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

• Today's official LME nickel closing prices - cash - $13.97/lb 3 month buyer - $14.24/lb (6% lower than 1/1/07)
• Baltic Dry Index - minus 230 to 10,656.
• LME nickel inventories - plus 96 tonnes into Rotterdam, Netherlands warehouse, minus 60 tonnes from Rotterdam warehouse
• We didn't expect much from LME traders today, but the nervous quiet that had settled over the exchange in anticipation of today's Fed announcement, finally broke in afternoon trading. Apparently gambling that the Fed would cut its prime rate by 25 points (1/4%), nickel prices gained. The Fed announcement will not be made until 2:15 pm EST, but there appears to be a general concensus in the media, that the Fed will cut the rate. It will be interesting to watch the LME reaction tomorrow if the Fed surprises the market, and leaves the rate alone. With headlines like Market Watch ran today "Dollar likely to drop no matter what Fed does" (here), today's metals trading isn't necessarily surprising. We added a purchasing alert below for any readers who may use, or purchase product using potash. For the day, three month nickel ended the day at $14.52 ($32,000/tonne)
• Dow Jones Closing Metals Report - more

  Standard Bank Commodities Research Weekly - pdf here

  Translated China articles

• The raw material bottleneck restriction, becomes the hot spot which the common people pays attention. The people pay attention are lack the nickel, the few chromium raw material, whether supports China to make great strides forward to the stainless steel powerful nation. " - more here  Chinese version here
• In yesterday's report, we have stressed that China is supporting 2007 global demand growth rate in the main role. In the table below, we summarize the data so far this year, China and other parts of China outside the growth rate of some key commodities. - more here  Chinese version here

  Copyright/courtesy Dow Jones - " Analysts said the option for stainless mills to use pig iron means nickel prices will likely be capped at between $38,000/ton and $40,000/ton. Currently, the differential between pig iron and refined metals allows stainless producers to turn back to nickel. "At current nickel metal prices, importing and processing the very low-grade laterite ore from the Philippines is most likely uneconomical, so if nickel prices do increase, the ability to use laterite ore will cap the upside above $38,000/ton," said Standard Bank's Westgate....But going forward, JP Morgan analyst Michael Jansen said producers would likely innovate to use nickel pig iron in higher grades of stainless steel if prices threatened to revisit the year's heady gains. "If nickel prices go back up to $40,000/ton, the stainless market will find a way to put low-nickel ore into high-grade stainless steel," he added."

  Courtesy/copyright www.okokok.com.cn (from China Stainless Steel Industry Report, 2007)

  Purchasing alert - If you use potash, or purchase product dependent on potash, you should be aware of what is happening in Russia. Apparently a large sinkhole has formed and if it keeps growing, it will consume a railroad line carrying 10% of the world's potash over it. Here is a photo and the aforementioned tracks - here  and story from Moscow Times yesterday - here

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.05/lb. Not much expected out of LME trading today, as all eyes are turned toward the US Federal Reserve meeting, which won't start until after London trading is closed. Meeting at 18:15 GMT. Trading should remain light and edgy.
• Bloomberg - more

  News Bites

• copyright KCI Publishing  - "European Confederation of Iron and Steel Industries (Eurofer) has filed the first two of four anti-dumping complaints with the European Commission. These primarily cover cold rolled stainless coil and HDG imports from China and stainless cold rolled flat products from South Korea and Taiwan. Two further complaints are likely to be filed for wire rod and plates."
• courtesy Steel Guru - "Mr Luo Bingsheng VC of the China Iron and Steel Association during the 7th China International Steel & Raw Materials Conference 2007 at Dalian recently said that that steel production in the first nine months was 360 million tonnes and would cross 480 million tonnes in 2007."
• courtesy Platts - "Ferro Alloys Corporation group which is into ferro alloys and alloy, special and stainless steel has announced a large expansion over the next for to five years, in view of the boom in the steel market. Mr.R.Saraf chairman and md of the group announced that it will spend around Rs 35 billion in putting up power plants and a 0.5 million green field stainless steel plant in Orisaa."
• "The National Multi-Commodity Exchange (NMCE) is launching new series for futures contract in aluminum, copper, lead, nickel, tin, zinc and raw jute, with effect from Thursday, November 1, 2007."
• courtesy Reuters - "Kazchrome, the world's third-largest ferro-chrome producer, is spending $111 million to build a new plant to produce 700,000 tonnes a year of chrome ore pellets, its parent company said on Tuesday. "The launch of the plant is planned for the second quarter of 2009," Eurasian Natural Resources Corp said in a statement."

  Yieh Corp October 2007 Special Edition - pdf here

  If All Projects Progress As Scheduled, Nickel May Become Over-Production In 2010 - more

  Indonesia's state-owned gold and nickel miner PT Antam said Wednesday it is joining forces with China's Tsingshan Holding Group Co. Ltd to build an integrated stainless steel facility in Indonesia. - more

  The global stainless steel market is still being hit by production cuts and slower demand for nickel, French metals group Eramet SA (13175.FR) said Wednesday. - (more)    French metals group Eramet SA (13175.FR) will see a drop in its 2008 nickel production of around 1,000 metric tons due to a technical incident at its ore enrichment plant in Tiebaghi, New Caledonia, it said Wednesday. - (more)

  China will import 410 million tons of primary iron ore next year, up 10.8 percent from this year, a senior industry official forecast at the 7th China International Steel & Raw Materials Conference 2007, held in Dalian today. - more

  Mining giant BHP Billiton is planning to ditch the confrontational iron ore annual benchmark pricing system and attempt to introduce index pricing based on an over-the-counter forward market. - more

  The world's three largest iron ore miners, Brazil-based Companhia Vale do Rio Doce (CVRD), and Australian-based BHP Billiton and Rio Tinto are committed to keeping pace with with China's increasing iron ore demand, officials from the companies told Interfax at the 7th China International Steel & Raw Materials Conference 2007, held in Dalian yesterday. - more

  Carpenter Technology Reports Record First Quarter Results - press release here

  Indonesia can attract as much as $11 billion in mining investments for 2008, if the mining bill becomes a law, said Priyo Abadi Soemarno, executive director of the Indonesia Mining Association. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 180 tons = 37,608 tonnes (2.28% - 858 tonnes cancelled warrants/ 36,750 net stock level)
•   Shanghai Jinchuan nickel - 272000-274000 RMB/t, no change

• Today's official LME nickel closing prices - cash - $14.02/lb 3 month buyer - $14.24/lb (5.52% lower than 1/1/07)
• Baltic Dry Index - minus 147 to 10,886.
• LME nickel inventories - plus 264 tonnes into Rotterdam, Netherlands warehouse, minus 168 tonnes from Rotterdam warehouse, minus 18 tonnes from Singapore, minus 24 tonnes from Helsingborg, Sweden warehouse, 18 tonnes in and 18 tonnes out of Busan, South Korea warehouse
• If you want to understand 'tense' these days, take a gander towards the Chinese steel industry. There are the negotiations with the world's biggest iron ore producers, with some analysts predicting the cost could easily double. Freight rates for raw materials that the nation is dependent upon are hitting levels simply unimaginable just a year ago. The raw material costs themselves are near record levels, or for those that have retreated off highs, are still well above levels they were at just a few short years ago. In the meantime, their government is demanding the industry become more energy efficient and much less polluting (when your government is Communist run, you tend to pay close attention to their requests). And now, Europe has taken a shot across their bow, filing two dumping complaints and seeking import tariff's on steel. US steelmakers, as well as other major steel producing countries, will be watching how this complaint turns out closely, as they consider similar action. And overshadowing all of this negative news? Record production, record demand, and record sales.
  Nickel started out southbound this morning from the opening bell, but by the end of trading, had crawled back to about where it started. Tomorrow could prove to be a turning point, as the US Federal Reserve announces a possible rate change. A lowering of the interest rate could easily stimulate the market, with no change signalling Fed confidence, and attracting a similar reaction. No change could also boost the dollar, which is generally negative toward base metals. Time will tell, but in the meantime, markets remain in neutral. For today, three month nickel ended trading at $14.29/lb  ($31,500/tonne)         
• Dow Jones Closing Metals Report - more

  Mick Davis, chief executive officer of Xstrata Plc, the world's fourth-largest nickel producer, said he is ``bullish'' on the outlook for stainless steel. - more (quote - ``At a certain level, deriving nickel from low-grade ores through this process yields an advantage, and below a certain price that advantage fades away. Some of our colleagues were in China and saw (nickel) ore on the wharves that had not been collected for processing due the relatively low nickel price at the time. There is a floor that is built into the nickel price for this kind of production, and that floor is around about $25,000 a ton to $28,000 a ton.'')

  Copyright/courtesy Bloomberg - There will be ``little or no increase'' in stainless-steel production in the fourth quarter, the Brussels-based Bureau of International Recycling said. Demand for stainless-steel scrap ``will quickly recover in the first quarter of 2008,'' Michael Wright, chairman of the BIR's stainless steel and special alloys committee, said today in an e-mailed statement. ``We are well past the bottom and are on the increase,'' Wright said. ``When the market comes back, we feel it will come back heavily for stainless-steel scrap.''

  News Bites

• courtesy The Age (yesterday) - "No sooner had Goldman Sachs JBWere issued it's morning report on Jubilee Mines than Full Disclosure's phone was running hot. The global broker put a 12-month price target on the nickel miner of $11.25 a share, and analyst Andrew Quail rated the stock a "sell" — although he had qualified it as "under bid review". The Goldman note put a couple of clients in a huff — hours earlier Swiss giant Xstrata had formally offered $23 a share in cash for the stock. "How can Goldman get it so wrong?" ranted one. "They're always undervaluing stocks."
• Courtesy Metal Bulletin - "Chilean molybdenum processor Molibdenos y Metales SA (Molymet) says the molybdenum price will stay at around the $30 per lb mark through 2009 due to the supply and demand factors in China, ceo John Graell told MB."
• Courtesy Rusmet - "Nippon Daido reduced prices for the domestic market for stainless rolled 304 class grade by about 8% ($ 613-875 per tonne) for October contracts in shipment in January...This is the second reduction in prices during the year. ...In August, has already announced a reduction of 10%. Prices of Ferritic stainless grade rent remain unchanged."

  Xstrata, the London-listed mining group, made inroads into the burgeoning market for nickel yesterday, announcing a deal to acquire Jubilee Mines, an Australian-based producer, for A$3.1 billion (£1.37 billion). - more (In the last two years, CVRD and Xstrata have both made aggressive moves in building up their nickel sectors, while BHP has seemingly been content with its 2004 purchase of WMC, and pegging its future on the opening of Ravensthorpe. It will be interesting to see if BHP makes a defensive counter-offer here, or CVRD values an Australian foothold as well.)

  BHP Billiton has broken with its iron ore rivals Rio Tinto and Brazil's CVRD, calling for the commodity to be traded in a more transparent market like that seen for thermal coal rather than in the "outdated" benchmark pricing system. - more

  The Chinese steel industry yesterday sent two strong messages to Australia's iron ore producers, as negotiators prepare to fix next year's ore price: steel production is moderating as exports are curbed, and there will be no concessions to acknowledge soaring shipping rates. - more

  Baoshan Iron & Steel Co., China's biggest maker of the metal, paced declines in Asian steel stocks after profit slumped because of higher raw-material costs and losses at its stainless-steel business. - more

  Shanxi Taigang Stainless Steel Co., China's biggest maker of the alloy, said profit rose 20 percent in the third quarter on increased production, and that it expects full-year profit to as much as double on higher prices. - more

  All four major Japanese steelmakers renewed record group sales in April-September, thanks to strong demand for automobiles and shipbuilding, according to earnings reports released by Tuesday. - more

  Japanese steelmakers Nippon Steel, Sumitomo Metal Industries and Kobe Steel said Tuesday they had expanded their scheme to share raw material supplies and production facilities. - more

  PNG’s biggest mining boom is gathering pace, with small, medium and large-scale mines being developed simultaneously in different parts of the country. - more

  (the soap opera continues) Splitting EnergoPolus off GMK Norilsk Nickel is generally viewed one of the key components to divide the business of Vladimir Potanin and Mikhail Prokhorov. - more

  Russia is making a macroeconomic breakthrough, and already by 2010 its economy will reach two trillion dollars, while by 2020 it will become the fifth biggest in the world, CEO of Deutsche Bank in Russia Charles Ryan said here on Monday. - more

  This is the badly beaten face of a construction worker boss, assaulted after he is said to have called an employee a "bastard and a baboon." - more

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

• Indications at 7:50 am CST show 3 month nickel selling  down by $.23/lb    We are suffering a major slowdown in internet access (slower than dial-up at moment) this morning and were seriously limited in our scope of coverage. Should be cleared up by our noon update.
• Bloomberg - more

  TD Bank Weekly Commodity Report - pdf here

  European Confederation of Iron and Steel Industries have filed the first two of four anti dumping complaints with the European Commission. - more

  It is reported that Indian Steel Alliance recently forecast that India would become a net importer of steel by the end of this financial year due to rupee depreciation and rising demand in the domestic market. Currently, India’s imports and exports of steel are almost at the same levels. - more

  Due to the stable nickel prices in October, Taiwan’s Yieh United Steel Corp (Yusco) and Tang Eng all raise prices for November. - more

  Courtesy Shanghai Nonferrous Metals SMM specialist Emily Xiang - "Price of nickel for three-month delivery found support at 31,000 usd per tonne. It was trading at 31,850 to 323,000 usd per tonne. As the demand of nickel on the last quarter will be better, and stockpiles of nickel on LME will continue to increase, it is forecasted that price will rally steadily. Shanghai nickel was consolidating at around 270,000 yuan last week. It tried to rise but failed as consumption is weak in the market. The price might rise to 280,000 yuan per tonne with rebound on LME."

  Courtesy AISI - "In the week ending October 27, 2007, domestic raw steel production was 2,088,000 net tons while the capability utilization rate was 87.5%. Production was 2,063,000 tons in the week ending October 27, 2006, while the capability utilization then was 86.2%. The current week production represents a 1.2% increase from the same period in the previous year. Production for the week ending October 27, 2007 is down 1.7 % from the previous week ending October 20, 2007 when production was 2,126,000 tons and the rate of capability utilization was 89.1%. Adjusted year-to-date production through October 27, 2007 was 87,878,000 tons, at a capability utilization rate of 85.9$. That is a 4.2% decrease from the 91,808,000 tons during the same period last year, when the capability utilization rate was 89.8$.

  News Bite - "The world's leading steel information service World Steel Dynamics, is expecting hot rolled steel prices to increase to $700 to $800 per ton through 2008, against an earlier estimate of $550 per ton this July."

  The latest edition of Nickel Magazine is now available online here

  Today's beginning nickel inventory

•   London Metal Exchange - plus 54 tons = 37,428 tonnes (2.15% - 804 tonnes cancelled warrants/ 36,624net stock level)
•   Shanghai Jinchuan nickel - 272000-274000 RMB/t, minus 1000

• Today's official LME nickel closing prices - cash - $14.14/lb 3 month buyer - $14.31/lb (5.52% lower than 1/1/07)
• Baltic Dry Index - plus 8 to 11,033.
• LME nickel inventories - plus 158 tonnes into Rotterdam, Netherlands warehouse, minus 125 tonnes from Rotterdam warehouse
• Expect a volatile first few days of this week, with the all important FOMC meeting on Wednesday drawing the major attention. Even the major news that Xstrata had made a $3.1 billion dollar offer for Australian miner Jubilee Mines didn't draw the bullish reaction takeover news usually does. Tomorrow's talk will be probably about whether BHP or CVRD might trump Xstrata's offer. Market did take an early morning bounce, but by late morning had fallen into the red, where it spent the rest of the day. For the beginning of the last few days of October, three month nickel ended the day at $14.31/lb ($31,550/tonne)
• Dow Jones Closing Metals Report - more

  South Korea's Public Procurement Service, a state-run body that manages commodity stockpiles, is seeking to buy 200 metric tons of refined nickel at a tender. - more

  Outokumpu press release - "Among some other Finnish companies, Outokumpu’s Tornio Works was affected last week by the Salaried Employees Union strike. The strike started on October 22 and ended on October 26. During the strike most of the stainless steel production operations in Tornio were suspended. Deliveries, however, continued from existing stock. Production was ramped back up during the weekend, and the mill is now capable to meet all orders. Due to the short duration of the strike, direct effects to the Group’s results were marginal."

  North American Steel Price Forecast - Flat Products - here

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.09/lb Market started out in the green, but has fallen into the red in afternoon trading. Expect a nervous market for the first part of this week, as all eyes will be on the FOMC meeting on Wednesday.
• Bloomberg - more
• Reuters - more
• AFX - more

  Haywood Securities - Metals & Mining Weekly - pdf here

   Weekly Forecast by China Shanghai Metal analysts - Of 31 responding, 22 (70%) felt the price of nickel would rise this week, while the remaining 9 (30%) felt the price would stay steady. None felt the price would fall.

  Interfax China reported that major Chinese stainless steel mills will raise prices for core products by CNY 500 (USD 67) per tonne in November from the October price level in response to recent rises in nickel prices. - more

  Recently Chinese stainless steel market is generally stable, however stockists are still adopting a wait-and-see approach. - more

  All stainless steel mills experienced profit shrinks due to the dramatic nickel price fall since May this year. - more

  Julian Hanna, managing director of Western Areas NL, may have known something when he told the Australian Nickel Conference last week that a major challenge for the new wave Western Australian nickel producers would be to retain independence. - more

  Type 304 stainless steel has been the star of foodservice equipment manufacturing for a long time. Now, with skyrocketing prices forcing manufacturers to seek alternate grades, you'll be facing new choices when spec'ing your kitchens. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 42 tons = 37,374 tonnes (2.39% - 894 tonnes cancelled warrants/ 36,480 net stock level)
•   Shanghai Jinchuan nickel - 273000-275000 RMB/t, plus 3500

  Xstrata makes $3.1 billion takeover offer for Australia's nickel miner Allegiance Mining....Jubilee mines around 12,000 tonnes of nickel a year from its Cosmos nickel project - more

  Scotiabank Commodity Price Index - pdf report here

  Courtesy Steel Guru - "According to the latest figures from China customs department that China’s net imports of refined nickel and nickel alloy were 6,414 tonnes in September 2007. The department said that was very much in the recent range of 5,000 tonnes to 7,000 tonnes per month since April. Outright imports at just under 7,000 tonnes in September were a little softer than the previous couple of months but that was offset by a decline in exports to just 530 tonnes the lowest level since the first quarter of 2005."

  Courtesy BNP Paribas Monthly - "Demand recovery from stainless steel mills, speculative money and a weaker dollar appear to be the only factors that explain why nickel is still above US$30,000 tonne. Even though they have corrected from the US$55,000/tonne level, prices are still well above production costs of less than US$10,000/tonne. Fundamental data appears to be generally bearish.....Besides, LME inventories have kept increasing, reaching 37,470 tonnes on October 25th – a 15% rise since September 28th. They have now risen eight-fold since mid May. Moreover, even if stainless steel demand is picking up, it is worth noting stainless steel scrap is available in large quantities and can provide a cheap substitute for nickel metal. In light of all these factors, we expect nickel to fall back below US$30,000/tonne in the near future." - report here

  Anecdotal evidence from miners is that they can pretty well sell their nickel anywhere but the analysts are getting gloomy about the metal's price outlook. - more

  If you are having a hard time understanding what nickel is doing, look at what one LME trader told Russia's MetalTorq on Friday - (from translation) "I am no longer thinking of the price of LME. I do not try to analyze because the nightmare continues. It is impossible to calculate, and it is impossible to understand, "confessed Trader."

  Spanish stainless steel producer Acerinox has announced it has no plans to change its method of calculating its surcharge, as have other producers of stainless steel in the EU, including Outokumpu.

  Steel producers of the European Union (EU) are threatening to file anti-dumping complaints to the European Commission next week against rising imports from China, media reports said on Friday. - more

  Universal Stainless Alloy Products, Inc. reported today that sales for the third quarter of 2007 rose 13 percent to $62 million compared with $55.1 million in the third quarter of 2006. - more

  Rio de Janeiro-based CVRD has pushed back the development of its Vermelho nickel project in Brazil due to difficulty in securing environmental licenses, CVRD CFO Fábio Barbosa said on Friday. - more

  BAOSTEEL, China's biggest steelmaker, says iron ore supplies are lagging behind demand from the country's mills, indicating it may struggle to hold down prices in talks with mining companies led by BHP Billiton. - more

  Russia’s emergence as a major minerals player, emissions trading and a surge in nickel exploration and production have been forecast as important to the future of the Goldfields economy. - more

  National Mining Association Mining Week - pdf here

  Despite lower nickel revenue during the third quarter, CVRD, the world's No 2 miner, has earned $10bn in the first nine months of the year, 77% up on the comparable 2006 period. - more

  The provincial elected officials could not meet without evoking the coldly announced concretization all of the factory of North. - translated article here

  China’s crude steel output September is reported at 42.71 million tonnes up by 17.5% YoY. - more

  PBS Frontline - watch episodes online - here

• Today's official LME nickel closing prices - cash - $14.27/lb 3 month buyer - $14.42/lb (4.71% lower than 1/1/07)
• Baltic Dry Index - plus 31 to 11,025. (first time ever over 11M mark)
• LME nickel inventories - plus 72 tonnes into Rotterdam, Netherlands warehouse, minus 168 tonnes from Rotterdam warehouse, minus 102 tonnes from Busan, South Korea warehouse
• Finally, a slow news day. Traditionally, analysts like to play the whole "us against them" card as stainless steel producers against the nickel miners. And while in years past that may have been true, the reality of today's market has shifted the paradigm to stainless steel producers against LME traders. Every time buyers make a purchase, the traders think that demand is recovering, and raise the price of nickel. This draws an inevitable reaction and demand dries back up, or buyers goes stealth. A couple of things are fairly certain right now. Buyers are only buying what they need and traders are betting they are going to need a whole lot more soon. Eventually, one side of the other will have to blink. We are seeing many reports out of China that buyers are refusing to accept current market prices. On the other hand, they have been refusing these prices for a very long time now, and when buyers come shopping and distributors make the decision to re-stock, the producers have no nickel stockpiles to fall back on, and they will have to pay whatever price is offered. Other news indicates producers are starting to fire back up, at least in Asian markets. While inventories have risen in LME warehouses, and now are higher than they were at anytime last year, everyone realizes they could drop as easily as they have risen. There is currently a lot of tension building in the market, as both sides play cat and mouse with the other. The problem with tension is it inevitably snaps at some point, and this is usually followed with bad news for one of the parties. Nickel started off very strong this morning, but the enthusiasm faded and prices stair-stepped back down until late trading, when they climbed back up a little. Three month nickel ended the day and week at $14.42/lb ($31,800/tonne)  After losing ground on Monday and Wednesday, the trading price of nickel was unable to return to last Friday's close and for the week, ended down by 1.3%
• Dow Jones Closing Metals Report - more
• Here is a short video that should amaze you - here and another to impress you pool sharks here  Have a great weekend!!

  Courtesy/copyright October Citigroup Report "Commodity Heap"

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.10/lb.   Price of nickel jumped straight up this morning at the bell, rising by nearly $850/tonne, on news that nickel inventories had actually fallen. Traders must have thought Christmas had come early and assumed the stainless drought was finally over, until someone reminded them that when considering cancelled warrants, the net inventory actually grew. And that the "net" LME inventory level is higher than it was at anytime last year. Doh! Prices have been on a stair-step slide since.  
• Bloomberg - more
• Thompson Financial - more

  Copyright/courtesy Dow Jones - "LME nickel is looking technically strong, says Will Adams of BaseMetals, adding it is range bound between $31,000/ton and $33,000/ton. If nickel breaks above $33,550/ton then the metal could rise higher, but then "prices would be running ahead of fundamentals" as physical traders say there hasn't been any real sign of a pickup in stainless steel production. "

  Germany’s stainless steel production this year is expected to drop by 20 percent in the same comparison to around 1.4 million tons, according to estimate by the ERG-Edelstahl Recycling GmbH. - more

  The Indonesian unit of Inco Ltd said on Friday its nickel in matte output rose 15.3 percent in the first nine months of the year, helped by a increase in power supplies at its mining area in Sulawesi. - more

  China’s booming economy continues to draw in raw materials of all kinds, with few signs of let-up in the key steel, copper or aluminium industries, customs data showed on Thursday. - more

  The negotiations with steel mills in Japan on price of low carbon ferro-chrome for shipments in October - December quarter of 2007 have been settled by a rise of 20 US-Cents per lb. in comparison with that fixed for the preceding quarter of July - September and the new price has come to 185 US-Cents per lb. CIF Japan for carbon 0.1% max. material. - more

  Jindal Stainless Ltd., India's biggest maker of the alloy, said second-quarter profit more than halved as sales fell and raw material costs climbed. - more

  LOCALS for Esperance Development (LED) group have sought assurances from nickel companies and Department of Environment and Conservation (DEC) that there will be zero nickel dust emissions from the Esperance Port Authority (EPA) and along the transport corridor. - more

  Courtesy STT - "The Union of Salaried Employees (TU) and the Finnish Technology Industries on Friday accepted a settlement proposal submitted earlier the same day by Juhani Salonius, the national conciliator. About 3,000 managerial and clerical workers at six large engineering, smelting and steel companies had been on strike since Monday."

  Australian coal miners are being given lessons in foreplay and the menopause in an attempt to boost productivity. - more

  Today's beginning nickel inventory

•   London Metal Exchange - minus 138 tons = 37,332 tonnes (2.17% - 1146 tonnes cancelled warrants/ 36,552 net stock level)
•   Shanghai Jinchuan nickel - 269000-272000 RMB/t, plus 2500

• Today's official LME nickel closing prices - cash - $14.06/lb 3 month buyer - $14.29/lb (5.67% lower than 1/1/07)
• Baltic Dry Index - plus 10 to 10,994.
• LME nickel inventories - movement shifted back to Europe. plus 450 tonnes into Rotterdam, Netherlands warehouse, minus 252 tonnes from Rotterdam warehouse, minus 12 tonnes from Liverpool, Great Britain warehouse. Cancelled warrants slip 1/2%.
• China was the big story of the day - again. With a GDP running at 11-1/2%, and news from Reuters that stainless steel producers have left their stores of refined nickel run dry (see first story below), nickel bounced today. The US new housing report was disappointing, but not overly alarming. Most traders are betting on a rate cut by the US Fed next week, so as that meeting nears, expect further volatility as traders play cat and mouse. Base metals were green across the board, with nickel gains taking a momentary pause before the US report was made public, then returning to nearly match its early morning trading peak. US consumer confidence is out tomorrow, which may or may not have an effect on trading psyche in the US, but should not have any bearing on London metals trading. Did the fundamentals change today? No. But the news from Asia was definitely in the bulls favor. Inventories of nickel in LME warehouses are now greater than they were at anytime last year. Three month nickel ended the day at $14.33/lb ($31,600/tonne)       
• Dow Jones Closing Metals Report - more

  China faces a shortage of spot refined nickel due to fewer imports and stronger demand from stainless steel mills, traders said on Thursday. - more

  Service center inventories of steel and aluminum products continued their year-over-year decline in August, and shipments of both metals also fell during the month from 2006 levels, according to the latest Metals Activity Report from the Metals Service Center Institute, Rolling Meadows, Ill. - more

  Major Chinese stainless steel mills will raise prices for core products by RMB 500 ($66.76) per tonne in November from the October price level in response to recent rises in nickel prices. - more

  Russia is becoming a major customer of Australian nickel exports - more (Russia buying nickel ore from Australia to ship to Finland - go figure!)

  Copyright/courtesy Reuters - ""In nickel, there is a clear case of demand destruction -- we're seeing that in reports from steel makers," Corrigan (Sean Corrigan at Swiss-based fund Diapason Commodities Management) said. And there is nickel mine supply coming on stream. "I would have thought that the recent rise in nickel prices was not really fundamentally supported, with physical demand still relatively soft, so I see potential for a correction," Michael Widmer, metals analyst at Calyon, said. Analysts worry there could be further fallout for base metals as a sector from the crisis in global credit markets."  

  Courtesy Platts - "With "not a great deal of fundamental news out over the last few days", base metals players are looking everywhere for clues as to movement, according to a trader with a London Metal Exchange ring dealing member."

  Strong demand of more than 4 percent a year and stagnant supplies will boost prices of molybdenum, prized for its ability to harden stainless steel. - more

  From China media - "During the first 9 months of this year, Taigang Stainless production of cold-rolled stainless steel rose 79.27%, cold plate output grew 37.47%." "Stainless steel company Nippon Steel (NSSC) officials have said the company will resume full production next week at its Hikari factory." "European Commission Secretary General Dzurek told by Chinese State Development and Reform Commission that China wants to reduce iron and steel production capacity by 20%. China is very nervous about EU anti-dumping tariff's. Article does not make clear if this statement is a general remark, or specific to exports to the EU."

  A huge steel plant which is Beijing's worst polluter has pledged to drastically cut production next summer so that the 2008 Olympic Games can enjoy better air quality. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.23/lb . Market is trading off earlier high's, with markets watching for reaction to US new housing starts report due out later this morning. Yesterday's markets fell on dismal house sales, but by afternoon the Dow had recovered nearly all of its losses on the day on rumors floating around the Fed would cut interest rates a week earlier. While we feel this is a huge stretch even for a rumor, the market bought it and reacted positively. The rumor also drove the dollar lower, which in turn added positive sentiment to metals, which got an additional boost this morning by fresh economic reports out of China showing that country has yet to slow down its blistering growth. Lot of news this morning - so pick what interests you.
• Bloomberg - more

  Standard Bank - Commodities Research Weekly - pdf here

  New nickel projects will inject a further 275,000 tonnes of the metal into global markets by 2013, but supply-demand dynamics are expected to remain tight despite the additional volumes, according to a commodities researcher. - more

  News Bites - "China's industrial output up 18.9 pct y-o-y in September" "China's GDP up 11.5% in first nine months"  "With shipping freight rates and local railway charges rising sharply last month, Indian iron ore prices (high grade) in the spot market have hit a record high of $175 a tonne." "China's output of medium and heavy plate rose by 40 percent year-on-year in the first nine months of 2007, according to the latest figures from China's Statistics Bureau." "Major Chinese stainless steel mills will raise prices for core products by RMB 500 ($66.76) per ton in November from the October price level in response to recent rises in nickel prices" "China produced a total 362.73 million tons of crude steel during the first nine months of 2007, up 17.6 percent from the same period last year, with September production alone reaching 42.71 million tons, up 2.72 percent from August, according to statistics released today by the China Iron and Steel Association (CISA)." "Stainless steel sales within Brazil are expected to grow some 10% this year versus 2006 to 220,000t, local news agency AE-Setorial reported based on data from industry association Núcleo Inox."

  SMM Weekly Review and Forecast - "Shanghai nickel spot goods holders wanted to follow the rallying trend of nickel on LME, but domestic consumers would like to wait and did not want to buy at high price. It was difficult to keep steady because of wide consolidation on LME."

  China's exports and imports of refined lead, zinc, tin and nickel as well as concentrates in September and the first nine months of 2007, as reported in official customs figures. - more

  Samancor Chrome Ltd., which produces about a fifth of the world's ferrochrome, said it's pushing customers to pay more for supplies, while most of its peers have agreed to keep prices at a record high for the fourth quarter. - more

  According to a recent International Nickel Study Group announcement China's demand for nickel and nickel containing products is set to boost global primary nickel consumption by 8.9% to 1.47 million tonnes next year from 1.35 million tonnes this year. - more

  First production mining is underway in west Tasmania at Allegiance Mining’s Avebury underground mine, which is expected to produce the world’s highest-grade nickel concentrate. - more

  Indian Jindal Stainless plans to spend 100 million dollars for the construction of the steel plant in the northwest of Russia capacity of 400,000 tons of stainless steel a year, told Reuters Representative Jindal in Russia Mahendra Agarwal. Construction of the plant to the west of St. Petersburg will take a year from the date of approval of the project, which is expected in the next two weeks, said Agarwal.

  Courtesy ferrosilicon.net - "Notice from NDRC, MOF and SERC, local government must carry out the policy about preferential power tariff rate on classified enterprises, like ferroalloy and electrolyte aluminium producer. Before Oct 20, 2007, those preferential rate must be cancelled."

  While the Government of South Africa has already suggested the South African companies concerned to enforce the regulations for exports of chrome ore, the matter to impose export duty is supposed to be under consideration. A promising duty is thought to be US$50 per ton. - more

  The biggest problem facing nickel ore exporters from the Philippines is freight costs to China, the chief executive of Toledo Mining Corp. PLC told Dow Jones Newswires. - more

  With 2008 iron ore contract price talks set to begin next month, analysts have been rushing to revise their price forecasts upward. Projected increases are generally in the neighborhood of 25%, but some are postulating hikes of as much as 50%, and one steel analyst suggested to Platts this week that prices could conceivably double. - more

  Acerinox SA said it posted net profits in the nine months to September 30 of 424.3 mln eur, up 56.4 pct from 271.3 mln a year earlier. - more

  JFE Holdings Inc., the world's third- largest steelmaker, reported a 10 percent decline in second- quarter profit as freight charges doubled and costs increased for nickel, iron ore and manganese. - more

  BIR Stainless Steel World Mirror October - Michael Wright, ELG Haniel Metals Ltd, United Kingdom, Chairman of the Stainless Steel & Special Alloys Committee - "At the time of our previous Stainless Steel Mirror published in March 2007, we still anticipated global stainless steel production of over 31 million tonnes for this year, but warned of risks relating to the high nickel price of over US$ 50,000 per tonne and the effects this could have on substitution of austenitic grades by lower-valued material. We mentioned that experience had told us that a decline in the nick- el price would see stainless steel users and service centres quickly stop new orders, and also delay or even cancel existing orders. The dramatic fall in nickel prices experienced during the second quarter triggered this exact scenario. We now expect 2007 production to total no more than 28.6 million tonnes, which is almost the same as in 2006."

  A European Union official said Wednesday he received assurances from China that it is trying to curb steel production, an announcement that could ease tensions between the two sides over soaring Chinese exports. - more

  October 2007 report - Bolt, Nut, Screw, Rivet, and Washer Manufacturing Industry in the U.S. and its Foreign Trade (1997-2009) - Abstract - "The industry's revenue for the year 2006 was approximately $9 billion US dollars. The gross profit was around 30%. Market sizes for the bolt, nut, screw, rivet, and washer manufacturing industry are: aircraft fasteners, except plastics (including aerospace) (18.3%); externally threaded metal fasteners (except aircraft types) (41.6%); internally threaded metal fasteners (except aircraft types) (10.6%); nonthreaded metal fasteners (except aircraft types) (13%); products (except fasteners), cold/warm/hot-heading processes (8.5%); and bolt, nut, screw, rivet, and washer manufacturing, not specified by kind, total (8%). Import was valued at $3.68 billion US dollars from 86 countries. The industry also exported $2.44 billion US dollars worth of merchandises to 157 countries."

  SteelBenchmarker reported that the US hot rolled band spot price for October 22nd 2007 dropped by 0.5% to USD 577 per metric tonne, FOB the mill after 4 consecutive rises, The World export HRB price dropped by 0.3% to USD 585 per tonne FOB the port of export for the fourth consecutive time. - more

  The Development of China Fastener Industry (Part 5) - here

  Today's beginning nickel inventory

•   London Metal Exchange - plus 162 tons = 37,470 tonnes (2.69% - 1008 tonnes cancelled warrants/ 36,462 net stock level)
•   Shanghai Jinchuan nickel - 267000-269000 RMB/t, minus 7000

• Today's official LME nickel closing prices - cash - $14.13/lb 3 month buyer - $14.24/lb (6.04% lower than 1/1/07)
• Baltic Dry Index - plus 40 to 10,984.
• LME nickel inventories - plus 60 tonnes into Rotterdam, Netherlands warehouse, minus 54 tonnes from Rotterdam warehouse, plus 96 tonnes into Singapore warehouse
• While nickel inventories into LME warehouses grew overnight, the net level is still lower than it was on Monday as cancelled warrants remained in the 3% range. The last few days have seen an unusual shift in inventory growth from Europe to Asia, with Rotterdam receiving smaller shipments, and Singapore and Busan receiving larger shipments. Nickel traders bet on a dismal housing report in the US today, and weren't disappointed. Prices slumped from the beginning of the trading session, leveled off, and then slumped further after the report was made public. The new housing report is out tomorrow, but many traders have probably already traded this news in, figuring it will be dismal, so the price of nickel may rebound a little tomorrow. For the day, three month nickel ended the day at $13.97/lb ($30,800/tonne)    
• Dow Jones Closing Metals Report - more

  Stainless demand has not yet returned, according to market reviews by several analysts who had expected purchasing and pricing to rebound this month or next. - more

  Poor economic data from the United States suggesting weaker demand for industrial metals, sank copper prices to near a one-month low, traders and analysts said on Wednesday. - more

  Southern California Fire Updates - Google Map here  Live TV coverage here 1750 homes and 100 businesses damaged or destroyed  in San Diego County alone (reported by San Diego Union-Tribune 18 hours ago) - over 950,000 people evacuated thru this morning

  from select Chinese Media

• Chinese media reports Japan sources advise they have sold 70 tons of nickel cathode in the past two weeks, 20 tons destined for South Korea and the remaining 50 tons to Southeast Asia. Believed to be destined for stainless steel producers as manufacturing buying, including battery producers, has been very soft.
• Pipeline growth in US is booming and expected to continue. Other uses that will add support to above average molybdenum prices for many years include worldwide oil and gas projects, increased production of diesel-driven vehicles, and the continued growth in the nuclear power industry.
• China Steel Industry Association statistics - Chinese stainless steel production reached 3.5 million tons, an increase of 54% over the same period, imports of 956,500 tons of stainless steel, a 25.45% year-on-year decline, stainless steel export 833,800 tons, an increase over the previous year of 224.44%
• Baosteel ferritic stainless steel production currently accounts for 50% of the total output to reduce risk of high nickel prices. Baoshan Iron and Steel Research Service officials said the company currently has 100,000 tons of stainless steel production capacity dependent on the use of nickel pig iron. The three major steel mills in China, Baosteel, TISCO and Zhangjiagang Pohang, since the beginning of 2007, have replaced monthly consumption of 2,000 tons of refined nickel with total monthly consumption of 50,000 tons of pig iron nickel.
• courtesy RongPhui(HK) Enterprise Limited - "Although China has enjoyed rapid economic growth this year, its growth in steel product apparent consumption has been slowing down since 2004. In 2003, growth in apparent consumption stood at 25.75%. This fell to 11% in 2006 and 10% in the first eight months of this year."

  Sources in European trade departments have confirmed that the European Industrial Fasteners Institute (EIFI) has lodged an antidumping complaint with the European Commission targeted specifically at carbon steel fastener imports from China. The complaint covers a wider range of iron and steel fasteners, other than stainless steel on which antidumping tariffs already exist, ... more

  The Development of China Fastener Industry (Part 4) - here  Parts 1 thru 3 posted October 19 here

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.16/lb . One of those nervous days for traders as US releases existing home sales report in about an hour. Expected to be yet another reflection of a housing market in downturn since the sub-prime debacle became concern #1, traders are leery what psychological implication the news will carry, and how other traders will react. Many traders are quietly waiting and watching. We don't expect much movement today, with another key report, new home sales, out tomorrow. 
• Bloomberg - more

  The global stainless steel market is expected to pick up in the first quarter of 2008 after heavy production cutbacks, which encouraged more scrap sales to Asia, a recycling conference heard this week. - more

  With one week left to October, we estimate the 300 series stainless surcharges for US stainless steel producers in December, which will be officially determined at the beginning of November, will increase over the November surcharge by about 3%. Subject to market price movement during remainder of October.

  South Korean Posco is considering to produce 200 series stainless steel, according to the company. Currently South Korean imports around 5,000 to 10,000 tons of 200 series stainless steel products per month. - more

  North American Stainless has announced to raise the price of stainless steel cold rolled products by US$5 cent/lb (US$100/ton) since 15 October. - more

  Allegheny Technologies Incorporated reported net income for the third quarter 2007 of $193.9 million, or $1.88 per share, on sales of $1.33 billion. - more

  Australia's Allegiance Mining NL, which is backed by China's largest nickel group, Jinchuan, said it was on track to start nickel production from a new mine in the first quarter of 2008, driving up its stock. - more

  Graph from Recycling International October 2007 - pdf here

(Note the comments)

  Chinese output of nickel pig iron, a cheap substitute for nickel used in stainless steel, will stall in 2008 as prices fall, according to Toledo Mining Corp., which supplies ore to make the product. - more

  The peak of May seems to be digested. The price of the nickel, which had dropped of almost half, has just found its course of January 2007. - translated article here

  Russian aluminum giant United Company Rusal has offered to buy Mikhail Prokhorov out of Norilsk Nickel, business daily Vedomosti reported Wednesday. - more

  US September Monthly Steel Imports Fact Sheet - pdf here

  Police officers have been sent to the remote [Chinese-backed] Ramu nickel mining site to investigate the allegations of an influx of illegal foreigners. - more

  The head of one of Australia’s new wave nickel producers warned today that the country’s industry needs to ensure its nickel mines don’t get absorbed like most of the major gold mines by foreign owners. - more

  Strong economic growth will support the world's steel industry over the next year but a shortage of raw materials and high prices are putting pressure on margins, the head of the German Steel Federation believes. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 102 tons = 37,308 tonnes (3.26% - 1218 tonnes cancelled warrants/ 36,090 net stock level)
•   Shanghai Jinchuan nickel - 274500-275500 RMB/t,  minus 1500

• Today's official LME nickel closing prices - cash - $14.38/lb 3 month buyer - $14.56/lb (3.7% lower than 1/1/07)
• Baltic Dry Index - plus 91 to 10,944.
• LME nickel inventories - plus 60 tonnes into Rotterdam, Netherlands warehouse, minus 66 tonnes from Rotterdam warehouse, plus 144 tonnes into Busan, South Korea warehouse. While day shows another gain, when taking cancelled warrants into consideration, net inventory actually dropped today.
• Nickel started off on the plus side this morning, but by afternoon, traders lost their enthusiasm and backed off. US housing reports are due out tomorrow and Thursday, and while they may mean little to base metals demand, they are likely to have a psychological effect on market trading, which in turn, could effect metals market sentiment. Three month nickel ended the day at $14.40/lb (same as yesterday) ($31,750/tonne)
• Dow Jones Closing Metals Report - more

  Chinese media reports imports of low grade laterite ore from the Philippines declined by 45.4% during September compared to last year. Low grade laterite is used in the production of the so-called pig-nickel.  

  Chinese media reports YUSCO of Taiwan will raise prices on stainless steel by around $200/tonne in November.  

  Copyright/courtesy Dow Jones - "The outlook for nickel remains subdued and rallies are unlikely to be sustained, says UBS analyst Robin Bhar. Adds stainless steel production growth will slow sharply in the second half of '07 as consumers run down stocks rather than place new orders, citing the International Stainless Steel Forum."  and  "Nickel on-warrant stocks declined a hefty 258 metric tons, with canceled warrants spiking 396 tons in data Tuesday, which suggests that the physical market is waking after a summer hibernation, says JP Morgan analyst Michael Jansen. This was a result of aggressive de-stocking of stainless steel by consumers and in turn, mills who saw demand slump due to high nickel and thus stainless steel prices, as well as substitution, he says. Still with stocks at multiyear highs, and no sign of tightness in the front month spreads, "the preconditions for a sustained nickel flat price rally are sorely missing," he says.

  Outokumpu expects demand for its stainless steel to improve during the fourth quarter but overall deliveries to still be short of normal seasonal levels, chief executive Juha Rantanen said. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.16/lb . Numerous quarterly reports out today. BHP reports its nickel output dropped 19% from the previous quarter due to maintenance shutdowns at two of its operations, down 13% from last year. Sally Malay told Mineweb it has set 20,000 tonnes of nickel as its production goal next year, up from 12,000 tonnes this year. Dollar is drifting lower this morning, which is adding fuel to base metals buying.  
• Bloomberg - more
• Reuters - more
• AFX - more

  Copyright/courtesy Dow Jones - "If LME nickel successfully tests the $32,000 a metric ton level Tuesday, there is potential for another test higher of $33,000/ton, says Triland Metals. Adds that further gains are subject to what the physical hedgers "deem the correct level to unwind for some profits."

  Copyright/courtesy Dow Jones - "Outokumpu has encountered problems with some distributors that the company said often delayed orders so that they could speculate on the price of nickel, a key ingredient in value-added stainless steel products.  In order to counter this, Outokumpu last month launched a restructuring program to cut out distributors by boosting sales of finished products directly to end-customers."

  Behre Dolbear Global Mining News - pdf here

  EDC Commodity Price Update - pdf here

  TD Bank Weekly Commodity Price Report - pdf here

  Presentation to Steel Logistics Conference September 24-26 2007Overview and outlook of global steel production - pdf here

  This Week’s Raw Steel Production - here

  Finland's leading metals group, Outokumpu Oyj, reported a third-quarter net loss of €214 million (US$303 million), mainly because of lower nickel prices. - more  press release here

  Stainless-steel inventories held by members of the Japan Stainless Steel Coil Center Association rose 2.3 percent in September from August, the industry group said. - more

  Universal Stainless & Alloy Products, Inc. reported today that sales for the third quarter of 2007 rose 13% to $62.0 million compared with $55.1 million in the third quarter of 2006. - more press release here

  AK Steel today reported net income of $108.4 million, or $0.97 per diluted share of common stock, for the third quarter of 2007, compared to net income of $26.0 million, or $0.23 per diluted share, for the third quarter of 2006. - more

  The data showed that US exported 39,300 tons stainless steel in August, up by 17 percent year-on-year, but in 9 percent drop compared to July this year. - more

  BHP Billiton, the world`s biggest mining company, reported production growth that missed some analysts` forecasts, a sign capacity constraints and maintenance requirements will make it harder to meet surging demand from China. - more  press release here

  Platts steel editorial director, Francis Browne, talks to Platts.com web content director, Michelle Hart, about the topics discussed at the International Iron & Steel Institute annual conference this month, including China; climate change; and skillsets for the future. - audio here

  The Philippines' Berong Nickel Corp is looking at buying an integrated steel plant in China's Guangxi province to produce nickel pig iron and stainless steel within one of its main markets. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 138 tons = 37,206 tonnes (3.26% - 1212 tonnes cancelled warrants/ 35,994 net stock level)
•   Shanghai Jinchuan nickel - 275000-278000 RMB/t, minus 3500

  Daily Nickel/Stainless Roundup

• Today's official LME nickel closing prices - cash - $14.11/lb 3 month buyer - $14.27/lb (5.8% lower than 1/1/07)
• Baltic Dry Index - plus 55 to 10,853.
• LME nickel inventories - plus 612 tonnes into Rotterdam, Netherlands warehouse, minus 84 tonnes from Rotterdam warehouse, minus 48 tonnes from Liverpool, Great Britain warehouse, and plus 66 tonnes into Chicago, US warehouse.
• Markets started out the week in a sour mood as the housing credit crunch reared its ugly head again Friday. Markets worldwide were in the red today (see here) The U.S. stock markets could be choppy throughout this week, with US existing home sales and new home sales reports due out later in the week. Some analysts would like everyone to believe the worst is behind us, but we seriously doubt that. There are way too many adjustable rate mortgages due to increase over the next few years for this credit problem to be dismissed. How that may or may not affect metals, is another question. The world economy is healthy, and is far less dependent on the US market as it once was. Not everyone agrees with that, and we posted an article from miningmx today that says commodities are still very dependent on the US economy. The dollar fell to an all time low against the Euro in Asian trading, but rose later in European and American trading. A falling dollar usually supports higher metals prices, but as we stated earlier, traders were in a sour mood from the first bell. Nickel inventories took another big jump up, gaining 543 tonnes overnight. This added negative sentiment, as LME stored levels went over the 37,000 tonne mark for the first time since February 3rd, 2006, when nickel inventories topped out for 2006 at 37,218 tonnes.  For the first day of the trading week, three month nickel ended at $14.40/lb ($31,750/tonne)      
• Dow Jones Closing Metals Report - more

  Haywood Securities Metals & Mining Weekly - pdf here

  Outokumpu to change the alloy surcharge calculation method for stainless steel starting with deliveries for January 2008 - more

  Toledo Mining's decision on pig iron production in China hinges on whether it is the most cost effective way to use the miner's substantial laterite ore deposits, company Chief Executive George Bujtor told Dow Jones Newswires Monday. - more

  Commodity shares are responsible for the JSE being so strong. And the question now being asked is whether that trend can continue, given the marked slowing in economic growth in the United States. - more

  World Economic Outlook Globalization and Inequality October 2007 - report here

  Teaser from Wall Street Journal article - " The cost of shipping raw materials across the world's oceans has reached an all-time high, pushing up prices of grain, iron ore, coal and other commodities. The average price of renting a ship to carry raw materials from Brazil to China has nearly tripled to $180,000 a day from $65,000 a year ago. In some cases, ocean shipping can be more expensive than the cargo itself. Iron ore, for example, costs about $60 a ton, but ship owners typically are charging about $88 a ton to transport it from Brazil to Asia."

  European finance ministers this weekend failed in their bid to slap down the United States for allowing the dollar to plunge to record lows against the euro. - more

(taken from Xstrata Nickel Koniambo Presentation pdf here)

  Industrial metals fell sharply at the London Metal Exchange on Monday as asset prices across markets dropped on concerns that problems in housing and credit were spreading to the broader economy, analysts said. - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.32/lb . Indicators also show all base metals traded on the LME are lower in mid afternoon trading.
• Bloomberg - more
• CNN - more
• Reuters - more

  Courtesy/copyright Dow Jones - "LME nickel is under pressure as news of cuts in stainless steel requirements continue to filter through market, says Societe Generale's Stephen Briggs. A "sizeable surplus" is now expected for the market in '07-'08, he notes, even though nickel projects seem "peculiarly prone to cost escalation and delays."

  Metal prices will probably have to take it on the chin when London trading opens tonight. - more

  In a weekly survey of Chinese metal analysts, the majority of those responding felt the price of nickel would fall this week. 19 (57%) felt the price of nickel would fall, while 8 (24%)  predicted the price would stay the same, and the remaining 6 (18%) forecast the price would rise.

  Iron Ore News

• Unofficial iron ore price negotiations have kicked off in Tokyo with analysts predicting a hike of up to 50 per cent. - more  
• Iron ore and coal prices are taking another massive leap as Chinese, Indian and Japanese steel mills fret that they will not be able to get enough to meet their needs. - more

  According to the latest statistics from the General Administration of Customs, China's imports of iron ore fines went up by 14.5% year-on-year to reach 250 million tons in the first eight months of this year. - more

  About 3,000 employees of seven large metal companies across 34 sites are to go on strike in Finland on Monday. - more

  Steel Prices Decline As Oversupply Builds Up - report here

  Courtesy Rusmet - "Baosteel, a key producer of stainless steel in China, seeking to capture a 10% share of the of the global stainless steel market by 2012. The purpose of the scheme is contained in a draft strategic plan for the development of six companies in the year 2007-2012. The company acknowledges that it will not be easy, because its stainless business still lags behind the world's leading manufacturers in such areas as development and accumulation of technologies, product types, the supply of raw materials and to be protected from market fluctuations. The export of stainless steel companies has increased dramatically since 2006, while full export volume is still small. This year, the company expects to export about 20000 -30 000 tons of rolled coil, mainly to Asian markets.

  Ferrochrome prices may rise as much as 50 percent in 2008 from current record levels, said Samancor Chrome Ltd., the world's second-biggest producer of the stainless steel raw material. - more

  Courtesy Dow Jones - "Toledo Mining Corp PLC said through its partly owned subsidiary, it signed a letter of intent with two Chinese companies to form a joint venture to enter into nickel pig iron production within China. It said an existing integrated steel plant in Guangxi province has been identified as a possible target for the joint venture. The venture partners plan to perform detailed due diligence over the next six months before making a decision on buying the assets, the company added. Toledo said it has proposes to convert part or all of the steel plant to produce nickel pig iron, and eventually stainless steel. It also intends to enter into a long term contract to supply all the plant's feedstock requirements on prevailing commercial terms."

  The air is thick that Beijing is mulling over tougher moves to curb massive steel export in early November 2007. The export tax on some steel products may be raised up by 5% to 10% according to sources close to the regulators. - more

  LAKSHMI MITTAL and Ratan Tata have a lot in common. They both come from Indian steelmaking families and both transformed the fortunes of their empires. - more

  China's steelmaking industry cannot sustain its current expansion in production and exports due to limited resource supplies and a deteriorating environmental situation. - more

  ABOUT 30 Chinese nationals flown in from China to work with the Ramu nickel project have been denied entry into the company premises because they lack proper work permits. - more

  HU Jintao wants to make every Chinese twice as rich by 2020. He has done it once - in just five years, per capita income doubled to $US2000 ($2250)- and the only obstacle in the Chinese President's path is the fuel needed to stoke the boiler of China's locomotive. - more

  Investika Ltd said it mined a total of about 220,000 wet metric tons of nickel at its Berong project in Philippines for the quarter ended Sept 30, with record production rates achieved for the months of July and August. - more

  Today's beginning nickel inventory

•   London Metal Exchange - plus 543 tons = 37,068 tonnes (2.20% - 816 tonnes cancelled warrants/ 36,252 net stock level)
•   Shanghai Jinchuan nickel - 279000-281000 RMB/t, plus 500

  US based Metals Service Center Institute in its latest Metals Activity Report said that demand for metals in the United States and Canada softened further in September and metals service centers continued to reduce inventories to bring supplies into better alignment with the weaker than expected economy and seasonal low order rates. - more

  It is reported that the landed price of Indian iron ore on spot basis in China has extended strong gains since the beginning of October, mostly driven by ocean freight rates. - more

  Denis Battrum Molybdenum Monthly Commentary - pdf here

  Mr Chu Jiandong deputy general manager of Tangshan Steel at Asia Ferrous Metals Development Dialogue 2007 on October 17th 2007 said that "2008 Iron ore benchmark price negotiation will start in early November 2007. The price may rise further, but should not rise over 15%." - more

  National Mining Association Mining Weekly - pdf here

  Environment and Natural Resources Secretary Lito Atienza has suspended tree-cutting permits extended to small-scale mining companies and individuals. - more

  courtesy SteelGuru - "It is reported that China Dongbei Special Steel Group has awarded the Gases Division of The Linde Group a contract for the installation of a new annealing furnace for stainless steel wire. The installation will be the world’s first application of oxyfuel technology in stainless steel wire treatment and demonstrates the wide range of applications that can be improved with this technology. The new annealing furnace for stainless steel wire will combine two of Linde’s technologies, DST and Rebox oxyfuel solutions and the use of oxyfuel will further improve important parameters such as fuel consumption, throughput capacity and emission levels."

  A House committee agreed Thursday to impose the first-ever federal royalties on gold, silver and other hard-rock mining on public lands. - more

  Need an example of how the downturn in housing construction has effected some metals? Compare monthly average for annual imports during the last 7 years for collated and bulk steel wire nails - here (also see US Imports of All Steel Products (thru Oct 16) here

• Today's official LME nickel closing prices - cash - $14.67/lb 3 month buyer - $14.85/lb (1.69% lower than 1/1/07)
• Baltic Dry Index - plus 66 to 10,798. (chart for last few years thru yesterday here)
• LME nickel inventories - plus 108 tonnes into Rotterdam, Netherlands warehouse, minus 60 tonnes from Rotterdam warehouse, plus 66 tonnes into Gothenburg, Sweden warehouse, plus 60 tonnes into Chicago, IL, USA warehouse
• Nickel spent much of the day in the green until late trading drove it down into the red. Very slow news day, typical for a Friday. The big news for the week was the decision by Xstrata to go ahead with the Koniambo project in New Caledonia. The majority of the islanders greeted the news with enthusiasm, but with time, the welcome will wane and Xstrata will face many of the problems CVRD has had with the construction of its Goro project. The question is not when will the mine start producing nickel, but when will the first labor strike delay construction. Signs of a stainless steel rebound are confusing. We think the rebound has started, but no one is stomping on any gas pedals to get it moving. While the news out of Asia is hinting things are firing back up, the price of pig nickel has yet to move up...which is something we are watching as positive evidence. One day we read an article in Chinese media about price increases, the next we see where prices have been lowered because of excess material. Rather confusing trying to get a clear picture of what exactly is going on at street level in Asia. For the last trading day of the week, three month nickel ended at $14.61/lb   ($32,200/tonne). After an exhausting week of ups and downs, nickel ended up over last Friday's close by a mere $.09/lb.    
• Dow Jones Closing Metals Report - more
• Have a safe and restful weekend!!

  China's steelmaking industry cannot sustain its current expansion in production and exports due to limited resource supplies and a deteriorating environmental situation. However, as a net exporter of steel products, China will continue to supply global demand, and increase the number of overseas steel mills in the future, industry analysts told Interfax yesterday. - more

  The new face of CVRD Inco is no stranger to the Greater Sudbury mining camp. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.16/lb
• Bloomberg - more
• Reuters - more
• Forbes - more

  Comment - From the beginning of nickel's bull run, there have been those who have identified two major threats to the nickel market, and their potential adverse effect on long term demand. On the supply side, was the introduction of the so-called "pig-nickel". On the demand side, was the threat of substitution. While we have discus