Updated twice daily before 8:00 am CST and by 1 pm CST

Friday, October 31 (Happy Halloween)

  Daily Nickel/Stainless Wrap-up

• Baltic Dry Index -  minus 34 to 851. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (MarketWatch) European shares extend winning streak // Nikkei slides 5% despite rate cut, region mixed  (Reuters) Dollar rises, on pace for best month in 17 years  // As the financial crisis takes its toll, U.S. consumer sentiment dropped a record amount in October from the prior month, according to the University of Michigan/Reuters index released Friday. // Gold futures lose ground as dollar strengthens - Metal poised for biggest monthly loss since 1983 (Hemscott) US October Chicago Purchasers Index Collapses To 37.8 Vs 48.0 Expected (Bloomberg) Yen, Dollar Head for Record Monthly Gains on Slumping Economy // US Economy: Consumers Throw in `the Towel' as Spending Falls // Oil Falls, Poised for Record Monthly Drop, as Demand Declines // Commodities Head for Worst Month in 52 Years as Economies Slow
• Here is your afternoon round-up of the markets. At present, the US dollar is trading a little less than 1% over the Euro, while crude oil is trading 2-1/2% lower. Metals ended mixed, with all precious and most base metals trading lower. Except for lead and nickel. Indicator charts show nickel opened in the basement today, but surges in late afternoon trading. Dow Jones reports three month nickel ended the day, week, and month at $5.47/lb . Sucden's day old chart shows yesterday's large dip (chart). For the number crunchers amongst our readers, cash nickel averaged $8.07/lb in September. As of yesterday, it had averaged $5.51/lb thru October. It ended last month at $7.19/lb, and last week at $4.54/lb. LME inventories took a small step down, after Rotterdam shipped more than it received. Cancelled warrants also fell. BDI is down, but its spiral downwards has slowed to a trickle. The volatility index, known as the VIX, while still high, has been declining most of the week. World stock markets, that were mixed this morning, are now mostly trading in the green. The news out today was either worse than expected, or not as bad as expected, but on that, the Dow is trading higher and might actually pull off a first for the month, albeit on the last day. It may pull off two consecutive days of trading and ending in the green. Then again, the one fact that has been repeated time and time again this month, the last few minutes of the trading day can bring some big changes.
• Have a safe and relaxing weekend!!

  Commodity/Economic Comments

• (Dow Jones) The general consensus is China's metal consumption will soften further over the next three months at least, says Barclays Capital. "Based on our findings, it looks increasingly likely that we can expect a period of weaker metals consumption, with China unlikely to come to the rescue in the short-term," the bank says.
• (SBB) China’s largest stainless producer Taiyuan Iron & Steel is currently producing at half capacity, a company insider tells Steel Business Briefing. Taiyuan is unlikely to completely halt production like other stainless mills, he says, but adds that in the near-term the company may be stopping operations at some of its hot and cold rolling facilities to carry out maintenance.
• Which way for the world economy? A hung jury is almost too much to bear - more
• The bailout may need a fix Commentary: Is the free flow of capital a good thing for banks and taxpayers? - more
• Mortgage Plan May Irk Those It Doesn’t Help - more

  Mining industry freezes capital expenditure - Analysts say $US50 billion ($75 billion) in planned expenditure is at risk of being delayed next year, as miners bunker down to survive the global financial turmoil. - more

  The chief executive of Brazilian iron ore miner Vale, Roger Agnelli, said on Friday that he expected the global financial crisis to worsen in the coming three to four months. - more

  "Darwinian culling" in junior mining sector - If you think things are bad for junior miners right now, this could just be the start. - more

  Russia May Nationalize Norilsk Nickel Following A State-Sponsored $4.5 Billion Bailout - The Kremlin's move to bail out Russia's richest man, Oleg Deripaska, by providing him with the $4.5 billion emergency loan could lead to the partial nationalization of Norilsk Nickel, says Michael Thompson, financial analyst for RUXX Index. - more

  Ship of Canadian ore hijacked in Gulf of Aden - Pirates have hijacked a Turkish ship with 20 crew and a cargo of Canadian ore off the coast of Somalia, officials said yesterday. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around  $.20/lb lower and drifting. All precious and base metals are down, this last trading day of October. Crude oil is trading 3% lower, while the US dollar is trading nearly 1% higher against the Euro. Markets are mixed (here), and US futures are lower (here). The Commerce Department has already reported consumer spending fell 0.4% in September, this morning. This would be the biggest drop since June 2004. We have the National Association of Purchasing Management - Chicago report out later this morning, and the University of Michigan's Consumer Sentiment Survey results will be announced later. The last day of the month, in which has been one of the worst on record for traders. Will it go out with a whimper, or does the market hold one more October surprise? Stay tuned. 
• Bloomberg morning metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• AIIS September 2008 Press Release - here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices got hammered yesterday, giving up most-- and in some cases all -- of Wednesday's solid gains. Nickel fared the worst, losing all the previous day’s gains of some 14%, while copper dropped by 10%, as rising LME stocks and concerns about a US-led global recession weighed on the complex.  ... For the moment, metals seem to be caught between offsetting factors. On the bearish side, there continues to be legitimate concern about a US-led global recession, a fear that has dominated sentiment for much of this month and which is impacting metals again this morning, where we are sharply lower across the board. Tugging in the other direction, is the fact that metal producers are turning off incremental production rather quickly, while the US equity markets also have a better feel to them in so far as their dizzying sell-offs are becoming far less frequent. ... We are currently at $11,378, down $527, and like lead, nickel is hovering well above the $8850 low seen earlier this week. Our London-based mining analyst told us in a note earlier this week that a major nickel producer said it believes that half of the group is now losing money to the tune of almost US$4,000/ton. (read Ed Meir's complete morning base metals report here)
• (Dow Jones) UBS said Friday that it is lowering its commodity price forecasts for 2009 and 2010 by an average of 37%, excluding precious metals, after the bank downgraded its global growth forecast to 1.3% in 2009 from a previous estimate of 2.2%.
• Drastic steps for uneconomic pits - more
• (SG) It is reported that China has imported 670,000 tonnes of nickel ore in September 2008 up by 170, 000 tonne YOY, but the total import from January 2008 to September 2008 has slipped 14% to 10.43 million tonne.
• (SBB) World stainless steel production is projected to fall by 4.5% to 27.2m tonnes this year, and continue contracting to just 26.3m t in 2009, Michael Wright of ELG Haniel Metals told the BIR convention in Düsseldorf yesterday (30 October).
• Global economic meltdown casts shadow on Orissa - more

  ArcelorMittal to shut European steel-making furnaces - Steel giant ArcelorMittal is shutting down furnaces at a dozen sites across Europe after sharp fall in demand from carmakers. - more

  Japanese ferromoly consumers hold back as European prices plunge - Japanese consumers of ferromolybdenum appear to be holding back from new purchases after spot prices in Europe plunged to $33-36/kg in warehouse Rotterdam this week, from $51-54/kg a week earlier. - more

  Stainless steel producers brace for lean patch in first half of 2009 - Stainless steel consumption in the UAE is expected to go through a downturn period in the first half of 2009, in light of the global financial crunch, industry experts say. - more

• Global Stainless Steel Industry Marks UAE as Strategic Hub - The Emirate of Dubai is well positioned to play a major role in the development of the global market of stainless flat products, according to Mr. Luigi Agarini, Managing Director of Tad Metals, one of the speakers at the 2nd International Stainless Steel Symposium, which commenced yesterday at the InterContinental Dubai Hotel. - more

  Mining's great depression - At the start of the Great Depression in 1929, SA prime minister Barry Hertzog insisted: "There is no reason to anticipate a slump." He got it horribly wrong. - more

• Structure To Decrease Fe-Cr Production In South Africa Is Expanding, With Same By Assmang = ARM Announced On End Last Week To Suspend Operations Of Two Electric Furnaces - /more

  Vale to Cut Output Starting Tomorrow as Metals Demand Slows  - Cia. Vale do Rio Doce, the world's biggest iron-ore producer and second-largest nickel supplier, will start cutting production tomorrow as demand for metals slows. - more

• Brazil Vale says to cut iron ore output 30 mln T/yr - Brazil's Vale, the world's largest iron ore miner, said Friday it would cut its iron ore output by 30 million tonnes a year from November to adjust to what it sees as a new economic outlook under the current credit crisis. - more

  Norilsk Nickel to cut 10 pct Moscow office staff - Norilsk Nickel, the world's largest nickel miner, will cut 10 percent of the work force at its central office in Moscow due to the financial crisis, Norilsk spokesman Viktor Borodin said on Friday - more

• Kremlin keeps assets under Russian thumbs - The Russian government has agreed to lend $4.5-billion (U.S.) to a key arm of Oleg Deripaska's empire, but the bailout is as much about saving MMC Norilsk Nickel, the world's biggest nickel maker, from foreign control as rescuing an oligarch with money problems. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 30

• Baltic Dry Index - minus 40 to 885. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Globe & Mail) U.S. jobless claims remain high (Bloomberg) Dollar, Yen Fall as Rate Cuts, Stock Rally Boost Risk Appetite // U.S. Economy Shrank 0.3% in the Third Quarter as Consumer Spending Dropped //  Treasury, FDIC Consider $500 Billion to Back Mortgages, Slow Foreclosures  (Wall Street Journal) Stocks Climb on Hopes for More Rate Cuts (Business Week) 30-year mortgage rates rise sharply
• Here is your mid-day update. Crude oil has reversed course and is now trading nearly 4% lower, while the US dollar is now trading 1/2% higher against the Euro. While precious metals are trading mixed, base metals ended their trading lower.  Indicator charts show nickel was trading very choppy this morning, but by late afternoon, experienced a big fall. Traders appeared to be watching US markets for cues, and when the Dow turned lower, traders took some profits. Dow Jones reports three month nickel ended the day at $5.40/lb . We got a kick out of this Reuters headline today. "LME copper, aluminium, nickel fall on demand worries". Say it ain't so!? We forget sometimes that many readers aren't following metals everyday, so business news writers must provide an explanation for every twist and turn in the price. Demand worries, demand destruction, whatever you want to call it, demand is down, inventories are up. We mentioned yesterday that cancelled warrants had yet to climb, casting doubt on the ability of the market to hold this rally. Overnight, they actually dropped, as did inventory numbers by less than 200 tonnes. Sucden's day old chart shows nickel trading thru yesterday (chart here). It is interesting reading metals analysts these days. None of them will admit it, but they really have no idea what is going to happen from day to day. And it is not just metals analysts . Stocks ARE oversold, but convince the guy who is watching his retirement slowly disappear, and he'll remind you the market has room both ways left to move. Demand WILL return, but not until buyers/sellers of the actual commodity feel better about what the future holds, and see a need for their product, and traders of paper can go hang.  Nickel WILL go higher, and nickel WILL go lower. But until the first two questions provide some clearer answers, trying to guess what nickel prices will do from day to day, gives worse odds than flipping a coin. We like to pick on analysts but they have a tough job. They get paid to provide answers to impossible questions sometimes. And to make matters worse, some of their clients are making multi-million dollar decisions based on these forecasts. There are just as many arguments to prove a zebra is white with black stripes, as there are that a zebra is black with whites stripes. After all the number crunching, and historical analysis, and head scratching, much of what a metals analyst is going to present in times like these, is based as much on instinct, a gut reaction, and a wish and a prayer, than anything else. We'll stick to Monday night quarterbacking them, because the few times we have stuck our necks out and forecast something, we got our heads chopped off. What's the saying? Those who can - do. Those who can't - teach. Class dismissed. 

  Commodity/Economic Comments

• (Dow Jones) LME base metals prices will retrace and prices will stabilize after the surge higher since the start of the week, says Standard Bank analyst Leon Westgate. "It will be a case of watching the stock markets and the wires," Westgate says. Adds metals will be volatile, but sentiment remains bearish.
• UBS analyst John Reade - "We doubt that this is the start of a sustainable recovery in commodity prices."
• Fed turns very pessimistic - more

  Albidon maintains Munali nickel mine ramp up - African mining company Albidon is sticking to plans to ramp up nickel production at its Munali mine in Zambia, but is set to defer work on two projects due to current financial instability, the company said in its quarterly results statement released Thursday. - more

  Russian metals firms cut output, capex - Steel and metals producers in Russia have announced widespread cuts in production and capital expenditure plans to cope with a slowdown in demand and the need to refinance loans during the global financial crisis. - more

• Russia tycoons bailout could turn into Kremlin trap - Russia has spent $8 billion from its foreign exchange reserves to help some of its richest men to refinance foreign debts and the names of the recipients give a clue to the Kremlin's favorites. - more
• Russia's Image Suffers as Deripaska's Rusal Bans Norilsk Nickel From Buyback and Attacks Minority Shareholders - more

  300 steel mills burning tyres - Around 300 steel mills in the city are increasingly burning used tyres as fuel, releasing toxic smoke into the environment, it was learnt on Wednesday. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.05/lb  lower, but rebounding from an earlier drop. Nickel rose 13.2% yesterday, with three month nickel rising as high as$13,550. Today, it is markedly lower. So far this morning, crude oil is trading 2% higher, while the US dollar is trading off by nearly 1% against the Euro. Precious metals are higher, while most base metals are lower. World markets are all in the green this morning, as are US futures. Market Watch has just reported "The U.S. economy contracted at a 0.3% annualized rate in the third quarter, as consumer spending declined at the fastest rate in 28 years, the Commerce Department estimated Thursday."
• Bloomberg morning metal news - more
• Reuters - more
• Reuters India - more

  Nickel Slump Signals Output Cuts Needed, Norilsk Says - Nickel producers need to cut supply further to halt a drop in prices, as demand may not grow next year and new capacity starts operating, said an economist at OAO GMK Norilsk Nickel, the world's largest maker. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Commodity Price Index - pdf here
• Damstahl Stainless Steel Report - pdf here
• SSINA remarks on China SS trade - pdf here
• Eliminating Global Barriers to Trade in Steel Scrap and Raw Materials - ppt here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals were on fire yesterday, with copper soaring almost 14% for one of its biggest moves on records. Other metals in the group also pushed higher, buoyed by a weaker dollar, which had one of its sharpest down move in years. ... We are seeing a general retreat in metals this morning despite the fact that energy markets are higher, the dollar is again lower, while Asian and European stocks are up on the day. ... We are currently at $12,878, down $762, and giving up a good portion of yesterday's gains. Nevertheless, nickel’s price decline seems to be emanating more from the weakness we are seeing in copper, and does not have to do much with the sector itself. Short-term, we remain moderately constructive on prices. (read Ed Meir's complete morning base metals report here)
• (Purchasing) Quoting Scotiabank economist Patricia Mohr - Current nickel prices are below break-even level for some miners. Average production costs are estimated at about $5/lb as an industry average--and as high $6.80 for the highest cost producers. Since it now is estimated that some 40% of the nickel mining and smelting industry may be losing money.
• Is it boom or gloom time for commodities? Experts may wax eloquent on this for weeks after the global market meltdown. - more
• (JMB) Nippon Steel reduces the production by around 1 million tonnes in fiscal 2008 ending March 2009 from previous year to meet slower demand under US financial crisis.

  European factories have announced November surcharges, and thanks to falling nickel, chromium and molybdenum prices, they fell substantially. 304 SS surcharges dropped an average of 23%, while 316 SS surcharges fell 18%. 430 ferritic stainless surcharges dropped 12%.

  China's September unwrought nickel exports rise 2% year on year - China's unwrought nickel exports stood at 541 mt in September, just 2% more than in the same month a year ago but up 45% on the 373 mt exported in August, latest data from the General Administration of Customs of China showed Wednesday. - more

  Japan's steel mills mull cuts in moly-containing stainless output - Japan's production of chrome-nickel-molybdenum stainless steel, more commonly known as SUS316 stainless steel, is likely to fall in November, which will hit molybdenum demand, local market sources said Thursday.  - more

  Eramet May Prolong Nickel Output Cuts Into 2009 - Low nickel prices lasting beyond "a few weeks or months" could force French nickel producer Eramet S.A. (ERA.FR) to prolong output cuts into next year and introduce cost cutting measures, said Pierre Alla, chief executive of Societe Le Nickel, Eramet's subsidiary in New Caledonia. - more

• Brazil Miner Vale's Goro Nickel To Start Up In 2009 -Estado - Brazilian mining giant Companhia Vale do Rio Doce's (RIO) Goro nickel mining project in New Caledonia will start up in 2009, an executive with the company's Vale Inco unit told the local Estado news agency Wednesday. - more

  Lower nickel prices reduce employment, salaries in mining sector - Employment and average compensation in the mining and quarrying sector started to fall in the April to June period as companies face declining mineral prices. - more

  Nickel boss predicts vintage price rise - Australian nickel producers have continued to punt on nickel making a return to $US8 a pound at Chinese New Year. - more

  China will host an international mining congress in Beijing this November, creating an information exchange platform for both domestic and overseas mining industries, according to a press conference today. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 29

• Baltic Dry Index - minus 57 to 925. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Reuters) FTSE surges 5.3 pct ahead of U.S. rate decision (Bloomberg) China Cuts Interest Rates for Third Time in 2 Months (MarketWatch) Orders for durables up 0.8%, lifted by aircraft // US Fed poised to fight crisis with another rate cut (CNN) Experts say investors need to prepare for more big moves - both up and down - in the coming months. (Toronto Star) Surging oil boosts TSX (MarketWatch) Commodities float on crude (Dow Jones) Commodity Stocks Climb Ahead Of U.S., Brazil Rate Decisions  // Venezuela Launches First Satellite With China's Help
• Saying commodities had a big day would be a slight understatement. Some of them had a huge day. Let's do a round-up. US dollar is trading about 1/2% lower against the Euro, and keep it mind it fell hard late yesterday. Crude oil is now trading over 8% higher. Metals, both precious and base, had a big day, for the most part. Indicator charts show nickel headed skyward at the start and never gave up its momentum. Dow Jones reports three month nickel ended the day at $6.19/lb  . And while it may seem like a long time to some, we were trading at this level back on the 9th of this month. Markets are watching the Fed announcement closely, which is due out minutes after our afternoon update is posted, and with the market betting on a 50 point cut, anything less could easily disappoint, and anything more could easily overjoy the markets. Dow is presently up and traders are hoping for a second consecutive day to end in the green, a feat Wall Street hasn't pulled off in a very long time. And while it is easy to get caught up in the sudden buying frenzy nickel is experiencing, there are reasons to believe it may not last. Cancelled warrants remained flat overnight, after nickel had already had two big gaining days. If there were buyers, we should have seen some purchases by now. Nickel official cash prices fell as low as$8805/tonne on Friday, and had risen to $11,635/tonne yesterday. When stainless steel producers buy, they typically buy by the thousands of tonnes - so movements like this really take a chunk out of their bottom line. If we don't see some movement in the cancelled warrants overnight, amounts committed for shipment, then we will have serious reservations about this increase having much staying power. LME warehouses took in another large shipment of nickel today. The durable goods report out of the States helped today, especially the part about aircraft industry giving a most major boost. Lot of nickel goes into the aircraft industry. The dollar falling late yesterday, also gave some early momentum to metals trading.  It is interesting to note that among US analysts, there are many who feel the dollar has a long way yet to fall. If true, this will give another shot to metals pricing. Let's hope this puts some miners back to work. Being in the stainless steel industry, we like low nickel prices, but not so low that we put people out of work.     

  Nickel prices are expected to plunge well into 2009 - "Nickel prices have plunged almost 60% this year, as slowing global economic growth has cut demand for the alloying mineral from producers of stainless steels and other specialty metals." - more

  Nickel price slump halts projects, but outlook bullish - "Many nickel projects are expected to be delayed because they have become unprofitable due to falling prices, but this could cause future supply tightness and push prices up again, industry sources said." - more

  Sherritt suspends some expansion plans - Resources company Sherritt International Corp. is “suspending significant expansion initiatives” at its metals division and putting a lid on costs because of a slumping economy while reporting strong third-quarter results. - more

  Minara accepts lifeline from Glencore -  Nickel producer Minara has been forced to call on the underwriting support of its biggest shareholder, Glencore, to get away a life-saving $210 million rights issue at the distressed price of 30¢ a share. - more

  OMC to retender for fixing of iron ore and chrome prices - "In a move that is likely to bring some relief to the industries depending on supply of raw materials by the Orissa Mining Corporation (OMC), the state owned mining company has decided to retender the fixing of prices of raw materials sold by it." - more

  Asian steel mills' profit hit by flagging economy - "Nippon Steel Corp and China's Baoshan Iron and Steel Co (Baosteel), two of Asia's biggest steelmakers, posted weak quarterly results and face a bleak demand outlook as recession fears stalk the global economy." - more

  The commodities boom has gone bust overnight. SA mining is under threat, jobs are at stake and the economy is under pressure. Is there light at the end of this dark and gloomy tunnel? - more

  The Australian Stainless Steel Development Association (ASSDA) says its PacRim Stainless 2008 conference will be held in Townsville, Queensland, from 30 to 31 October 2008. - more

  400 workers will idle longer at AK Steel - A union official said Tuesday the local AK Steel Corp. plant will be idle from mid-November until after the first of the year because of a lack of orders. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.31/lb higher.  Money is suddenly pouring back into markets, and commodities are feeling the rush. Crude oil is up 6% this morning, and precious and base metals are all trading in the green. The US dollar is trading higher against the Euro, only slightly, but ended much lower yesterday (chart). World stock markets are nearly all green this morning (here) as are US futures (here). US markets are watching for a rate cut by the Fed today, while the world will be watching how Wall Street reacts to the news. US report orders for durable were up 0.8% in September, thanks to a strong demand for aircraft.  
• Bloomberg morning metal news - more
• Financial Times - more
• Reuters - more
• Something to think about - Two articles  from yesterday - (Reuters) Americans losing sleep - "92% of respondents said the economic turmoil is keeping them awake at night, according to a survey by ComPsych Corp, a provider of employee assistance programmes." (story) 92%!! What could be worse that 92 out of 100 American's being tired and nervous?? (CBS) Gun Sales Thriving Despite Tough Economy  - "Purchases of firearms and ammunition have risen 8 to 10 percent this year, according to state and federal data." (story)

  LME nickel bounces more than 5 pct to $12,600/T - Nickel prices bounced as much as 5.3 percent on Wednesday to track other industrial metals higher as global equity markets jumped and provided positive sentiment. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• China Commodities Weekly - more
• World Crude Steel Production as of August 2008 - pdf here
• Large nickel report - pdf here (month old but extensive)
• Metal Center News Association News - more
• AISI September Imports Up 15 Percent vs. August - pdf here
• U.S. Imports for Consumption of Steel Products Sept 2008 - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - We are seeing a substantial bounce in metals this morning, as stronger equity markets and a slightly weaker dollar are both coming to the rescue of the beleaguered bulls. The firmer tone was first in evidence yesterday, after the Dow Jones Industrial Average surged by a spectacular 880 points, lifting most commodities in its wake. The spike has spilled over into both Asian and European stock markets overnight, fueling the rise in commodity prices for a second day running. ... Whether this latest equity-induced bounce that is lifting commodities sustains itself remains to be seen, as we have seen equally promising rallies fizzle in the past. However, we suspect that the current rally could have some legs to it. We say this in view of the fact that most markets are extremely oversold, and have perhaps discounted much of the bad news that has been hammering them for the past few weeks. In the case of the US stock market, participants are also looking at the likelihood of yet another interest rate cut out of the US later today. ... Short-term, look for metals (and most other commodities) to continue to gain ground, as given the extent of the recent price declines, short covering rallies could be substantial and are to be respected. Eventually, we foresee metals settling into a broad, sideways trading range, one that will be distinctly different from the "falling knife" pattern that we have been seeing for much of the last few weeks, a trend that may is great for the shorts, but has the negative impact of paralyzing physical business.  ... We are currently at $12,625, up $655, and prices seem to be on track for a test of $13,800 resistance. We would suggest that nickel at $8000- $10,000 is an attractive level at which to price fix, since these levels are in line with the ten-year average nickel price of $9600 evident from 1996 -2006. More importantly, in this price range, nickel is well below the cost of production for many producers.(read Ed Meir's complete morning base metals report here)
• Canada - Samuel Manu-Tech Inc. third quarter results - Stainless steel surcharges decreased in the third quarter along with some reduction in base prices, driven by weak demand, particularly in the automotive and housing markets. Surcharges will decrease significantly in the fourth quarter due in part to continuing lower demand and the reduction in the price of nickel, iron and other base metals used in the production of stainless steel.
• (Reuters) Recent moves by China to stimulate economic growth should take effect within months, Rio Tinto's chief executive said on Tuesday in Montreal, predicting that metals demand from the country will recover.
• (Dow Jones) Ravensthorpe currently losing money, analysts say, outlook for nickel market short term shaky but longer term agree current prices not sustainable, producers eyed aggressively cutting output, which could result in swift rebound once demand resumes.

  Ravensthorpe nickel yield rising in next half-BHP - "Nickel production at Australia's Ravensthorpe mine will rise to 7,000 tonnes in the January-June half year from 2,000 tonnes in the current half, owner BHP Billiton Ltd said on Wednesday." - more

  Low nickel price forces Minara to embark on $210m - The sharp drop in the nickel price has forced nickel miner Minara Resources to embark on ambitious capital raising plans to allow it to stay afloat amid volatile markets. - more

  Siberian court suspends Norilsk share buyback - A Siberian court on Tuesday froze a $2 billion share buyback planned by Norilsk Nickel , the world's largest nickel miner, pending a final ruling in a case brought by one-quarter shareholder United Company RUSAL. - more

• Russian miner Norilsk Nickel, which plans to buy back about 4 percent of its share capital for $1.8 billion, received tenders for nearly 14 times more shares than were on offer, the company said on Wednesday. - more

  Eramet: Adjusting Nickel Output To Market Requirements - French nickel producer Eramet SA (ERA.FR) said Wednesday it is adjusting its 2008 nickel production to match the weakening demand environment, with output and deliveries to drop around 13% on year to 52,000 metric tons. - more

  Scotiabank says base metals prices will stay at low ebb through year-end - Scotiabank economist Patricia Mohr predicts China will step up its copper buying in 2009, as nickel prices rally in the first half of the year as Asian steel production ramps up again. - more

  Japan plans to ask the European Commission to oppose BHP Billiton's bid to merge with rival Rio Tinto on the grounds that a merger would adversely affect the domestic steel market, the Nikkei business daily reported on Wednesday. - more

  Small-Scale Nickel Producers Successively Withdraw From Nickel Production = First Nickel / Canada Suspends To Operate Nickel Mine - here

  Baosteel sees stainless, carbon steel losses in Q4 - Baoshan Iron and Steel Co, the listed unit of China's largest steel maker, said on Wednesday that it expected losses on its carbon steel products in the fourth quarter of this year due to slumping prices. - more

  Global Steel Prices in Freefall - Further Reductions Anticipated - Transaction prices continue to head downwards. In the US as scrap costs are dropping rapidly. - more

  Courtesy AISI - In the week ending October 25, 2008, domestic raw steel production was 1,680,000 net tons while the capability utilization rate was 70.4 percent. Production was 2,112,000 tons in the week ending October 25, 2007, while the capability utilization then was 88.5 percent. The current week production represents a 20.5 percent decrease from the same period in the previous year. Production for the week ending October 25, 2008 is down 3.7 percent from the previous week ending October 18, 2008 when production was 1,744,000 tons and the rate of capability utilization was 73.1 percent.

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here or here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 29 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, October 28

• Baltic Dry Index - minus 66 to 982. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (CNN) Home prices see another record plunge (Globe & Mail) U.S. consumer confidence drops to 41-year low (Washington Post) Gun Sales Thriving Despite Tough Economy (MarketWatch) ASIA MARKETS Hang Seng rockets 14.4%, Nikkei spikes 6.4% (UPI) US markets hold to gains Tuesday (Reuters) Europe shares snap 5-day losing run; VW soars (Bloomberg) Europe Faces `Huge Threat' as Emerging Markets Slide (Forbes) Gold up as dollar softens, oil firms
• At the moment, the US dollar is only slightly higher against the Euro, but only by 1/10 of a percent, while crude oil is trading dead even with its morning start. Metals are trading, and ended mostly in the green, except for silver and zinc. Indicator charts show nickel had a strong morning, a temporary setback in afternoon trading, and another surge at the end. Dow Jones reports three month nickel ended the day at  $5.43/lb . We were wrong on Sunday when we said the most read article in the London Times was probably adding to metals traders sense of futility. Obviously it gave them renewed hope for the future, as they came back from the weekend on fire. Sucden's day old chart shows the pattern breaking change we witnessed yesterday (chart), and today continued the spurt. The RSI was showing overbought when the market opened this morning, but traders were having none of that, and continued buying today. Overnight LME nickel inventories gained again, and cancelled warrants moved up a tad. Lots of questions about why the sudden change, with lots of speculation around, but few answers. Short covering may have started this mini-rally, but we think there was more involved today than that. Dollar not doing much? Dow trading higher? Who knows. Nickel gave all the trademarks of being seriously oversold in the recent panicked stampede to get cash in hand, but that could be said about most commodities and stocks worldwide. Do LME traders have more confidence in the future than US traders? Doubtfully, with the VIX hitting an all time high in yesterday's opening (graph). And will it stick? That's a million dollar question. Nickel's recent freefall has cost us some mines, that have shut down operations, due to their sudden fall into un-profitablity. Even with these closure's, we still face a situation of oversupply, primarily due to the decline in stainless steel production. Speaking of depression, how would you like to be the poor person who is responsible for buying nickel at a stainless steel producer? For the last three years, these poor souls have been making decisions based on gut instincts, with a 50-50 chance of making, or losing their company thousand's of dollars in a day. Now, with nickel back to 2003 level's, and their purchase order pen ready to be used, they find they don't need any nickel right now.  

  Upturn in Stainless Steel Market Expected Early Next Year - Stainless steel prices are likely to slip further over the next few months. More production cuts are also envisaged for the rest of 2008. - more

  Reports

• The Steel Weekly - pdf here

  Commodity/Economic Comments

• (Reuters) Alex Tonks, associate commodities analyst at Citigroup - "We forecast nickel to average $6 a pound next year ... But it's unlikely we will see sustained trough cycle prices because of the extremely steep nature of the cost curve. We estimate that 30 percent of the industry is making losses, the heaviest among nickel pig iron producers and laterite smelters."
• King Henry Paulson says: 'Buy banks!' But gurus say no: Cool Andy, Mad Jimmy, Genius John, Nervy Naomi - more

  Its competitors are shutting in more nickel supply by the day but BHP Billiton yesterday touted its ability to make countercyclical investments in the stainless steel raw material. - more

  Steel Business Briefing reported that November alloy surcharge numbers have now been issued by all European stainless coil mills using the short fuse four week price monitoring window, and they confirm previous indications of a significant fall in November values. - more

  Nickel crisis in Murmansk - The drop in nickel prices from more than 50,000 USD per ton to less than 10,000 USD has resulted in drastic revenue cuts for nickel producer Norilsk Nickel. - more

  Scotiabank's Commodity Price Index Retreats Further in September - For the second consecutive month, Scotiabank's Commodity Price Index, which measures price trends in 32 of Canada's major exports, lost significant ground in September, declining 6.8 per cent month-over-month. - more

  In this climate, a 19 per cent rally in the nickel price over the past two days makes for a handy gain. - more

  Kazakh miners cut output as crisis hits demand - Kazakhstan's leading miners, ENRC and Kazakhmys, are scaling back production as the global financial crisis hits demand for their metals, company and government officials said on Tuesday. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.21/lb higher, and climbing. Metals, both precious and base, are all trading in the green this morning. The dollar is also trading higher against the Euro, by about 1/2%, and crude oil is trading nearly 2-1/2% higher. World markets were, and are trading mostly in the green (here) and US futures show Wall Street may be in a much better mood today (here).  The Fed begins its two day session today, and markets are betting on a large rate cut on Wednesday. European Central Bank Jean-Claude Trichet hinted another rate cut may be coming in Europe yesterday.    
• Bloomberg morning metal news - more

  LME tin, lead, nickel jump on short-covering - "Nickel also advanced 5.9 percent to an intra-day high of $11,750 a tonne and lead hit a high of $1,380 versus a close on Monday of $1,295. - more

• (Dow Jones) LME nickel prices are extending gains made Monday amid thin market conditions, says a London trader. Says the volumes are not huge and sellers are getting "stopped out" as buyers take advantage of improved broader financial market sentiment. "It shows how thin the markets are," the trader says.

  Reports

• Global Mining News - pdf here
• India markets closed for holiday today
• Daily Resource Plus - here
• Commodity Observatory - pdf here
• Mining Eye- pdf here
• Financial Weekly - pdf here
• TD Special Report - President, Economy, and Financial markets - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - next report tomorrow - Ed traveling today
• Weekly Nickel Forecast by SMM Specialist - more
• (Ukranian Journal) Ukraine's steel industry may reduce output of long and flat products 11.8% this year to 28.8 million tons, Andriy Fedoseyev, president of the Ukrainian Metal Traders' Association, told Interfax.
• (MNP) Nickel rose 11% on the London Metal Exchange overnight, but at just $US10,920 per tonne, it is trading at around half of its August 21 price of $US21,465.
• (MB) Industrial Metallurgical Holding (IMH) has stopped all nickel production, a source at the company told MB on Tuesday.
• (Recycling International) It has been another month of rising stocks and falling prices for nickel, while stainless steel producers are largely unenthusiastic about sales prospects for the fourth quarter. (more)
• Nickel – where to from here? - more
• (CE) China's coal output slowed down in September after power consumption weakened for five months in a row on economic downturn, the Beijing News reported on Tuesday citing sources with China Coal Transportation and Sales Society(CCTS).
• (SBB) The preliminary decisions in an antidumping administrative review by the US Department of Commerce (DOC) on stainless bar from India and Brazil have been postponed, Steel Business Briefing learns, because of complexity in the cases.
• ENRC: Cutting 4Q Iron Ore Production As Demand Weakens - more

  BHP Says High-Cost Nickel Producers Under Pressure  - BHP Billiton Ltd., the world's third- largest nickel producer, said high-cost competitors are under pressure because of falling prices and slowing demand for the metal used to make stainless steel. - more

• China to underpin stainless steel growth: BHP - BHP Billiton expects stainless steel demand to be robust over the long-term, underpinned by China's urbanisation and industrialisation. - more

  Work stops at Redstone mine project - The Timmins Chamber of Commerce president says the suspension of operations at the Redstone Mine is no reason for those in the local mining sector to panic. - more

• Laid-off miners won't see plays - Salo says the decision was not in Sudbury's best interest. If you take into consideration that approximately 80 per cent of the funding was to come from outside sources, I think she should give her head a shake. - more

  Jinchuan lowers 2008 nickel target output by 16.7% on weak market - China's largest nickel producer Jinchuan Group has lowered its target output for electrolytic nickel to 100,000 mt in 2008, down 16.7% from the initial goal of 120,000 mt on the back of unfavorable market conditions, the company said in a statement over the weekend. - more

  Metals commodities outlook positive despite forecasts of rough going in 2009 - BMO’s Bart Melek notes that the sentiment at the recent LME Week was not as bearish as one would expect given that many metal prices are so low and some miners are operating below cash costs. - more

  China Iron and Steel Association has called a conference of the largest domestic steelmakers to work out a common stand in bargaining with major iron ore producers in the 2009 round of price negotiations starting next month, the English newspaper China Daily reported on Tuesday. - more

• (SG) Bloomberg reported that cash prices of iron ore imported by China fell by 11% to an almost two year low because of weaker demand from steelmakers.
• Although iron is one of the most abundant elements on earth, the market for iron ore is surprisingly complex. Securing iron ore, which is used to make both iron and steel, is a priority for many nations. - more
• Don't expect China to get the West out of this mess - more
• At the moment, when the iron ore business is widely seen as a buyer’s market, Chinese steel companies are not directly contradicting the giant Brazilian and Australian suppliers in contract negotiations for long-term iron ore supply in 2009. - more

  The Ministry of Industry and Trade has rejected an export application from a northern iron ore mining company, saying locally mined ore must be used for domestic production. - more

  The government has agreed to delay export restrictions on scrap metal because of the potential implications of such a ban. - more

  A day after being treated here to a boat ride, a banquet, and a cultural show, President Gloria Macapagal-Arroyo found herself making an unexpected sales pitch for “halo-halo,” among other Philippine ventures that may interest Chinese investors. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, October 27

• Baltic Dry Index -  minus 54 to 1,048. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (UPI) September U.S. home sales up slightly (Bloomberg) Oil Falls to 17-Month Low as Recession Concern Intensifies (Business Week) Yen Keeps Rising as Japan Stocks Hit 26-Year Low (Bloomberg) Yields on commercial paper rose as the Federal Reserve began buying the debt directly from companies, showing the central bank's efforts to unfreeze short- term credit markets have yet to take hold.(CNN) Global stocks suffer again (AsiaOne) Asian shares tumble despite G7 unity pledge (Reuters) HK shares plunge 12.7 pct in biggest drop since '97 (Guardian) 9-More US banks turn to Treasury; G7 sounds yen alarm (MarketWatch) Blue chips locate the green
• At update time, the US dollar is still trading higher against the Euro, but only by 3/4%. Crude oil has regained lost ground from this morning and is presently trading in the green by 1/2%. Metals did a complete turnaround today, with only platinum amongst the base and precious metals trading lower. Nickel had a big day, and indicator charts show after a dismal start deep in the red, it spent the rest of the day heading up. According to indicator charts, nickel came close to gaining $2000/tonne today. Dow Jones reports three month nickel ended the day at  $5.01/lb . New homes sales in the U.S. came in .008% higher than expected(an additional 4000 homes), and this forced some short covering (report). As Citigroup analyst David Thurtell put it, "Confidence is so shaken that any good news is pounced upon. And (in) metals, people are so short that on every sniff of a recovery some of the shorts will cover their positions." Wall Street is having another green Monday, with markets nearly 200 points higher. Markets are betting on a large interest rate cut by the Fed on Wednesday. Then Thursday, the market is expecting to get its first official recession reading with GDP numbers being released. If either of these numbers come in better, or worse than expected, look out for some potential major market movement.

  Reports

• Canada Commodity Price Update - pdf here
• Weekly Commodity Price report - pdf here
• Commodities Daily - pdf here

  Commodity/Economic Comments

• The credit crisis risks delaying around $50 billion of the mining sector's capital expenditure used to fund new or expand existing projects in 2009, Credit Suisse said on Monday. - more

  Jinchuan Group, China's largest nickel producer, said it has decided to reduce its full-year nickel output target to 100,000 tons, down 16.7 pct from the previous target, in order to help support market prices. - more

  Ufaleynikel, Russia's third-largest nickel producer, said on Monday it had stopped production of the metal due to a fall in world prices and planned to sack some 400 employees. - more

  The London Metal Exchange is trying to extend its reach into the world of minor metals with contracts for cobalt and molybdenum, but success depends to an extent on consumers. - more

  Upcoming quarters will see the EU steel market enter a period of temporary instability and oversupply, with a pick-up in demand only likely near the end of 2009, European steelmakers' association Eurofer said in a statement released Monday. - more

  The global financial crisis and sharp falls in metals prices have forced several companies to abandon or put on hold their plans to bring new mines on-stream. - more

  German steelmaker and industrial conglomerate ThyssenKrupp AG Monday denied it was considering making a takeover offer for U.S.-based competitor AK Steel Holding Corp. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.04/lb lower. Indicator charts show nickel opened very low this morning, but has spent much of the morning recovering. US dollar is trading 1.3% higher against the Euro, while crude oil is trading about 2-1/4% lower. Except for tin, which is having a big day, all other base and precious metals are trading lower. Dow futures are lower this morning (more), and world markets traded, or are trading, in the red (more). MarketWatch gives a rundown "U.S. stock futures slumped on Monday on heightened worldwide economic turmoil, with several regional banks getting cash from the U.S. government, the Group of Seven industrialized nations hinting they could intervene to stop the Japanese yen's ascent and the International Monetary Fund announcing rescue plans for Hungary and Ukraine."    
• Bloomberg morning metal news - more
• Reuters - more
• Financial Times - more

  LME nickel falls 5 pct as metals rout continues - London nickel futures dropped 5 percent on Monday, tracking steep falls in other metals as the weakening global economic outlook dragged down industrial raw materials. - more

  Reports

• Metals & Mining Weekly - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Steel Founders' Society of America Casteel Reporter - pdf here
• ISRI Friday Report - pdf here
• South African Iron and Steel Institute Steel News - pdf here
• EUROFER Economic and Steel Market Outlook Quarterly Report - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  next report on Wednesday as Ed is traveling
• (Yieh) Korean Posco denies that it will lower its stainless steel price; it says that it isn’t the time to cut the price.
• (SG) It is reported that total shipments reported by US service centers in September 2008 were 3.73 million tonnes, down by 4.4% MoM from August 2007 and off 7.6% YoY from September 2007. Average daily shipments were 177,600 tonnes, down by 16.4% YoY. This was the weakest September since 1993 in terms of shipments.
• Can a President Tame the Business Cycle? - here
• Forecasters Race to Call the Bottom to the Market  - more

  Minara Resources Ltd., the Australian nickel producer controlled by Glencore International AG, said its reducing costs by cutting workers and changing its mine plan as a slump in nickel prices erodes profits. - more

• Minara Resources said it believes the nickel price will stabilise in the medium term before returning to a more favourable outlook. - more

  Price Of Domestic Ni-Based Stainless Scrap Falls To Yen 120,000 / Ton After Interval Of 4 Years = Suspension Of Stainless Steel Production In China Accelerates To Fall Scrap Price - more

  The cost of protecting against a default by the world's largest commodity trader Glencore International AG has risen fivefold in two months as investors run ``scared'' from mining companies, said Jonathan Pitkanen, a credit analyst at Aviva Investors in London. - more

  Indonesian nickel producer International Nickel Indonesia posted net earnings of $369.1 million in the first nine months of 2008, down 62.1% from a year ago, the company said Monday. - more

• PT International Nickel Indonesia, or PT Inco, said Monday it produced 19,100 metric tons of nickel-in-matte during the third quarter, slightly below target because of an earlier-than-planned maintenance shutdown of an electric furnace, and expects output to fall by about 20% in 2009 as a result of cost cutting initiatives. - more

  Two international banks have blamed the global financial crisis for their decision to withdraw their support from a nickel mining project in New Caledonia. - more

• New Caledonia's government-backed nickel miner La Societe Miniere du Sud Pacifique has run into trouble with US$500 million of funding for the US$3.8 billion Koniambo nickel project, which it is developing with Anglo- Swiss miner Xstrata PLC - more

  Brazilian mining colossus Companhia Vale do Rio Doce (RIO) "is not at loggerheads with China over iron ore prices," CEO Roger Agnelli said Friday. - more

  Chinese steel mills are planning further production cuts because of a lack of export orders, according to Macquarie Bank. - more

• Chinese steel production is likely to be flat this year, rather than rising 5-10 per cent as expected, the head of a steel industry group said, a further sign that the global economic crisis is hurting the Chinese economy. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Weekend Head Start, October 25 & 26

The London Times most read story this morning is "Sex addiction: not just for men"(here). Oh that's just swell!! The world financial system is crumbling and the city where the world's metals traders meet each business day, is more interested in finding out about female sex addiction! Traders, already depressed over falling metal prices, are going to learn that the real reason they can't get lucky, in a city where the opposite sex apparently wants it as bad as they do, must be because they were apparently born losers! And you wonder why we don't dare make a prediction of what is going to happen in metals trading this week.    

  Reports

• The Chart Store Weekly Scoreboard for October 24, 2008 - pdf here

  Commodity/Economic Comments

• (The Star - England) Finnish firm Outokumpu, is closing its thin strip business on the former Arthur Lee site at Meadowhall, with the loss of 230 jobs, but is retaining its stainless steel melting shop, long products production, service centre and sales operations, which employ 650 people.

• (SG) Steel Daily reported that Taiyuan Steel's stainless steel export price to South Korea has dropped on consecutive 6 months. Now, it has cut price by USD 480 per tonne again to South Korea for December 2008 shipment.

• (SG) In response to the recent market plight, Taigang Stainless Steel Co is expected to slash 50% of commercial stainless products production in October 2008 on the basis of September output.

• (China) When China's steel price has slumped recently, no one in the market dare to buy the product. The phenomenon is an abnormal and it is mainly caused by panic psychology, said an official with China Iron and Steel Association (CISA).

• Pakistan - Weekly Review: Commodity prices tumble - more

• Metal Meltdown - The fury of the ongoing financial crisis has engulfed base metals. - more

• Tumbling commodity markets an unexpected bonus? - more

• The man who predicted global markets meltdown - more

• Commentary: The real tragedy of this financial crisis is that people will die - more

• Boom will return, don't ask when - The commodities massacre took even the biggest, the best and the allegedly brightest by surprise - more

• Video - In Debt We Trust - more

  Plummeting nickel prices hitting Sudbury -What one analyst called a "cascading" drop in nickel prices has affected another Sudbury- based miner. - more

  Vale refuses to ship iron ore without price rise - Brazil's Vale, one of the world's top three miners, said on Friday that it would refuse to ship iron ore to China unless steel mills there accept a price increase of 12 percent. - more

  Lord Mandelson and Oleg Deripaska, the billionaire at bay - He owes billions, is banned from the US and faces a major court case in the UK. Our correspondents investigate the strange world of Peter Mandelson’s friend Oleg Deripaska - more

• Rusal defaults on $700 million payment for Norilsk stake news - Russian aluminium major Rusal has defaulted on payment of $700 million in cash payment to billionaire Mikhail Prokhorov for his 25 per cent stake in mining giant OAO GMK Norilsk Nickel. - more
• Putin to rescue Deripaska over $2.5bn loan - Oligarch at heart of Tory funding row gains Kremlin support in repaying banks that backed Norilsk stake - Russian Prime Minister Vladimir Putin will bail out Oleg Deripaska, the oligarch at the centre of the "yachtgate" affair, with a $2.5bn (£1.6bn) loan refinancing this week. - more

Friday, October 24

• Baltic Dry Index - minus 47 to 1,102. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Dow Jones) Asia Markets: Indexes Fall Hard On Bloody Friday (Bloomberg) Europe Stocks Fall on Earnings Concern; Banks, Auto Shares Drop (ShareCast) London’s blue chip index fell as low as 3,715 after negative broker notes and new figures revealing Britain’s economy shrank for the first time in 16 years during the third quarter hurt leading banks. (AP) OPEC slashes production; crude continues to tumble (Canadian Press) Stocks Dive On Belief Global Recession Is At Hand; Oil Sags Despite OPEC Cut (Globe and Mail) Financial crisis spreads to forex market (MarketWatch) US Existing-home sales jump 5.5% to 13-month high // Sell-off spans globe // Dow industrials suffer big loss but skirt speculated 1,000-point dive
• Depending on where your are located in the world, your reaction to today's market results in your area was probably shocked, stunned, or disappointed. If you lived in the US, at least so far, you might be feeling relief. What? Relief, with the market down 250 points?? Well early this morning, it looked like Wall Street was going to be the scene of a bloodbath. As of yet, that threat has not manifested itself, and if the day survives without a major drop, the mere fact the market did not nosedive, 'could' potentially be taken as a positive sign. Here is a rundown of where we are so far today. Dollar is still trading strongly against the Euro, but less than this morning - at about 1.75% higher. Oil is still trading lower, but only 4-1/2% lower. OPEC announced a million and a half barrel a day cut in production quota, but traders either #1 don't believe it will happen, or #2 don't believe it will make much difference as recession spreads around the globe. Metals were mostly lower, but gold, tin and nickel gained. Nickel was the only one of the three to make a noticeable gain, after Vale announced production cut-back's and delay's in opening new nickel mines. Nickel has been beaten so badly the last few weeks, that traders jumped on this news, even if the potential effect of the changes mean little at this point. Indicator charts show nickel slumped in early morning trading, before bouncing back this afternoon. Dow Jones reports three month nickel ended the day at $4.54/lb , exactly where it closed Wednesday, and 7% lower for the week. Sucden nickel chart shows trading thru yesterday (chart here). Nickel inventories rose overnight in LME warehouses, while the Baltic Dry Index continues to slide. The volatility index shows the panic that greeted Wall Street this morning, has subsided some, but when you compare the 1 day to 3 month graph, you can see the markets are still at remarkably high levels (chart here)
• You survived - have a safe and restful weekend!!

  Nickel's Rebound Accelerates After Vale's Cutbacks, Mine Delays - Nickel's advance accelerated in London after Brazil's Cia. Vale do Rio Doce said it was cutting production and may delay new mines. - more

  Commodity/Economic Comments

• (Reuters) Brazil's Vale, one of the world's top three miners, said on Friday it expects global demand for metals and minerals to weaken further and said Chinese demand for metals was down sharply.
• (Bloomberg) Charles Perry, president of Perry Management - "I opened my trading platform this morning and thought I must be at a funeral ... But the market seems to be firming now."
• China seen overtaking Germany as top exporter in '08 - more

  ARM to shut ferrochrome furnaces as demand falls - African Rainbow Minerals Ltd said on Friday uncertainties in the global economy had led to a slowdown in demand for ferrochrome and chrome ore forcing it to shut two ferrochrome furnaces. - more

• Announcement by African Rainbow Minerals Limited - press release here
• African Rainbow Minerals Cuts Output, Sales on Prices - African Rainbow Minerals Ltd., a producer of platinum, chrome and nickel in South Africa, will close two ferrochrome furnaces and cut chrome-ore sales because of weakening demand. - more
• SAfrica gives conditional OK for BHP's bid for Rio - South Africa's Competition Commission on Thursday said it had recommended with conditions a multi-billion dollar bid by global miner BHP Billiton to acquire rival Rio Tinto - more

  Worthington Industries to shut 2 plants, cut 300 jobs - Anticipating a drop in sales, Worthington Industries is cutting its work force by about 300 and will close plants in Louisville, Ky., and Renton, Wash., though no layoffs are planned in central Ohio. - more

• Falling metal prices could stymie new mine projects - A dramatic decline in the price of base metals, such as copper and nickel, is raising questions about the economic feasibility of proposed non-ferrous mining projects in northeastern Minnesota. - more  (quote - The company estimates its cost of production for nickel at $4.57 a pound, which means at the current price, nickel production would be a losing proposition.)

  Power Grab at Norilsk Nickel Likely if Deripaska Goes Broke, Global Insight Reports - Russia's richest man is having money troubles, and the country's largest nickel producer could change hands as a result. - more

  Philippines says Hyundai eyeing mining ventures - South Korea's Hyundai Group is looking at investing in mining projects in the Philippines, in particular copper, iron and nickel, a senior government official said on Friday. - more

  Mount Gibson talks go on, but the ships are staying put - There's no sign of action in the ports for the iron ore producer.- more

  Tata Steel Says Prices to Fall This Quarter on Waning Demand - Tata Steel Ltd., India's largest producer, said prices will decline by more than 10 percent this quarter as slowing economic growth and the global credit crunch forces builders and automakers to slash orders. - more

  Stolen Copper Not Worth a Plug Nickel - Not too long ago, it seemed anything made of metal was as good as gold. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.05/lb lower. Nickel is recovering from an early morning drop that took the cash price below $4/lb for a bit. Morning is shaping up to be another day of global mini meltdown's. Euro is over 2% lower against the Dollar so far today (java chart), while the 1.5 million barrel cut in production announced by OPEC has not convinced traders, and crude oil is down nearly 7% this morning (java chart). Metals are also down, some steeply. Futures show Wall Street could open with a huge thud, showing down 550 (here). Overseas market numbers are bathed in red (here) Is it going to be a Black Friday - or just another day at the office?? Stay tuned
• Bloomberg morning metal news - more
• Reuters - more

  London nickel down more than 5 pct on demand worries - Nickel prices fell more than 5 percent on Friday to $8,850 a tonne -- its lowest since July 2003 -- as investors priced in the threat of a global recession and the dollar strengthened. - more

• Dow Jones - "Nickel broke below $9,000 a metric ton on the London Metal Exchange Friday, falling to its lowest in over five years amid a deepening rout in industrial metals. At 1033 GMT, three-month nickel was trading at $9,100/ton, down 2.7% on Thursday's close. It touched a low of $8,910/ton.

  Reports

• Fortis Asian Metals Monthly - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Yesterday...other metals fared somewhat better, except for nickel, which lost more ground. A rally in the energy markets, plus a late-day bounce in US stocks, helped stabilize the metals complex somewhat as well.... Friday's trading direction will come, we think, from the energy markets, where OPEC is scheduled to meet later in the day. Should the cartel announce higher than expected cuts in production, we could see a continued move higher in oil, which, in turn, could lift metals in its wake. Ironically, a temporary surge in the commodity sector may also help the US stock market, where some of the selling of late has been largely attributable to the implosion in various commodity-related stocks. ... We are currently at $9,260, down $90, and very difficult to pinpoint where next support is going to be, as there is no sign of stability in nickel.  (read Ed Meir's complete morning base metals report here)
• Former Federal Reserve Chairman Alan Greenspan - "If we are right 60% of the time in forecasting, we are doing exceptionally well. That means we are wrong 40% of the time. Forecasting never gets to the point where it is 100% accurate.''
• (MNP) Nickel should climb back to $US17,000 a tonne but miners must accept that the highs of the last two years are gone, a research analyst told a Perth resources conference.
• (News Bites) Western Australian Mines Minister, Norman Moore, expects further pressure on the nickel industry in 2008-09. Moore noted at the Australian Nickel Conference in Perth that nickel sales dropped 34% in 2007-08, associated with falling nickel prices and the negative impact of the Varanus Island gas explosion on production. Moore said conditions will be even more challenging in 2008-09.
• (JMB)  Nippon Steel expects Japanese steel consumption could decrease by 2.5 million tonnes for fiscal 2008 ending March 2009 from original estimate of 79.5 million tonnes.
• (Interfax) China produced 390.95 million tons of crude steel in the first nine months of this year, up 6.2 percent from the same period last year, the World Steel Association (Worldsteel) announced in Brussels on Oct. 23.
• AK Steel CEO James Wainscott - "(Stainless Steel) Demand is simply not there"

  Two of the three banks backing one of the two world-class nickel-mining projects in construction in New Caledonia have pulled out. - more

  Spanish stainless steel producer Acerinox missed forecasts with nine-month net profit of 125.3 million euros ($161 million) on Thursday after making a 51 million euro provision for the falling value of its inventories. - more

  Brazilian mining titan Companhia Vale do Rio Doce (RIO) posted its second-best quarterly net profits ever in the third quarter on higher iron ore prices and record metal production, it said late Thursday. - more

  Steve Sarnoff is caught in a classic recessionary squeeze. Earlier this year, the owner of scrap metal dealer General Metals Corp. paid top dollar for unruly stacks of aluminum cans and copper wires, believing he could sell them for more to metal smelters and manufacturers. - more

  The Philippines has given the go-ahead for the South Korean-controlled Rapu Rapu copper and zinc mine to resume operations, a senior government official said on Friday. - more

  World Capacity For Nickel Production At End 2009 Increases By 270,000 Tons / Year = Large Nickel Projects Complete Successively, To Put Pressure On Supply Situation - more

  China's steel production will barely rise this year, the head of an industry group said on Thursday, scaling back previous forecasts of 5-10 percent growth. - more

• Rio Tinto Ltd, the world's third largest mining company, says a bounce in China's commodity demand next year is inevitable as the effect of the global financial crisis on that country eases. - more

  United Co. Rusal, the aluminum producer controlled by Russian billionaire Oleg Deripaska, got an extension to pay Mikhail Prokhorov for his 25 percent stake in OAO GMK Norilsk Nickel. - more

• Russian molybdenum miner SMR, controlled by billionaire Oleg Deripaska, has delayed a planned share offering in Hong Kong due to the global financial crisis, the company's chief executive said on Friday.  - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 24 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Thursday, October 23

• Baltic Dry Index - minus 72 to 1,149. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (MarketWatch) US home prices down 5.9% in past year, FHFA says // US jobless claims advance more than forecast //  Wall St dips on economic worries in choppy trading // Greenspan "shocked" at credit system breakdown // Two Australian funds freeze redemptions to stem exodus (Washington Post) FDIC May Guarantee Some Home Loans (Bloomberg) European Stocks Fall on Economy Concern; ABB, Daimler, BHP Drop // Brazil to Sell $50 Billion of Currency Swaps to Quell Real Rout (Prime-Tass) Russian stocks slide to 2003 level on S&P downgrade (Dow Jones) Possibility Oil Prices Could Fall As Low as $10 Per Bbbl - Venezuela
• We have had a flip flop day from the morning briefing, to our afternoon update. Dollar is now trading 1/3% lower against the Euro, as Forex traders reportedly take profits. Crude oil is trading around 2% higher, on speculation OPEC will cut shipments by up to a million barrels a day in their meeting tomorrow. Metals ended mixed, with precious mostly lower, and base mostly higher. Base metals appear to be watching Wall Street closely for clues, and with the Dow up (it was earlier anyway), and the dollar down, metals got a nudge. Gold continues to lose ground as the dollar gains, which has many market watchers perplexed. Nickel came very close to falling below the $4/lb range today in mid-day trading, but indicator charts show after a morning of slump, a late afternoon recovery was able to gain back some of the earlier losses. The official cash price for the day, which of course, is supposed to be a big freaking secret unless you pay an authorized vendor to find out what it is that you'll be charged to buy nickel today, came within $.14 cents of settling below $4/lb. Nickel took it on the chin a little harder than the rest of the LME traded base metals, possibly because of the 800+ tonne inventory gain it registered overnight. According to Dow Jones, three month nickel ended the day at $4.24/lb .  Not much extra to say today. Nickel continues to fall, which hurts the miners. Stainless demand is in the dumper, which hurts stainless steel producers. Scrap prices are falling, and your gutters are a little safer today than they were a few months ago. Mining stock is taking a beating and it's hurting not only the big boys, but the small mom and pop traders, who were told last year that the commodities boom would last for many more years. Things keep going the depressing way they are going and we might have to re-vamp this site to spice things up. Wonder if a metals site called "Babes, Boobs, and Base Metals" would work?

  Commodity/Economic Comments

• Outokumpu Oyj - "Lower raw material costs will make stainless steel an even more attractive and competitive material. In the short-term, however, the decline in the nickel price is negative for our profits."
• Margin Calls Ignite Billionaire Fire Sale - more

  Next metals boom may outshine the last - CRU - The economic downturn will hurt demand for metals and lead to sharp price falls, but in the medium term prices could recover and put the last commodity boom in the shade, consultants CRU Group said on Thursday." - more

• The double whammy of China's self-imposed credit squeeze and the Western world's financial turmoil has continued to force a retreat in commodity prices. - more

  Mindoro Clarifies Agata Nickel Laterite Disclosures  - Subsequently, in a May 27, 2008, press release, the company noted that there had been a softening in prices quoted for low-grade DSO nickel laterite, and that many of the nickel pig iron blast furnaces in China had been shut down, apparently for environmental reasons. In a press release dated June 26, 2008, the company stated that due to a weakening nickel prices and demand for DSO ore, "the option to commence a DSO operation, currently on hold, will be kept open". - more

• The Philippines is seeking opportunities for cooperation with central China's Hubei Province, said visiting Philippine President Gloria Macapagal Arroyo here on Thursday.  - more

  Miners face tough talks as Asian steel struggles - "China's steelmakers must unite this year to win a single iron ore price in 'tough' 2009 negotiations with miners, an industry leader said on Thursday as the global financial crisis chokes Asia's steel industry. " - more

• (Reuters) China's own iron ore can replace blocked imports from the world's top supplier, Vale of Brazil, Shan Shanghua, Secretary General of the China Iron and Steel Association, said on Thursday. "China will increase investment in domestic iron mines, raising domestic iron ore production, in order to replace imported ore and restrict the price increase of imported iron ore," Shan told a conference in the port city of Qingdao.

  BHP still has sights on Rio Tinto - The chairman of BHP Billiton, Don Argus, told investors at the miner's London annual meeting it had no plans to drop its bid for Rio Tinto despite the recent global financial turmoil and slackening of demand in China. - more

  Bad-Boy Prokhorov Stirs Up Trouble In Russia - "The international credit crisis is hurting even Russia's wealthiest, and it is not just shrinking their bank accounts." - more

• Deripaska caught in British political scandal - "Add political problems to Oleg Deripaska's financial woes." - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.35/lb lower. Today is starting out like much yesterday, as markets around the world take a beating. Nickel tanked early this morning, and is still faltering. All of the other metals are trading in the red. The Dollar is trading slightly higher against the Euro, but only by about 1/6 of a percent, while crude oil is quiet, down about $.30/barrel. LME inventories got hit with a huge shipment overnight, and after only 3 additions over the last 17 working days of October, the other 14 days registering declines, nickel inventories in LME warehouses now stand higher than they did at the beginning of the month. The Koniambo curse is back, as Xstrata's New Caledonia partner, reports it has lost funding due to the financial crisis. If Xstrata thinks nickel prices could stay as low as they currently are, this might give them the excuse to back out of this project, without giving up future rights.  
• Bloomberg morning metal news - more
• Reuters - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• SEA Steel Industry Set to Battle with Global Recession - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Nickel and tin were also badly mauled, with nickel breaking the key $10,000 mark at one point. There was really no place for the longs to hide except in the dollar, which soared to two-year highs against the Euro and to five-year highs against sterling. Continued selling in energy and US equity markets helped sour the overall mood. Yesterday’s selling is spilling over into today's session, especially after Asian markets were unable to turn things around. In fact, Shanghai finished limit down for a third day running, prompting the exchange to close the markets tomorrow. Copper and nickel are the weak links today, each breaking $4000 and $10,000 support decisively. ... We are currently at $9,600, down $400. The key now is whether prices will move decisively away from the $10,000 vicinity; initial signs do not look promising, but we nevertheless would like to see how things close today. (read Ed Meir's complete morning base metals report here)
• CRU in today's report - ""The fall in metal prices is likely to be made more severe this time as we witness a combination of contraction in demand, a slow response from producers, and the unwinding of financial investments in metal markets."
• (Bloomberg) Stephen Barnett, president of the International Nickel Institute - "The lower nickel price is certainly putting the industry under stress and will lead to closures, especially for some of the higher-cost operations .. Metals will recover when the economy recovers. When that is, is anyone's guess.''
• (Bloomberg) Carey Smith, an analyst at Alto Capital , at Australian Nickel Conference yesterday - "The junior end of the market will struggle over the next couple of years, with little or no capital available to conduct exploration, let alone project development ... Numerous nickel mines are expected to shut down globally as profits turn to losses...  The tough times could last longer than people expect. Supply is now falling dramatically as high-cost producers struggle to survive the current low nickel price environment. ... The nickel price in three years time will be higher than it is now, but I doubt it would reach the heights of last year.''
• Canaccord Capital - Morning Coffee  - Canaccord Adams Metals and Mining Analyst Orest Wowkodaw, continues to forecast a significant surplus in the nickel market during the next three years, and anticipates further industry closures to come in the near-term. At the current depressed nickel price, Wowkodaw estimates that roughly 30-40% of the nickel industry is under water, a level that is not sustainable.
• First Birthday for the Recession? - more

  The global banking crisis has hit New Caledonia’s SMSP mining company, which is a majority stakeholder in the multi-billion dollar Koniambo project. - more

  Finnish stainless steel maker Outokumpu Oyj reported a narrower-than-expected loss as nickel hedging offset inventory losses, but warned nickel prices and the economic slowdown would hit fourth-quarter results. - more

  Universal Stainless & Alloy Products, Inc reported today that sales for the third quarter of 2008 were $57.6 million compared with $62.0 million in the third quarter of 2007. - more

  Japan stainless steel major Nippon Steel and Sumikin Stainless Steel Corporation will extend cuts in austenitic and ferritic stainless steel production from October through to March next year due to the slowing world economy, the company said late Wednesday. - more

  The London Metal Exchange is trying to extend its reach into the world of minor metals with contracts for cobalt and molybdenum, but success depends to a large extent on consumers. - more

  A giant nickel mine, partly owned by a British company, is being foisted on a unique tribal community in the Philippines through bribery and corruption according to a new report. - more

  BHP Billiton Ltd. (BHP) said Thursday that at this time it is not going to reduce output of its assets, but the company has noted that nickel prices are below $10,000 a metric ton, the company's chief executive officer said. - more

  The overall economic and financial crisis has not spared the international recycling industry. Moreover, the situation is worsened by the unprofessional behaviour of some buyers who completely ignore the terms of the contracts they signed some weeks ago with their sellers. - more

  China is likely to raise its tax rebate rate for steel exports, predicted Qi Xiangdong, executive vice secretary-general of China Iron & Steel Association (CISA).  - more

• When China's steel price has slumped recently, no one in the market dare to buy the product. - more
• China's steel industry will seek a unified iron ore price from Brazilian, Australian and Indian iron ore miners in the 2009 pricing negotiations, the head of the Chinese industry body said on Thursday. - more

  Indian steel makers may cut prices and as also production in tandem with dip in demand in domestic market spawned by a global slowdown. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 23 - 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, October 22

• Baltic Dry Index - minus 71 to 1,221. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Dow Jones) Emerging market stocks and bonds plunged as falling commodity prices, weak earnings out of the U.S. and a surging dollar delivered a triple punch Wednesday. (MarketWatch) Euro, British pound plunge - Global recession fears remain positive for dollar (Bloomberg) Libor Slides as Fed Offers Cash to Mutual Funds; CP Yields Drop // Oil Falls to 15-Month Low, Gasoline Tumbles, as Demand Declines (Xinhua) Wall Street tumbles amid concerns about earnings, economic slowdown (CNN) Mass layoffs highest since 9/11
• Except for crude oil, our afternoon briefing looks much like our morning update. Dollar is still trading a little over 1% higher against the Euro, while crude oil is now trading around 7% lower, currently at $67.27/barrel. Metals all ended lower, on the back of a trifacto of negative news. The rising dollar, falling demand, and global recession fears gripping the market. Indicator charts show nickel held its own for much of the morning, before succumbing to the negativity, and the afternoon was spent in a declining pattern. Apparently London traders had their eyes on Wall Street again. When the dust settled, Dow Jones reports three month nickel ended the day at $10,000/tonne or $4.54/lb .  Sucden's chart shows why nickel's drop today wasn't exactly surprising, but we challenge you to find anyone that was forecasting prices this low, this fast (chart here) as early as last month. We may be seeing the beginnings of a separation between the volatility index and the Dow. For the last few weeks, with the market paralyzed in fear, the Dow would move lower as the VIX moved higher. Today, after a morning spurt, the VIX has settled down some, but the Dow is currently down nearly 400 points(VIX chart).  Based on its history, the VIX remains incredibly high. LME warehouses witnessed only their second day this month of a net gain in nickel inventory overnight. The Baltic Dry Index continues to slump, and much like metals, traders are baffled as each day's hopes for a bottom, prove fruitless. Like the image on a fish radar screen, the bottom keeps moving. We review many charts and graphs, but the current China Commodities Index is probably one of the most descriptive of a bear market we have ever seen (chart here).   

  Nickel tumbles more than 5 pct to $10,000/T - Nickel prices tumbled more than 5 percent on Wednesday as metals were hammered in a broader sell-off, triggered by demand worries, traders said. - more

  Commodity/Economic Comments

• (Reuters) Richard Knights, an analyst at Numis Securities - "At current prices some 50 percent of the nickel industry is losing money - it is not a sustainable situation...It is all about timing and how quickly operations shut down."
• (Gold News) "The high nickel prices of the past two or three years are gone," claimed Carey Smith, an analyst at the Alto Capital brokerage, at a conference in Perth, Australia today. The base metal – a key element in stainless steel and electroplating – has dropped 80% of its price since mid-2007. "The selling is not due to fundamentals," says Smith. "It's hedge funds and other hot money rushing to get out of the market."
• What's Up Now with the U.S. Dollar? - more
• The fundamentals for commodities were not affected by government policies that are propagating inflation, Jim Rogers, CEO of Rogers Holdings, told CNBC Wednesday. - more
• S&P Officials: We'd Do a Deal 'Structured by Cows' - more

  Outokumpu has published its stainless steel surcharge for November, as has ThyssenKrupp Nirosta. To give you an idea of what they are doing, looking at Outokumpu's charge compared to October, we see 4301 (304 SS) has fallen from 2226 to 1696 ($US), 4401 (316 SS) has fallen from 4245 to 3447, and even ferritic is falling, with 4000 (410 SS) sliding from 861 to 732. Here is the link for Outokumpu's monthly surcharge's here and ThyssenKrupp Nirosta here.

  South Korean steel mills are moving to cut output this year as a global economic downturn is draining demand while inventories pile up, industry sources said Wednesday. - more

  Cuba's nickel industry was still operating at below capacity six weeks after taking a direct hit from Hurricane Ike, according to local media from the nickel region of eastern Holguin province. - more

  A freefall in the nickel price from record highs above $50,000 a ton is set to continue into next year, with the industrial metal likely to plunge well below $10,000 as a global economic downturn bites. - more

  The depressed nickel price would make a Chinese New Year comeback, but not before a "fire sale" of juniors, nickel analysts.say. - more

  For the last few months, rumours have been circulating among the staff at junior mining company First Nickel that layoffs were coming at its Lockerby Mine, according to one worker. - more

• What one analyst called a "cascading" drop in nickel prices has affected another Sudbury-based miner.  - more

  Metals processor Allegheny Technologies Inc posted lower third-quarter earnings on Wednesday, hurt by lower demand for stainless products and the strike at planemaker Boeing Co, a major customer. - more

  Four barges, each carrying 1,000 tons of nickel-rich soil, leave Agusan del Norte frequently to transport raw quarried land to mainland China. Locals would joke that in a few years, there will be another Tubay in China. - more

  Some of Russia's richest men have been forced into a firesale of assets as tough market conditions make it difficult for them to repay Western and local lenders. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.01/lb  lower.  Metals are trading in the red across the board this morning, although some are just barely. US dollar is currently trading 1% higher against the Euro, while crude oil is trading down nearly 4%, and under $70/barrel. World equity markets were also in a foul mood today, most ending lower (chart here), with US Dow futures showing potential big losses at its opening (figures here).    
• Bloomberg morning metal news - more
• Reuters - more

  Nickel Prices to Take Years to Recover From Slump, Analysts Say - Nickel, used to make stainless steel, will take years to recover from a price slump that's wiped out almost 80 percent of the metal's value in the past 18 months, industry analysts say. - more

• Nickel prices to rebound: analyst - A key market analyst says a realistic outlook for nickel prices over the next few years is around $US17,000 per tonne and producers should take heart from an expected doubling in demand over current levels by 2030. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Commodity Bell -pdf here
• Metals Commentary - pdf here
• September 2008 World Crude Steel Production - pdf here
• Merafe Resources presentation - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals were hammered again yesterday, with copper losing the most ground and shedding more than 6% on the day, while aluminum ended at a three-year low. We are off to an equally dismal start this morning, with copper and lead being particularly hard hit against a backdrop of a broadly based commodity retreat. Fueling the negative sentiment is the stronger dollar, which hit a 2-year high against a basket of currencies today. A struggling US stock market and a wobbly energy complex are not helping matters much either.... For the balance of the week, we continue to see more weakness ahead, as growing perceptions of recession now seem to be replacing credit anxieties. ... There are no macro numbers slated for release out of the US today. However, out of the UK, banking authorities have voted unanimously to lower benchmark interest rates by 50 basis points as signs increase that Britain has entered a recession. ... We are currently at $10,600, down $100, and seem to be on our way for a test of the $10,000 mark." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Commodity prices, especially for base metals and energy, could rebound very sharply from the current selloff when investor confidence improves, says US industry analyst CPM Group. "There is so much money piled up in cash and Treasuries, with its owners waiting to reallocate these funds when their confidence in the economic outlook for the world has been restored."
• (Dow Jones)  The steady downward drift in metals prices is deterring bargain hunters from stepping in and picking a bottom, since buyers who have done so have been burnt in recent weeks, said a metals trader in London. "If (bargain hunting) has stopped, we might come off even further," the trader said, adding the selloff has been exacerbated by hedge fund and speculative traders being forced to liquidate long positions. "It's become more obvious that more hedge funds than we thought had long positions in metals and they were way overextended," the trader said.  
• Wall Street's 'Disaster Capitalism for Dummies' - more
• China media reports the Jinchuan Group officially pushed the start up button in a ceremony held Monday, on what it claims is the world's largest top-blown oxygen-rich nickel smelting system. Construction began on September 30, 2006, and gives Jinchaun the capacity to process 1,000,000 tons of nickel concentrate and produce 120,000 tons of nickel annually. 

  South Korea's POSCO said on Wednesday it would boost an ongoing stainless steel production cut to 30 percent in the fourth quarter in a bid to support prices, which have faltered on weak demand and cheaper nickel. - more

  China's Baoshan Iron and Steel Co (Baosteel) has cut prices for December by as much as 20 percent in a bid to lift domestic demand amid a slowing economy. - more

• The iron ore price negotiation for 2009 next month is likely to turn the tables against producers for the first time in several years because of fears of a US-led global recession. - more
• It is reported that Chinese domestic steel mills have made concerted efforts in output cutback to halt the falling steel prices in recent past months. However, the move was considered as useless by some mills. - more

  Australia's Kalgoorlie nickel smelter has resumed full production after a shut-down for unscheduled maintenance work in the September quarter, owner BHP Billiton Ltd said on Wednesday. - more

• Mines and Petroleum Minister Norman Moore says the strength of the state's iron ore industry masked the warning signs from the nickel sector where the outlook is "not promising". - more
• Australian mid-tier nickel producer Western Areas Ltd. said Wednesday that its proposed Diggers South project requires a nickel price of at least US$8 a pound (US$17,632 a metric ton) to justify development. - more

  Jindal Stainless Ltd, India's largest stainless steel maker, expects a slowdown in the coming two quarters due to the rising cost of credit, a top official said on Wednesday. - more

  The crisis in the financial sector worldwide is now impacting badly on the EU steel market. The tightening of credit lines and a complete breakdown of confidence has stalled all business activity. - more

  Sydney-based Sims Group, the world’s biggest recycler, has suspended purchases of non-ferrous scrap metals. The company says it will not buy the material because the prices are so low it could make a loss on-selling the metals. - more

  Junior mining companies are cutting hundreds of jobs in northern Ontario due to plunging metal prices, and analysts say some miners will go out of business before the global financial crisis is over. - more

  Corrosion Table - pdf here

• How a steel bolt is made - video here

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 22 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, October 21

• Baltic Dry Index - minus 63 to 1,292. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Marketwatch) French banks rally after $14 billion capital boost // Bank of Canada lowers target interest rate to 2.25% (AFP) India, Pakistan resume Kashmir trade after 60-year freeze (Bloomberg) The gap between rich and poor increased in three-quarters of countries in the Organization for Economic Cooperation and Development over the last two decades, the group said in a report today. // Dollar Advances to 19-Month High Versus Euro on Rate Outlook (Dow Jones) ECB Draghi: Euro-Zone Econ Slowed More From 1st Half (Reuters) Oil down as weak demand outweighs OPEC // Commodities - Markets broadly down as economic fears return (Pittsburgh Business Times)  Dow drops 200 points by noon Tuesday (CNN) Poll: Americans angry, worried over state of nation - Poll reports 75 percent say things are going badly in United States // Why the U.S. needs China - more
• At update time, crude oil is trading nearly 5% lower, while the US Dollar is trading nearly 2% higher against the Euro. Gold, which typically does well in bad economic times, was also down, having fallen from $930/oz less than two weeks ago, to the $770/oz range today. Except for a slight increase by silver, precious metals traded lower, and except for a slight increase in nickel, base metals traded lower. Yep, nickel. The news that another large Canadian nickel mine had shut down sent a momentary shock thru the market, but by closing, the negative sentiment got the better of any supply concerns, and nickel gave up some of its gain. Indicator charts show nickel took a nearly $600/tonne bounce when FNX made their announcement, fell, regained its high point, before falling off in late trading. Dow Jones reports three month nickel ended the day at $4.85/lb .  Sucden's day old chart shows nickel trading thru yesterday (chart). Nimit Khamar has now put support at $4.67/lb, while Ed Meir, from MF Global, has support at $4.54/lb. Metal Bulletin has posted a story on their subscription website today and used the following teaser line "Nickel stocks are set to rise by as much as 30,000 tonnes in London Metal Exchange-bonded warehouses before the end of the year, market participants have told MB. A combination of destocking from stainless mills and major nickel producers in Russia, Germany, France and Finland could take stocks in LME warehouses to as much as 85,000 tonnes, market sources said. Talk of a large tonnage arriving into European warehouses has been “festering for about a month”, one trader said" If this story has any merit to it, it will put further strain on an already low nickel price. So far this month, London Metal Exchange warehouses have only registered a net gain on one day, the rest seeing net losses. Even with this track record, today's inventory stands over 55,000 tonnes. Interesting story about Oleg Deripaska's credit problems and how a 25% stake in Norilsk might become property of Western banks if he fails to make a payment. If we were betting people, we would say this won't happen. One of those little jabs we throw in every once in awhile is a reminder to readers that back in July of 2006, Russia classified its nickel deposits as strategic, thus ensuring a majority foreign ownership never happens. 25% is, of course, not a majority stake, but enough to catch the Kremlin's attention.  

  Reports

• Steel Weekly - pdf here
• Commodities Daily - pdf here

  Commodity/Economic Comments

• Gayle Berry, associate director at Barclays Capital - ""We're getting to the point where the market is pricing in near-recessionary demand levels for metals consumption."
• Calyon - "Industrial metals had already been undermined by a weakening outlook for global economic growth  ... The ongoing uncertainty and lack of confidence is likely to result in a further erosion of prices."
• Scotia Capital - China has set its molybdenum export quota for 2009 at 25,500 tonnes (metal content). This compares with the 2008 export quota of 26,300 tonnes. We view this quota reduction as a positive development for the international molybdenum market.
• (Xinhua) China's crude steel output drops 9.1% in Sept to 39.6 mln tons
• China Slows, World Feels the Pain - here

  The European Commission is expected to oppose new duties on stainless steel products imported from China, South Korea and Taiwan, European Union government officials said Tuesday. - more

  Plunging commodity prices and higher costs will pull down third-quarter earnings of Canadian base metal miners, analysts say, but the recent selloff of mining stocks means the weak results may go largely unheeded by investors. - more

  Junior mining companies are cutting hundreds of jobs in northern Ontario due to plunging metals prices, and one analyst says there is "no doubt" some miners will go out of business before the global financial crisis is over. - more

  Brazilian mining giant Vale still sees rival Xstrata as a possible takeover target but would struggle to have an offer accepted by Xstrata shareholders given its Swiss rival's sharply lower share price, a source at Vale said. - more

  Courtesy AISI - In the week ending October 18, 2008, domestic raw steel production was 1,744,000 net tons while the capability utilization rate was 73.1 percent. Production was 2,112,000 tons in the week ending October 18, 2007, while the capability utilization then was 88.5 percent. The current week production represents a 17.5 percent decrease from the same period in the previous year. Production for the week ending October 18, 2008 is down 6.7 percent from the previous week ending October 11, 2008 when production was 1,869,000 tons and the rate of capability utilization was 78.3 percent.

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.17/lb  higher. Bucking the trend, nickel is up this morning on news of another nickel mine closure in Canada. All other precious and base metals are trading lower. US Dollar is trading over 1% higher against the Euro, while crude oil is nearly 2% lower in this morning's trading. Considering the overall market sentiment, nickel's bounce this morning may turn out to be no more than a knee jerk reaction to the FNX news, but it may assist is establishing a floor to nickel trading.  
• Bloomberg morning metal news - more

  Reports

• Numerous updated nickel forecasts - here (1/2 way down page)
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Metals Commentary - pdf here
• Global Mining News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "We suspect the main reason metals have been so lethargic--especially during yesterday's session when they had ample justification to move higher -- is attributable to the fact that the global slowdown is now spreading to China. ... Another exogenous factor that could be causing some nervousness in metals could be traced to developments in Russia. In this respect, yesterday's Financial Times carried a piece saying that Russia's richest man, Oleg Deripaska, needs to raise more than $2 billion by the end of this month in order to repay part of a $4.5 billion loan to Western banks. This story is not exactly new, but should Mr. Deripaska fail to come up with the money, he may have to hand over his 25% controlling stake in Norilsk to creditors. ... Today's LME session is off to a sluggish start after a weak session in China overnight, where we saw limit-down moves in copper and zinc. Energy markets are also slightly lower, while the dollar is up again, generating additional downside pressure. We expect metals to drift lower for the time being, pending further direction from the US equity markets.  ... We are currently at $10,500, down $55. Charts suggest that we could target the $10,000 mark as the next stop."(read Ed Meir's complete morning base metals report here)
• (Reuters) In a research note, UBS analyst Adam Schatzker said he expects FNX to announce it will put the mine on care and maintenance due to its deteriorating economics.
• (Yieh) Taiwan’s largest stainless steel producer, Yieh United Steel Corp (Yusco), has said to adjust the production of 30 percent cut on 300 series stainless steel output to October end.
• (SBB) Chinese domestic stainless 304 prices crumbled over the past month, with hot rolled coil prices falling RMB 5,200/tonne ($761/t) and CRC by RMB 6,500/t ($951/t) as panicky sellers dump material cheaply in a worsening economic environment..... “It is crazy behaviour. Most of those selling are those with huge inventories and need cash to pay off their loans,” says a trader in southern China. Traders predict prices are likely to continue sliding as the economic fallout affects more companies.
• (JMB) Tokyo Steel Manufacturing announced on Monday the firm reduces the selling price by 23,000-35,000 yen per tonne for all items for distributors for November order. The price cut is the widest ever ...
• (Dow Jones) The European Commission is expected to oppose new duties on stainless steel products imported from China, South Korea and Taiwan, European Union government officials said Tuesday.
• The Good Sheet - It's The Economy Stupid - chart here
• China has fuelled fears over a global recession by warning that the financial crisis is damaging its economic growth. - more

  FNX Mining Co Inc suspended contact nickel production in its Levack complex, citing low commodity prices and high operating costs at its Levack nickel contact deposits, and cut its 2008 production outlook. - more

• A decision by First Nickel Inc. to suspend operations in Sudbury because of plunging nickel prices is likely the first in a series of mine shutdowns facing Canada's nickel capital. - more

  Baoshan Iron & Steel Co Ltd, the country's second largest steel producer, has announced cuts to its December prices for major products by up to 1,000 yuan per ton, the official Xinhua news agency reported. - more

  It is reported that void transaction and mixed quotation have severely destroyed makers' confidence, dimming the hope for a rebound in the future nickel market. - more

  Demand for service center products in the US and Canada declined substantially in September, the Metals Service Center Institute reported Monday. The Illinois-based trade group cited "unprecedented economic volatility spreading uncertainty throughout the business community." - more

• Shipments of steel and aluminum products from metals service centers in the United States and Canada continued to decline in year-over-year comparisons during September, but U.S. inventories of the two metals actually rose slightly from year-ago levels, the Metals Activity Report (MAR) from the Metals Service Center Institute shows. - more
• At least a half dozen class-action lawsuits seeking damages from eight US steelmakers under US antitrust laws have now been filed in US District Court of Northern Illinois. The latest was submitted October 16 by attorneys for REM Systems of Paoli, Pennsylvania, according to a copy of the filing obtained by Platts. - more

  Market Tendency On Imports Of Ferro-Alloys At 15th October 2008 = All Prices Of Chinese Ferro-Alloys For Exports Have Fallen - more

• Japanese steelmakers could soon cut output as demand shows signs of weakening amid growing fears that the U.S. financial crisis could develop into a wider global growth recession, Shoji Muneoka, the head of the Japanese Iron and Steel Federation, said on Tuesday. - more

  South Korea, which imports 97 percent of its energy and minerals, has signed an agreement to develop uranium and nickel mines in Australia as part of efforts to secure supplies amid increasing Asian demand. - more

  National Australia Bank Ltd., the nation's biggest by assets, said commodity prices may decline ``sharply'' amid expectations global economic conditions will continue to deteriorate. - more

• The iron ore price negotiation for 2009 next month is likely to turn the tables against producers for the first time in several years because of fears of a US-led global recession. - more

  Oleg Deripaska may have other things on his mind when Lord Mandelson arrives in Moscow. ... Mr Deripaska has until the end of the month to come up with more than £1.14billion to repay part of the loan or give his creditors a 25 per cent stake in Norilsk. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 21 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, October 20

• Baltic Dry Index - minus 83 to 1,355. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) - Bernanke Backs More Stimulus, Citing `Weak' Outlook (Thomson) Fed's Bernanke says stimulus should be 'significant,' declines to provide number (Globe & Mail) Chinese economy grows at slowest pace since 2003 (MarketWatch) Leading indicators rise 0.3% in September (Reuters) France may help economy with jobless, car aid
• For the first time in a few days, we aren't reporting much flip flopping that went on between our morning and afternoon updates. Crude oil is trading about 2-1/2% higher, and the Dollar is trading about 1.1% higher against the Euro. Metals ended mixed, precious higher, and base lower. With oil higher and equities mostly higher, base metals traders must have been looking to the Euro/dollar mix for their daily dose of bad news. Indicator charts show nickel took a dive first thing this morning, and spent the afternoon, crawling out of the hole it had dug. For the day, Dow Jones reports three month nickel ended the day at $4.79/lb . Sucden's day old chart shows LME nickel trading in October thru Friday (chart here). It will be interesting to see where Nimit Khamar establishes a new support line, and where Ed Meir will set one in tomorrow's report. Ed just got back from a week in London, and posted an abridged, but very interesting report this morning. It appears the LME traders are as perplexed at what is happening as the rest of us are. First Nickel's decision over the weekend should have raised a few eyebrows. Here is a quote from the press release - "Regrettably, the prevailing nickel prices are below Lockerby's cash costs per pound of payable nickel even though the Company has worked diligently throughout 2008 to reduce costs," said William Anderson, President and CEO of First Nickel." Their website states "unit cash operating costs net of by-product credits are estimated at US$6.08 per pound of nickel over the 5.2 year mine plan, attaining a low of US$5.70/lb in peak production years of 420,000tpy." With nickel's close of $4.79/lb today, you can see why this mine was forced to shut down. Smaller mining companies dependent on one primary metal are becoming more an more vulnerable to the lower metal prices. Large miners, who are more diversified in the metals they mine, also feel the sting of declining prices, but not usually to the fatal degree that some small miners are facing. Regretfully, we suspect we will see many more close before things get any better.

  Reports

• TD Commodity Weekly - pdf here
• Canada Commodity Price Update - pdf here

  Commodity/Economic Comments

• Reena Walia, analyst with Angel Broking Ltd. - "The demand for nickel is a big question as stainless steel producers have restricted buying the raw material and the macro-economic worries are weighing on prices too."
• (Dow Jones) LME base metals will likely remain under pressure "until there is evidence of a turnaround in physical interest," says JP Morgan. ... Adds, China's worse-than-expected 3Q GDP figures highlights the deterioration in the macroeconomic backdrop for metals, and is a bearish warning signal for metals, as the poor figures suggest China's GDP growth could slow below 8% if the government doesn't deliver a fiscal package.
• (XFN) China's annual crude steel output is expected to rise to 600 mln tons by 2010, from 489 mln tons last year, said Jiao Yushu, a senior consultant with the Metallurgical Mines Association of China. Speaking at a conference, Jiao said that crude steel output would rise further to 650 mln tons a year by 2015.
• China slows but demand 'to stay solid' - more
• Demand for base metals is likely to contract as the world economy slows and investors ignore short-term supply disruptions, according to two separate reports last week. - more

  Stainless steel maker Outokumpu is seen reporting a narrowing loss in the third quarter, dented by a milder inventory price charge and one-time hit for closing a unit in the United Kingdom. - more

  A number of smaller steel makers, caught short by the rapid decline of the markets, could be facing the bleak prospect of liquidation down the line, underwriters Credit Guarantee Insurance Corporation warned on Monday. - more

  World finished steel consumption growth will slow to 3 percent this year from around 8 percent in the last few years, a senior executive at the European steelmaker Grupo Celsa told a conference on Monday. - more

  Saudi Basic Industries Corp (SABIC) will cut reinforcing bar (rebar) prices for the third time since September amid signs of slowing demand, the Gulf’s largest steelmaker said yesterday. - more

  The inherent cleanliness and properties of stainless steel enhanced by preparation processes make it the material of choice for critical applications - more

  Smart Money magazine has calculated the losses experienced by Russia’s leading businessmen due to the financial crisis. Rusal owner and major Norilsk Nickel shareholder Oleg Deripaska has suffered the most from the crisis, the magazine says, with losses totaling $28.4 billion. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.12/lb   lower.  Metals are mixed with precious trading higher, and base metals trading lower. Dollar is trading slightly higher against the Euro, while crude oil is trading nearly 2-1/2% higher on fears OPEC will cut production. World equity markets traded, or are trading mostly in the green today (chart) and Dow futures are higher before the bell on Wall Street.  
• Bloomberg morning metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Financial Weekly - pdf here
• The Challenges for Sustainable Ironmaking at Arcelor Mittal - Pinakin Chaubal - pdf here
• Production of Canada's Leading Minerals - Sept - pdf here
• Molybdenum Market Outlook -  Thompson Creek - pdf here
• AIIS October 2008 Steel Market Import Survey - word document here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "We will revert to our normal reports tomorrow, but thought that in today’s installment, we would share with our readers some thoughts and observations about what we heard from our various conversations at last week's LME dinner. It was quite a strange week to say the least, in that unlike previous years, the mood was neither bullish, bearish, nor mixed, but rather just confused. The relentless talk, of course, centered on the dizzying crisis in the equity and credit markets, with the conversation varying depending on whom you talked to. Many in the investment community, for example, were taken aback by the complete failure of the commodity markets to correlate inversely with equities, as has been the case for much of the last 20 years. In fact, some studies are showing that the correlation between the two assets is now running at a stunning 90% over the past 30 days, ravaging the notion that commodities will provide a reliable offset to non-commodity equity exposure.... In the physical world, most people we talked to seem to be continuing to do deals, although at a much reduced pace. However, this did not apply to all. ... . Some traders were said to be reluctant to do new deals with Chinese buyers given that some of their existing contracts are at substantially higher prices. The possibility of outright cancellation, therefore, remains high, especially if sellers do not perform to the tee. In this regard, bill of lading dates are being watched closely, as being late by even one day could result in buyers walking away. Some of the more nervous sellers of high-priced contracts are also demanding margins, a tactic we have seldom seen used before in the physical business. ... For the time being, it seems that metals should continue to track equity markets, which in turn are tracking developments in the credit world. In this regard, there is some reason for cautious optimism, as some key rates, such as LIBOR, are coming down, while others are also heading in the right direction. However, the mood remains very tentative, and we would agree with the sentiment expressed by many at the LME dinner last week, that the recovery from this latest setback will be slow and painful.  (read Ed Meir's complete morning base metals report here)
• "The decline in the nickel to gold price ratio from 75 to 15 over the past 18 months indicates a significant slowdown in economic growth lies ahead." Notes, if the slowdown equals the recessions in the 70s and the early 80s, the ratio would likely fall into single digits; adds, such a scenario would suggest a decline in nickel prices to $8,500/ton. - more
• (Yieh) - "The ferrochrome market in Europe remained quiet and the price was expected to drop further. Stainless steel mills reduced production due to sluggish market getting worse under the overspread financial crisis, which distinguish the possibility of recovery of ferrochrome market in future."
• (China Daily) China's gross domestic product (GDP) grew 9.9 percent year on year to 20.16 trillion yuan ($2.96 trillion) in the first three quarters of this year, the National Bureau of Statistics said on Monday.
• (Beijing Times) China's iron ore imports failed the expectations for a substantial decline in September, due largely to traders and steelmakers betting on possible mounting demand after the Beijing Olympics. According to latest customs data, China bought from abroad 39.2 million tonnes of iron ores last month, up 1.8 million tonnes on the August figure. The arrivals were valued at $5.79 billion, up 18.2 million dollars from the previous month. The import volume went against expectations and failed to be in line with real demand at home over the past weeks, Xu Xiangchun, a steel industry analyst, said on Saturday.
• (Interfax) China produces 39.6 million tons of crude steel in September, down 7 pct month-on-month
• (SG) It is reported that Taiwan based Yieh United Steel Corporation has extended the 30% production cutback for 300 series stainless steel to the end of October 2008.

  Industrial metals including copper and nickel will average less than previously forecast in 2009 as demand declines, Credit Suisse Group AG said. - more

• Deutsche Bank AG lowered its price forecasts for copper and aluminum because of ``rapid deterioration'' in the outlook for the global economy. - more
• Slowing growth in China and a recession in the developed world means metal markets are much more likely to move into significant surpluses in 2009 and 2010. - more

  Open outcry trading on the London Metal Exchange may seem archaic in a world dominated by computers and the Internet, but it fulfills a vital function and continues to thrive.  - more

  China's Baoshan Iron and Steel Co Ltd (Baosteel) has cut its sales prices for major products for December by as much as 20 percent versus its November prices, trade sources said on Monday. - more

• Recent cuts in Chinese steel mills' output won't been able to stop steel prices from falling further, as downstream demand continues to shrink, industry participants said Monday. - more
• It is now eight weeks since Beijing waved goodbye to the Olympic Games and yet the sky remains an eerie, brilliant blue. The world is waiting for China's smokestack economy to roar back to life. - more

  Robert Gregory, chief executive officer and managing director of Rusina Mining N.L, which operates the Acoje nickel project in the Philippines, said the company will pursue its ferro-nickel processing project on Semirara Island and is set on further expansion for the long term. - more

  Reuters reported that Turkey's Yildirim Group expects to produce 400,000 tonnes of ferrochrome annually starting from the fourth quarter of 2009 and will have a total of 8 ferrochrome producing furnaces by the end of 2008. - more

  The global economic and financial crisis could soon have repercussions in the French Pacific territory of New Caledonia, which is heavily reliant on exports of nickel, a mineral New Caledonia is deemed to hold about a quarter of the world's deposits. - more

  Tata-owned steel giant Corus has announced plans to cut production in Europe by up to one million tonnes over the next three months due to slowing demand. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Weekend Update, October 18 & 19

  First Nickel Inc. announced that, from today, it is suspending production and initiating a care and maintenance program at its wholly owned Lockerby Mine due to low metal prices and the challenging financial environment.  - more

  Nickel not only took a beating on the market this week, but a public relations hit when a report issued Friday by the the British Association of Dermatologists, stated the metal content in cell phones is causing nickel allergic rashes on the faces of some heavy users. The report recommends cell phone users keep their cell phones away from their faces while in use, which would second the recommendations made earlier by those who believe cell phone usage may lead to an increased risk of brain cancer.   

  Reports

• The Chart Store Weekly Scoreboard - pdf here
• National Mining Association Mining Week - pdf here

  Commodity/Economic Comments

• SBB reported this week that one of China’s largest stainless steel producers, "Guangzhou Lianzhong Stainless Steel Corp, has halted production indefinitely on weak demand and concerns over the global economic downturn" and that another large stainless steel producer, Zhangjiagang Pohang Stainless Steel (ZPSS), a subsidiary of South Korea’s Posco, had also stopped production indefinitely as of October 13th.
• Chinese media reports that analysts estimate POSCO's stainless steel output for 2008 will be 200,000 tonnes lower than last year. 60% of Posco's stainless steel production is .
• NBD - Nissan, Japan's largest stainless steel maker ,Nippon Steel Sumikin Stainless Steel Corporation (NSSC) , cut stainless steel output to 2-year low point and said that as a result of the global credit crisis, it will continue to reduce the demand for stainless steel production. Ni stainless steel sheet price cut of about 10,000 yen / ton to 445,000 yen / ton. At the same time, its output since early October has decreased from the original 70%.
• China media - BNG Steel suspended the production of stainless steel in October
• Kyodo News - Japan’s five major steelmakers, including Nippon Steel Corp, and Japanese trading house Itochu Corp plan to jointly obtain iron ore mining rights in Brazil, sources familiar with the matter said Friday. South Korean steelmaker Posco is also expected to join the Japanese firms to submit a bid for shares in iron ore mining firm Namisa that are put up for sale by Brazilian steelmaker CSN, according to the sources.
• Slowing growth in China and a recession in the developed world means metal markets are much more likely to move into significant surpluses in 2009 and 2010. - more

  Metal prices mauled as shipping sinks - If you want to know what is likely to happen to commodities demand, watch the ships. Watch both those that carry the bulks and those that deliver the finished products. - more

  South Africa's platinum-group metals (PGMs) mining sector is set to be revolutionised by minerals and metals beneficiation institution Mintek's ConRoast smelting technology, developed with the financial support of JSE- and London Aim-listed Braemore Resources. - more

  As the Asian proverb goes, it is much harder to break a bundle of chopsticks than just one chopstick. So when a mining firm in Brazil came up for grabs, a number of Japanese, Korean, Chinese and Indian steel makers jumped aggressively into the fray. - more

  Ferrochina Ltd, a Chinese steel maker that's unable to pay its debt and has halted production, is in talks with creditors, potential investors and local Chinese government and may try to restart some output to generate cash, Bloomberg News reported. - more

  Faced with falling prices, Indian steel makers said on Friday they would have to cut production by 30 percent and postpone expansion projects if import duties aren't raised and an export tax eliminated. - more

  Xstrata Nickel has ordered two 100-ton, four-girder ladle cranes from Konecranes of Finland. The purchase is part of a major upgrade of the converter aisle at Xstrata's Sudbury smelter.  - more

• Some companies call it corporate social responsibility, while others prefer to focus on values and principles of doing "it" right. Either way, it is an opportunity to do well while doing good, states author Alison Jeffery of The Ethics of Corporate Social Responsibility, Management Trend in the New Millennium. - more

  Andrew Lahde, manager of a small California hedge fund, Lahde Capital, burst into the spotlight last year after his one-year-old fund returned 866 percent betting against the subprime collapse. Last month, he did the unthinkable -- he shut things down, claiming dealing with his bank counterparties had become too risky. Today, Lahde passed along his "goodbye" letter, a rollicking missive on everything from greed to economic philosophy. Enjoy: - more

Friday, October 17   (LME Week ends)

• Baltic Dry Index - minus 68 to 1,438. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Reuters) FTSE jumps 5.2 pct, ends week on positive ground (MarketWatch) Consumer sentiment plunges at fastest rate ever (Canadian Press) U.S. home construction falls sharply in September (AFP)  Oil prices climb on fears of OPEC output cut (Financial Post) Canadian consumer confidence falls to 26-year low (Agencies) Germany passes $675bn bank bailout (China Post) US consumer confidence plummets; US, EU to meet (Xinhua) Hong Kong stocks fall to 3-year closing low (MarketWatch) Weekly dip for key three-month dollar Libor is first since July
• Another day, more volatility. US dollar is trading a quarter of a percent higher against the Euro, although Forex traders seem to be confused as to why. Oil is trading higher by 6% at update time, thanks to concerns OPEC is going to shut down some production to stimulate the price. Metals were a mixed bag today, with more ending in the green than in the red. Indicator charts show nickel fell sharply during the morning, and climbed back to re-coup most of its losses by close. For the day and week, three month nickel ended at $4.88/lb , down a whole penny a pound from yesterday. Nickel closed last week at $5.51/lb, and last month at $7.19/lb. LME inventories of nickel started the month at 56,034 tonnes. After 12 days of registering declines, and only one day of gains, total inventories held in LME warehouses has fallen by less than 1%.  Nickel traders seem to be taking their cues more from equites than the dollar/euro moves lately.  TED Spread is declining, currently at 359, a chart some traders watch closely. On the other hand, the Baltic Dry index continues to slump. And Sucden's day old nickel chart shows trading thru yesterday (chart here).  The volatility index (VIX) shows the market, while still on edge, seems to be getting used to its higher blood pressure. In our opinion, Wall Street is like an over-wound rubber band right now. The bulls appear to have stopped their exit stampede and are trying desperately to turn market sentiment around. The bears are resisting, but even with more dismal U.S. economic news out today, the market gives the appearance of having the potential of another afternoon like yesterday. Then again, it could end quite differently than yesterday. No one knows until it happens. And in this market, that is changing by the hour.
• We wish our readers a safe and relaxing weekend.     

  Reports

• MF Global - abridged daily report - pdf here
• Natixis Commodity Markets 4th Quarter Review - more

  Commodity/Economic Comments

• (SBB) China’s Maanshan Steel plans to reduce output by around 250,000t this month due to the weak domestic steel market.
• International Study Group - Nickel was in surplus by 7500 tonnes in August.
• In all of gold's fancy footwork, copper's been much ignored, but the metal may offer a hint that there's hope for the global economy yet. - more

  US 18/8 stainless steel prices collapse due to demand vacuum - Prices of 18/8 or 304 series stainless steel scrap in the US market have fallen by more than 50% this week amid a trade and demand vacuum, with one processor saying the market could fall to zero cents and that dealers and processors could go bust. - more

  Powerhouses of metals world quake at crisis - In the corridors of London's posh Grosvenor Hotel this week, there was much doom and gloom to be heard from the movers and shakers of the world metals industry. - more

  Norilsk Nickel said on Friday it will halt production at its Cawse laterite nickel operation in Western Australia because of higher costs and lower metal prices. - more

  "The boom is over", declared a senior trader as Australia's blue chip mining companies copped their biggest one-day pasting in more than 20 years. - more

• Market conditions are also setting the scene for the next leg up of the commodity supercycle. There are three things that are happening today that will guarantee higher prices for commodities in the future, once the current jitters have started to ease. - more

  ArcelorMittal SA, the world's largest steelmaker, said Friday it is temporarily cutting European steel output by 15 percent because of lower demand and uncertainty surrounding the fallout from the financial turmoil. - more

  Platinum producer Impala Platinum Refineries has been named the overall winner of the Stainless Steel Awards for 2008. - more

  Canadian exporters will increasingly feel the heat as China´s economy further slows under the weight of a global economic decline and tightening internal credit, industry experts said Thursday. - more

  Novolipetsk Steel (NLMK) has stopped its 1.3 million tpa No.3 blast furnace for maintenance and expects pig iron production this year as a whole to be 2% lower than targeted.  - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.18/lb lower and bouncing. Three month nickel dipped its feet into the $4/lb range yesterday, and today, it has jumped in with both feet. Rest of the metals complex is all trading in the red, although most are not suffering the beating they took yesterday - at least yet. Our source for dollar and oil prices is not functioning properly this morning, but the dollar appears to be higher against the Euro and the price of oil has appeared to have stabilized and possibly a tad higher this morning. Shaping up to potentially be another volatile trading day.  
• Reuters morning metal news - more
• Forbes - more

  Copper Steady, Nickel Drops in London Before Housing Report - Copper was steady in London and nickel fell before a U.S. report that may show declines in housing construction, adding to evidence of slowing demand for industrial metals. - more

  Reports

• BMO The Goods - pdf here
• Danske Commodity Monthly - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Commodity Bell - pdf here
• World Crude Steel Production as of August 2008 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - resumes Monday
• (Business Day) The beating taken by BHP shares has reduced the value of its 3.4-for-1 scrip offer for Rio Tinto to $104 billion. That is down by close to $20 billion in the past five trading days.
• Plunging Commodity Prices Hurt Miners, But Create Fertile Ground For Acquisitions - more
• (China Mining) UBS predicated that China's steel output may drop five million tons, or 11 percent, in October and pig iron output may dip 5.5 million tons unless demand for steel starts to rebound.
• (SG) It is reported that Chinese domestic imported chrome ore market continues to dip on weak demand. Mainstream offer declined. At present, 50% fragile chrome ore from India is offered at CNY 110 per mtu in the market and transaction price stays lower than it.
• (SG) Mr David Wilson senior economist at Norilsk Nickel said that flagging nickel demand should pick up slightly by the end of 2008. But, he admits this probably won't force a rebound in nickel's price since the demand bump will be marginal against this year's global production increases.
• Nickel supply will be 110,000 tonnes of oversupply in 2009, according to International Nickel Study Group (INSG)

  Steelmaking giant ArcelorMittal (MT) has asked Brazilian mining conglomerate Companhia Vale do Rio Doce (RIO), or Vale, for a 60% discount on iron ore supplies, Brazil's Globo newspaper reported Thursday. - more

• Brazilian miner Vale has suspended iron ore supply to at least one of its major Chinese customers, to pressure the steelmaker into accepting a 12 percent price rise in term supplies, a Merrill Lynch report said on Thursday. - more
• Cash prices of iron ore imported by China, the world's biggest buyer, fell 12 percent to a 19-month low because of weaker demand from steelmakers. - more
• (Interfax) China's iron ore stockpiles down to 70.98 mln tons by October 17 - Indian iron ore CIF prices fall $13 from October 6 to October 10
• A consortium of major Japanese and Korean steelmakers is has launched a daring $US3 billion swoop on one of Brazil¿s largest iron ore producers.. - more
• Australian miner Fortescue Metals Ltd is renegotiating iron ore delivery contracts with Chinese customers following sharp falls in steel and shipping freight prices, the Sydney Morning Herald reported on Friday. - more
• Fortescue Metals Group says it is not renegotiating any iron ore delivery contracts. - more
• Chinese steel mills are continuing to purchase iron ore directly from Chinese port stocks, sources said, as buyers prefer to purchase at the last minute, rather than wait on deliveries and risk the price falling further. - more

  Fears of a global recession have caused a slump in metal prices that could trigger a series of multibillion-dollar writedowns in the mining sector. - more

  In the commodities fraternity, the buzzword earlier this year was “the supercycle”. The steady rise in metals prices since the beginning of the decade has confounded an industry used to long busts interspersed with brief three-year booms. - more

• China's steel exports will fall considerably in and after October from an all-time high of 7,680,000 tons in August as a result of slackening global demand in a contraction of the world economy because of financial uncertainties, forecast Japanese steel industry sources.  - more

  Supply And Demand Of Ferro-Chrome In Japan For First Half 2008 = 6% Decline Of Stainless Steel Production Influenced, Consumption Of High Carbon Fe-Cr Also Decreased By 6% - more

  Slowing growth in China and a recession in the developed world means metal markets are much more likely to move into significant surpluses in 2009 and 2010. As a result, RBC Capital Markets has made widespread cuts to its commodity price forecasts – everything from iron ore and coal to uranium and copper. - more

• Goldmans Bullish On Commodity Prices - more
• The International Nickel Study Group (INSG) says that the nickel market, which started 2008 on a high note but has experienced softening demand since the middle of this year as stainless steel production declined, is unlikely to see an improvement until well into 2009. - more

  More than 4,500 anti-mining advocates formed a human chain along J.P. Rizal Street here Thursday to urge President Macapagal-Arroyo, who arrived for a peace council meeting, to respect a mining moratorium. - more

  (Radio Australia) A fall in nickel prices is likely to spell the end of the economic boom in New Caledonia. For the last five years, the metallurgical industry has been driving economic growth in the French Pacific territory. Now, experts say that if prices continue to fall, New Caledonia will face a slowdown as early as next year. (source)

  The American Iron and Steel Institute (AISI) reported today that for the month of August 2008, U.S. steel mills shipped 8,860,000 net tons, a 3.9 percent decrease from the 9,209,000 net tons shipped in August 2007 and a 3.6 percent decrease from the 9,175,000 net tons shipped in the previous month, July 2008. - more

  The import of illegal steel is increasingly widespread and rose by up to 20 percent in the first nine months of the year compared to the same period a year earlier, benefiting from robust domestic demand, according to estimates from the customs office - more

  Shareholders in a Russian power firm are considering lawsuits against Russian metals tycoon Mikhail Prokhorov over the withdrawal of a share buyout offer worth up to $1 billion, the shareholders said on Thursday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 16   (LME Week)

• Baltic Dry Index - minus 109 to 1,506. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & headers - (Reuters) Jobless claims fell 16,000 last week  // U.S. industrial output falls by most since 1974 (MarketWatch) Conditions in the manufacturing sector in the Philadelphia region deteriorated significantly in October, the Federal Reserve Bank of Philadelphia reported Thursday. (NY Times) Home Prices Seem Far From Bottom - more (Reuters - Asia) - Deep recession fears thrash Asia stocks (MarketWatch) The credit crunch underway in the U.S. economy may restrain economic growth by a greater amount that the previous episode in the 1990s, Gary Stern, the president of the Minneapolis Federal Reserve Bank said Thursday. (Domain B) OPEC has announced that it will hold an emergency crisis meeting in Vienna on 18 November a month ahead of its original meeting in December to discuss a cut in production as oil prices plunged to a 13-month low, sliding below the $80 mark on Friday. (Resource Investor) 'It's All About The Global Recession'  (AP) Stocks fluctuate as market tries to assess economy // 'Joe the Plumber' says he has no plumbing license (if you watched the debates last night, you'll understand the humor)
• What a difference a day makes! Yes, it's a nice thought, but we can't say that today. Watching the markets these days is like watching a sheep dog guide sheep around a pasture. The main difference being the sheep dog has a general idea of where he is going, where the sheep just go where the dog isn't. In the market's case, the dog is named 'Panic', and the fear of his bite, has traders looking for the safe spot in the herd. For the third day in a row, we reported the Dollar was trading lower against the Euro in the morning, only to report a flip-flop by our afternoon update. The Dollar is currently trading about 1/3 of 1% higher at this point. Crude oil has fallen below the $70/barrel line and OPEC leaders are starting to feel the panic we all did at $4/gallon gas. That is over 6-1/2% lower than yesterday's close. Except for aluminum, which managed to barely squeeze out a finish in the green, the rest of the metals complex ended in the red. Whether correcting this morning, reacting to the dollar, or traders covering shorts, any upward inertia we saw this morning fizzled soon afterwards. Indicator charts show nickel started lower in pre-market, climbed into the green shortly after our report this morning, and then decided to play skydiver, plummeting to below the $5/lb mark, before opening the parachute and getting caught in a small updraft in after market trading. Dow Jones reports three month nickel ended the day at $4.89/lb . This is a stunning dollar amount close (at least to us), and whether it holds or not, there is no one who would have dared forecast nickel could sell this low this year. Some even said it would never sell this low again. The only analysts worth listening to these days, are the ones who confess they have no freaking idea what is going to happen. Here is Sucden's day old chart of nickel trading thru yesterday (chart here). You might notice that the RSI started today at 28.15 (oversold market) and a Slow Stochastic of 9.7 (did we mention seriously oversold). These fundamental numbers are all well and good, in a normal market, but the only chart that seems to matter these days is the volatility index (chart here). Compare today's level of nervousness to the week to the month to the year. As Kitco's Jon Nadler put it "cash continues to seduce while stocks continue to reduce".     

  Reports

• MF Global reports an abridged daily report - pdf here

  Commodity/Economic Comments

• (Metals RU) Kazakhstan - January-September 2008 figures show 3 million, 527,053 tons of crude steel were produced, which is 0.8% lower than in the corresponding period of 2007, reported in the State Agency.
• (Prime TASS) Russia’s Mechel steel output up 4% on year in Jan-Sep
• (MetalTorq) China National Gold Group Corporation (CNGC) is planning to complete the first phase of construction of copper and molybdenum business and run it in December 2008 upon completion of the project at the mine will produce and process 120 tons of ore per day.
• (Dow Jones) Nickel is expected to average $22,500 a ton in 2008 as a base case and then fall 38% to $14,000 a ton on expectations of a surplus, says Natixis. The surplus has been revised upward to 30,000 tons in 2008 compared to a previous estimate of 10,000 tons.
• (Japan Metal Bulletin) Nippon Steel & Sumikin Stainless Steel (NSSC) announced the firm rejects almost all order for nickel series cold rolled stainless flat steel from domestic distributors for October order. The firm keeps rejecting the order for 3 months in a row. The firm expands the output reduction to more than 30% of the capacity at Hikari plant.
• Are Safe Haven Investments Really Immune From Current Crisis? - more

  There’s evidently much irritation in the house of Goldman Sachs this week as the commodities research team have been forced to cut their raw price targets across the board. - more

  Chinese steelmakers are asking Cia. Vale do Rio Doce to reduce iron ore contract prices instead of raising them for a second time this year as they lower production, the China Iron & Steel Association said. - more

  No one is blaming Tom Albanese for the exaggerated thrashing global investors have given resources equities. But his Ides of October warning of a short, sharp dislocation in Chinese raw materials markets sure hasn't helped the mood out there. - more

  The world's top aluminium company RUSAL, controlled by Russian billionaire Oleg Deripaska, won its demand for an extraordinary shareholder shareholder meeting to elect a new board, Norilsk Nickel said on Thursday. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.01/lb  lower. Nickel opened lower in pre-market trading, but has since climbed to flirt with yesterday's close. Dow Jones is reporting one trader is crediting short covering for the "blip". Precious metals are trading slightly lower this morning, while most of the base metals are trading slightly higher. Crude oil is down another $1, trading in low $73/barrel range. US Dollar is trading about 3/4 of a percent lower this morning against the Euro, which could also be helping metals. US Dow futures are up about 100 points this morning, but we also have round two of market reports being issued today, including releases on weekly jobless claims, consumer prices for September, industrial production for September, a Philadelphia-area manufacturing survey for October and the NAHB housing index for October.
• Bloomberg morning metal news - more
• Reuters - more

  Reports

• GFMS Quarterly Newsletter - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Commodity Bell - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -
• Standard Chartered analyst Daniel Smith - "Producers are hurting. My feeling is (metals) should stabilize at current prices, despite the doom and gloom."
• (China Daily) According to the procurement managers' index (PMI) announced by the China Federation of Logistics and Purchasing, the sub-index for new export orders was 48.4 points in September, dropping 2.3 points from a month earlier, while the purchasing sub-index plunged to 44.7 points, the first time it fell below 50 since 2006.
• (Asia Pulse) Rio Tinto Ltd said yesterday there had been a marked reduction in Chinese commodity demand from the overheated levels in 2007 and warned any bounce in demand would be delayed until next year.
• (Asia Pulse) The government is expected to give its approval for plan of PT International Nickel Indonesia (JSX:INCO) to build a nickel ore processing plant in Pomalaa Timur, Southeast Sulawesi, an official said. The project has met all the legal and administrative requirements, Mineral, Coal and Geothermal Director General Bambang Setiawan said.
• (Yieh) Nippon Sumikin Stainless Corp (NSSC), the biggest stainless steel producer in Japan, announced its prices drop along with production cuts in the fourth quarter.... NSSC will cut the production capacity of sheets by around 70 percent in October and it may continue to cut further depends on how the market will recover in future.
• (Interfax) Changshu govt to take over FerroChina operations - official
• Article on Baltic Dry Index - "SIMON SAYS: Shippers Washed Up, For Now" -  more
•  Article on Baltic Dry Index  - "Baltic Dry index at lowest since 2003" - more
• (Purchasing) With no post-Olympic bounce and steel orders falling China's Boasteel plans to cut prices for steel sheet products for November, according to China Steel Briefing. Prices will be cut by around $117/ton to $488 (hot-rolled) and $525 (cold-rolled), while hot-dipped galvanized sheet prices are to go down by $102 to $627. Prices last were this low in the early first quarter.
• Economist believes nickel demand will improve as year ends - more
• The Gathering Storm—Is Another Great Depression Approaching? - more

  OAO GMK Norilsk Nickel, the world's largest producer of the metal, is reviewing its operations in Australia and Africa because of market conditions. - more

• Norilsk to keep Cawse mine closed amid Australian review - more

  The fall in steel prices in China, which started in the third quarter, may continue due to weakening demand despite higher costs and production limits, analysts say. - more

  Hurting the real economy - It is about as far as you can get from the woes of Wall Street:the mucky business of digging ore out of the ground, shipping it across the oceans and turning it into steel, the feedstock of industry. - more

  What goes up must come down. After a record-breaking 10-year boom for commodities, it was inevitable that prices would have to retreat—especially in the face of global financial turmoil and sagging economic growth. - more

  Even as nickel prices are expected to remain low, more foreign mining companies disclosed plans of investing billions of dollars to put up nickel processing plants in the Philippines. - more

  Listing Molybdenum On LME Causes To Change Business Scheme = Contracts To Purchase Molybdenum For 2009 Become Touchstone, May Be Converged Upon LME Price - more

  Steelmakers and iron-ore mining firms are bracing for another round of fierce contract talks as weakening demand for steel and abundant supplies of iron ore dent chances of a hefty price rise in 2009. - more

  Posco, the world's fourth-largest steelmaker, yesterday warned of falling demand for steel products, amid growing concern that the steel industry cycle has peaked as demand from China slows and global steel prices fall. - more

  Brazilian miner Vale has suspended iron ore supply to at least one of its major Chinese customers, to pressure the steelmaker into accepting a 12 percent price rise in term supplies, a Merrill Lynch report said on Thursday. - more

  The shortage of skills in the mining industry is so acute that it is likely to persist even if 5%-10% of new projects are halted in the wake of the global financial crisis, Ernst & Young mining and metals sector leader Adrian Macartney said yesterday. - more

  A figure being put about by serious market analysts is that as much as 50 percent of the large number of junior miners and explorers may not survive the next 12 months as cash runs out and there is little prospect of raising money by other means. - more

  Where Homer Seguin went, so did the history of trade unionism and mining health and safety in northeastern Ontario. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 15   (LME Week)

• Baltic Dry Index - minus 194 to 1,615. (chart) (article)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & Leaders - (Bloomberg) U.S. Retail Sales Slump 1.2%, Most in Three Years (MarketWatch) Producer prices fall 0.4% in September, energy prices down  // More fund managers say there's a world recession (Reuters) NY Fed manufacturing hits record low in October // Norway c.bank cuts rates, more expected this year // S.Korea plans another dollar injection into banks // U.S. crude falls to lowest since Sept 2007 // Finland housing prices fall 6.5 pct y/y in Sept // UK gilts rally as stocks falter, joblessness rises // Spectre of global recession hits European stocks // Toronto stocks drop, hit hard by commodity fall // WTO creates financial crisis taskforce (Globe and Mail) Canada's approach to bank troubles: Hands off  // Bush, Paulson say economic rebound will take time (Sydney Morning Herald) China slowdown a blow for Rio (Dow Jones) US Inventories Rose Less Than Expected In Aug // Austria Chancellor:May Nationalize Banks "By Force"  // U.S. Stocks Dragged Lower At The Start Amid Recession Worries (Bloomberg) Brazil Stocks Fall on Growth Outlook, Led by Vale; Bolsa Drops // European Stocks Drop on Recession Concerns; BHP, Xstrata Slide (Guardian) Miners lead the way down, as two-day rally ends abruptly
• As far as the American market stands, the volatility index pretty much tells the story (chart here). As far as many other markets go, commodities retreat had an additional negative effect on them. US Dollar is copying yesterday, down against the Euro early, then up later. Right now it is trading about 1/3 of 1% higher. Oil continues to toy with and bounce off the $75/barrel level, hurt today by an earlier OPEC forecast of lowered world consumption. As far as metals go, gold is trading in the green... all by itself. Besides gold, the rest of the metals  traded lower, and in the base metals section, most substantially lower. Indicator charts show nickel made a slight bounce into the green very early, but fell nearly $1000/tonne during the rest of the day. Dow Jones reports three month nickel ended the day at $5.38/lb . Many analysts seem to be reporting that investors/traders are fixated on metals demand right now and supply means very little. We can understand this, with recession concerns spreading worldwide, but also believe the massive withdrawal of fund money from world markets are having a marked impact also. We received a few disgruntled e-mail's last year when we stated massive retirement fund portfolio's, looking for a high ROI home, were partly responsible for the intensity of nickel's bull run in early 2007. Some called it no more than mere speculation, we called it a new market dynamic, with no historical precedence that we could find. Now, we are seeing these same funds return to cash, unwilling to stick to their guns in a panic market. There is an old trader saying that buying a declining stock is about as smart as grabbing for a falling knife. These days, trading at all, is more like sticking your hand in a fan. Dow down over 5% today as we update - sheesh!! 
• Business cartoon - here

  Reports

• MF Global did publish a late report today - pdf here

  Commodity/Economic Comments

• (Dow Jones) German steelmaker and industrial conglomerate ThyssenKrupp AG Wednesday said the global financial crisis is hitting the stainless steel business.... Speaking on the sidelines of the inauguration of a new electron beam furnace in Essen, western Germany, Fechter told Dow Jones Newswires that the financial crisis has also negatively impacted business with other high-performance materials, such as nickel alloys. The market for such special stainless steels was weak in September and demand further dropped in October, Fechter said.
• (Scotia China Update) We wrote this unscheduled report in order to keep investors abreast of developments in the Chinese market, which is changing rapidly in today’s unstable global macroeconomic environment. We observe that in the past week, commodity prices dropped sharply across the board, indicating that sentiment is weakening in China and confidence of local traders and users is being shaken. In response, Chinese producers of steel, aluminum, oil products, and coal are cutting output or delaying commissioning of new projects. (On the positive side, September trade data feature higher copper and oil imports and lower steel and coal exports.) That being said, we argue that the equity markets have largely priced in all of these moves. Major commodity-related sectors, such as steel, metal, and energy, are trading at levels first seen in late 2005 or early 2006. In other words, we have given up all the gains of the past three years in merely a few months. This is why we argued last week that after the recent sharp selloff in the equity markets, the near-term seasonality and cyclicality of the Chinese economy and commodity demands are quickly becoming irrelevant. The equity market is, in our opinion, pricing in (or has already priced in) the scenario of a synchronized global slowdown. At this stage, with all the panic and capitulations, arguably we should look through the near term issues such as the post-Golden Week market behaviour in China and the implications of the Q3/08 data release. And we should remind ourselves by asking, “Are we still a true believer that we are living through the era of the most massive urbanization in human history; and if yes, should we should buy this dip?” And for the record, we remain a secular bull and we maintain our “buy the dip” call here.
• China's sovereign wealth managers are getting cold feet and some private Chinese companies are pulling out of Australian start-up mining projects, raising more doubts about whether Chinese investors can insulate Australia from the global financial crisis. - more

  Miners are facing their first potential losses on metals production in around five years as prices for zinc, aluminium and nickel drop below the cost of production, likely forcing more companies to shut mines. - more

  China Iron & Steel Association (CISA) said yesterday that recent gossips that Chinese steelmakers agreed to pay higher prices for certain kinds of iron ore supplied by Brazilian miner Vale, as asked by the latter, was groundless. - more

  PT International Nickel Indonesia Tbk, one of the world's top nickel producers, may cut production in the fourth quarter if prices of the metal fall further, its chief executive said on Wednesday. - more

  Listed company DMCI Holdings Inc. is studying the possibility of reducing its mining operations in Zambales Province. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.36/lb lower. Uncertainty about the world economic condition has returned to front stage, and commodities are paying the price. All precious and base metals are trading lower this morning. As is oil, down another 4-1/2% as we write this, at $75/barrel. Euro is trading about 1/3 of 1% higher against the Dollar. MarketWatch headline gives a taste of what kind of mood Wall Street might be in this morning "Bearishness back in vogue - Stock futures flashing deep losses; triple whammy in economic data".  Baltic Dry Index continues to plummet, down another 194 points today. World markets return to mostly red (chart here). If you are trading in the US today, keep an eye on the volatility index (here).  
• Bloomberg morning metal news - more
• Financial Times - more

  LME nickel slips over 6 pct on economic worries - Nickel prices fell more than 6 percent on Wednesday to track other base metals lower as fears over the global economic outlook and demand for industrial commodities dominated sentiment. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Global Economic Outlook Summary JP Morgan - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "There will be no Metals Commentary until Oct 20th as Ed Meir is traveling until then."
• Craig Oliver, finance director of Western Areas to Dow Jones- "At US$8/lb, most of the industry with mines in production will be feeling some pain. We see a 'hard floor' for prices at US$6/lb, where virtually all groups are in a lot of pain,"
• Francisco Blanch of Merrill Lynch - “With the likelihood of a global recession rising, industrial metals prices will face further downward pressure.”
• Leon Westgate of Standard Bank - “Given the current low price of metals relative to production cost, and the impact of expensive capital, we may see supply retreat further.”
• (Dow Jones) In a dinner speech to members of the metals industry, LME Chief Executive Martin Abbott said traded LME volumes were more than 40% higher compared to September 2007 and traded volumes year-to-date were about 20% above the same period last year....The exchange is now focusing its efforts on launching minor metal contracts for cobalt and molybdenum, two new metals which are, in large part, co-produced by producers of metal that already trade on the LME. The exchange plans to launch the new contracts in the second half of 2009.
• Treasury Secretary Henry M. Paulson Jr. -  (yesterday) "Today, we are taking decisive actions to protect the U.S. economy. We regret having to take these actions. Today's actions are not what we ever wanted to do, but today's actions are what we must do to restore confidence in our financial system. .... Government owning a stake in any private U.S. company is objectionable to most Americans, me included. Yet the alternative of leaving businesses and consumers without access to financing is totally unacceptable."
• (SBB) Nisshin Steel will cut crude stainless steel production at its Shunan works in western Japan by up to 10% from next month.
• (SBB) China’s Taiyuan Iron & Steel has officially announced it will cut its benchmark contract SUS 304 and 430 domestic stainless prices by RMB 2600/tonne
• As the world is concentrating on the effect of rescue plans in developed economies, China is pondering how to maintain its stable economic growth, with interest rate cuts expected to continue, analysts said. - more

  SSINA Issues Report on China's Use of Illegal Subsidies to Bolster Stainless Steel Industry - pdf here

  Nickel prices bring down Murmansk - The regional budget of Murmansk Oblast might shrink 5 billion RUB following the last weeks’ major drop in nickel prices. - more

  BHP Billiton Ltd., the world's largest mining company, will shut its Beijing office this month as it halted exploration of metal deposits in China. - more

Nickel 1/2/08 thru 10/13/08

Since its peak May 2007

  Oslo-listed Intex Resources ASA may take bank loans, issue bonds or find an equity partner next year to fund a $3 billion nickel project in northern Philippines, its president said on Wednesday. - more

• A wholly-owned unit of Canada's Mindoro Resources Ltd. is considering building a $500-million nickel processing plant in the southern Philippines, the CEO of the company said Wednesday. - more

  Rio Tinto Group, battling a $86 billion takeover bid from BHP Billiton Ltd., may delay the planned sale this year of $10 billion of assets because of the global financial crisis. - more

  New Caledonia’s employer organisation, MEDEF, says the territory’s economy is set to return to normal conditions after years of exceptional growth. - more

  The fate of the Climax molybdenum mine reopening near Leadville was left in question Tuesday after its owner said it will cut back on development projects. - more

  Steelmakers and iron-ore mining firms are bracing for another round of fierce contract talks as weakening demand for steel and abundant supplies of iron ore dent chances of a hefty price rise in 2009. - more

  Following is a chronology of announcements of output reductions made by steel companies in recent weeks: - more

  Russia's United Company RUSAL lashed out at billionaire Vladimir Potanin on Tuesday for selling $600 million in assets to a unit of mining giant Norilsk Nickel. - more

  Following the collapse of the financial sectors in the U.S. and Europe, fear of a global economic slowdown has begun to spread. In spite of measures taken by the U.S. and European governments to help their financial sectors, the threat of a global recession remains prominent. - more

• Indonesia is expected to lure fresh mining investment despite a global economic slowdown, the head of country's mining association said Wednesday. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 15 - 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, October 14   (LME Week)

• Baltic Dry Index - minus 167 to 1,809. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Financial Times) Commodities drive higher on equity rally (MarketWatch) Yesterday - Dow index gains 936 points, completing in one day what first took 69 years (MorningStar) Today - U.S. Stocks Turn Mixed; Nasdaq Dips Into The Red (RTT) Oil Prices Turn Lower After Topping $85 (Dow Jones) EU Leaders Bid To Expand Financial Rescue Across Bloc (MarketWatch) Australia unveiled a surprise A$10.4 billion ($7.4 billion) fiscal stimulus package Tuesday designed to bolster the economy in the face of what Prime Minister Kevin Rudd described as the greatest global financial crisis since the Great Depression. (Telegraph) Japan's Nikkei leads Asian stocks surge (Bloomberg) Santander to Take Over Sovereign in $1.9 Billion Deal (Bloomberg) Treasury Secretary Henry Paulson urged banks getting $250 billion of taxpayer funds to channel the money to customers quickly to halt a credit freeze that's threatening to bankrupt companies. (Reuters) 2007 - special note dated April 20, 2007 - U.S. Treasury Secretary Henry Paulson said on Friday the housing market correction appears to be at or near its bottom and that troubles in the subprime mortgage market will not likely spread throughout the economy. (had to add the last one for credibility purposes)
• While the rest of the world seemed to still be awash with optimism over the G-7's weekend actions, and a few countries that had markets closed yesterday, played catch-up, Wall Street has calmed down somewhat with an early morning boost in the Dow having since fizzled. The volatility index is showing some stabilization, (5 day chart here), with the panic subsided, but nerves still on edge. There is little reason to believe the Dow won't end positively today, but traders could be looking forward to tomorrow, when the US Fed starts releasing a whole rash of reports over the next three days, that some believe, will confirm the country is in a recession. If the reports come in more favorably than expected, we could see the bull unleashed yet again. The dollar and Euro have been bouncing around all morning, and while the Euro was higher this morning, it is unchanged at update time. Crude oil climbed nearly $5 barrel early this morning, but it too has since settled into a nearly no change status, being down 15/100's of a percent at update time. Metals were, for the most part, slightly higher today, but nothing like they were yesterday. Copper was up 10% early, but ended about 3% higher, while nickel was up around 7% at one point this morning. It became apparent that London traders were watching US markets closely, and when equities in America declined, they dragged metals down with them. Indicator charts show nickel started very strong, but fell sharply in the early afternoon, before stabilizing. Sucden's day old chart shows yesterday's gains, which have since pretty much evaporated (chart here). Dow Jones reports three month nickel ended the day about 3 cents lower than yesterday, at $5.78/lb .     

  Base Metals Rally But Global Econ Concern Remains - Base metals rallied strongly Tuesday as Asian and European equity markets surged on rising confidence about U.S. and European government financial bailout plans. Market participants, however, warned that this week's metals rally isn't a clear sign that risks about a global economic slowdown have dissipated. - more

  Reports

• Weekly Commodity Report - pdf here
• Steel Weekly - pdf here

  Commodity/Economic Comments

• (Dow Jones) Fortis forecasts a refined nickel surplus of at least 100,000 tons in '09 as demand for stainless steel continues to fall. Expects prices will continue to fall, leading "many of the world's nickel producers ... (to scurry) to work out the profitability of their planned new projects."
• (Reuters) China's exports of steel products in September retreated from a record high in the previous month to 6.67 million tonnes, as demand from the international market weakened due to the global financial crisis.
• Commodity Rout Far From Ended as Recession Approaches (Update3) - more
• We're Laying the Groundwork for Recovery by Ben bernanke - WSJ - more

  With world prices of nickel sliding to almost a quarter of its previous levels, local firm DMCI Mining Corp. said it is mulling to propose to its Australian partner, Rusina Mining NL, to temporarily suspend their direct shipments from their mining site in Zambales. - more

• Rusina Mining N.L., which operates the Acoje nickel project, will decide this week on whether or not to suspend temporarily its nickel mining operations following a steep drop in nickel prices. - more

  Weakening demand could push copper towards its marginal cost of production while nickel demand is supported as stainless steel destocking comes to an end, a senior industry figure said on Tuesday. - more

  Metals to head down in 2009 despite supply blips - Industrial metals prices will fall further next year as economic slowdown hurts demand, but labour disputes and other production problems may help limit falls in markets such as copper, where stocks are still low - more

  China exported 6.67 million tons of steel products during the month of September, 13.15 percent less than the previous month, though the influx of foreign iron ore continued to climb, according to statistics released by the General Administration of Customs (GAC) on Oct. 14. - more

• Stockpiles of iron ore and coal are building up at Chinese ports as the country's economic growth rate slows at a faster-than-expected rate. - more

  Companies shy away from long-term supply contracts - Prefer buying raw materials from spot markets and in small quantities to keep inventories low. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.41/lb  higher. Commodity traders, as well as equity traders, continue to respond favorably to the weekend move by the G-7 to protect the world financial system from collapse. World stock markets continue to trade significantly higher this morning, as are metals, both precious and base. Crude oil is up 4% and the US dollar is trading about 3/4 of 1% lower against the Euro. We suspect today and yesterday have witnessed a huge rush of fund money rushing back into the market, which has helped boost commodity prices.  
• Bloomberg morning metal news - more
• Reuters - more
• Financial Times - more

  Reports

• GFMS Analysis - Nickel - here
• Global Mining News - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• SSINA releases market data for July 2008 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "There will be no Metals Commentary until Oct 20th as Ed Meir is traveling until then."
• (The Australian) Monday's move was the best one-day closing point gain ever for the Dow and its biggest one-day percentage climb since March 15, 1933
• Ben Simpfendorfer, economist for Royal Bank of Scotland in Hong Kong - "...fall off in commodity demand. This is a sign that growth is slowing, but we can't exaggerate the significance of it. Commodity prices are collapsing, so it makes a lot of sense for Chinese commodity buyers to be stepping back, at least temporarily"
• (Dow Jones) Finnish stainless steel producer Outokumpu OYJ would consider using the London Metal Exchange's molybdenum futures contract despite the risk that it could inject volatility into the market, the company's chief executive, Juha Rantanen said.
• (Interfax) Jinchuan hauls in nickel prices for second time in October
• (MB) Three-month nickel to average $22,375 in 2008 - Mitsui

  Metals to head down in 2009 despite supply blips - Industrial metals prices will fall further next year as economic slowdown hurts demand, but labour disputes and other production problems may help limit falls in markets such as copper, where stocks are still low. - more

• Global demand for industrial metals will shrink over the next 12 months, prices will hit a bottom before the end of 2009 and output will be cut over the next year, a survey by Macquarie Bank showed. - more
• Global market turmoil will see no floor established for base metals prices before spring 2009, according to David Abramson, managing editor of commodity strategy at BCA research, speaking at the London Metal Exchange's metals seminar in London Monday. - more

  Nippon Steel & Sumikin Stainless Steel Corp., Japan's largest maker of the alloy, dropped prices to the lowest in more than two years and said it will cut production as the deepening global credit crisis saps demand. - more

  Japan's Sumitomo Metal Mining Co Ltd. is considering building a $1.7 billion nickel processing plant in the southern Philippines, despite global financial market turmoil, company officials said on Tuesday. - more

  Transactions of nickel-based stainless CR sheets for October shipments have come to a virtual standstill in East Asia where a wait-and-see position is predominating among stainless steel manufacturers and their customers.- more

  Fe-Cr Producers Turn To Take Defensive, Fe-Cr Price Continues On Weak Tone Until First Half 2009 = Stainless Steel Production Recedes From Recovery, Priority Is Given To Quantity - more

  Nickel futures prices across all national commodity bourses may continue to rule weak over the next few days chiefly on slow down in demand and lower production supported by higher inventories at London Metal Exchange (LME). - more

  Deep cuts in steel output at Russian mills have been exaggerated by some steelmakers and the press and reflect attempts by some Russian proprietors, like Alexei Mordashov, owner of Severstal, to sustain profit margins, according to industry sources. - more

• European steelmakers are preparing production cuts by the end of the year in the face of a deeper-than-expected economic slump, although German companies are likely to cope better than their rivals with weaker demand. - more
• POSCO, the world's No.4 steelmaker, said on Tuesday its profitability was not likely to fall sharply next year, despite weakening steel prices, as its product prices remain cheaper than those of its rivals. - more
• China's domestic steel prices plummeted an average 12 percent last week, the biggest single-week decline since 2000, The China Securities Journal reported yesterday. - more
• The prices of all flat-rolled sheet products in the US market plummeted Monday amid just a handful of transactions, and offer/bid chatter as domestic mills scrambled to lure buyers with attractive offers. - more
• JSW Steel Ltd, India's third biggest producer of the alloy, will show another drop in earnings despite strong volume growth and margins will continue to suffer on surging input cost and marked-to-market losses. - more

  Fortescue Metals says its quest to become the alternative supplier of iron ore to the Chinese market has been boosted by jostling between rivals Rio Tinto and BHP Billiton, and by moves by Brazil's Vale to push up prices. - more

  Courtesy AISI - In the week ending October 11, 2008, domestic raw steel production was 1,869,000 net tons while the capability utilization rate was 78.3 percent. Production was 2,112,000 tons in the week ending October 11, 2007, while the capability utilization then was 88.5 percent. The current week production represents an 11.5 percent decrease from the same period in the previous year. Production for the week ending October 11, 2008 is down 3.8 percent from the previous week ending October 4, 2008 when production was 1,942,000 tons and the rate of capability utilization was 81.4 percent.

• August U.S. manufacturing technology consumption totaled $323.07 million, according to the Association for Manufacturing Technology and the American Machine Tool Distributors’ Association. - more

  Norilsk Nickel board member Mikhail Prokhorov forwarded a request on the basis of Article 68 of the Federal Law "On Joint Stock Companies" "seeking to call a board meeting to discuss the issue of canceling the metal major’s decision to buy back its common shares that was adopted by the Board of Directors on August 22, 2008". - more

  The warm waters of the Gulf of Aden became the focus of the world's media after Somali pirates hijacked the Faina, a Ukrainian ship carrying a cargo of 33 T72 Soviet-era tanks as well as other heavy artillery on September 25, triggering fears that the arms could fall into the hands of terrorist sympathizers. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 14 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, October 13 (LME Week) (Happy Thanksgiving Canada)

• Baltic Dry Index - minus 245 to 1,976. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Infocast) Central banks to offer unlimited funds to mkt (NewsHour) World Markets Rally as Government Announce Financial Rescue Plans (CNN) Dow soars, cracks 9,000  (CNBC) Money Markets Ease on Unlimited Dollars Pledge (MarketWatch) Three-month dollar borrowing rate eases slightly (Libor rate)
• What a difference a weekend makes! Markets rebounded with a vengeance today after the G7 handed the keys to their nations vaults to the world's banks over the weekend. Ok, maybe not exactly the keys. Will the bullishness hold? Not too many analysts calling a bottom quite yet, although there are a few proclaiming the worst is behind us. Many of them are on their fifth or tenth bottom prediction, and eventually they will be right. Time will tell, but the US markets have a free pass for the next few days before a whole rash of government economic reports start hitting the newswires on Wednesday. This could turn out to be no more than an "enjoy it while it lasts" suckers rally. The volatility index has backed off today, but still incredibly high (chart here) revealing the smiles on Wall Street today are masking a lot of nervous concern. Dollar started out lower this morning, with the Euro reaching a three week high at one point, but rebounded in the afternoon, and is trading higher by 3/4 of a percent at update time (live java chart). Oil is bouncing between $80 and $82 barrel, while gold lost its earlier gains as the dollar reversed course. The rest of the precious and base metals did better, all ending in the green. Indicator charts show three month nickel started off very strong this morning, climbed over the $6/lb mark, before backing off before the close. Dow Jones reports three month nickel ended the day at $5.81/lb .

  Reports

• Molybdenum Supply Forecasting update - pdf here (thanks 2b)

  Commodity/Economic Comments

• (Reuters) Prices for the stainless steel raw material (nickel) dropped 23 percent last week in a sell-off of all base metals on concerns of a deepening recession.
• (Dow Jones) A ban on short selling in commodities isn't likely and wouldn't be inappropriate, the chief executive of the London Metal Exchange told Dow Jones Newswires....The minor metals community isn't completely opposed to the London Metal Exchange's planned futures contracts, despite some fairly outspoken protests from a number of industry participants earlier this year..."
• (Goldman Sachs) "Although we remain structurally bullish commodities, the credit crisis has exacerbated an already weak economic environment, which has significantly damaged current and forward commodity demand."
• Norilsk Nickel Deputy Director-General Viktor Sprogis to LME week briefing today - "Producers are in a difficult position - they are currently in discussion on what to do. They are discussing 2009 plans and the possibility of closures. We think we will be the last company to cut production. ... We assume certain stagnation and that we will face certain problems. It will take time - we are talking years, not months. Demand will recover, it is just a question of time...."The speculative part of the market is not as strong as it was before. In the past few years, the industry has been affected by speculation on nickel prices. It is time for fundamentals to come back."
• Todd Hultman, president of DailyFutures.com - "The notion that commodities can be a 'safe haven' for investors is true from some market environments, but not others ... Commodities are traditionally very good investments during times of war or other hardships when production is hampered, and when economic growth is slowing and interest rates are accommodative ...But in times of financial panic, when there is a mad scramble for liquidity, commodities do not do well."
• (Dow Jones) "About 100,000 tons of low-cost nickel pig iron capacity will be built in China in 2009, a bearish development for nickel prices in the short-term, says Macquarie Research analyst Jim Lennon. Notes while a significant proportion of older nickel pig iron capacity in China is operating at a loss at the current LME 3-month nickel price of $12,784/ton, the production cost of this new 100,000-ton capacity will be around $10,000/ton, which should protect it from low prices. "
• How This Bear Market Compares - NY Times - more
• We Are Facing an 'Inflation Holocaust': Jim Rogers - more

  LME 'healthy' but no floor for base metal prices until 2009 - Global market turmoil will see no floor established for base metals prices before spring 2009, according to David Abramson, managing editor of commodity strategy at BCA research, speaking at the London Metal Exchange's metals seminar in London Monday. - more

• Volumes on the London Metal Exchange have risen as volatility on global markets and concern over counter-party risk prompts investors to bring business to the perceived safety of the exchange, the LME chief has said. Total turnover in the LME climbed 45 percent year-on-year in September and has risen 20 percent in the year-to-date, LME Chief Executive Martin Abbott told Reuters in an interview. - more

  Battered base metals seen finding support in 2009 - Base metals prices are seen struggling in the short term, but will find a floor next year as the current financial turmoil fades, a senior commodity strategist said on Monday. - more

  Steel scrap prices to recover this year - analyst - Steel scrap prices are likely to rebound after a sharp fall in the past couple of months as producers substitute to take advantage of lower prices, a conference heard on Monday. - more

• Europe's scrap metals business will shrink this year as the global economy slows and some consumers may buy recycling firms in an effort to secure supplies, the head of European federation of scrap dealers says. - more

  OAO Severstal, Russia's largest steelmaker, will slash output in Russia, the U.S. and Europe by as much as 30 percent this month and review full-year forecasts as financial turmoil saps the world's demand for metals. - more

  With the market demand for steel slowing down and steel price falling, Hebei Steel Group has decided to cut production by another 10%-20% following the 20% decrease in its current production, said China Business News today. - more

• Following recent retreat, the prices of iron ore and steel products have further room for slide, according to China's Ministry of Commerce. - more

  At least one wealthy investor has turned his lemons into lemonade. Mikhail D. Prokhorov, the youthful banker-turned-mining-tycoon, seemed to be washed up earlier this year, when he was compelled to sell his 25 percent stake in Norilsk Nickel, the Russian blue-chip mining company, to industrialists who were more in favor with the government. - more

• Russian billionaires from aluminum magnate Oleg Deripaska to football club owner Roman Abramovich lost more than $230 billion in five months during the nation's worst financial crisis since the 1998 default on its debt. - more

  Tati Nickel Mining Company (TNMC) will tomorrow hold an HIV/AIDS awareness campaign at Matshelagabedi Primary School in the North East District. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.24/lb   higher on a Monday relief rally. All metals, both precious and precious are trading in the green this morning, as world markets react favorably to G-7 action taken over the weekend. US dollar is trading about 1/3 of 1% lower, while oil is trading over 5% higher, around the $82/barrel level. Asian and European markets reacted positively in today's trading (chart here), and futures show that Wall Street should start on a positive note early (here) Sucden's day old nickel chart reflects the huge drop on Friday here.
• Bloomberg morning metal news - more
• Reuters - more
• Financial Times - more

  Reports

• Fortis Metals Monthly - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "There will be no Metals Commentary until Oct 20th as Ed Meir is traveling until then."
• (Dow Jones) A delayed resurgence in stainless steel demand and a curtailment of expected strong supply growth pose the main risks to nickel prices, says Barclays Capital analyst Gayle Berry at the LME week seminar in London. Recovery in stainless steel buying is likely to be pushed forward into 1H '09, and weaker stainless steel prices pose the main downside risk for nickel prices, she adds. But sees strong supply growth is on the horizon for '09.
• The record 39 percent decline in commodities since July 3 is nowhere near finished, if history is any guide. - more
• (Interfax) Billionaire Mikhail Prokhorov, who is a member of the board of directors at MMC Norilsk Nickel, has demanded an emergency board meeting to try and reverse a decision to buy back $2 billion worth of the nickel producer's stock.
• Why global Nickel prices are crashing - more
• Xinhua - Nickel Production Grows by 10.6% in Jan-Aug, Consumption up by 23.2%.
• Merafe - Shareholders of the Company are advised that the European benchmark ferrochrome price has been settled at $1.85 per pound for the fourth quarter of 2008, 9.8% down from $2.05 per pound in the third quarter of 2008. - pdf press release here

  Global market turmoil will see no floor established for base metals prices before spring 2009, according to David Abramson, managing editor of commodity strategy at BCA research, speaking at the London Metal Exchange's metals seminar in London Monday. - more

  Sumitomo Metal Mining Co., Japan's largest nickel producer, will decide whether to proceed with a Philippine smelter after estimated costs soared and the global credit crisis roiled financial markets, an executive said. - more

  China's domestic steel prices plummeted by an average of 12 percent between Oct. 6 and Oct. 10. That is the biggest single-week decline since the year 2000, China Securities Journal reported Monday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Weekend Review, October 11 & 12

  A Chinese mining company accused of causing a security scare in Papua New Guinea has denied claims its expatriate engineers were entering the country without being checked by immigration officials. - more

  Commodity prices stumbled badly in the third quarter, harpooning investors in natural resources mutual funds. This category was by far the biggest loser among all the domestic stock fund categories tracked by Morningstar, down 36 percent, on average, in the three months through September. - more

  With world markets in turmoil, and commodity prices collapsing, we are adding a weekend update for your convenience. Friday's US Dow ended down "only" 128 points after the largest one day shift in its history. Media reports during the late afternoon bull run, credited "U.S. stock markets look to G7 finance ministers and central bankers in the hopes positive statement and actions will help improve market psychology." The results of the meeting are questionable, but maybe enough to calm nerves, if only temporarily. As Reuters reported Sunday "The G7 on Friday vowed to take all necessary steps to unfreeze credit markets and ensure banks can raise money, but offered no collective course of action to avert a deep global recession." MarketWatch reports this morning "The global financial system is on the brink of a meltdown and additional steps must be taken immediately by the richest nations to calm jittery bankers and investors, the IMF warns." It adds "The U.S. recession has been nearly forgotten in all the anxiety about the financial meltdown in the past few weeks. For those who care about the fundamentals, however, the coming week will feature a lot of data about the economy, much of it rather depressing."

• Five days that shook the world - As the markets dived, ministers, mandarins and bankers thrashed out a survival plan - more
• Week of 'utter carnage' moves the crunch into the real world - As panic sets in and the rush to sell shares intensifies across the world, economists call for swift, decisive action from governments to avert a global slump that seems inevitable. - more

  Reports

• Weekly Scoreboard for October 10, 2008 - pdf here

  Commodity/Economic Comments

• Global Insight metals analyst John Mothersole said copper, tin and cobalt have more potential downside, while aluminum, nickel and zinc don’t because their prices have already moved below what it costs to produce the metal. - source
• (Reuters) Investor and author Jim Rogers, one of the earliest to predict the boom in commodities of the last few years, said Friday that he recently bought agricultural commodities despite the sharp fall in prices. "I've been buying agricultural commodities. I bought some a couple of days ago. It's down today. It did not matter, I bought them. I covered shorts yesterday," Rogers said on CNBC. Rogers told CNBC's Maria Bartiromo that the financial markets are in a liquidation phase. "Commodities are only thing that I can see that will not be impaired."
• (Rusmet) It is reported that Russian steel major MMK is contemplating cutting production amid a drop in demand for steel and uncertainty in financial markets, while Novolipetsk, another top producer, said it is considering a similar reduction. MMK, or Magnitogorsk Iron & Steel Works, Russia's third largest steelmaker, has cut its planned output for October to 850,000 tonnes a reduction of at least 15% and could lay off workers as construction firms freeze new projects and carmakers predict slowing sales.
• Commodities to take a hit as world turmoil deepens - more
• (Jiji Press) Orders for ordinary steel products in Japan in August 2008 fell by 5.4% YoY to 6,262,000 tonnes, the first drop in 28 months.
• (Steel Guru) According to an information from Europe, it is supposed that, in consequence of the negotiations taken place between stainless steel mills in Europe and producers in South Africa on price of charge chrome for shipments in October to December 2008 quarter, it has been agreed upon to reduce the price by 20 cents per pound of Cr in comparison with that settled for July to September 2008 quarter.
• (Press Release) URSA Major Minerals Incorporated (URSA Major) (TSX:UMJ) has temporarily suspended pre-production mining at the Shakespeare Nickel Project located 70 km west of Sudbury, Ontario, due to the decline in commodity prices. To date in 2008, URSA Major has mined, crushed and hauled approximately 90,000 tonnes of ore to Xstrata Nickel's Strathcona mill for processing.

  Molybdenum oxide and ferromoly markets came under further downward pressure this week, with sentiment and the global financial crisis, rather than fundamentals, being the main driving force behind the lower prices, according to market participants. - more

  Mineral wealth and commodity prices have kept Australia a rung above the rest, but the squeeze is catching up. - more

• Resource stocks were battered again yesterday as concerns that Chinese demand will not save Australia from the growing credit market turmoil caused more investors to flee. - more

  China's largest steel maker, Baosteel Group, will cut steel production over the next three months in the face of a weakening outlook for demand, sources close to the company said on Saturday. - more

  Presentations from "Metals in China Seminar", which took place in Lisbon, Portugal in 8 October 2008 (more posted Friday) - courtesy of International Nickel Study Group

• Mr. Shang Fushan , Vice President, CNIA, made a presentation on “Current situation and forecast on Chinese nickel industry”. - pdf here
• Mr. Shang Fushan , Vice President, CNIA made a presentation on “Development review on 2007 and prospects for 2008 on China’s non-ferrous metals industry”. - pdf here

  Hit by the recent spurt in import of steel, primary steelmakers have urged the government to levy 20% import duty on steel or completely ban its imports for the next three months. - more

• SooNews.ca has reported that up to 1000 people may be laid off at Essar Algoma Steel in the near future. - more

  Australian miner Mount Gibson Iron Ltd said some Chinese steel makers have asked it to delay ore shipments, a further sign of weaker demand that will add pressure on mining giants in the upcoming annual price negotiations. - more

  In celebration of Anti-Mining Solidarity Week, the Alyansa Tigil Mina (ATM), a network of mining affected communities, indigenous peoples’ groups, academics, religious organizations and other support groups lined up a series of activities including a dialogue with President Arroyo to bring to her attention the horrors of large-scale commercial mining.  - more

  Loans to shipowners will drop by at least a third this year as frozen money markets curtail banks' ability to raise funds and shipping prices tumble, according to the largest lender to the industry last year. - more

  Working on Burj Dubai has literally been going where no man has ever gone. Arabian Aluminium speaks to Gulf Construction about the challenges involved in cladding the world’s tallest tower. - more

Friday, October 10

  Daily Nickel/Stainless Wrap-up

• Baltic Dry Index -  minus 282 to 2,221. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• There is no reason to post a bunch of headlines today. Except for those marooned on a deserted island without a cell phone, everyone knows how bad things are. Like our readers, we have grown numb to the constant barrage of bad news and daily losses in the market. But even we were stunned to see what happened to nickel today. First ,a run down on other aspects of the market. Dollar is trading higher against the Euro, about 3/4 of 1%. Crude oil is still selling in the $80/barrel range, down about 6-1/2%. Metals all traded in the red today, both precious and base. Indicator charts show nickel fell hard in the morning, and rose during the afternoon. At one point the price per tonne of nickel was selling over $2000/tonne lower. After the climb, Dow Jones reports three month nickel ended the day and week at $5.51/lb . That is the lowest close for three month  nickel on the London Metal Exchange since Nov 18, 2005. We were shocked last week, when nickel dipped below $7/lb; this week we end halfway between $5 and $6. The VIX, also referred to as the fear factor, broke yet another record today (chart here). People around the world are just plain scared, and no one knows where to turn, or who to believe.  

  Commodity/Economic Comments

• (Dow Jones) U.S. nickel imports fell 25.9% in August from last month, and was down 33.3% from the previous year, the Commerce Department reported Friday. U.S. nickel exports fell 10.0% in August from the previous month, but was up 26.4% from the previous year, the Commerce Department reported Friday.
• (Dow Jones) Russia’s richest man has been forced to sell a second holding in less than a week after being issued with another margin call by one of his lending banks, as the global crash in stock markets wreaks havoc on the value of his shares.

  China's ferroalloy spot prices moved sharply lower this week on the back of falling demand and more supply in the market, industry sources said this week. - more

     Orders for ordinary steel products in Japan in August fell 5.4 pct from a year before to 6,262,000 tons, the first drop in 28 months, an industry group said Friday. - more 

  Nickel production may outpace demand by 110,000 tons in 2009 as usage by stainless steel makers is slow to recover, the International Nickel Study Group said. - more

  Hunan Valin Steel Co Ltd, in which Arcelor Mittal holds a 29.48 pct stake, said its Hunan Valin Xiangtan Iron & Steel Co Ltd unit is considering a stainless steel project with an estimated investment of 9 bln yuan (approximately USD1.3 bln). - more

  The Russian Copper Company has temporarily shelved separate projects to expand into nickel and build a zinc plant with a rival miner due to the global financial crisis, a company spokesman said on Friday. - more.

  Record prices for sulphuric acid, used in the production of copper and a significant cost in extraction, are squeezing mining company margins at a time when copper prices are weakening, analysts say. - more

  Russian steelmaker Severstal said on Friday it will cut output at its steel plants in October as a result of slower demand for steel products due to recent changes in global economic conditions. - more

• OAO Severstal, Russia's largest steelmaker, will slash output in Russia, the U.S. and Europe by as much as 30 percent this month and review full-year forecasts as financial turmoil saps the world's demand for metals. - more

  The crisis facing Singapore-listed Ferrochina has completely surprised analysts who now fear the real prospect of liquidation. - more

  The launch of Russia’s stock markets in the early 90s and the privatization of state assets was one of the best things that happened in the short career of Dmitri Mededov, a Russian attorney. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around  $.70/lb   lower. How about waking up to these headline's -  (MarketWatch) "Stocks plunge globally - In a meltdown" or this one (Reuters) "Metals plunge as much as 10 pct as panic spreads"!! Even by the standards set in recent days, today is turning into a bloodbath for metals. Nickel down 13%, tin down 10%, copper down 9%, and so on. Crude oil, down 4%, dollar unchanged against the dollar. After Wall Street's unexpected dive yesterday afternoon, pure panic has spread around the globe (world markets chart). Even spot gold is down this morning? If you have ever heard the phrase "don't throw the baby out with the bathwater", in our opinion, you are seeing this happening right now in metals trading.  JP Morgan said this morning "..the memory of the bull market might be enticing some traders to look at buying some of the metals (as they look) oversold, the reality is that the real economy is now weakening to such an effect that rallies in these metals are unlikely to last."
• Bloomberg morning metal news - more
• Reuters - more

  Nickel falls 10 pct, metals rout gathers pace - London Metal Exchange nickel futures tumbled 10 percent on Friday to their lowest in just under three years as worries about a global economic meltdown sent investors running from industrial raw materials. - more

  Reports

• Daily Market Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Metals Commentary - pdf here
• Commodity Trends - pdf here
• The World Bank Commodity Markets Review - pdf here
• September Steel Distributor Survey - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "LME metals rebounded yesterday as US stocks gave the metals complex some breathing room at least early on. Lead and zinc each rallied by more than 5%, boosted by gains in copper and ali. However, the mood changed abruptly late in the day yesterday after the US stock market entered yet another vicious spiral lower, losing almost 700 points on the session. There were a myriad of reasons behind the selloff, both real and perceived, and these are too long to itemize here. ... The aftershocks of Thursday's US stock market plunge is making itself felt today, where we are sharply lower across the board. Energy prices are down $4/brl, and metals are getting thrashed as well, .... Where and when all this will end is anybody's guess. The implosion in the various markets, led by US equities, conjures the image of a “Black Swan” event, an unexpected phenomenon that cannot be explained by the benefit of hindsight. Even those who have been warning about the subprime crisis and derivatives in recent years, surely cannot have imagined such a spectacular seizure in the financial system. ... We are currently at $12,300, down $1100. Charts looked miserable, and we suspect that prices could target the $10,000 mark as long as this commodity-wide retreat remains intact." (read Ed Meir's complete morning base metals report here)
• According to The Fredonia Group, Inc., China will surpass Japan in 2008 to become the second largest fastener market in the world, after the US. They forecast global demand for industrial fasteners is projected to increase 4.8 percent annually to $66 billion in 2012.
• (Reuters) The world's top aluminium producer United Company RUSAL said on Friday it had requested an extraordinary general meeting of top nickel miner Norilsk Nickel to elect a new board. UC RUSAL, which has a 25 percent-plus-two-shares stake in Norilsk, is seeking an increase of the board to 13 members from the current 9.
• (La Tribune) Brazilian mining company Companhia Vale do Rio Doce (RIO) received authorization Thursday to begin operating its Goro Nickel factory in the southern part of the island, La Tribune reports, citing unnamed sources. Operations will start by the end of December or the beginning of January, La Tribune reports.
• More downside risks for metals in Q4  - more
• Investors pulled a record $52.1 billion from U.S.-managed stock and bond mutual funds in the past week, seeking the safety of government-insured bank deposits as the financial crisis worsened.  - more

  Current market turmoil is unlikely to push base metal prices below historical levels as global demand prospects look more price supportive than in previous downturns, according to analysts at UK investment bank, Barclays Capital. - more

  European steel makers are preparing production cuts by the end of the year in the face of a deeper-than-expected economic slump, although German companies are likely to cope better than their rivals with weaker demand. - more

  Presentations from "Metals in China Seminar", which took place in Lisbon, Portugal in 8 October 2008

• Mr. Peter Kaumanns , Director, Economics & Statistics, International Stainless Steel Forum, made a presentation on “Current and future trends in the Chinese stainless steel market”. - pdf here
• Mr. Xinfang Jiang , President, Shanghai Tsingshan Mineral Co Ltd., made a presentation on Stainless Steel. - pdf here

  Signs that China's economy will be further cooled by the financial crisis are prompting analysts to revise down their expectations for the iron ore price that major minor Vale could charge next year. - more

  Russia’s aluminium and nickel oligarchs go to the mat for state bank funding. - A fierce battle has begun for access to state bank cash to determine who ends up in control of Russia’s largest metal and mining companies, Norilsk Nickel and United Company Rusal. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 9

• Baltic Dry Index -  minus 261 to 2,503. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Reuters) U.S. crude futures drop more than $2  (Thomson) US August wholesale inventories up 0.8%, sales down 1.0% (Reuters) The number of U.S. workers filing new claims for jobless benefits fell 20,000 last week, in line with forecasts, as the impact of hurricanes Gustav and Ike eased, government data on Thursday showed. (AFP) Euro rises against dollar (Bloomberg) India May Allow More Overseas Investment as Rupee at 6-Year Low (Daily FX) U.K. Home Prices Slip to Multi-Decade Low, Fueling Recessionary Fears (Reuters) Oil falls towards $86, OPEC mulls November meeting (FX News) IMF's Strauss-Kahn-World on cusp of global recession (MarketWatch) Nielsen: More Than One-Third of U.S. Consumers, Including Nearly One-Third of High Income Consumers, to Cut Holiday Spending (SBD) According to provisional data of the Federal Statistical Office, ...German exports of August 2008 were thus 2.5% below and imports 2.6% above the respective August 2007 levels.
• At update time, the Dollar continues to trade lower against the Euro, but by only 1/4 of a 1%, while oil is trading around $87/barrel. Base metals ended the day in the green,  except for tin, and excluding gold, so did the other precious metals.  Indicator charts show nickel trading had a little more life to it today, trading in a plus/minus range of about $700/tonne. By the end of the day, Dow Jones reports three month nickel ended trading at $6.03/lb , about 4 cents higher than yesterday's close.
• Why not take a minute and send a free love e-card to your spouse and make their day. Plenty of options on the net, and if you don't have a favorite already, here are a couple here and here

  EU Average Stainless Steel Prices - Latest Forecasts from MEPS - Stainless selling figures are forecast to decrease further in October. Declining nickel costs, together with large drops in scrap values will, almost certainly, push alloy surcharges for austenitic grades lower. - more

• North American Average Carbon Steel Prices - Latest Forecast from MEPS - here

  Commodity/Economic Comments

• (Dow Jones) International Nickel Study Group says demand is unlikely to recover this year; "any recovery in primary nickel demand and stainless steel production is, at this point of time, not anticipated until well into 2009," it says in statement after meeting of 70 government and industry representatives in Lisbon.
• Base metals hit hard as hedge funds unwind - Concerns about a global slowdown are continuing to put metal prices under pressure. - more
• MetalTorq - Shipments of iron ore by rail fell 10.7% in September compared to August. Total shipments for the year thru September are 8.1% higher than the same period last year.

  Australia's best shield from global economic turmoil - the high value of its commodity exports - is under threat with news that China has told suppliers to slow iron ore shipments and predictions that iron ore and coal prices could fall by 20 per cent next year. - more

  Minara says nickel outlook positive - Minara Resources, Australia's second largest nickel producer, says the outlook for the steel hardening agent is positive after posting a rise in output for the third quarter. - more

  Mining stocks in choppy waters but intact long term - Mining stocks, the darlings of investors in the first half of 2008, run the risk of ranking among the worst performers by year end as a commodity boom runs out of steam and metals prices tumble. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling unchanged . At update time, oil is trading unchanged, while the dollar is trading lower against the Euro by around 3/4 of a percent. Metals are mostly trading in the green this morning, although most are very thin. Gold is actually down a tad. Sucden's day old chart shows the shellacking nickel has been taking (chart here) and shows an RSI this morning of 14.  Worldwide markets are still mostly red, although the large European nations this morning have gone green (chart here). Dow futures this morning reflect Wall Street will open in the green. Short players will be allowed back in the game today, so who knows what will happen.
• Bloomberg morning metal news - more
• Reuters report - here

  Nickel Trades Near Three-Year Low on Signs of Weakening Demand - Nickel traded near a three-year low on the London Metal Exchange as a surplus of the metal used to make stainless steel signaled increased supplies - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• World Bank Commodity Price update - pdf here
• Sept 2008 Molybdenum Largo Letter - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "LME metals slumped again yesterday on continued global economic concerns, this despite aggressive steps taken by central banks to loosen credit.  ... The mood in most markets is better this morning, as more central banks and governments are joining the push to loosen money.  ... The dollar is weaker for the second day running, currently at 1.375 against the Euro. ... We are looking for the modest bounce we are seeing in metals today to sustain itself, especially if US equity markets stabilize after a six-day losing streak. ... We are currently at $13,150, down $50. Nickel has been looking quite sloppy for some time now, and unable to snap back like many of the other metals. In part, this is due to the sector’s increasingly bearish fundamentals. In this regard, the International Nickel Study Group’s latest production-consumption outlook calls for a surplus of 110,000 tons in 2009, followed by a record production-consumption surplus of 30,000 tons expected for this year. New production facilities slated to come on stream between now and 2010 are behind the progressively larger surplus numbers. (read Ed Meir's complete morning base metals report here)
• (Dow Jones)  Barclays Capital says the global nickel market will likely be in a surplus of 34,000 tons in '08, which will grow into a bigger surplus of 58,000 tons in '09. Notes its '08 forecasted surplus is much smaller than the 110,000 ton surplus estimate of the International Nickel Study Group.
• (Dow Jones) Jones)--French mining and metals group Eramet S.A.'s Doniambo nickel smelter in New Caledonia has restarted metal output from one of its three electric furnaces, after nearly four months of reconstruction work. The refitting of the No.3 furnace will help lift nickel output at Doniambo to 72,000 metric tons by 2012, Societe Le Nickel, a wholly-owned subsidiary, said in a statement.
• According to the data compiled and released by International Nickel Study Group, the supply and demand of nickel in the world for July 2008 were - more
• As the scion of the Lundin family resources empire, Lukas Lundin has both prospered and suffered through plenty of commodity sector booms and busts. Yet in all his years as a mining executive and financier he has never seen anything like this. - more

  Chinese and Brazilian governments appear to be getting involved in contentious midyear iron ore price negotiations between Chinese steel mills and Brazilian miner Companhia Vale Do Rio Doce (RIO), or Vale. - more

  Japan's Imports Of Stainless Steel Products In August 2008 Had Slight Decrease = Imported 12,072 Tons, Imports From South Korea Remained Unchanged, Keeping Scale Of 10.000 Tons / Month - more

  Mount Gibson Iron has been requested by its Chinese customers to delay shipments in the second quarter of fiscal 2009. - more

  Up to 300 Chinese are allegedly entering Papua New Guinea as executives for the Ramu nickel mine every week without being checked by customs, security officers and immigration. - more

  India’s iron ore exports fell sharply by almost 26% to 3.08 million tonnes during September this year over the previous month as demand for steel slumped globally. This has marginally increased the availability of ore in the domestic market. - more

  Norilsk Nickel investigation of asset spinoff leads to questioning of shareholder intention - more

  Union officials say Russian steelmaking giant OAO Severstal plans to temporarily lay off hundreds of workers due to the economic downturn. - more

  Presentation made at the last Meetings of the INSG, which was held in Lisbon, Portugal in October 2008:

• Mr. Stephen Barnett , President of Nickel Institute, Belgium, spoke on “REACH and Nickel” and provided an update on the crucial “read-across” issue. - pdf here
• Mr. Xinfang Jiang , President Director of Shanghai Tsingshan Mineral Co., Ltd., China P.R., made a presentation on Nickel Pig Iron in China and its raw materials. - pdf here
• Mr. Salvatore Pinizzotto , Managing Director of Xida Market Research, Italy, made a presentation on Special Steels. - pdf here

  British Stainless Steel Association Technical Library - list of pdf's here

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 8

• Baltic Dry Index - minus 158 to 2,764. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• World headlines and leaders - (Dow Jones) U.S. Stocks Mixed After Coordinated Rate Cuts Around (The Globe) Dow Theory editor turns bullish, calls end to bear market (The Mercury) Oil prices fall to one-year low (Reuters) Gold jumps nearly 4 pct, central banks cut rates //  World stocks return to red despite rate cuts (Reuters) The International Monetary Fund, in its bleakest forecast in years, said on Wednesday the world economy was set for a major downturn with the United States and Europe either in or on the brink of recession. (Thomson) U.S. crude oil futures fell more than $3 on Wednesday after government inventory data showed huge jumps in crude oil and gasoline supplies last week. (Thomson) Risk of a global depression 'nearly nil' - IMF
• Here are a few graphs for you to look over. The VIX is the volatility index for Wall Street trading. Here is the chart, and to put it into perspective, when it loads, push YTD at the bottom of the graph (chart here). (When you are sitting in your rocking chair in a few decades and you are reading how a 1% drop in the market that day is classified as 'volatile', you can smile and call the author a young twit who has no clue.) Wall Street Journal Housing Pain Gauge: Nearly 1 in 6 Owners 'Under Water' - (chart here) NY Times - Areas of US in Recession - (chart here)
• The US Dollar continues to trade lower against the Euro, by nearly a percent at update time, and oil continues to slide, down nearly 4%. While precious metals were mixed in today's trading, base metals were pummeled. Indicator charts show nickel had a brutal pre-market, and an even tougher afternoon. For the first time since December 1, 2005, Dow Jones reports three month nickel ended trading below the $6/lb mark at $5.99/lb . Nickel ended down over 9% today. Based on what we have been told by the analysts over the last few years, this should effectively eliminate any future production of the so-called pig-nickel, and make many of the laterite ore mines under construction, or already in production, non-profitable. Goro, Ravensthorpe, Ambatovy, Weda Bay, Vermelho... all laterite. What will happen to these mines if prices don't find a bottom soon? Just 17 months ago, nickel hit the precious metal classification, now there are more sellers than buyers. Very tough and confusing times ahead for the industry.  And in a follow-up to our remarks yesterday about financial advisors telling their clients to stand firm and analyze their "risk tolerance", we thought we would share this article out today with you. "In crisis, financial advisers have more questions than answers" - here Wonder which way worldwide liquor consumption is heading these days? 

  Commodity/Economic Comments

• (China media) The contract price for ferrochrome to Japan for October-December has fallen 20 cents (9%) to $1.93/lb
• (RTT) Universal Stainless & Alloy Products Inc., a steel manufacturer, lowered its outlook for the third quarter and announced reaching a deal with hourly employees at its Bridgeville facility.
• (Reuters) Baosteel, one of China's largest steelmakers, has cut prices twice since August, and its CEO is glum: The era of rapid growth for China's steel industry "will soon be remembered as history," says Xu Lejiang.
• (XFN) The current demand downturn, especially from the property market, is having a big impact on Chinese steel producers, JPMorgan said, noting that the property sector accounts for 38 pct of steel industry demand. Chinese spot prices for hot rolled sheet have fallen from a peak of 5,957 yuan per ton in June to 4,863 at present, a correction of 18 pct, JPMorgan said in a research note. In August, China's pig iron output was down 1.5 pct year-on-year, while crude steel output fell 1.3 pct, the first contraction in recent years, it noted.

  Ferrochrome prices were expected to soften in the next two years, but they were more robust than those of other commodities, analysts said this week. - more

  Four big Chinese steel makers have agreed to cut production by up to 20 percent, perhaps until year-end, in a bid to put a floor under falling product prices, a Chinese industry official said on Wednesday. - more

  CHINA has a bottom line of demand that will sustain Australia's mining - but at a more modest level, says one of Australia's leading deal-makers with Chinese corporations. - more

  Mr Patrick Buffet CEO of Eramet SA said that the French government sees the mining group as a strategic interest and wants to keep a French shareholding base. He added that "Europe and France do not have any other mining champions apart from Eramet." - more

  Ukraine's steel sector is in 'critical' shape due to falling demand overseas with urgent measures needed to help the industry weather the crisis, steelmakers said Tuesday. - more

  Courtesy AISI - In the week ending October 4, 2008, domestic raw steel production was 1,942,000 net tons while the capability utilization rate was 81.4 percent. Production was 2,112,000 tons in the week ending October 4, 2007, while the capability utilization then was 88.5 percent. The current week production represents an 8.1 percent decrease from the same period in the previous year. Production for the week ending October 4, 2008 is down 2.3 percent from the previous week ending September 27, 2008 when production was 1,986,000 tons and the rate of capability utilization was 83.2 percent.

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.25/lb   lower. Metals are mixed again, with precious mainly higher, and base metals mostly lower. It is getting harder to find green among the world stock markets these days (chart here). US Dow futures are higher this morning on news of a half point cut in the benchmark lending rate, and European markets took back some earlier losses. Interest rate cuts are generally bad for the Dollar, but as this was a coordinated move with European central banks, some of the typical Forex negativity attached to the move was negated. US dollar is weaker against the Euro by 1/3 of 1% at update time, and a barrel of oil is over 1% lower this morning. Nickel started the day with an RSI of 21, seriously oversold(day old chart here), but buyers appear to be few and far between.
• Bloomberg morning metal news - more
• Morning headlines and leaders - (Reuters) Russian stock exchanges shut down until Friday as prices plummet  (CNBC) - Nikkei falls 7.3 pct on economy fears, Toyota report (Forbes) Hong Kong shares sharply lower as global credit crisis deepens  (MarketWatch) The world's major central banks moved in concert Wednesday to slash key interest rates as policy makers struggle to head off global financial turmoil that has threatened to throttle world economic growth. In coordinated announcements, the Fed said it had cut its key lending rate by a half point to 1.5%.  (Thomson) Bank of Canada lowers key rate to 2.50 pct // G7 leaders to meet on financial crisis-Germany (Reuters) Applications for U.S. residential mortgages climbed last week from the lowest level in a month as home loan rates declined, according to data published by an industry group on Wednesday.

  Tin Slumps to Lowest in a Year; Nickel Plunges to 33-Month Low - Tin dropped to the lowest in over a year and nickel plummeted to a 33-month low on the London Metal Exchange as the credit crisis deepened, raising concerns that a slowdown in the global economy will curb demand for raw materials. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Metals Commentary - pdf here
• Global Mining News - pdf here
• Third World Steel Association Sustainability Report 2008 - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - " Metal prices saw a modest bounce yesterday despite a sagging US stock market, but the notion that we could withstand another wave of selling in equities was tested earlier in the day when base metals sold off sharply in line with plunging equity markets in Asia and Europe. However, as we were writing this report, the Fed said it would cut rates by .5%. This lifted metals off its lows, but we have our doubts that these gains will be sustained over the course of the day. We say this in view of the fact that no matter what the authorities seem to do in an attempt to nudge the system towards looser credit, it does not seem to be working.  ... It has been hard to focus exclusively on metals the past two weeks, as more often than not, the complex seems to be tracking the flow of the US equity markets and the mood of the moment. One factor that gives us some hope that we are not heading towards an all-out economic crash is the fact that the dollar is holding its own, an indication that while investors may not want to be in US stocks, they are still content to hold the greenback. Amid the current carnage and talk of doom and gloom, that surely must be viewed as a major positive. ... We are currently at $13,600, down $600, and still working lower. The $12,500 level is next support." (read Ed Meir's complete morning base metals report here)
• (MarketWatch) In a speech to economists, Bernanke said that the combination of recent economic data and the financial market turmoil "suggests that the outlook for economic growth has worsened and that the downside risks to growth have increased." At the same time, the outlook for inflation - a key concern of Fed officials - has "improved," he said. ... "The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance and further increase the risks to growth."
• (Yieh Corp) Akio Mimura, Chairman of Nippon Steel Corp., said yesterday in a newspaper interview that the growth in global steel demand will slow to less than 5 percent in 2009 due to the global financial crisis even thought it grew 7.5 percent in 2007.
• (Reuters) INSG forecasts 110,000 T nickel surplus in 2009
• (Dow Jones) International Nickel Study Group says demand is unlikely to recover this year; "any recovery in primary nickel demand and stainless steel production is, at this point of time, not anticipated until well into 2009," it says in statement after meeting of 70 government and industry representatives in Lisbon.

  Domestic nickel prices may further slide to below $14,600 per ton - Domestic spot nickel prices may further drop to below RMB 100,000 ($14,637.22) per ton due to sluggish demand from downstream stainless steel mills and bearish sentiment arising from the global financial crisis, industry insiders told Interfax on Oct. 8. - more

• Confirmation that four key Chinese steel plants have cut production by a fifth this year drove another wave of equity selling, particularly mining stocks, around the world this morning.  - more

  World Supply Of Nickel In July 2008 Was Still Excess Of 10,000 Tons = Nickel Surplus In 2008 Shrunk Compared To That In 2007 Because Of Decreased Nickel Production - more

  The World Steel Association Executive Committee has reviewed its original Short Range Forecast issued in April 2008. The executive has recognized that the market is going through rapidly changing circumstances but noted however that 2008 will still be another year of growth for the steel industry. - more

  World steelmakers, gathering at a meeting in Washington, are scrambling to determine how far to cut output before prices fall below the break-even cost of making steel. - more

  Stainless steel public art is an area of expertise; from a stainless steel spiral staircase to iconic lighting columns, rotating wind shelters and stainless steel walkways, ... - beautiful photo's here

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 8 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Tuesday, October 7

• Baltic Dry Index - minus 70 to 2,922. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• (Bloomberg) The Federal Reserve may have trimmed borrowing costs yesterday without actually saying so. (Reuters) The IMF increased its estimate of global losses from the financial meltdown to $1.4 trillion and warned that the world's economic downturn was deepening. (Bloomberg) The Federal Reserve will create a special fund to purchase US commercial paper after the credit crunch threatened to cut off a key source of funding for corporations.(AFX) Gold climbed, hitting a new all-time high in euro terms according to Reuters data, as fears over the outlook for the financial sector spurred buying, and as the dollar weakened against the euro. (MarketWatch) Fears that ongoing financial turmoil could wreck the world's banking system and worsen a global slump fueled speculation Tuesday that major central banks will deliver a rare round of coordinated interest-rate cuts if conditions don't improve. (MarketWatch) Stocks take turn for worse (Bloomberg) GM's Europe Unit to Suspend Production on Sales Drop (Reuters) Australian stock market leaps with interest rates cut  (Guardian) Europe stocks fall on weaker banks; RBS, HBOS sink
• Today has, and in the Western Hemisphere is, turning out to be much like recent bearish days. But there were some differences to be found. The dollar was trading lower against the Euro, by less than a percent at update time. Crude oil climbed to $93/barrel earlier, and while still up on the day by nearly 2%, traders have been treating the $90 level as if it were resistance for much of the day. With the dollar down today, and metals oversold (Sucden had nickel with an RSI of 27 going into today, Ed Meir with MF Global has nickel at 24), that metals might get, at the very least, a dead cat bounce. It turned out to be more like a fish flop. Metals ended mostly in the green, with precious metals like gold and silver up a few percent, and base metals higher by a less noticeable amount. Indicator charts for nickel look more like a cardiac reading than any resemblance of a trading graph. Within a $100 range, nickel bounced all day long. According to Dow Jones, three month nickel ended a few cents lower than yesterday, at $6.44/lb

  Base Metals May Fall Further Before a Floor Is Found - With base metals enduring another round of sustained selling in a market gripped by worsening fears of a global slowdown, the emerging consensus appears to be that prices have to fall much further before real demand returns.  - more

  Reports

• PMPA Material Impacts October 2008 - pdf here
• The Steel Weekly - pdf here

  Commodity/Economic Comments

• Macquarie analyst Adam Rowley - “When you look at base metals, they are taking their lead from what's happening in the equity markets ...Clearly, there are ongoing concerns about how deep and prolonged the downturn is going to be and concerns about the impact it's going to have on demand across the board.”
• (Reuters) “Market participants are usually aware of the stocks coming in before the actual delivery,” an LME trader said, explaining why the impact from the inventory rise was brief. “The market is so much oversold and that's why we are bouncing,” he said.
• Barclays Capital - “In this kind of environment, prices are starting to price in reasonable surpluses coming through next year. The focus of the market is, how far into the cost curve down we have to go before we start to find the floor?”
• Dresdner Kleinwort commodity analyst Peter Fertig - "We are moving toward recession, or are already in recession in the G7 countries, and this is weighing on base metals.... and emerging markets are not providing the support that a lot of market participants expected."
• UBS client note - "China, returning from a week-long holiday yesterday, showed no inclination to pick up "cheap" LME copper. If China is shunning copper at these prices, there is no signal for the shorts (bets on lower prices) to cover."
• Barclays Capital note - "We continue to see weakness in U.S. consumption. European consumption is faltering rapidly and is expected to get worse."
• Japan Metal Bulletin - "Japanese stainless scrap market price plunged by 20,000 yen per tonne for SUS304 series. Stainless scrap demand maintains low when Japanese stainless steel makers continue the output reduction. Japanese stainless steel makers such as Nippon Steel & Sumikin Stainless reduced the scrap purchase price from October."

  The headline price of mining group BHP Billiton's $US86 billion ($118 billion) hostile takeover of Rio Tinto is not the only big number involved. Yesterday BHP estimated it would pay $US4.4 billion in fees to bankers, lawyers and accountants. - more

  Russian tycoon Mikhail Prokhorov told his former business partner Vladimir Potanin he would pull out of an asset split deal, citing force majeure, a spokesman for Potanin's investment vehicle Interros said on Tuesday. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.01/lb lower. Metals are mostly higher this morning, indicator charts showing nickel jumped dipped into the red, however slightly. Dollar is trading lower, about 3/4 of a percent at update time, while a barrel of oil is trading about 3-1/2% higher. Sucden's day old report tells the story for nickel the last few days (chart here). Worldwide stock markets continue to fall on economic concerns and the spreading banking crisis - chart here. The Dow after falling 800 points at one time yesterday, and ended down less than 1/2 that. From media reports, what turned the Dow from a disaster to a mini-disaster yesterday, was a rumor that began to float around Wall Street of a coordinated world wide rate cut possibility. Australia made a surprise 1% cut last night, so US markets are opening somewhat optimistically, with the rumors still floating.      
• Bloomberg morning metal news - more
• Reuters morning report - more

  Reports

• Weekly Commodity Price Report - pdf here
• Canada Commodity Price Update - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Metals Commentary - pdf here
• Monthly Scoreboard for September 30, 2008 - pdf here
• Weekly Scoreboard for October 3, 2008 - pdf here
• Brook Hunt Latest Nickel Monthly Report - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "LME metals got shredded yesterday, with copper tumbling 9% to its lowest level in almost two years, as worries over the health of the global economy and overall metal demand weighed on the sector. Aluminum and nickel plunged to early 2006 lows, while zinc sank to where it was in 2005.  ... This morning, there are indications that some stability is returning to metals, although whether this will last remains to be seen. The dollar is holding steady at 1.3562 against the euro, but we suspect it still could work higher from here.  .. Short-term, we are quite oversold in a number of complexes and could be due for a modest bounce. However, much depends on the US equity markets and how it fares today. One thing working against the current panic is that short of a worldwide economic crash, there comes a point where things do not get significantly worse. In such a case, we could see participants conclude that the sky may indeed not be falling, although right now, it certainly feels that way. ... We are currently at $14,250, down $50. We could see some support around current levels, but should the downtrend resume, charts point to $12,500 as being next support." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) Russia exported 163,200 metric tons of nickel in January-August, a fall of 2.2% from January-August 2007, the federal customs service said Tuesday. The exported nickel was worth

  The metals sector is bracing for a wave of mine shutdowns and development project cancellations amid a deepening crash in commodity prices. - more

  Several of China’s largest steelmakers are expected to cut output by about 20 per cent this month in a bid to support falling steel prices at a time of weakening demand. - more

  India is expected to remain a net importer of steel in the fiscal year from April 2008 to March 2009, as domestic demand growth was outpacing its production growth rate, steel minister Ram Vilas Paswan said on Saturday. - more

  Today, the Conference Board Employment Trends Index was reported to have continued its decline in September, suggesting at least by this measure that the latest spate of job losses may not the last. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 7 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

Monday, October 6

• Baltic Dry Index -  minus 10 to 2,992. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines and leaders - (MarketWatch) Blue chips down 500 // Russian shares down by 19% // European shares plunge 7% (Reuters) Euro hits 13-mth low vs dollar, yen soars // Shanghai metals open 4 pct limit down after holiday (Nasdaq) Crude Oil Drops Sharply, Touches Below $90 A Barrel (Thomson) Canada dollar in biggest one-day drop since Nov '07 // British new car sales fall 21 percent in September // Gold climbs more than 4 pct as investors seek safety
• World markets took a beating overnight and today - chart here Headlines give the current state of events in the stock markets, as well as the commodity markets. Except for the flight to precious metals for safety reasons, base metals were hit hard today. Indicator charts show nickel started out lower, and kept heading that way throughout the trading session. Dow Jones reports three month nickel ended the day at $6.46/lb . That's the lowest close for nickel since the second trading day of 2006. Nickel would average $11.01/lb that year. It averaged $6.69/lb for cash thru all of 2005, a level we fell below in today's trading. At update time, the dollar is trading about 1.1% higher against the Euro, and oil is 4% lower at the $90/barrel mark.  
• Personal note - It's the middle of the night. You are in a strange city, and in a section of that city that has an incredibly high crime rate. You are at a restaurant that is closing, the bus stop is two blocks away and down two unlit streets, and there are numerous characters hanging around in the dark. You have a choice - call a cab from the restaurant - or take your chances walking to the bus stop to save few bucks. What is your choice? If you chose the cab, keep this in mind the next time one of these financial wizards gets on tv and blows off your concerns about your retirement investments and tells you to examine your "tolerance for risk".   

  Reports

• IMF World Economic Outlook -  index here

  Commodity/Economic Comments

• Analyst John Meyer at Fairfax Investment Bank in London - "Metals prices have much further to fall if global growth continues to slow."
• Analyst Michael Rawlinson at Liberum Capital - "In some of these emerging market plays, this margin call is the latest area of worry. It's got everyone worried about potential forced sellers of assets.... I think what's been a surprise to some is how the Chinese newsflow is deteriorating. Supposedly we were getting ready for a post-Olympic bounce, turning back on the steel mills, and now it didn't happen."
• Calyon Financial metals analyst Robin Bhar - "It's difficult to come up with anything positive at the moment... Deleveraging risk aversion is the only game people want to play at the moment."
• JP Morgan analyst Michael Jansen - "The main conclusion seems to be that prices still have some more downside scope, certainly until sentiment recovers, with copper testing $5,000, aluminum $2,000 and nickel $12,000."
• (Dow Jones) Wiktor Bielski of Morgan Stanley expects Chinese mills to look for a price decline of 15% to 30% in '09 price negotiations, while iron ore producers are likely to seek a 15% to 30% increase.

  Contract prices for European ferrochrome for the fourth quarter are expected to be settled at about $1.85 per lb, down 10 percent from the third quarter, two sources at ferrochrome producers said on Monday. - more

  The newly-named World Steel Association has postponed its prediction for 2009 steel consumption until the spring of next year, because of uncertainty caused by the current economic turmoil, the association's representatives said at a conference in Washington. - more

  The reference prices of 20 steel products declined an average of 7.3% in September 2008, following an August slide of 3.9%. Even more pronounced than the finished steel price erosion, European and US scrap prices averaged with the declining spot market for iron ore posted a substantial 27% plunge in prices - more

  Oleg Deripaska will keep his 25 percent stake in mining giant Norilsk Nickel regardless of market conditions, the head of the Russian billionaire's investment vehicle said on Monday as Norilsk's stock crumpled. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.30/lb   lower. The rush to dump commodities continues today, as precious metals appear to be the only gainers. Crude oil is trading lower, as is the US Dollar against the Euro, and all of the base metals are lower in London after being brutalized overnight in India and Shanghai markets. MarketWatch is reporting stock futures reveal when Wall Street opens for business today, we can expect to see more early selling in the Dow. Might we see the Fed step in and try yet again to calm the markets with a rate cut? The $700 billion dollar bail-out package passed Congress and was signed into law early Friday afternoon, after which the Dow plunged - much the the chagrin of many in Washington.  
• Some other headlines this morning - (Associated Press) "Oil prices fall below $90 a barrel" (MarketWatch) Asian markets dived Monday, with most indexes falling 4% or more, amid concerns about a raging global financial crisis and the effectiveness of the U.S. financial bailout. (Moscow Times) Trading suspended on Russia's MICEX after 15 percent plunge - Kyiv Post (AP) Asian markets plunge on fears financial turmoil spreading to Europe, hurting global growth (AP) Japan's Nikkei falls to lowest in 4 1/2 years (Thomson) Europe scrambles to shore up bank sector

  Nickel tumbles 5 pct to $14,400/T in sell-off - Nickel sank around 5 percent on Monday to its lowest level in more than 2-1/2 years as demand worries triggered a broad metals sell-off, traders said. - more

  Reports

• Haywood Metals & Mining Weekly - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Commodity Bell - pdf here
• Metals Commentary - pdf here
• Financials Weekly - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Base metals were higher on Friday, but the overall performance was not that convincing considering the sellerish mood in practically all the other markets. The most incredible reversal took place in US equities markets, where prices gave up a 300-point gain before finishing sharply lower. This took place despite the passage of a landmark $700 billion bailout bill, and was a classic illustration of “buy the rumor sell the news” type of trading pattern. ... Of most concern to the markets, however, is the question of whether the recent bail-out bill will be enough to break the logjam in the credit markets. This morning, it seems the markets are answering our last question with a resounding no. Stock markets around the world are getting pummeled, while credit markets continue to tighten. Base metals are off sharply, as are oil prices; the only asset classes that seem to be winners are gold and government bonds. ...Chinese metal markets are back in action overnight after having been closed last week, but participants are likely wishing that they had this week off as well. Metals, not surprisingly, closed limit down on the Shanghai Exchanges. ... We are currently at $14,550, down $600. We could see some support around current levels, btu below that things look murky until $12,500.  (read Ed Meir's complete morning base metals report here)
• New Delhi, India - The entire base metals pack, led by copper and nickel, virtually melted down in futures trading on Monday as traders indulged in panic selling, sparked by weakening trend on the London Metal Exchange on demand worries and growing evidence of a global slowdown following deepening financial crisis.
• Ashok Mittal, analyst at Karvy Commodities Broking. - “The Chinese demand is here to stay. Infrastructure development across the fastest-growing Asian economies is set to continue. Hence, base metals’ demand may rebound very soon.”
• Junior mining companies usually are quick to talk up the grand potential of a new exploration property or metal resource, but these days a check of the balance sheet is the start of any pitch to investors. - more
• Base metals are facing another week of price pressure as the global financial crisis grinds on, an anemic recovery on Friday night failing to change the fact that last week was the worst for commodities since 1956. - more
• A veteran analyst, Kerry Smith of Haywood Securities covers a broad range of companies in the mining sector, from juniors to mid-tiers to majors, from explorers and developers to producers, from base to noble metals. - more
• (Interfax) Base metals futures contracts on the Shanghai Futures Exchange (SHFE) may plunge by their daily limits on Oct. 7, the second session of trading after a week-long break during the National Day holiday, during which prices on the London Metal Exchange (LME) exhibited significant drops on negative sentiment over the global financial crisis, industry analysts told Interfax on Oct. 6.
• The International Iron and Steel Institute (IISI) announced today that it has changed its name to World Steel Association (worldsteel). The name change is effective immediately.  - pdf here

  UBS AG lowered its price forecasts for copper, aluminum and most bulk commodities amid concern a slowing global economy will dent demand from builders and automakers. - more

  Market Tendency On Imports Of Ferro-Alloys At 30th September 2008 = Price Of Charge Chrome For Shipments In Q4 / 08 Is Turning To Reduce, Price Of Si-Mn Is Softening - more

  The large domestic steelmakers earned huge profits in the first two quarters of 2008 and had expectations for continued profitability into 2009. But economic realities are intervening as the year proceeds. - more

• Four large Chinese steel firms have been in talks to reduce their crude steel output by a total 20 percent, or up to 20 million tonnes, in a bid to cut ore imports and support prices, the official Xinhua agency said late on Friday. - more

  The Vietnam Steel Association has asked that the government bans export of iron ore so that local companies can use it for production. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, October 3

• Baltic Dry Index -  plus 12 to 3,002. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headline and leaders - (HowEstreet) US Payroll numbers much worse than expected; markets await bailout (MarketWatch) Payrolls sink 159000, worst job loss in 5 years (MarketWatch) Economic activity in the nonmanufacturing sectors of the U.S. economy expanded slightly in September, the Institute for Supply Management reported Friday. (AP) France in recession, statistics agency says (XE) Credit Suisse sees Fed rate cut after jobs data  (Forbes) Russian shares plunge, regulators halt trading (MarketWatch) U.S. stocks remained higher on Friday after a measure of non-manufacturing business activity held at 50.2 in September versus 50.6 the month before.  (Dow Jones)  Asian markets declined Friday after fears of a recession sent Wall Street stocks sharply lower, with machinery stocks like Komatsu suffering heavy losses in Tokyo. (Wall Street Journal) House Leaders Express Confidence Ahead of Vote on Revised Bailout (vote due to start anytime now)
• US dollar traded slightly lower against the Euro today, while a barrel of oil was still trading about $.50 higher. Metals traded mixed, with precious mostly lower, and base mostly higher. Nickel broke from the group today and according to Dow Jones ended the day and week at $6.87/lb . Indicator charts show the day's trading volatility was pretty well limited to pre-market trading, with trading fairly quiet thereafter.  Sucden's day old chart shows yesterday's dip under the $7/lb mark (chart here)
• Have a safe and enjoyable weekend!!

  Reports

• BNP Monthly Market Data - here

  Commodity/Economic Comments

• Barclays Capital - Sentiment has taken a turn for the worst and although there could be a temporary boost to prices next week when Chinese buyers return from this week's holiday, we suspect it could be short-lived
• (Wall Street Journal) A key index tracking commodities shipments has fallen 52% since the start of the month, a steep decline that suggests manufacturing activity will recede as the world economy slows further. The drop in the Baltic Dry Index underlines the extent of the U.S. financial crisis' impact on growth in emerging markets and puts into doubt the ability of these economies to expand with North American and European financial markets mired in uncertainty.
• The recent commodities crash rivals that of the Nasdaq’s decline after the dot-com bubble burst, Cramer said during Thursday’s Stop Trading! - more
• Commodities head for worst week in 50 years - more

  Australian miners are expected to win a 10% price rise in negotiations for 2009-2010 iron ore contracts with Asian steel mills, rather than the 15% they had originally been seeking. - more

  Orica chief executive Graeme Liebelt and Rio Tinto chief executive Tom Albanese separately drew attention to a world within a world this week when they referred in speeches to the six dozen or so ASX-listed companies that are resource-sector pilot fish, swimming alongside the big miners. - more

  The toll Eskom’s electricity crisis took on SA’s mining industry went largely unnoticed amid substantial profit increases, based on strong metals prices in the first half of this year, that companies posted recently. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling unchanged this morning . Dollar is trading 1/4 of a percent lower against the Euro, crude oil is trading unchanged, and the metals complex is trading mostly slightly higher. Wells Fargo announced it will merge with Wachovia without government help and US House leaders take up the bailout bill vote again today. And just reported, "U.S. employment fell by 159,000 in September, the worst job losses since March 2003, the Labor Department reported Friday. - The unemployment rate was steady at 6.1% as expected, the government said. An alternative measure of unemployment that includes discouraged workers rose from 10.7% to 11%, the highest since April 1994."
• Bloomberg morning metal news - more
• Reuters - more

  Reports

• Fortis Asian Metals Monthly - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Commodity Bell - pdf here
• Daily Commentary - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  “There’s no place to hide”. That is what one money manager told this writer yesterday, and judging from the carnage we are witnessing in practically all the markets, he is right.... Things got even uglier in base metals-- copper hit a 19-month low, while slow-moving aluminum prices fell from one $100 marker ($2400) to another ($2300) in the space of one session, bringing prices to a 31-month low.  ... Surprisingly, amidst this gloomy backdrop, the dollar continues to forge ahead, benefiting from the turmoil that is in evidence in other foreign markets.  ... Metals are generally higher today, after recovering earlier losses, as is energy. It remains to be seen if some calm returns to the markets after the likely passage of the Treasury bill later today or, more ominously, if markets shrug this off as being too little, too late and continue selling off. The action over the next two days -- Friday when the vote is cast, and Monday, when markets have more of a chance to mull things over -- will be critical. Murky as the waters seem right now, we remain optimistic that the current panic and hysteria should subside in light of the massive fiscal and monetary stimulus being generated.  ... We are currently at $15,400, but charts continue to look very poor. We could make a bit of a stand at current levels short-term, but nickel should have more to go on the downside." (read Ed Meir's complete morning base metals report here)
• Metal markets can withstand a recession in the United States and prices, which have been "savaged" in a massive sell-off the past few weeks, should recover by next year, say analysts at Desjardins Securities. - more
• AK Steel has advised its customers that a $620 per ton surcharge will be added to invoices for electrical steel products shipped in November 2008. - November surcharges pdf here
• Canadian investors, rattled by sinking stock markets and worried about the safety of their money market investments, yanked a whopping $4.6-billion from their mutual funds in September. - more
• (Dow Jones) The London Metal Exchange added a new warehouse to store metals in Singapore, the exchange said Friday....The data also show there are now a total of 25 warehouses listed by the LME in Singapore.
• Belvedere Resources Ltd. BEL:TSX-V ("Belvedere") is pleased to announce that concentrate deliveries have commenced from the Hitura mill in Finland to Jinchuan Group in China. The first shipment of approximately 2000 dry metric tonnes of nickel, copper cobalt concentrate has left from Rauma Port in Finland, today. Shipments will continue weekly at the current rate until inventory backlogs are cleared by the end of October.

  The notion that long-term contracts for iron ore can be renegotiated at the whim of producers was always a little specious; the crash in iron ore spot prices could make it a dangerous discussion to be having. - more

  On Thursday, October 2, David A. Hartquist, counsel to the Specialty Steel Industry of North America and the China Currency Coalition , will testify before the U.S. Trade Representative that China is in violation of its commitments to the World Trade Organization on subsidies. - more  (written testimony to Congress pdf here)

• In a letter sent Thursday to members of the US Congress, American Iron and Steel Institute (AISI) President and CEO Thomas J. Gibson urged elected officials to expeditiously pass legislation that addresses the financial crisis in the US. - more

  World Production Of Nickel In First Half 2008 Decreased By 3% = Owing To Adjustment Of Full Production In 2007, Disordered Operations Of Electric Furnaces, And So On - more

  World market price of nickel have decreased. Stocks of nickel in the London Metal Exchange - LME stock for the last month have increased. - more

  OAO GMK Norilsk Nickel, the world's biggest producer of the metal, said first-half profit dropped 33 percent as nickel prices declined and costs rose. - more

  RIO Tinto chief executive Tom Albanese has sent a strong message to the Rudd Government on foreign investment policy, saying the nation risks serious long-term damage if it blocks Chinese investment in the resources sector and does not develop a clear and open framework. - more

  U.S. sets anti-dumping duties on China steel rod - The United States has set preliminary anti-dumping duties ranging up to 206 percent on imports of nearly $74 million of a steel product from China, the U.S. Commerce Department said Thursday. - more (long time readers of this site will remember that we cautioned buyers of steel all thread rod to stock up earlier this year, when this case was originally filed)

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 2

• Baltic Dry Index -  minus 35 to 2,990. (chart)  (article)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines and leaders - (RTE) ECB keeps interest rate at 4.25% (Bloomberg) Trichet Says ECB Discussed Rate Cut as Growth Slowed  (MarketWatch) Factory orders drop 4% in August, most in 2 years (AFP) Eurozone unemployment climbs to 7.5% in August (MarketWatch) U.S. jobless claims inflated by hurricanes - First-time filings hit highest level in seven years (Press Trust) US Senate clears modified USD 700 bn bailout plan (MarketWatch) Recession now certain, economists say - Consumer spending on track for first quarterly decline since early 1990s
• As for commodities, the Globe and Mail headline said it best "At the open: Commodities slugged". While the dollar traded consistently lower throughout the day, still running about 1% higher against the Euro, base metals attempted a rally this morning, to no avail. The metals board, both precious and base, spent the latter part of the day in solid red, some taking rather large hits. US factory orders down, China manufacturing numbers weaker, and a stronger dollar combined to determine the direction of the market. Indicator charts show nickel sent a few minutes in the green this morning, before spending the rest of the day in a slow gradual decline. Even oil took a beating, down 3-1/2% at update time. Dow Jones reports three month nickel ended the days trading at $6.94/lb . That is nickel's first close below $7/lb since March 31, 2006. Typically, the decline in nickel would be positive news for stainless steel producers and distributors, but in the current market, even good news is bad. Distributors, the largest single customer base for stainless steel producers, get nervous when nickel prices move in either direction, and especially down, as they must become concerned about inventory becoming over-priced by the day. This became dramatically clear last year when nickel hit $23.50/lb and then began to freefall. At that time, moving inventory became a matter of making money, or moving it quickly before it became a profit killer. At the time, the economy was just starting to show signs of a slowdown in the US, and for most, there were still plenty of buyers. Now distributors not only have to worry about their inventory losing value, they are scrambling to find customers to take the inventory they might already have. In the mean time, the producer, also deeply affected by the fluctuation in nickel pricing, is still feeling the effects of a worldwide slowdown in demand. Nickel producers, who were having a hard time keeping up, with demand just 18 months ago, are now watching levels of nickel inventory climb weekly. The economic uncertainty and anxiety that is gripping the world, goes well beyond the nickel and stainless steel industry. Listen to what Warren Buffet said in an interview last night. "In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now." Having lived, and profited thru some of America's toughest recession's, his comment raised more than a few eyebrows. But we can't help wondering what 'people' he might be referring to? We tend to think he probably hangs out with other wealthy people, which makes his comment even more disconcerting.

  Commodity/Economic Comments

• Mark Pervan, senior commodities analyst at ANZ - "Even if it passes the House (bail-out plan), it doesn't really change the longer-term term bearish outlook for commodities. If if fails again, we could see a lot more pain in these markets other than gold, which should hold its own and crack on above $900."
• Stephen Briggs, commodity strategist at RBS Global Banking & Markets - "For a long time people were unwilling to accept a global slowdown was coming, so the realization is viscous."
• (Dow Jones) The Brazilian government has created a task force to study a possible tax hike on mining companies, Mines and Energy Minister Edison Lobao said, Folha de Sao Paulo reported Thursday.
• (Dow Jones) Talvivaara Mining Co. PLC Chief Executive Pekka Pera - "When the world goes back to normal condition I reckon there must be some kind of punch in the nickel price. But for now prices could go anywhere."
• (The Charlie Rose Show) Warren Buffet - "In my adult lifetime, I don't think I've ever seen people as fearful economically as they are now." (full video interview here)
• NY Times graph showing progression of economic crisis - here
• Despite severe commodities correction, Citigroup insists mining supercycle will survive - more
• Wary UK savers queue to buy gold - more

  In order to cope with a sharp fall of nickel price, stainless steel companies of Japan have aimed to reduce price of nickel based stainless steel scrap to be purchased from domestic sources by JPY 30,000 per tonne in total in the second half of September 2008. - more

  China's manufacturing sector weakened sharply in September, hit by a steep fall in orders from domestic and foreign clients, a survey by brokerage CLSA showed on Thursday. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.07/lb  lower.  Precious metals are lower this morning, while base are mixed, with three metals gaining, however slight. US Dollar is trading over a percent higher against the Euro, while crude oil is trading around a dollar lower. The US Senate passed its version of the bail-out plan last night, and it is now headed to the House of Representatives, who defeated a similar plan on Monday. This morning, the US Labor Department said initial claims for unemployment benefits rose 1,000 in the last week to 497,000, the highest in seven years. Swiss bank UBS said it expects to return to profit in the third quarter after reducing its exposure to U.S. mortgages. Reuters is reporting that French President Nicolas Sarkozy will host a meeting of the leaders of Britain, Italy, Germany and European Central Bank Governor Jean-Claude Trichet on Saturday to discuss the financial crisis, but denied that any bail-out was being considered. And the Wall Street Journal is reporting the US Federal Reserve is considering additional rate cuts to stimulate the economy.
• Bloomberg morning metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• TED Commodity Watch - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - " In the latter regard, the latest ISM reading was particularly grim, with the September level coming out at 43, well below the 49 reading expected. The ISM’s sub-indices for employment, orders backlog, production and new orders, all showed sharp declines. The rest of the metals followed copper lower, although their falls were not as steep. ... For the balance of the week, all eyes will once again be on Washington, as Congress debates a “new and improved” version of the Treasury proposal, one apparently labeled with all sorts of goodies in an effort to persuade wavering Congressman to vote for the measure. The Senate has just approved the revised package as we write this note, and the House takes it up again on Friday.  ... (read Ed Meir's complete morning base metals report here)
• Rusmet - Taiwan's largest producer of stainless steel, Yieh United Steel Corp (YUSCO), has lowered export prices of hot and cold rolled stainless steel for October. 300 series stainless fell by $100-$150/ton, 400 series was lowered by $50-$80/ton, and 200 series remain the same. Domestic prices fell by $124/ton and $62/ton respectively.
• (ShareCast) Strong nickel and zinc prices leave Finland-focused miner Talvivaara Mining confident about its short-term outlook. “The present spot prices of nickel and zinc ($16,250 a tonne and $1,680 a tonne, respectively) are substantially above Talvivaara's estimated cash costs,” it said. “Hence the company anticipates being able to operate profitably at present or lower price levels.”
• HedgeWeek - As fears of mass redemptions reverberate through the hedge fund industry, many managers are implementing defensive tactics to counter the possibility of investors withdrawing their capital. For example, RAB Capital has won a vote allowing it to freeze client redemptions from its flagship Special Situations fund for three years, which otherwise could have faced liquidation after its value fell by half this year.

  Rio Tinto Ltd. (RTP) Chief Executive Tom Albanese said Thursday the China-driven commodities boom will not be derailed by the current financial turmoil but conceded growth in demand from China has slowed. - more

  Japan's steel industry says it is extremely dissatisfied with Australia's competition regulator for approving the proposed takeover of Rio Tinto by rival BHP Billiton. - more

  An outlook for chrome ore in 2009 is that, in addition to an expansion of chrome ore production in South Africa, Oman and Turkey have been increasing chrome ore production and the world capacity to export chrome ore is on a basic tone to enlarge, following the same case in 2008. - more

  Andrew Forrest-chaired Poseidon Nickel will suspend mining activities at its Mt Windarra nickel mine, after announcing it was “the most sensible course of action in the current period of global uncertainty”. - more

  The Platts reference prices of 20 steel products declined an average of 7.3% in September, following an August slide of 3.9%. - more

  During recent global market turmoil, Asian coal stocks have attracted the strongest investment inflows, among global resources subsectors. - more

  A "pact for sustainable development" was signed Saturday between the traditional South Rheebu Nuu and Goro Nickel. After some recent upheavals, the three parties now have a common interest that the plant starts as soon as possible. - translated version here

  The most important change that has taken place in our traditional rankings of official ruble billionaires is the vigorous surge in prosperity among all of the participants in the ratings. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 1

• Baltic Dry Index - minus 192 to 3,025. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines and leaders - (MarketWatch) The nation's manufacturers cut back production at a much faster pace than expected in September, the Institute for Supply Management reported Wednesday. ..The ISM index plunged to 43.5% in September from 49.9% in August. This is the biggest drop in the index since 1984. The drop surprised economists. ...Readings below 50 indicate contraction. (Reuters) Global manufacturing activity contracted for the fourth consecutive month in September, falling to its weakest in almost seven years, a survey showed on Wednesday. The JP Morgan Global Manufacturing PMI, compiled with research and supply management organisations, fell to 44.2 in September, its lowest since November 2001, from 48.6 in August.  (FX Street) EU Purchasing Manager Index Manufacturing down to 45 in Sep from 47.6 in Aug (AP) Euro jobless rate climbs to 7.5 percent in August (Bloomberg) U.S. MBA's Mortgage Applications Index Dropped 11% Last Week  (MDM) August Construction Spending Flat from July (NY Times) Senate to Vote Today on the Bailout Plan
• While the dollar and crude have been active today, they are currently trading about where they were during our morning update, dollar down approx 1/2% against the Euro, and oil up a little over 1%. Metals ended mixed, with precious trading higher, and most base metals lower, except for tin and nickel. Indicator charts show three month nickel started in the green, where it spent much of the day, trading as high as +$400/tonne, but near the end of the trading session, the price collapsed. Dow Jones reports that nickel ended two pennies higher than yesterday, at $7.21/lb . While finding any positive news is a difficult task these days, there is always the chance you might find a small flower in any pile of cow manure. China manufacturing expanded during August, and we posted the story below.

  Commodity/Economic Comments

• KeyBanc Capital Markets steel analyst Mark Parr - "The (decline) in ferrous scrap pricing and the fragile state of domestic financial markets has likely further reduced buying momentum for steel, while steel equity values have collapsed in concert with most other basic materials-related equities...Investor focus will likely return to the uncertainty around timing of a Chinese industrial rebound, the true magnitude of slowing global and domestic growth, and potential implications for steel pricing after the (decline) in ferrous scrap resource costs."
• Barclays - "Nickel stocks at 56,000 tonne are at their loftiest level since June 1999, with a hefty 10,000 tonne build in Europe reflecting weak stainless steel demand conditions - a situation we do not expect to reverse this year."
• September 2008 Manufacturing ISM Report On Business® PMI at 43.5% - report here

  China's manufacturing expanded for the first time in three months, indicating the economy is weathering a global slowdown. - more

• India's manufacturing grew at the slowest pace in 14 months in September as demand for goods eased because of higher costs, a key gauge showed. - more

  Copper forecasts for next year were lowered by Triland Metals Ltd. because of slowing economic growth in the U.S., the world's second-largest user of industrial metals. Estimates for nickel were also lowered and tin raised. - more

  One of Palawan’s major nickel mining ventures, Berong Nickel Corp., confirmed Wednesday that it laid off 158 employees, mostly tribal people hired as ore breakers and mine laborers, because of the global drop in nickel ore demand. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.25/lb higher. The US dollar is trading about 1/2% lower against the Euro, while oil is trading about 1% lower. Precious and base metals are mixed, with nickel the morning's chief gainer. Sucden's day old chart (here) shows the market opened with a higher RSI and SStoch, meaning the market was not as oversold this morning as yesterday was, so traders must be taking their cues from a lower dollar and a slight decrease in LME nickel inventories registered overnight. Markets are watching the U.S. Senate today, which is expected to vote on a revised version of the controversial $700 billion bailout package later today. 
• Some headlines this morning - (Reuters) French Sept new car sales up 8.4 pct (MarketWatch) Employment dropped by 8,000 in the private sector of the U.S. economy during September, according to the ADP employment index released Wednesday. (Daily FX) U.K. Manufacturing Slips to Record Low, Service Sector Contracts - Growth Concerns Deepen (Reuters)  European and Russian policy makers urged U.S. politicians to pass a new version of a $700 billion bank rescue package on Wednesday as a new Senate vote on the bailout loomed. (DailyFX) The Euro-Zone final September manufacturing PMI was revised down to 45.0 from 45.3 in the previous month and versus 47.6 in August. This was the lowest reading since December 2001.
• Bloomberg morning metal news - more

  Global Stainless Steel Output Is Forecast To Slip Again This Year - We predict no improvement in world stainless steel production in 2008. - more

  Reports

• Danske Commodity Monthly - pdf here
• Global Mining News - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Morning Bell - pdf here
• Scotia Commodity Price Index - pdf here
• Association of Steel Distributors Summer Newsletter - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "There was an interesting disconnect in commodities yesterday, with energy prices recouping a good portion of Monday’s losses, and rising in sympathy with a surging energy complex, while base metals ended lower, although off their worst levels of the day. We have to surmise that the stronger dollar exerted more of a restraining influence on metals than it did on energy. In this regard, the Euro dipped close to 1.40 against the dollar at one point on Tuesday, as skittish investors continued to seek out safe dollar assets. ... LME metals are slightly higher at the time of this writing, but are well off earlier highs, (as is crude). The fade we are seeing may be attributable to the belief that participants may not want to get too carried away on the upside despite another bailout vote tentatively scheduled for later tonight. Although a yea vote will be constructive for commodities, which could rally in sympathy with a stronger stock market, there is always the possibility of getting blindsided, as was the case last time. We, in fact, prefer the sidelines until the dust settles in this regard.  ... We are currently at $16,190, up $340/MT, and recovering somewhat from a poor showing yesterday. The $15,500 level offers short-term support. (read Ed Meir's complete morning base metals report here)
• Angel Commodities - We foresee volatility in base metal prices as the current macroeconomic scenario is highly uncertain. We do not expect metals to react to fundamental factors as of now and feel that global economic issues would play a key role in determining prices. The US will take a call on the bailout plan tonight and markets await this news. Hence, base metals will remain under pressure until they get some direction.
• Asian Mineral Resources Limited announced today that development activities on the Company's Ban Phuc nickel project will be suspended effective October 1, 2008.
• A $10 billion (£5 billion) takeover in the mining sector today fell victim to the growing economic turmoil today as Xstrata scrapped plans to bid for its rival, Lonmin.

  It’s reported that China would probably cancel its 5 percent export tax rebate on stainless steel seamless pipe/tube, based on its macro-control policy and also in responding to the pressure from the continuous anti-dumping investigation overseas. - more

  Kosovo attracts foreign investors with its safe banking system and natural resources. CVMR (Chemical Vapour Metal Refining) is working on opening a bank and refining nickel metal, with which Kosovo is one of the richest in the world. - more

  Finnish miner Talvivaara said its Sotkamo mine in northern Finland produced its first metal sulphides on Wednesday on schedule and would reach 60 percent production capacity in 2009. - more

  The Australian competition watchdog said today it would not oppose BHP Billiton's proposed takeover of rival mining giant Rio Tinto. - more

  Morning Nickel Inventory and Price Statistics & Figures

• London Metal Exchange inventory figures/changes - (for today's figures see MF Global report above) (charts and archives)
• Today's almost official prices here  /  Yesterday's actual LME official prices here (chart)
• Shanghai Jinchuan nickel price - available here   (charts)
• India Metals Prices - Delhi - Oct 1 - more
• Please let us know if any of these links stop working, stop carrying info, or become available to subscriber's only. We encourage our readers to use the services of those companies who supply reports and information free of charge. Contact us

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