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

• Respected industry source Metal Bulletin recently held its sixth International Stainless and Special Steel Summit in Finland and analysts at Barclays Capital were present to note some points of interest from the meeting. - more here

  Metals prices to remain strong this year

• It is reported that medium term risks, such as Chinese demand, production costs, the weakening US dollar and the slowing of the US economy will harm mining credit ratings in spite of strong metals prices. While Standard & Poor's anticipates that strong metals prices will continue for the rest of this year individual mining company risks will strain their credit ratings. - more here

  Scotiabank Commodity Price Index - pdf here

  China threatens death penalty for copper thieves

• China is threatening the death penalty for people who steel copper wire, thereby destroying power lines and disrupting telecommunications, state media said Wednesday - more here

  Week in Review (different source used than for daily updates)

• Trading opened the week at $14.83/lb, also the low for Monday, increased to a trading high of $15.16/lb, and close the day at $15.06/lb. Monday would turn out to be the only gaining day of the week, with momentum that had spilled over from the 13.6% gaining prior week, dwindling quickly. The next three days of trading, while ending lower, would prove to be rather uneventful. On Tuesday, the market began trading at $14.86/lb, rose to $14.90/lb, fell to $14.70/lb, where it ended the day. Wednesday's trading opened at $14.72/lb, rose to $15.06/lb, and closed again at its daily low point of $14.67/lb. On Thursday, trading began at $14.75/lb, rose to $15.01/lb, fell to $14.40/lb, and ended at $14.54/lb. With Friday being the end of the third quarter, a noticeable price shift was highly likely, and in this case the profit takers stole the momentum. Markets opened at $14.63/lb, rose to $14.74/lb, fell to $13.65/lb, and ended $13.86/lb. For the week, three month nickel fell 6.42%, for the month, 6.34% higher, for the quarter, 18.5% lower, and since January 1st, 8.95% lower. Most analysts seem as perplexed as we are at the last few weeks of trading. The evidence has yet to be shown, that proves the stainless steel industry is in revival. In the mean time, inventories of nickel stored in LME warehouses, continued to swell. The falling U.S. dollar, and the positive momentum still carrying over from the cut in US interest rates, seem to be the primary motivating support for nickel's gain over the last few weeks.   

  Credit Suisse (from Research Weekly)

• Despite the price increases of the last 2-3 weeks, we continue to believe that the current price rally is more fragile than many market participants believe. Sentiment toward base metals improved a great deal after the Fed rate cut. However, in the end, prices are determined by the physical supply/demand balance....Nickel imports also declined. Since China is a large net-importer of these metals, declining imports should take away some of the upward pressure on prices that is currently observable.....At the same time, China should start importing more base metals again as the domestic destocking cycle nears completion. At that time, a more sustainable uptrend in prices should emerge. Copper, nickel, zinc and lead are likely to be the main beneficiaries of this development.

  Chinese H1 stainless exports up by 54% YoY

• According to China Iron and Steel Association’s statistics, China's stainless steel outputs during January to June 2007 period amounted to some 3.5 million tonnes up by 54% YoY. China during January to June 2007 period totally imported 956.5 thousand tonnes of stainless steel, down by 25.45% YoY; exported 833.8 thousand tons of stainless steel up by 224.44% YoY. (courtesy/copyright SteelGuru)

  Merafe Puts R181m in Ferrochrome Venture

• EMPOWERMENT mining company Merafe Resources, which is part of a ferrochrome joint venture with Xstrata, would take a 20,5% stake in an associated project for R181m, it said yesterday. - more here

  The Zhejiang merchant pursues rises nickel "the bull market" nearly 10 billion funds investments to welcome falls suddenly

• (while the translation is terrible, this article appears to contain some very interesting information about the so-called pig nickel, including its history and most importantly, some clues to its true profitability level. Here is the translated version here and the original version here. If you know someone who can read Chinese, it might be worth your while to ask them what it actually says. And if you learn anything about the cost of producing, we would love to hear it.)

  Mining firms buying tribe support

• Two foreign firms have won the support of tribal communities for mining exploration in ore-rich areas in Kasibu town through cash promises, documents showed. - more here

  Power blackout in Brazil halts operations at seven CVRD iron-ore pellet plant

• Brazilian mining company CVRD (RIO/NYSE) said on Thursday a power blackout in Espirito Santo state on Wednesday halted operations at seven iron-ore pellet plants, causing it to cease production of 100,000 tonnes of pellets. - more here

  Nickel miners out of work? In this day?

• Officials of Agusan del Norte province, led by Gov. John Erlpe Amante, members and officials of the League of the Municipal Mayors asked President Arroyo and Environment Secretary Jose "Lito" Atienza to help some 1,200 displaced workers of the local nickel mining and quarrying firms that shut down operations Sunday.

  Europe, US see rebound in steel prices

• Europe and the US have witnessed a rebound in steel prices with China unexpectedly faulting on the prices as it records a moderate slowdown, going by the data made available by the World Steel Dynamics Steel Benchmarker. - more here

  National Mining Association Mining Week - pdf here

  John Authers: Go back to basics before you buy commodities

• The first rule of journalism, some say, is: “Never be afraid to admit ignorance."  (opinion - if true, one can either be a journalist, or an analyst)

  Bookmarks

• It is amazing what can be found on the internet. We found a site, which contains many new books and magazines in pdf format, only recently published. The site allows anyone to upload their pdf's for public viewing. Like many free services, much of the content is of an adult nature, but there is some good literature also posted. Need a copy of "The Art of War" by Sun Tzu? here Need classical sheet music? here or here Planning on doing some business in China? here  The Works of William Shakespeare? here   The Quran in Arabic here or English here Or search for your favorite among thousands here
• Have a favorite food from a chain restaurant? The recipe, or a copycat, might be here (how about an Outback Bloomin Onion here or KFC Chicken here)

• Today's official LME nickel closing prices - cash - $14.06/lb 3 month buyer - $14.33/lb (5.4% lower than 1/1/07)
• Baltic Dry Index - plus 104 to 9,474.
• LME nickel inventories - plus 168 tonnes into Rotterdam, Netherlands warehouse, minus 12 tonnes shipped from Rotterdam, plus 60 tonnes into Gothenburg, Sweden (haven't heard from them in awhile), and minus 78 tonnes from Busan, South Korea
• Typically, the last day of a quarter sees some movement in nickel prices, and today was no different. For most of the morning, nickel was quiet on the plus side, but then profit takers took over and drove the price down. With new fund money looking for a home next week, we could see today as a momentary breather. But with prices almost falling thru the $30,000 tonne barrier, we could see that barrier re-tested again, although the price rebounded pretty hard when it got dangerously close. It's anyone's guess at this point. With China shut down and on holiday next week, we don't expect to hear much in the way of ground shattering news. October is also the time for mining companies to issue their third quarter earnings reports, which will also help guide the market. Yet for today, another quarter goes down in the history books, and three month LME traded nickel closed at  $13.79/lb ($30,400/tonne)
• Dow Jones Closing Metals Report - here
• Have a safe and enjoyable weekend! And to our readers on holiday for part or all of next week, our best wishes.

  Nickel falls 5% on producer selling

• (blurb) “Producers think these are good selling levels given stocks and dubious global economic outlook,” analyst David Thurtell at BNP Paribas said. - more here

  Blurb from Financial Gazette

• Global ferrochrome demand is expected to rise by about 5 percent a year for the next few years, driven largely by China's economic growth, which has seen demand soar for stainless steel for infrastructure development and consumer products. Ferrochrome provides the hardness to stainless steel. - more here

  Metals prices to remain strong this year but risks will strain mining credit ratings

• Medium-term risks, such as Chinese demand, production costs, the weakening U.S. dollar, and the slowing of the U.S. economy, will harm mining credit ratings in spite of strong metals prices. - more here

  Commodities boom extends to obscure metals, too

• If one deal in the mining industry raised eyebrows in recent years, it was molybdenum producer Blue Pearl Mining Co.'s $575-million acquisition of Thompson Creek Metals Co. last October. - more here

  South Africa: Exchange Rate Hits Tata Project

• TATA's high-carbon ferrochrome plant under construction in Richards Bay is expected to start operating in January. - more here

  Why you NEVER, ever ask us for investment advise

• CVRD was never on our radar screen until they suddenly popped up with their hostile bid for Inco during the nickel soap opera of August 2006. After completing the deal, and suddenly becoming an overnight player in the nickel industry, research into the company and their president, proved to us, that this was a company worth watching closely. Did we buy any stock, which at that time was running about $22/lb? Of course not.
  Earlier this year, the company announced that it had nearly paid off the entire debt incurred to take over Inco, thanks to high nickel prices. Very impressive. On July 19th, the price of nickel had plummeted, but a share of CVRD was worth $51.81/each. On that date, while making a forecast on future iron ore prices, we made a statement on a RIO board, that if the share should fall back to $42/share, we would break with our rule and buy in. Three weeks later, came the great mini-panic of August 2007. CVRD was caught in the sudden rush to turn stock into cash, and by August 16th, a share of RIO had plummeted to $34.00/share. Did we buy any stock? Of course not.
  The following day, the recovery began, and by Sept 13th, a share of CVRD was selling for $53.05/share. Then it split. This morning, a share of RIO was selling for $34.27, or equivalent to $68.54 for a share bought in August. At anytime during this period, did we buy any stock. Of course not.
  
  So if you ever wonder if you should ask us for stock advise, please think, "Of course not".  

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

• Indications at 7:55 am CST show 3 month nickel selling down by $.23/lb . For the final day of the third quarter, we will probably see some profit taking. Next week could be interesting, as fresh fund money looks for a home.
• Bloomberg - more

  TD Bank Weekly Commodity Price Report - pdf here

  Behre Dolbear Global Mining News - pdf here

  Copyright/courtesy MineWeb

• (partial from article) "In a question and answer session, the subject of the nickel contract, and the LME's handling thereof was broached. One particularly interesting fact for the writer emerged from this is that Abbott reckons that a virtual bottom to the nickel price is attained at $30,000 a tonne (around $13.60 a pound) under the current supply/demand situation. This is the level at around which it becomes uneconomic for stainless steel manufacturers to switch to a pig nickel (iron with a nickel content) feed as a substitute for nickel itself - something that had been becoming a significant factor for nickel demand when it was trading around US$24 a pound in the middle of this year before falling back sharply. The nickel price has recovered some of this fall in recent weeks as supplies remain tight." - rest of article here

  Asian Steel Prices Rally To Keep Global Figures Steady

• Customers' inventories are said to be lower now in Canada. Imports are minimal. Once the seasonal downturn is over, local producers expect to see a pick up in demand, although distributors report slow activity levels. However, delivery lead times remain short with some mills still willing to do deals in order to keep their operations busy. - more here

  China's stainless steel prices up

• China’s major stainless steel mills, including Taiyuan Iron and Steel Co. (Tisco) and Baosteel, have announced to raise the price in October. The prices rise is aiming to meet the increasing demand and higher nickel prices. - more here

  China to introduce stainless alloy surcharges next year

• An alloy surcharges system is expected to be introduced into the stainless steel sector as early as January of next year, a consensus achieved at a recent meeting of Chinese leading stainless producers. They have seen nickel price keeps soaring up from last year. Therefore, taking steps to reduce risk of surging raw material cost is on top of their agenda. - more here

  US to WTO: China boosts exports unfairly

• AP reported that the United States has accused China of manipulating prices on the raw materials used to produce steel, chemicals, airplanes and automobiles, giving Chinese manufacturers a massive advantage over their American competitors. But a US trade official said that Washington voiced its objections to the World Trade Organization to get the issue on the record and not necessarily to prepare for a formal complaint. - more here

  Rio Tinto's Albanese Says Iron Ore Market Has Grown Tighter

• Tom Albanese, chief executive officer of Rio Tinto Group, the world's third-largest mining company, comments on iron ore demand ahead of annual contract talks due to start next month. - more here

  Eramet, Vale's Goro, Not Hit by New Caledonia Quakes

• Eramet SA, operator of the world's largest ferronickel plant, and Cia. Vale do Rio Doce, building the world's largest nickel mine, said their operations in New Caledonia were not affected by two earthquakes earlier today. - more here

  Rusina Mining Nickel Shipments From Acoje Ready Next Month

• Rusina Mining Limited Friday announced that ongoing construction progress for the first nickel laterite ore shipments from its Acoje project in the Philippines, with local partner DMCI advising that the main pier at the Santa Cruz export port will be ready next month. - more here

  800 Chinese State-owned enterprises active in Africa, covering every country

• In 1418, the prosperous coastal towns and cities of East Africa were visited by a tremendous fleet, spearheaded by the biggest sea-going ships ever built up to that time, from the mightiest ocean-going navy in the world – that of Imperial China. - more here

  Breakthrough Absorption Study of Migratory Nickel in Fine-Grained Soil

• ABSTRACT: The present study was conducted to evaluate the breakthrough curve for nickel absorption in fine-grained soil from a nearby ash pond site of a thermal power plant. Nickel was found to be the major polluting solute in the ash sluicing wastewater. The absorption of nickel by vertical soil column batch test and horizontal migration test was carried out in the laboratory. - more here

  Today's beginning nickel inventory

• London Metal Exchange - plus 138 tons = 32,442 tonnes (2.22% - 720 tonnes cancelled warrants/ 31,722 net stock level)
• Shanghai Jinchuan nickel closed at 274000-275000 RMB/t, minus 6500 .

• Today's official LME nickel closing prices - cash - $14.74/lb 3 month buyer - $14.83/lb (1.8% below 1/1/07)
• Baltic Dry Index - plus 111 to 9,370.
• LME nickel inventories - plus 816 tonnes into Rotterdam, Netherlands warehouse, minus 246 tonnes shipped from Rotterdam
• Nickel trading on the London Metal Exchange started out positive this morning, but by late mid morning was in retreat. We are seeing a whole lot of analysts being totally puzzled by what is happening with nickel, and this is one of those rare occasions we actually agree with them. It is doubtful that you would find anyone, who watches this market closely, that would not agree that the stainless steel market will recover from the demand destruction it has experienced after nickel prices began to plummet in May. The big question currently being asked, and bet on, is when this began or will begin to happen. Apparently traders have taken some things that have been said recently, and decided that the market has started its revival. And there are an equal number of us who watch the market, who wonder whether they are acting on a hunch, rather than reacting to market fundamentals. In the last 3 weeks we have seen official prices trade within a $3/lb range, and actual trading fall within in a $4/lb range. That's nearly $4,500/tonne, or a 13% jump. The dwindling confidence in the US dollar has played a role. The lowering in the US prime rate also gave the market a boost of confidence. Even Interfax stated yesterday that hearing reports of recovery in stainless steel production in China. Chrome, another key ingredient in stainless is up in China. And so in Jinchuan nickel. Asian producers, who have been announcing cut backs during the last few months, are quietly raising prices this month. Shipments into Busan and Singapore seem to have quieted down, although outbound shipments from either location have yet to pick up. Clues in other parts of the world are harder to find. Metal centers in North America still have extremely low inventories, and have yet to return to the buying side. Europe is quiet, except for the LME Rotterdam warehouse, that continues to add additional stock nearly every day. So.... is the market recovering? We remain skeptical, but open to real evidence. It would be difficult to believe buyers are ready to jump back into the game with market volatility so high. At $12/lb, the price of nickel spent a period trading in a $1/lb range that could have sparked some interest, as producers felt a new pricing floor had been established. Now, with prices $3/lb higher, the skepticism and anxiety of when to buy has returned. With one day left in the 3rd quarter, 3 month nickel ended the day at $14.40/lb ($31,750/tonne)  
• Dow Jones Closing Metals Report - more

  New grades help cut uncertainty in the machining of stainless steel

• Machining stainless steels subjects the cutting edge to higher levels of temperatures and cutting forces, smearing and work-hardening than associated with many other workpiece materials. - more here

  Norilsk Nickel

• ...is about to invest $830 mln in African assets over the next 3 years in order to double nickel output and phase in Activox technology, Norilsk Nickel International CEO Peter Breeze said, according to the metal maker's press release. Norilsk Nickel Africa's assets involve an 85% working interest in nickel producer Tati Nickel Mining and a refinery, Botswana Metal Refinery, in Botswana, with the other 15% stake owned by the Republic of Botswana.  (courtesy FINAM)

  Top mining guns fuelled by steel sector

• From iron ore to steel, from molybdenum to coking coal and nickel, one story that’s set to run up for years. - more here

  Update -  Dow Jones Newswire - LME Fines Sucden GBP80,000 Over Control Of Nickel Warrants  

• The London Metal Exchange fined Sucden U.K. Limited GBP80,000 after the company failed to report in mid-May that it had effective control over nickel warrants, the LME said Thursday. - more here

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

• Indications at 7:55 am CST show 3 month nickel selling up by $.11/lb . Inventories are up, cancelled warrants are down, no disruption to worldwide production, but there are stories surfacing that stainless steel production in Asia is picking back up. And on this speculation, and no real evidence yet to prove the claims, 3 month nickel has gained nearly $4/lb in the last few weeks, and hangs on. Go figure!!
• Bloomberg - more

  Courtesy/copyright Dow Jones

• LME nickel could slip lower if it fails to move back above the $32,500 a metric ton level, says a London-based broker. Notes the market has made strong progress and a period of sideways trade is needed to consolidate gains, but adds that risks remain to the downside given a still slow demand picture.
• LME Nickel Seen Lower As Stocks Outweigh 4Q Demand - more here

  Expert: Nickel prices will surpass expectations

• In spite of projections that worldwide nickel demand would fall in 2007 and that supply would increase 7%, "nickel producers fear a supply shortage due to maintenance issues," the director of Colombia's mining information website IMCPortal and mining expert, Jairo Herrera, told BNamericas. - more here

  Japan's stainless steel scrap prices hike

• South Korea's Posco has increased stainless steel scrap price by 10,000/ton to 255,000/ton on 19 September. - more here

  Copyright/courtesy Business Standard

• Indian iron ore exports to China has fallen by 26.5 percent in August to 4.59 million tons, hitting the lowest monthly level since October 2006, according to the data of China Iron and Steel Association (CISA). The decline continued after the Centre imposed an export tax in March.
• In the next three to four years, demand for iron ore is expected to go up by 7 percent, or up to 55 million tons, as Chinese steel output grows, a Goldman Sachs analyst said. A 'small' drop is expected in 2010.

  China unlikely to increase steel export taxes further this year

• A senior China Iron and Steel Association official told Interfax at the 2007 China Steel Export Summit held in Beijing on September 20th 2007 that the Chinese government is unlikely to impose any further restrictive polices on steel product exports in the remaining months of this year, due to the success of the current policy in curbing steel product export growth. - more here

  Market price based royalty on iron ore mining recommended

• It is reported that a government report has recommended that royalty rates for iron ore be fixed at 10% of the market value to boost the states’ share of revenues, as international prices of the commodity soar. - more here

  BHP, Rio Tinto, Vale May Increase Iron Ore Prices 30%

• Cia. Vale do Rio Doce, Rio Tinto Group and BHP Billiton Ltd., the world's three largest iron-ore exporters, may increase prices by 30 percent next year as demand driven by steelmakers in China outpaces growth in supply. - more here

  Merafe joins Xstrata chrome project

• MERAFE Resources Ltd said today it had agreed to take a stake in a plant producing chrome pellets with partner Xstrata Plc and issued 40-million shares to help pay for it. - more here

  Plant coming soon, Voisey's Bay Nickel tells Long Harbour

• Voisey's Bay Nickel insists it will honour its previous owner's commitment to process nickel in a southern Newfoundland community. - more here

  Market/Work Holiday's next week

• Monday - Australia for Labour Day
• Monday thru Friday - China for National Day / Golden Week
• Tuesday - India for Gandhi Juyanti
• Wednesday - South Korea for National Day

  Today's beginning nickel inventory

• London Metal Exchange - plus 570 tons = 32,304 tonnes (2.51% - 810 tonnes cancelled warrants/ 31,494 net stock level)
• Shanghai Jinchuan nickel closed at 280000-282000 RMB/t, minus 3000 .

• Today's official LME nickel closing prices - cash - $14.85/lb 3 month buyer - $15.06/lb (.003% below 1/1/07)
• Baltic Dry Index - plus 44 to 9,259.
• LME nickel inventories - plus 750 tonnes into Rotterdam, Netherlands warehouse, minus 66 tonnes shipped from Rotterdam, and plus 96 tonnes into Singapore
• Three month nickel ended the day at $14.70/lb ($32,400/tonne)
• Dow Jones Closing Metals Report - here

  Copyright/courtesy Bloomberg

• Jinchuan Group Co., Asia's biggest nickel producer, raised the price of the refined metal for a third time this month on increased demand from stainless steel producers in China.

  Copyright/courtesy Dow Jones Newswire

• LME nickel prices are likely to be capped above $35,000/ton and a move back towards $25,000/ton appears likely, says UBS analyst Robin Bhar. Says nickel supply looks plentiful both from primary and secondary, or scrap, sources with additional nickel units from strong growth in Chinese nickel pig-iron production. But adds that higher stainless production is expected in 4Q with recent output cuts reversed, which should mean demand for nickel picks up.
• LME nickel price rise will likely be limited until LME warehouse inventories make continuous falls, says BaseMetals analyst Will Adams. Adds that in the fourth quarter stainless steel producers are expected to start restocking nickel after the heavy summer draw down in stocks.

  US Shoots Foot with Cuba Nickel Ban

• Cuba is unable to sell its nickel production to US companies due to the economic, trade and financial blockade imposed by Washington almost five decades ago. - more here

  Recycling International - Market analysis: Nickel and Stainless, September 2007 - pdf here

  Major stainless steel producers to increase product prices in October

• Major stainless steel mills have agreed to increase the prices of core products in October in response to growth in market demand and the rise in the price of nickel, a source close to the situation told Interfax today. - more here

  Sinosteel buys Zimbabwe ferrochrome mining company

• Chinese mining and trading group Sinosteel Corp. agreed to buy Zimasco Consolidated Enterprises Ltd, the holding company for Zimbabwe's largest ferrochrome producer, for an undisclosed amount, Sinosteel said. - more here

  Asian Steel Prices Rally To Keep Global Figures Steady

• Customers' inventories are said to be lower now in Canada. Imports are minimal. Once the seasonal downturn is over, local producers expect to see a pick up in demand, although distributors report slow activity levels. However, delivery lead times remain short with some mills still willing to do deals in order to keep their operations busy. - more here

  Imports Put Kink in Standard Pipe

• Domestic producers of welded standard pipe are hoping their trade case, now before the U.S. Commerce Department, will provide some relief from predatory pricing of Chinese imports. - more here

  Steel Inventories Decline to Lowest Level in 17 Months

• Inventories of steel and aluminum products continued to fall at U.S. and Canadian service centers in July, reflecting sluggish summer demand and the uncertain economic environment, according to the latest Metals Activity Report from the Metals Service Center Institute, Rolling Meadows, Ill. - more here (1/2 way down page)

  Mining Association of Canada -  Facts and Figures - pdf here

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

• Indications at 7:30 am CST show 3 month nickel selling up by $.20/lb .
• AFX - more
• Bloomberg - more

  (special thanks to a reader) Lloyds Economics Weekly - pdf here

  Reuters Metals Weekly - pdf here

  Scotia China Commodities Weekly - report here

  Commodity prices unlikely to be affected by the credit crisis

• Commodity prices seem to be holding up remarkably well to the crisis in the financial markets. Is this because it is only a matter of time before they get impacted, or because the financial problems are overstated insofar as they will affect economic growth or is it that growth in the emerging market economies is so strong that it can shrug off any slowdown in the developed economies? - more here

  Stainless steel to spur nickel

• Prices of nickel are likely to bounce back to $35,000 a tonne on the LME and Rs 1,400 a kg on the MCX on growing demand from the stainless steel sector, according to the latest report by India Infoline. Nickel on the LME is currently quoted at $32,650 a tonne, while it trades at Rs 1,298 a kg on the MCX. - more here

  SS demand weakening in Europe

• YIEH reported that after continuously price rising since last year, the demand for stainless steel products is falling and the prices are gradually becoming weaker in Europe. Because the nickel price falls sharply and the demand keeps weaker, the stainless steel market changes its conditions from June 2007. - more here

  US steel import in August dip by 22% MoM

• Based on preliminary Census Bureau data, the American Iron and Steel Institute has announced that the US imported a total of 2,558,000 net tons of steel in August 2007, including 2,034,000 net tons of finished steel down by 22% and 18% respectively against July final data. - more here

  Stainless steel output of Japan's main steel mill down in August

• The production of stainless steel crude steel of Japan's main seven stainless steel mills was 420,000 tons, decreasing by 12.1 percent than the same time of last year. - more here

  ARM, Norilsk to raise Nkomati nickel mine output by almost 300%

• Diversified South African mining company African Rainbow Minerals and Norilsk Nickel, equal joint-venture owners of the Nkomati nickel mine in South Africa's Mpumalanga Province, have announced a Rand 3.2 billion ($448 million) expansion which is set to increase average annual nickel production to 20,500 mt, from 5,500 mt and, extend the life of mine by 18 years to 2027, according to a statement released on Wednesday. - more here

  SMSP Is Interested To Develop Low Grade Ores As Next Phase Of Koniambo Nickel Project

• While the Koniambo nickel project has been supported by Northern Province Government of New Caledonia to develop it, SMSP ( Societe Miniere du Sud Pacifique ), which is a major mining company of nickel ore in New Caledonia and has shared 51% of capital investment in this project, announced recently to finance US$1,500 million, corresponding a 50% of the total expenditure to develop the Koniambo nickel project, and, therefore, this nickel project has been finally determined to go ahead and to materialize. SMSP held on the 7th of September the Board of Directors and decided this financing. - more here

  India's iron ore export to China plunges 26% in August

• India's iron ore export to China has slumped by 26.5 per cent in August to 4.59 million tons, lowest monthly level since October last year, as compared to July, continuing the decline after the Centre imposed an export tax in March. - more here

  Today's beginning nickel inventory

• London Metal Exchange - plus 780 tons = 31,734 tonnes (3.18% - 1008 tonnes cancelled warrants/ 30,726 net stock level)
• Shanghai Jinchuan nickel closed at 283000-285000 RMB/t, minus 5000 .

• Today's official LME nickel closing prices - cash - $14.74/lb 3 month buyer - $14.88/lb
• Baltic Dry Index - plus 133 to 9,215 .
• LME nickel inventories - plus 462 tonnes into Rotterdam, Netherlands warehouse, minus 108 tonnes shipped from Rotterdam, minus 60 tonnes from Singapore
• Three month nickel ended at $14.76/lb ($32,545/tonne) 
• Dow Jones Closing Metals Report - here

  Today's beginning nickel inventory

• London Metal Exchange - plus 294 tons = 30,954 tonnes (3.41% -  1056 tonnes cancelled warrants/ 29,898 net stock level)
• Shanghai Jinchuan nickel closed at (not recorded - updated later)

• Today's official LME nickel closing prices - cash - $14.81/lb 3 month buyer - $14.97/lb (138% higher than 1/1/06)
• Baltic Dry Index - plus 126 to 9,082 .
• LME nickel inventories - plus 690 tonnes into Rotterdam, Netherlands warehouse, minus 42 tonnes shipped from Rotterdam, minus 42 tonnes from Singapore, and minus 18 tonnes from Busan, South Korea warehouse.  
• Lot of bullish news out over the last week, although we stick to our guns, and like the little old lady in the Wendy's commercial and ask "Where's the beef?". If any of you doubt our remarks over the last few weeks about how we aren't seeing the news of a stainless steel turnaround that the traders seem to be banking on, you might want to download the report from Metals Insider here and read their comments under the nickel section. They say the same thing.  AFX reported this morning that "Nickel's fundamentals is likely to depress the metal below 30,000 usd 'imminently', said Bank of America analyst Anatol Feygin." But apparently traders aren't listening to the analysts and instead, betting on a wing and a prayer, keep driving nickel prices higher. We show nickel went green from the bell this morning and never looked back. Three month nickel ended the first day of the last week of the third quarter at $14.99/lb ($33,050/tonne) 
• Dow Jones Closing Metals Report - here

  LCH.Clearnet cuts LME clearing fees

• The cost of clearing contracts executed on the London Metal Exchange (LME) will fall by an average of 15 per cent in 2008 under new fee reductions to be implemented by LCH.Clearnet. - more here

  Brazil Nickel Production Seen More Than Tripling By 2011 -Grp

• Brazil should produce upwards of 286,000 metric tons of nickel by 2011, up from 82,492 tons produced in 2006, thanks to $7.7 billion in investments by the sector's top mining companies, the Brazilian Minerals Institute, or Ibram, said Monday. - more here

  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 . Up nearly $1000/tonne earlier in morning, that gain has now been cut in half.
• Bloomberg - more

  Courtesy/copyright Dow Jones

• "The bull market for LME nickel will start to flag soon due to the current rise in LME warehouse inventories, says Commerzbank."
• LME nickel likely to struggle to retain recent gains as stainless steel market still oversupplied, scrap feed abundant, nickel demand weak, says Goldman Sachs JBWere. Notes nickel's strong rally last week surprising, as fundamentals show no discernible improvement, likely mostly consequence of short-squeeze "as speculators rushed to cut stale short positions in a relatively illiquid market.
• LME nickel needs to rally above $35,000/ton to draw out more short-covering, as recent bout of panic short-covering over now, prices less volatile, says Triland Metals.

  Weekly Forecast by SMM Specialist - more here

  Haywood Securities Metals & Mining Weekly - pdf here

  Stainless demand falling in Europe

• After continuously price rising since last year, the demand for stainless steel products is falling and the prices are gradually becoming weaker. - more here

  Interfax

• China imported 69,586 tons refined nickel in the first eight months of this year, up 16.2 percent when compared to the same period last year, according to statistics released by the General Administration of Customs today. (more to follow)

  CISA warns Australian iron ore miners over prices

• It is reported that China has warned BHP Billiton and Rio Tinto not to abuse Australia's position as the preferred source of iron ore to force price increases on its steel mills, which are desperate for scarce supplies. - more here

  Acesita sees 6% per year growth in SS demand in Latin America

• Brazilian specialty steel maker Acesita said that stainless steel demand in Brazil and South America is due to grow 6% per year through 2011 above the world average. - more here

  BHP holds key to nickel surge

• AFTER more than two years in charge of Australia's best nickel assets during a period of rising commodities prices, BHP Billiton believes it might finally have the key to unlocking the nickel production chain built by WMC Resources. - more here

  China's Imports Of Raw Materials In July 2007 - more here

  International Iron Ore Prices May Dip in 2009

• Global iron ore prices would show downward trend in 2008 with possible slump in 2009, forecasted experts on the second forum on raw material & fuel market of China's steel and iron sector. - more here

  Today's beginning nickel inventory

• London Metal Exchange - plus 768 tons = 30,660 tonnes (3.70% -  1134 tonnes cancelled warrants/ 29,526 net stock level)
• Shanghai Jinchuan nickel closed at 281000-283000 RMB/t, minus 1250 .

• While the high Canadian dollar has caused chaos in the manufacturing and forestry sectors, there has been little to no impact in the mining industry. However, that is expected to finally change. - more here

  The growing demand for molybdenum can be satisfied with the new industries

• It is expected that the growth of world demand for molybdenum in the coming years will be 4.5%, mainly due to China and the CIS countries. As Terry Adams from Adams Metals Ltd., at the annual general meeting of International Molybdenum Associations, held in Denver (USA), to meet this demand should increase production and the opening of new businesses since 2011 - translated article here

  Paswan demands Chiria ore

• Steel Authority of India Ltd (SAIL) should be given rights for one billion tonnes of iron ore from Chiria mines in Jharkhand immediately, said Union minister for steel, Ram Vilas Paswan. - more here

  Escalating freight cost increase tensions for iron ore talks

• China Business News cited Mr Luo Bingsheng deputy director of China Iron & Steel Association as saying surging freight cost could result in a lengthy tussle between Chinese steel mills and iron ore producers for the upcoming round of iron ore price negotiations. - more here

  US steel HRC prices forecast to hit USD 600 per short tons in Q4

• Platts citing Mr Mike Locker president of New York based Locker Associates, who spoke at the Institute of Scrap Recycling Industries' Ferrous Scrap Roundtable Commodities Forum in Chicago, reported that US hot rolled coil prices are forecast to hit USD 600 per short tonnes ex works. - more here

  China Pig Nickel Pricing for 2007, thus far...

• One of the signs of a possible recovery in the Chinese stainless steel industry would be an increase in the selling price of pig nickel. With LME nickel prices once again well over the thought to be break even point of $12/lb, the stage has been set for an increase in low grade laterite ore.... but only if the demand has returned. Here is the history of a few grades of "pig-nickel prices" during the current year.
• The lowest grade we monitor is laterite ore from Indonesia with a grade of .9 to 1.1% nickel, and 30% H2O. In December of 2006, the price of this ore was selling for $48-$50/MT. The price for this grade rose throughout the spring, and by June, was selling for $98 to$105/MT. The price then collapsed and for the last 3 months has been selling for $48-$55/MT.
• Another grade we monitor is laterite ore from the Philippines, containing 1.7 to 1.9% nickel and 35% H2O. In December of 2006, this grade of ore was selling for $67-$70/MT. By June of 2007, the price had risen to $208-$220/MT. In July, the price collapsed and has been selling for $110-$120/MT since August.
• As of last week, these prices have recorded no change. Besides analyst statements, the only metal reports we have been able to find that are reporting a rebound in the China steel and stainless steel industry this month is Japan's 'The Tex Report'. Here (9/3) and here (9/11)  

  China Minmetals buys into SA chrome

• China Minmetals Development Company, the Shanghai-listed arm of Chinese state-owned trading firm the China Minmetals Group, is to buy the exploration rights to a South African ferrochrome deposit for R45.7-million. - more here

  BHP news

• NORMALLY a metal price-slump would be enough to take the wind out of the sails of any mining operation. - more here
• BHP Billiton's chief executive, Chip Goodyear, is fond of pointing out that the ability to move dirt - and lots of it - is one of his company's key competitive advantages. - more here
• BHP Billiton is expected to announce this week that it has uncovered what is potentially the largest gold resources in the world at its Olympic Dam mine in South Australia. - more here

  Steel: Building on Asia’s strengths

• Increasing demand for stainless steel has been witnessed from users across construction, transport and several industrial sectors, and steel use is set to grow by leaps and bounds in India and China, though the latter’s per capita consumption of the metal is far higher than the former’s, says N. C. MATHUR. - more here

  CVRD ban shouldn't affect Brazil pig iron exports

• Brazil's pig iron exports should not suffer as a result of mining giant CVRD's plan to cut off iron ore supplies to producers whose operations are not fully legal, sector experts and players said. - more here

  China may work out more restrictions to curb steel export

• China may come up with more restrictions to curb steel exports, including imposing licenses to export companies, restricting steel projects in the processing sector, a senior official with the country's top economic planner said recently. - more here

  Substitution of low-nickel stainless steel grades finds momentum

• Increased use of low-or no-nickel steels continues to erode the market share of nickel-bearing 300-series stainless grades, the workhorse of the industry, at a time when the collapse of world nickel prices to half what the alloying metal cost in May has disrupted the global stainless steel marketplace. - pdf here

  The ferro-nickel iron merchant sudden wealth myth is disillusioned

• (very difficult translation to read, but interesting story of boom to bust for one nickel importer) Only month time, the Zhejiang Jiasha County's ferro-nickel iron producer increases suddenly from original 10 to 50. "The sudden and huge profits are the radical actuation factor." However, when the Jiashan ferro-nickel iron merchant on a large scale enters, has even affected the world nickel price when the certain degree, actually encounters the nickel price large diving - more here  (without translation here)

  Global scrap trade in 2006 and H1 of 2007

• UK based Iron and Steel Statistics Bureau reported that International trade of ferrous scrap, which fell by 4% YoY in 2005 to 90 million tonnes, saw steady trade in 2006 and estimated only a very small fall of around 1% for 2006 in full. - more here

  CISA sees down turn in iron ore price in 2008 due to weak demand

• China Iron & Steel Association official gave a projection, in a recent steelmaking raw materials conference held in Yinchuan, that global iron ore supply and demand looks set to move towards better equilibrium next year and prices would therefore fall back. - more here

Comment - "If you haven't heard, Chinese steel makers and the Big 3 producers of iron ore are currently in negotiations to establish iron ore contract prices for October thru December. Keep this in mind as you read "news" about steel making in China until negotiations are over." 

  China shuts down 18.4 million tonne capacity in H1

• China's National Development and Reform Commission announced that the China shut down 18.4 million tonnes of iron and steel production capacity in the H1 of 2007 to reduce energy consumption and greenhouse gas emissions. - more here

  India to import record Nickel this year

• It is reported that increasing consumption of stainless steel in the wake of India’s construction and economic boom may force the country to import more nickel this year. - more here

  Euroland: Purchasing managers more negative

• The FLASH PMIs published today fell more than expected and now signal that growth in Euroland is approaching trend. The composite PMI index fell from 57.4 to 54.5, which is the largest fall since August last year ? and the lowest level for two years. - more here

  Metals face negative sentiment

• Scorching prices of base metals are likely to cool down this week on low Chinese demand and the prevailing negative sentiment in the US economy despite the Fed rate cut. - more here

  Week in Review (different source used than for daily updates)

• It was a good week if you were a nickel producer, not so good for the stainless steel producer. Nickel trading opened Monday at $12.97/lb, rose to $13.27/lb, fell to $12.86/lb, and ended at $13.13/lb. On Tuesday, nickel opened at $13.09/lb, its low, and rose to $14.00/lb, the high and ending point for the day. Wednesday, trading opened at $14.11/lb, also its low for the day, rose to $15.60/lb, and closed at $15.28/lb. On Thursday, nickel opened at $15.24/lb, rose to $15.47/lb, fell to $14.74/lb, and ended at $14.79/lb. On Friday, the market opened at $14.76/lb, rose to $14.90/lb, fell to $14.46/lb, and ended the week of trading at $14.74/lb. For the week, nickel ended selling up by 13.6%, and since the beginning of the year, less than 1% lower.   

  U.S. November Surcharge Forecast

• Based on averages prices thus far this month, the estimated stainless steel surcharge for both 304 and 316 stainless steel will be higher for November, than those already established for October. This is subject to price averages of nickel, chromium, and molybdenum not dropping dramatically during the next week.

  Copyright/courtesy Credit Suisse

• Commodity prices rallied following the 50 bp cut in the US Fed funds rate. While the general market sentiment toward commodities has improved significantly, we believe the rally in base metals and energy prices might be more fragile than many market participants think. The FOMC cut rates in the USA to safeguard economic growth and limit the risk of recession in an environment of increased uncertainty. If the Fed believes that a 50 basis point rate cut is necessary to achieve this, there is the strong possibility that we might see some negative macroeconomics news for the USA in the weeks ahead......In light of the Fed rate cut, the current metal price rally comes as no surprise, as speculators are covering their short positions. Nevertheless, we believe that the speed of the current rally is unsustainable and that momentum will decline soon....In a nutshell, we think that the current rally is mainly a short-term reaction to the rate cut, and remains fragile and vulnerable to macro data from the USA, in particular. In this regard, volatility is likely to stay elevated. Nevertheless, investors should watch for price dips, since we expect a better entry opportunity during the fourth quarter, when the seasonal slump in demand comes to an end and China is expected to import more metals.

  National Mining Association Mining Week - pdf here

  TD Bank Weekly Commodity Price Report - pdf here

  ASA Material Market Digest - pdf here

  August Largo Letter - pdf here

  Metal Shipments, Inventories Still Dropping

• North America's metals service centers report further declines in shipments and inventories for steel and aluminum during August, continuing a series of year-on-year and year-to-date decreases. - more here

  Stainless Steel Producers Slash Output Amid Sluggish Demand (headline from Nikkei Net - subscription article so unable advise content)

  Sukinda chromite mines in Orissa leading to poisoning

• SNS reported that Sukinda chromites mine in Orissa is becoming main threat to the lives of local people as over 0.275 million people in the are have suffering from some form of chromium poisoning because of the untreated water discharged by the mines into the Damasala river. Sukinda contains one of the largest open cast chromite mines in the world. - more here

  Copyright/courtesy The Indian Express 

• Trying their best to avoid fixation of iron-ore royalty on ad-valorem basis, the Federation of Indian Mineral Industries (Fimi) has proposed to continue with royalty on tonnage basis with a hike of 100% of the present rate. Royalty rates currently range between Rs 16-27 per tonne depending on the grade of iron-ore.

• Today's official LME nickel closing prices - cash - $14.79/lb 3 month buyer - $14.83/lb (135.8% higher than 1/1/06)
• Baltic Dry Index - plus 337 to 8,956.
• LME nickel inventories - plus 192 tonnes into and minus 54 tonnes from Rotterdam, Netherlands warehouse, and minus 6 tonnes from Singapore.
• Dow Jones reported this morning "LME nickel trade is muted as the market's recent volatile activity takes its toll on sentiment and leaves participants sitting cautiously on the sidelines, says a London trader." And that is how trading went for much of the morning. A dip, then a recovery, then into positive territory, and finally, profit taking. Another uneventful news day, so traders went by sentiment, and apparently some felt the market had reached a little too far, and decided to take their profits before the weekend. Some positive news coming from Outokumpu, as Deutsche Bank reports their order book for the fourth quarter is starting to get interesting. Shanghai prices slumped overnight, and inventories resumed gaining. For the last day of the trading week, 3 month nickel ended at $14.65/lb  ($32,300/tonne) While still lower than the year started out, nickel climbed 13% for the week.
• Dow Jones Closing Metals Report - here

  Evidence, or hope??

• In a research note published this morning, the analyst mentions that there is significant upside to the target price, given the company’s current share price. Outokumpu Oyj’s current order book indicates that a turnaround in the stainless steel market is likely to begin in 4Q07, the analyst says. Alloy surcharge in December is likely to be higher than that expected for November, Deutsche Bank adds.

  BHP hopes Ravensthorpe will move to Brazilian rhythm

• IT is a safe bet that former CVRD executive turned BHP Billiton nickel king Marcelo Bastos has lost something in the translation when he declares that Australian workers are a disloyal bunch. - more here

  Sumitomo Metal Mining sees growth in nickel

• Sumitomo Metal Mining Co (5713.T: Quote, NEWS , Research), Japan's most aggressive investor in overseas metal resources, said on Friday its 10,000 tonnes-a-year Coral Bay nickel plant in the Philippines will come fully on line in September 2009, six months after the start of operations. - more here

  Westpac Commodity Capers 9/5/2007 - pdf here

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

• Indications at 7:55 am CST show 3 month nickel selling up by $.09/lb
• Bloomberg - more  "Nickel gained on speculation steelmakers will resume purchases in the fourth quarter. Stockpiles, which have increased almost eightfold since May, will be ``largely offset by renewed drawdowns in the fourth quarter,'' RBC Dominion Securities Inc. analysts including H. Fraser Phillips in Toronto wrote in a report yesterday."

  Metals - Nickel, copper up as weak dollar spurs buying

• Nickel erased earlier losses and rose along with copper, supported by US dollar weakness, which made the metals cheaper for those trading in other currencies. - more here

  TD Bank Weekly Commodity Report - pdf here

  Courtesy/Copyright Dow Jones

• LME nickel prices likely to rebound as demand from Chinese stainless steel producers improving, says Craton Capital Management analyst Peter Richardson. Fall in LME nickel stocks in Busan since start September most likely due to Chinese buying, as Busan "is a first resort for Chinese suppliers or consumers," he says. Adds LME nickel stocks should start declining, reversing steady increases that precipitated 52% plunge in nickel price to mid-August low of $26,800/ton. Adds stock withdrawals should improve fund sentiment towards nickel; funds oversold nickel earlier when prices tumbled.

  Copyright/Courtesy Metal Bulletin

• Recent signs of a recovery in the Asian stainless market appear to have been dashed, at least in the short term, as prices tumble another $100-300 per tonne on weak demand, traders said.

  Analyst Forecasts

• Copper Forecasts Raised, Nickel Estimates Cut by RBC Dominion  - more
• Credit Suisse Cuts Forecast for Nickel, Zinc; Raises Copper - more
• Barclays Lifts Commodity Price Forecasts - more

  Copyright/courtesy Stainless Steel World

• Hyundai Steel was announced that it has restarted production of austenitic cold rolled coil at its Incheon works west of Seoul early on 17 September, after a five-day shutdown. The stoppage was the Korean mill's fourth in as many months, deemed necessary because of falling sales in the wake of declining nickel prices. Posco announced on 29 August that it will cut austenitic stainless output at its Pohang works by 25,000t for the month of September, also due to declining nickel prices and the dent this has placed on orders. Hyundai Steel says operations at its subsidiary, BNG Steel, continue as normal at the Changwon plant near Busan because BNG only produces stainless. - source

  Global context for commodity fund-buying

• WHAT kind of world are we living in where the price of nickel can rise 12% in a day – as it did on the LME on Wednesday September 19? Not long ago that kind of rise might be regarded as quite decent over a year. - more here

  Stainless steel prices set to head north in Oct.

• Nickel price on the LME recently rose by 10 percent and the settlement price rebounded to U$30,000/ton, it suggests that the stainless steel mills may raise their prices for October shipments. - more here

  Copyright/courtesy Interfax

• Henan Qingpu Alloy Materials Co. Ltd. recently commenced production at a 300,000-ton nickel pig iron facility in Xuchang City in central China's Henan Province, a company official told Interfax today.

  CISA estimates Chinese 2007 crude steel output at more than 500 million

• Mr Li Shijun vice secretary general disclosed to 21st Century Business Herald that China Iron & Steel Association has released its forecast for crude steel output at 510 million tonnes to 550 million tonnes this year. The figure is 50 million tonnes more than 460 million tonnes predicted by National Development & Reform Committee in February 2007. - more

  Commodity boom won't last: Manuel warns

• Commodity-rich African countries should act wisely in order to benefit from the prevailing global boom for the sector, because it will not last, South African Finance Minister Trevor Manuel has warned. - more

  Ibram foresees strong iron ore demand till 2015

• BNamericas quoted Mr Paulo Camillo Penna president of Brazilian mining institute Ibram as saying that “Worldwide iron ore demand is expected to remain accelerated until at least 2015. From that date we do not know what could occur." - more here

  Courtesy/Copyright Forbes

• Chinese steel makers have warned Australian mining companies against exploiting their position when iron ore price negotiations begin next month, the Australian Financial Review reported Friday. Australian miners have won a 189 percent increase in the price of iron ore since 2002 as they have worked to meet a surge in demand from Asia. But the chairman of the China Iron and Steel Association, Zhang Xiaogang, told the Australian Financial Review that mining companies such as BHP Billiton and Rio Tinto should not abuse their advantage.

  Koniambo in boiling

• The preliminary works with the large power site of North advance at speed large V. After the installation of the RT1, the networks are under installation. The base life known as pionnière and her 220 beds should partially enter in service at the end of October. - translated article here

  Today's beginning nickel inventory

• London Metal Exchange - plus 132 tons = 29,892 tonnes (3.93% - 1176 tonnes cancelled warrants/ 28,716 net stock level)
• Shanghai Jinchuan nickel - 282000-284500 - minus 3750

• Today's official LME nickel closing prices - cash - $14.95/lb 3 month buyer - $15.10/lb (140% higher than 1/1/06, exactly the same as the price on 1/1/07)
• Baltic Dry Index - plus 190 to 8,619.
• LME nickel inventories - plus 228 tonnes into and minus 24 tonnes from Rotterdam, Netherlands warehouse, minus 228 tonnes from Busan, South Korea warehouse and minus 12 tonnes from Singapore.
• LME 3 month nickel closed the day at $14.79/lb ($32,600/tonne)
• Dow Jones Closing Metals Report - here

  Westpac - Commodity Capers - pdf here

  China Stainless Steel Industry Report, 2007

• In 1994-2007, the global consumption of stainless steel was 1.43 times than that of carbon steel, while that was 1.57 times in China. During the same period, the world's consumption of stainless steel was 1.6 times than GDP growth and, that was 2.5 times in China. In addition, China's consumption of stainless steel was 1.70 times that its GDP growth in 2002-2006, which is nearly the same as that of carbon steel. - more here

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

• Indications at 7:55 am CST show 3 month nickel selling down by $.14/lb
• Bloomberg - more
• Reuters - more

  Copyright/courtesy Dow Jones Newswire

• Demand for nickel picking up in Asia, recovery in nickel prices over past 3 weeks suggests possible short-term bottom, prompting buyers to restock, say traders. Taiwan-based trader notes buyers had been buying hand-to-mouth until recently as they didn't know how much nickel price would decline, but its steadiness since bottoming near $25,000 in mid-August has stimulated consumer buying, says Taiwan-based trader. However, some stainless steel producers still saddled with inventories built up earlier in year, may not buy again until October, November, says Seoul-based trader.

  CVRD Inco’s new COO

• CVRD Inco has appointed Parviz Farsangi as the company’s new chief operating officer. Farsangi will replace Mark Cutifani who has taken the chief executive operating position with AngloGold Ashanti in South Africa. - more here

  Jinchuan raises nickel price as steel producers increase orders China

• It is reported that Jinchuan Group Company Asia's biggest nickel producer raised the price of the refined metal for a second time this month on increased demand from stainless steel producers in China. - more

  Indonesia News (courtesy/copyright Reuters)

• Asia Pulse reported that PT Aneka Tambang Tbk (Antam) will team up with BHP Billiton Limited (BHP) to develop a nickel reserve in Buli, East Maluku. Antam and BHP will have a 50% split in a joint venture to be set up to handle the project. The construction is expected to begin in 2009 and completed in 2011. Meanwhile, Antam plans to build its fourth unit of ferronickel plant with an annual production capacity of 30,000 tons in the mining complex with an estimated cost of US$650 million. (more from Bloomberg here)
• PT Aneka Tambang Tbk announced that it expects the repair on its FeNi III smelter plant to finish and the plant to operate again in the first week of September 2007. The Company has also revised its fiscal year 2007 ferronickel production down to 16,000 tons from 20,000 tons.

  India to import record Nickel this year

• Increasing consumption of stainless steel in the wake of India’s construction and economic boom may force the country to import more nickel this year. - more here

  China unlikely to further lift steel product export taxes this year

• The Chinese government is unlikely to impose any further restrictive polices on steel product exports in the remaining months of this year, due to the success of the current policy in curbing steel product export growth, a senior China Iron and Steel Association (CISA) official told Interfax at the 2007 China Steel Export Summit held in Beijing today. - more here

  China economy driven by overinvestment; steel growth too rapid - state planner

• China's rapid economic growth is driven partly by overinvestment, said Hu Chunli, president of the Industrial Development Research Institute under the National Development and Reform Commission (NDRC). - more here

  US steel hot-rolled coil prices forecast to hit $600/st in Q4

• US hot-rolled coil prices were forecast to hit $600/st, ex-works, Wednesday by Mike Locker, president of New York-based Locker Associates, who spoke at the Institute of Scrap Recycling Industries' Ferrous Scrap Roundtable Commodities Forum in Chicago. - more here

  Africa: Mining Has Not Benefitted Africa - Aimes

• Africa Initiative on Mining, Environment and Society (AIMES) have observed that although foreign direct investment (FDI) in Africa's extractive sector has significantly increased over the last few decades especially with the new entrants such as China, India, as well as the US involvement in the oil extraction in Gulf of Guinea, this have not led to improvement in poverty reduction, environment protection, and respect for human rights in Africa. - more here

  Doomed: The Global Boom Will End in Gloom

• For the first time in the 200-year history of capitalism, there is a synchronized global economic boom, leading to rising commodity prices, shifts in growth and an increase in wealth inequity. - more here

  Today's beginning nickel inventory

• London Metal Exchange - plus 24 tons = 29,760 tonnes (3.17% - 942 tonnes cancelled warrants/ 28,818 net stock level)
• Shanghai Jinchuan nickel - 286000-288000 - plus 14500

• Today's official LME nickel closing prices - cash - $14.54/lb 3 month buyer - $14.65/lb (133% higher than 1/1/06, only 3% lower than 1/1/07)
• Baltic Dry Index - plus 116 to 8,429.
• LME nickel inventories - plus 192 tonnes into and minus 78 tonnes from Rotterdam, Netherlands warehouse, and plus 18 tonnes into and minus 354 tonnes from Busan, South Korea warehouse. Second day of gross drop, although inventory net inventory is still gaining.
• Comment - The World Bureau of Metal Statistics reported today that the nickel market remained in a world deficit by 2600 tonnes for the first 6 months of 2007, for the second month in a row. We phrase it that way because no one else seems to be. In August, the WBMS reported the deficit for the first 5 months of the year was 2600 tonnes. In July, the WBMS reported the deficit at that time was 8700 tonnes for the first 4 months of the year. In July, on the date of their report, LME nickel inventories stood at 10,824 tonnes, in August, 20,446, and today, they stand at 29,736. So while nickel inventories have grown in LME warehouses by about 10,000 tonnes for the last two months, somehow, the worldwide picture remains in a deficit?? Love to know what methodology they use.
• For those who have written and asked us what the heck is going on with nickel pricing the last few days, we can only shrug our shoulders. You'll have to ask one of those analysts who get paid to give the media reason's for the unreasonable. On the supply side, even the WBMS verifies that supply has increased. No present, pending, or foreseen disruptions in the pike. On the demand side, we see no signs that stainless production is picking back up, of any significance - yet. Yes, Posco did say they see good times coming again, with a disclaimer by adding, down the road, China's Jinchuan is raising their prices, and we aren't seeing the weekly reports that Asian mills are cutting back on stainless steel production. But, we also are still seeing fairly steep inflows of nickel into LME warehouses, so where are the buyers? We see that the cost of pig nickel ore in China has stabilized over the past weeks, but yet to see them increase, so where are the buyers? We would like to think that nickel trading got caught up in the euphoria over the 1/2% interest rate cut, where everybody is "getting while the getting is good", before reality returns. Nickel was up 12% at one time during the day, its largest one day gain in nearly 20 years. So while the nickel producers may be dancing again, so are those who mine pig nickel, as they are about to become popular again. And for those who make stainless, stock stainless, and sell stainless, once again they are reminded, why it is they aren't stocking up more than necessary. For those making money off this volatility, congratulations. For those, who will must explain this to their customers, good luck. Tell them it's like O.J. Simpson - a nightmare that won't go away. Whatever the reasons and excuses given, LME nickel closed the day at $15.30/lb ($33,750/tonne)
• Dow Jones Closing Metals Report - here
• Bloomberg - more

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

• Indications at 7:55 am CST show 3 month nickel selling way, way, way up by $1.60/lb . (that is nearly $3500/tonne folks). Well, we did break with our rule a month ago, and said that when nickel found a floor, that we thought it would trade in the $12 - $16./lb range. However, we did not predict that it would trade within that range, all in one week!! If nickel keeps going like it has the last few, our forecast will be deemed bearish. We still can't find a good reason for what is going on. US dollar is at record lows, which is always good for base metals. Its Third Wednesday, so some of this may be covering former short bets, and others making them pay dearly for their mistake. Some of it probably has to do with the euphoria that brought the trading world to life yesterday with the announcement of an aggressive 50 point cut in the prime by the Fed. And the WBMS report out today that claims the world nickel supply was still in a deficit for the first 7 months of this year, probably has traders all worked up. We would be surprised if dock workers at the Rotterdam or Helsingborg or Pusan or Liverpool LME warehouses would agree with the WBMS, as they have all been taking much more in than they have been shipping out since June, but we will leave that for later.  
• Bloomberg - Nickel, Copper, Zinc Advance in London After U.S. Rate Cut more

  Global Nickel Market In 13,000 Ton Deficit In Jan-July

• Mine production in January to July was, at 876,100 tons, 7% above the 2006 total. Refined nickel production was 13.4% above the comparable total for 2006 with output increases in China, Finland and Canada accounting for most of the rise, WBMS said. - more here

  China's Output of Stainless Steel Will Have a Share of 1.56% in Total Production of Steel Materials in 2007

• In 1994-2007, the global consumption of stainless steel was 1.43 times than that of carbon steel, while that was 1.57 times in China. During the same period, the world's consumption of stainless steel was 1.6 times than GDP growth, and that was 2.5 times in China. In addition, China's consumption of stainless steel was 1.70 times that its GDP growth in 2002-2006, which is nearly the same as that of carbon steel. - more here

  Interfax News

• China produced 10,388 tons of refined nickel in August, climbing 31.4 percent from the same period last year, according to an update from China's National Bureau of Statistics (NBS) released yesterday.
• The world's 67 main crude steel producing countries produced a total of 108.08 million tons of crude steel in August, up 5.3 percent from the same period last year, with production from China accounting for 38.47 percent of the global total, according to a press release from the International Iron and Steel Institute received by Interfax today.

  Taiwan's stainless steel scrap price continues to soar

• The price of Taiwan’s stainless steel scrap continues to surge since August. - more here

  China Nickel Resources to construct special steel plant in Indonesia

• China Nickel Resources Holdings Co. Ltd. (CNR), a Hong Kong-listed special steel producer formerly known as China Special Steel, intends to construct a special steel plant in Indonesia's Kalimantan, which was previously known as Borneo, a company official told Interfax today. - more here

  Global crude steel production in August up by 5.3% YoY

• International Iron and Steel Institute reported that the total crude steel production in August 2007 for the 67 countries is 108.1 million tonnes up by 5.3% YoY as compared to August 2006. The global crude steel production in January to August 2007 is 869.710 million tonne up by 7.5% YoY. - more here

  China likely to slow down iron ore imports

• China’s iron ore imports are expected to increase at a slower pace because of rising domestic supply and decline in the growth of steel output capacity, say industry insiders. - more here  (negotiations are underway this week between the Big Three iron ore producers and China steel producers over 2008 iron ore contracts)
• China's import of iron ore in July 2007- more here

  Today's beginning nickel inventory

• London Metal Exchange - minus 222 tons = 29,736 tonnes (2.54% - 756 tonnes cancelled warrants/ 28,980 net stock level)
• Shanghai Jinchuan nickel closed at (markets closed due to typhoon)

  Daily Nickel/Stainless Steel Roundup

• Today's official LME nickel closing prices - cash - $13.25/lb 3 month buyer - $13.34/lb (112% higher than 1/1/06)
• Baltic Dry Index - plus 17 to 8,313.
• LME nickel inventories - plus 192 tonnes into and minus 84 tonnes from Rotterdam, Netherlands warehouse, and minus 114 tonnes from Busan, South Korea warehouse. Small shipment received and two outbound means the first drop since August 30th.
• Ok...who let the bulls out of their pen - again? LME nickel was up today, way up. It broke thru the $30,000/tonne barrier, and didn't stop to take a breath until it hit $31,000/tonne. So what is up? The analyst's that the various media outlets interviewed said it was due to the Chinese stainless steel industry firing back up. We aren't seeing the reports they apparently are, but Jinchuan nickel is definitely throwing out some clues. We have some test graphs posted on this page here. While over the years we have noticed Jinchuan nickel tends to play follow the leader with the London Metal Exchange, in the last week it has apparently taken the lead. Jinchuan nickel, which we post each morning, has been on the gaining side since September 11th, with the LME not really kicking up a gear until last Friday. Most believe we have hit bottom on the summer's stainless steel demand destruction, but we must add, we have yet to see the evidence ourselves, in Chinese media, that things are picking back up of any substantial degree. They should be, based on the season, but we just aren't seeing the reports yet. When we do, we will post them.  Dow Jones, on the other hand, affirms what we stated yesterday about days preceding Third Wednesday trading, "LME nickel jumps 5.6% as fund players take advantage of thin conditions to bid prices higher in a general short covering rally, a London-based trader says." So was today based on facts LME traders are privy too, short covering, or speculation based on what is happening on the Shanghai Security with Jinchuan nickel? Whichever proves to be the truth, for today, 3 month nickel ended today's trading at $13.92/lb ($30,700/tonne), after hitting $14.06/lb near closing (highest ending since July 31).
• Dow Jones Closing Metals Report - more

  Nickel Rises to 7-Week High as China's Use Grows; Copper Gains

• Nickel rose to a seven-week high in London on demand growth in China, the largest consumer of the metal used in stainless steel. Copper and lead also gained. - more here

  World Bank Commodity Price Data - pdf here

  Damstahl Stainless Steel Solutions - 52 page September report - pdf here (very extensive European report)

  IISI Crude Steel Production - August 2007 - pdf here

  Billions more dollars headed for commodities - AIG

• Money is still flooding into commodities investments to diversify portfolios despite financial market turmoil, and more pension funds are looking at commodity investments, especially in southern Europe. - more here

  Saudi Arabia: 1,270 mining licenses in 2006

• A total of 1,270 m