010’s Best Metal - Nickel, this year’s best-performing commodity, is poised to decline as world supplies climb at the fastest pace in a decade and China’s search for lower-cost alternatives slows demand growth. - more

  Courtesy AISI - In the week ending May 1, 2010, domestic raw steel production was 1,754,000 net tons while the capability utilization rate was 72.5 percent. Production was 984,000 tons in the week ending May 1, 2009, while the capability utilization then was 41.1 percent. The current week production represents a 78.3 percent increase from the same period in the previous year. Production for the week ending May 1, 2010 is down 0.6 percent from the previous week ending April 24, 2010 when production was 1,764,000 tons and the rate of capability utilization was 72.9 percent.

  KEPCO, POSCO Join Hands to Produce Nuclear Power Plant Materials - Korea Electric Power Corporation on Monday signed a memorandum of understanding with steelmaker POSCO to domestically develop materials necessary for building nuclear power plants. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, May 3

  Daily Nickel/Stainless Steel Wrap-up
  • Baltic Dry Index - closed for holiday (chart)
  • Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
  • Headlines & leaders - (Bloomberg) China's Economy May `Crash' Within a Year as Bubble Collapses, Faber Says // India's Factory Output Rose in April for 13th Month, Backing Rate Decision // Buffett to Visit Japan Seeking Deals, Expects China Growth, Toyota Rebound // Australia May Consider Raising Rate to 4.5% in `Finely-Balanced' Decision // BHP Billiton, Rio Tinto Shares Decline on New `Super' Australian Mine Tax // EU Bets $146 Billion in Greek Bailout Medicine Will Stop Contagion Threat // European Stocks Gain as U.S. Data Outweigh Greek Concerns; E.ON, RWE Climb // Short Selling Profits Disappear as Bets Against Automakers, Banks Backfire // Banks Buying Treasuries Help Keep Interest Rates Low Amid Lending Drought // Manufacturing in U.S. Expands at Fastest Pace Since 2004 in Growth Signal // GM's April U.S. Sales Rise 6.4%, Trailing Estimates for Third Month in Row //
  • The US Dollar is currently trading over 3/4 of 1% higher against the Euro. NYMEX crude futures are trading nearly 1% higher and some forecast potential shutdowns from the Gulf oil slick, and the political fallout, could force prices much higher in the coming weeks. Gold is trading 1/2 of 1% higher, while silver is up nearly 1.1%. Base metals went untraded at the London Metal Exchange as England closed for the Early May Bank Holiday. Trading will resume tomorrow. The Baltic Dry Index is also published in England and went unreported today. US Stainless steel producers announced stainless steel surcharges for June this morning and Allegheny and AK Steel's 304 and 316 surcharges can be found on our updated page here. AK Steel reported the surcharge for 304 stainless rose from $1.1005/lb in May to $1.2748/lb for June. The US Purchasing Managers Manufacturing Index was announced today and is helping boost US stock markets. You can find a monthly comparison for China, Japan, Eurozone and the US here. MarketWatch reported this morning that "Boosted by spending on autos, real U.S. consumer spending increased 0.5% to a record high in March, at last surpassing the pre-recession peak set in November 2007, the Commerce Department estimated Monday." They also reported "With spending growing much faster than incomes in March, the personal savings rate fell to 2.7%, the lowest since September 2008". As Harm Bandholz, chief U.S. economist for UniCredit Research noted that consumer spending would most likely increase during the second quarter financed by further declines in the savings rate and commented "U.S. households are, therefore, on their way back to business-as-usual." This should put to the rest the argument that has been going on since this financial debacle started on whether Americans would actually "learn" anything from it, and change their saving/buying habits. President Obama visited the Gulf region over the weekend, a region that could potentially become an environmental disaster of enormous proportions (see graphic under comments below), that could potentially put some serious economic pressure on the economy. One does not have to stretch the imagination far to see how easily this could potentially hit American's hard at the pumps.  

  Commodity/Economic Articles and Comments

  • (Reuters) Russia’s Strikeforce Mining & Resources, the fifth-largest primary molybdenum mine producer in the world, plans to raise between US$150 million and US$200 million from a Hong Kong initial public share offering, a source close to the deal said on Monday
  • Nickel Heap Leaching Study - pdf here
  • China perspective - Going toe to toe with the bully - more
  • Greece secures bailout from Europe and IMF - more
  • Americans Retire Later, but Keep Sharp Longer - more
  • Laugh Lines: How Fed Officials Yuk it Up - more
  • After Chinese Rate Hike, Faber Warns Of Severe Market Crash In 9-12 Months - more
  • Number of the Week: $132 Billion of Lost Synthetic Mortgage Bets - more
  • Bob Bronson: Q1 GDP Overstates Business Cycle Growth - more
  • Track the Gulf of Mexico oil spill movement in animated graphic - more

  AK Steel Announces June 2010 Surcharges for Electrical and Stainless Steels - AK Steel has advised its customers that a $435 per ton surcharge will be added to invoices for electrical steel products shipped in June 2010. - more

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

  • The London  Metal Exchange is closed today for Early May Bank Holiday and will resume trading tomorrow. The US Dollar is trading nearly 4/10 of 1% higher against the Euro as the Greece bailout fails to calm concerns of contagion. NYMEX crude futures are trading 1/4 of 1% higher and at $86.37/barrel.
  • Asian markets, including China, were mostly closed for the Mayday holiday, but those that traded ended lower on new China actions to cool credit. The European market is trading lower this morning, while US futures show Wall Street should open higher.

  Reports

  Commodity/Economic Comments

  • Edward Meir of MF Global Morning Comments - No report today
  • (MW) Diversified miner BHP Billiton’s Leinster nickel operation, in Western Australia, is back to full production, after operations were halted following a fatality.
  • Glencore Said to Be Considering Merger With Xstrata - more
  • (CD) The Purchasing Managers' Index (PMI) for China's manufacturing sector stood at 55.7 percent in April, up 0.6 percentage points from last month, the China Federation of Logistics and Purchasing (CFLP) said Saturday.
  • (ITA) Shipments of manufactured durable goods in March were up after two consecutive monthly decreases, with an increase of $2.2 billion or 1.2 percent to $182.2 billion. This followed a 0.5 percent February decrease. Machinery, up two consecutive months, had the largest increase, $1.0 billion or 4.3 percent to $24.0 billion
  • (CD) China ordered banks to set aside more deposits as reserves for the third time this year to cool a record credit expansion that has sparked the risk of asset bubbles in the world's third-largest economy.
  • (NABE) Employment Net Rising Index, April 2010 NABE Industry Survey - more
  • As Recession Ebbs, Many Still See Gloom - more

  Weak Economic Conditions Make Nickel Buyers Skeptic - Weak global markets and tense situation of EURO zone led the markets trade in a flattish zone for Nickel; the markets lost all the gains, which it built up during mid April and ended flat. - more

  African Eagle Continues to Back 'Hot' Metal - Lower nickel prices will not deter African Eagle Resources from continuing to focus on its major nickel project in Dutwa, Tanzania, chairman Euan Arthur Worthington said on Friday. - more

  Q+A-How the new Australian mining tax works - Australia's new 40 percent tax on mining profits is not as far-reaching as it first seems. - more

  Global Stainless Steel Cycle Exemplifies China’s Rise to Metal Dominance - The use of stainless steel, a metal employed in a wide range of technology applications, has been characterized for 51 countries and the world for the years 2000 and 2005. We find that the global stainless steel flow-into-use increased by more than 30% in that 5 year period, as did additions to in-use stocks. This growth was mainly driven by China, which accounted for almost half of the global growth in stainless steel crude production and which tripled its flow into use between 2000 and 2005. The global stainless steel-specific end-of-life recycling rate increased from 66% (2000) to 70% (2005); the landfilling rate was 22% for both years, and 9% (2000) to 12% (2005) was lost into recycled carbon and alloy steels. Within just 5 years, China passed such traditionally strong stainless steel producers and users as Japan, USA, Germany, and South Korea to become the dominant player of the stainless steel industry. However, China did not produce any significant stainless steel end-of-life flows in 2000 or 2005 because its products-in-use are still too new to require replacements. Major Chinese discard flows are expected to begin between 2015 and 2020. - more

  Sudbury/Voisey's Bay Nickel Strike Coverage

  Morning Nickel Inventory and Price Statistics & Figures

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

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