Monday, October 31

• Baltic Dry Index - minus 53 to 1,965. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China’s Property Stocks Decline as Wen Pledges to ‘Firmly’ Maintain Curbs // China Regulator Reshuffle Makes Shang Biggest Banks Watchdog // China’s Stocks Decline, Paring Biggest Monthly Gain in Year // Thai Floods May Spare Most of Bangkok as Efforts to Divert Water Succeed // Tin Producers in Indonesia to Extend Export Ban to Yearend to Boost Prices // Bonds Drop in Italy, Stocks Slide on Europe Funding Concern; Yen Weakens // MF Global Files for Bankruptcy Protection //  Europe Tries to Recapitalize Its Banks // European Stocks Drop, Paring Best Month Since 2009; Vestas, HSBC Retreat // U.S. Profits Top Estimates for 11th Quarter Amid Rally // U.S. Economy Revives as Consumers Still Spend // Bonds Beat Stocks for First Time Since 1861 // Business Activity in U.S. Grows as Factories Accelerate Economic Recovery // Consumers ’Scared to Death’ But Still Spending // Stocks, Italian Bonds Decline Amid Bailout Concern; Yen Tumbles
• The Euro is currently trading over 1-1/2% lower against the US Dollar. NYMEX crude is also trading 1-1/2% lower and at $91.97/barrel. Gold is off 1-1/3% while silver is 3% lower. Base metals ended the session lower, but considering the bath the Euro was taking, they ended respectively. Indicator charts show nickel traded in the cellar all day, but within a $300/tonne range. Dow Jones reports three month nickel ended the final session of October at $8.88/lb  . Stockpiles of nickel stored in LME warehouses fell on Friday and now total just over the 86,500 tonne level. On the last day of September, the LME reported nickel stockpiles at 96,738 tonnes. One month later, they read 10,230 tonnes lower. MF Global, a company that allows us to post their daily report on this page, filed for bankruptcy protection, an apparent victim to the European debt crisis. MF's bankruptcy, and some closer analysis of last weeks new and revised EU bailout plan, has some wondering if MF is only the first of more to come. Analysts grew nervous over the weekend, as the source for most of the emergency funds mentioned in the EU plan, are left to future planning. Kind of like setting sail - without an actual sail but a really cool drawing of one.
• The time in London has changed, so our afternoon updates will now be posted closer to 2 pm EST.

  Reports

• Robry Monday Morning Economic Assessment - more
• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) Earlier Monday, MF Global filed for bankruptcy protection, becoming one of the highest-profile U.S. victims of bad bets on European government debt.
• Ontario Far North Act: Reducing Aboriginal Poverty through Parks or Mines? - more
• Number of the Week: Cutting Back on Driving - more
• Income Excluding Government Transfers Drops Again - more
• Consumers Had to Save Less to Spend More - more
• The Spending-Income Shortfall - more
• Where Does The Money Go - more
• Has America Become an Oligarchy? - more

  China sets 2012 tin export quota at 18,000 T - China will cut export quotas for tin, tungsten, antimony and molybdenum in 2012 from this year, a statement by the Ministry of Commerce showed on Monday. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.10/lb lower, with all other London traded base metals trading lower as well. The Euro is trading over 9/10 of 1% lower against teh US Dollar, as traders began to ask questions about last weeks announced EU rescue plan. NYMEX crude futures are down nearly 3/4 of 1% and trading at $92.65/barrel. Gold is off more than 1.1% and silver is down over 2.8%. In overnight trading, Asian markets started a new week and ended the month lower lower, with China down 1/2 of 1%. European markets are trading lower this morning, while US futures show Wall Street may open lower as well. Nickel stockpiles fell on Friday.  
• Bloomberg morning - Copper Declines as Investors Await European Bailout Details - more
• LME Morning - Eurozone concerns weigh on base metals, choppy trading expected - more
• Reuters - Copper slips as optimism over E.U deal tempered - more

  Reports

• SMM Nickel Price Forecast (Oct. 31-Nov. 4) - more
• The Weekly Scoreboard - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper sold off slightly on Friday, but still managed to wrap up one of its best weeks in decades, chalking up a 14% gain, and leading the rest of the metals higher as well. Optimism over initiatives taken last week to head off the Eurozone debt crisis, as well as escalating supply side threats at key copper mines prompted the surge, as did evidence that both the US and Chinese economies were moving away from any recession or slow-down type of scenarios. Things are far different as we start the new week. We are seeing broad-based declines in most commodity complexes as well as in global equities. Markets have backed off after investors have apparently taken a closer look at the recently completed European debt accords and are realizing that there are several loose ends that need to be tied up. We discussed some of these in last week's commentary, pointing out that a full "vetting" of the accord will likely take place in the European credit markets. Thus far, the reaction has not been that favorable. In auctions that took place in both Italy and Spain on Thursday and Friday for example, bond buyers demanded higher yields from both these countries. In Italy's case, the country is now paying more than 6% on its new 10-year debt, higher than what it was paying a month ago and a rate that is clearly unsustainable over the long run. Under pressure, Italian Prime Minister Silvio Berlusconi has pledged to pass measures aimed at rejuvenating the country's stalled economy, including reforms to Italy's labor market and pension system, but progress has been slow, and it is not at all that certain that he can has the political muscle to push the reform votes through in Parliament. Questions also remain about the composition of the European Financial Stability Facility and the fact that it would "backstop"countries that are unable to finance themselves. With €1.4 trillion at its disposal (and this amount is not fully raised yet either) investors are rightfully concerned about whether the fund is adequately capitalized for the task at hand. Investors also are skeptical of the plan to use the EFSF to insure losses on government debt. Under the agreement, the EFSF would absorb the first 10% of losses on debt issued with insurance, but if losses amount to 50%, which was the case with Greece, the guarantee will not be worth much. Another unsettled issue is how to read the new incoming ECB chief Mario Draghi as he takes over the reins at the ECB this week, and to what extent will the European Central Bank be the buyer of last resort for sovereign debt? The ECB started buying bonds of European governments in mid-2010 and after an 18-week pause, it restarted the program in August. However, Germany definitely wants to end the program, but Draghi has not clarified his stance on the issue, although preliminary remarks he made this past week suggest that he will resist German pressure and continue the ECB's role of being a buyer of last resort. Despite the misgivings that are surfacing, we suspect markets will likely hold most of their gains, as the recent accords are at least credible in that they have brought together a disparate group of politicians to coalesce around a program, questionable as some of its parts seem to be. Moreover, given how the talks evolved, it seems that broad areas of agreements were first reached among the EU leaders, while the details will likely follow later after junior officials have a stab at them. This “backwards” approach is perhaps what is causing some concern in the markets, but we suspect that the misgivings will not be enough to roll back the recent gains. In the case of metals, the bulls can hang their hat on the fact that macro numbers out of the US and China seem to have take a turn for the better lately, thus removing a major concern. We will see what we get later this week in terms of stats, but of the US later today we get we get Chicago October PMI (expected at 58.9 percent), to be followed on Tuesday by the October ISM index (expected at 52.1, slightly higher than last month). Tuesday also brings September construction spending (expected at .3%), while later in the day, November auto and truck sales follow. Wednesday brings us the ADP private payroll number (expected at +100,000), while the FOMC policy statement will come out later in the day. On Thursday, we get weekly initial claims readings (expected at 402,000, unchanged from the prior week), and third-quarter productivity readings (expected at +2.8%). We also get September factory orders on Thursday (expected at -.2%), as well as October ISM services readings (expected at 53.7, up slightly from the 53 reading seen last month). Finally, on Friday, we get October nonfarm payrolls (expected at 88,000), with the unemployment rate forecast to remain at 9.1%, unchanged from last month. .... Nickel is at $19,325, down $375. We still look somewhat toppy around the $20,000 mark. (Daily Metals Report here)
• (Dow Jones) LCH.Clearnet Ltd., which clears trades for the London Metal Exchange, Monday said it will raise initial margins for copper, aluminum and nickel. ... Initial margins for nickel will also be increased, rising to $2,670/ton, from $2,500/ton.
• China Seeks New Iron-Ore Price Model in Holds Talks With BHP and Rio Tinto - more
• Reuters- Moody's: European Steel Industry Outlook Changed to Negative
• (Yieh) It’s reported that Taiwanese Yieh United Steel Corp. (Yusco) released the November price policy for domestic and export market on October 28th. The company decided the cut the domestic prices of 300 series hot rolled (HR) and cold rolled (CR) stainless steel products by NT$3,500/ton and to decline the export prices of 300 series materials by US$30~US$100/ton for November deliveries.
• China Demand For Nickel Key For Futures - more
• Indonesia nickel producer Inco net off 2.6% - more
• (Interfax) - Imported iron ore prices have room to fall further, continuing a rapid slide that started early September and picked up speed at the beginning of October after the China National Day holiday, a senior official of the China Iron and Steel Association (CISA) said Oct. 31.
• Don't Look Now But Construction Spending Is Up - more

  CEO Abbott brings London Metal Exchange to brink of sale - Martin Abbott's appointment five years ago as chief executive at the London Metal Exchange (LME) raised a few eyebrows. - more

  Spain's Acerinox says stainless market recovery delayed - Spain's Acerinox , which produces more than 10 percent of the world's stainless steel, said on Friday that a forecasted market recovery has not occurred and is not expected until the first quarter of 2012. - more

  Japan's Domestic Nickel Production, August 2011 = Nickel Metal up by 5.3% year-on-year = According to the Steel Statistics Monthly of August 2011, Japan's domestic nickel production (on nickel metal content basis) during the month was as per the attached table hereto. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, October 28

• Baltic Dry Index -  minus 73 to 2,018. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Europe Looks to IMF, China for Rescue-Fund Cash // Chanos Says China Property Is Slowing, Still Shorting Banks // China’s Stocks Rise, Extending Best Week in Year, on Profit, U.S. Economy // Asia Stocks Set to Rise Most in a Week Since ’09 on U.S., Europe // Papandreou Says Europe’s Crisis Agreement Buys Greece Time // Saving Euro Produced Sarkozy Rage as Merkel Bent Banks in Six-Day Marathon // Italy Falls Short of Bond-Sale Target as Borrowing Costs Rise at Auction // European Stocks Retreat From 12-Week High as Investors Seek Detail on Debt // Whirlpool to Cut More Than 5,000 Jobs // Economy in U.S. Surpasses Pre-Recession Level // U Mich. Consumer Sentiment Unexpectedly Rises // Stocks, Euro Decline After Surge on Europe-Bailout Optimism; Copper Rises
• The Euro has done very little today and is still trading nearly 2/10 of 1% lower against the US Dollar. NYMEX crude is now only 1/2 of 1% lower and trading at $93.48/barrel. Gold is down 1/10 of 1% and silver is trading slightly higher. Base metals ended the session mixed and for the most part, quietly. Indicator charts show nickel opened lower, and at its best, went slightly positive, before sinking again. For the day and week, Dow Jones reports three month nickel ended the session at $8.94/lb , down for the day but up $.41/lb for the week. Stockpiles of nickel stored in LME warehouses fell hard on Thursday and now total just over 87,000 tonnes. Stockpiles have fallen 10,248 tonnes since September 28th and 17,976 since August 28th.  For those who follow charts closely, this week came as no surprise, with a positive trend looking to propel the Dow thru the 11,700 level. For those who don't believe in charts, the positive economic news out of the US, albeit weak, and the EU agreement, took the wind momentarily out of the doom and gloom crowd. Either way, it was a big week for both equity and metals markets, and the trend was truly ones friend. Thanks in part to a strike in Indonesia, copper is up an astounding 23% in just 8 days.
• Our best wishes and hopes go out to those suffering in the Turkey earthquake aftermath and Thailand floods.
• Have a safe and relaxing weekend!  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Pessimism, Volatility, & tHe Stock Market’s Range - more
• The Red Flag in Today’s GDP Report - more
• Spending and Depression Aren’t Mutually Exclusive - more
• Vital Signs: Per Capita GDP Still Lagging - more
• Squeezed Dry: Why Americans Work So Hard but Feel So Poor - more

  Norilsk to Lift Nickel Output 68%; Studies Indonesia, Africa - OAO GMK Norilsk Nickel, the largest producer of the metal, is studying Indonesian, African and Latin American projects under a $37.6 billion expansion to diversify from Russia and raise nickel output 68 percent through 2025. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.07/lb lower, with all London traded base metals lower. The Euro is down nearly 2/10 of 1% against the US Dollar at the moment. NYMEX crude futures are down over 1.8% and trading at $92.24/barrel. Gold is down over 1/2 of 1% and silver is up 1/10 of 1%. In overnight trading, Asian markets ended the week higher, with China up nearly 2%. European markets are down slightly this morning, and US futures show Wall Street may open slightly lower. Nickel stockpiles fell hard on Thursday.
• Bloomberg morning - Copper Traders See End to Record Rally as China Demand Slows: Commodities - more
• LME Morning - Base metals slip, profit-taking expected ahead of weekend - more
• Reuters - Copper slips but outlook bright post EU debt deal - more

  Reports

• ISSF stainless steel demand index and stock cycle review - more
• INSG Speakers presentations 2011 - more
• Great American Group Metals Monitor - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper surged to its highest level in more than a month yesterday and is now on track for its best weekly gain in some three years, as investors reacted bullishly to the long-awaited European accords cobbled together on Wednesday and Thursday. Other base metals also gained ground, with zinc, nickel, and lead all jumping by more than 5%. Crude futures rallied more than 4%, while agricultural's and gold also soared, as did US equity markets. In fact, US stocks are now on track for their best month since 1974, a remarkable turn of events from the earlier downward drift. News out of the US also helped sentiment; in this regard, it was reported that the economy expanded at a 2.5% annual rate in the third quarter, while September new home sales came in on the stronger side as well, rising at their fastest clip in five months. We have been expecting a rally going into some sort of European plan for weeks now, and although there were a few sharp selling bouts along the way, the base metals complex -- led mainly by copper -- came through. The question now is whether markets will retrace slightly as the bullish euphoria dies down, exposing some of the problems that still need to be worked out. As an example, the New York Times points out today that of the 340 billion Euros in Greek government debt, only about 200 billion Euros falls under the scope of the new accord, meaning the country’s total sovereign debt would be reduced by about 30% at best. The rest of the paper is apparently held by the ECB, the IMF, and other institutions that have said they would not participate in any debt restructuring. However, even the 30% reduction in Greece’s debt load is not assured. That is because the 50% write-off on Greek debt (derisively dubbed as "My Big Fat Greek Shredding" by a Financial Times headline) is voluntary--meaning that the authorities are hoping that investors will turn their bonds in for new ones. Since Greek government bonds are now trading at about 40% of face value, the number of participants is expected to be high, although that is not certain either. Requiring all bond investors to turn in their bonds for new ones would have constituted a “credit event,” triggering the payout of billions of Euros in credit default swaps, which is why the authorities left things on a voluntary basis. Questions also remain about expanding the Euro-zone bailout fund to around $1.4 trillion. The fund will see its lending boosted in two ways, either through guarantees on the issuance of new sovereign debt, and/or establishing a special purpose vehicle to purchase debt outright. The Chinese are expected to make a substantial contribution, but the fact that they have been brought on board formally is worrying somewhat. More importantly, it is not certain how the rest of the money will exactly be raised and whether it will be enough given that Italy's debt alone stands at $2.5 trillion. Finally, another main element of the plan is to shore up 70 of Europe’s biggest banks by requiring them to raise 106 billion Euros in fresh capital, but in contrast to rescue plans conducted in the US and Britain, European governments are not injecting funds directly into their banks. Instead, they are asking banks to turn to private investors to significantly raise capital. That may prove difficult, as many have suffered deep losses already from investing in bank investments and may not to come back for more. However, whatever the plan’s shortcomings are, the sense of anticipation is at least over and at worst, we seemed to have kicked the can down the road for now. We expect to see a modest retracement set in over most markets heading into next week. Right now, we are lower in base metals as well as in energy, while the dollar has picked up ground against the Euro and is now trading at $1.4100. US stocks are expected to open lower. In other important news out yesterday, we had reports out that Japan's industrial output fell some 4% in September, its first decline (and a rather substantial one) since the March twin disasters. .... Nickel is at $19,718, down $182.  (Daily Metals Report here)
• (Yieh) According to report, China’s stainless steel flat exports continued to drop in September by 8% month-on-month to 149,190 tons on falling nickel prices.
• (SSY) According to the latest data from the China Iron and Steel Association, the country's daily crude steel production in the second ten days of October fell by 2% from 01-10 October to 1.80 Mt. This represents the lowest daily rate since early February.
• (Dow Jones) It is reported that German steelmaker ThyssenKrupp AG sees little chance of selling its stainless steel unit in a public offering of shares, so it will concentrate on selling it outright or spinning it off to shareholders.
• (China) Turning point in housing market looms amid discounts - more

  BIR world mirror on stainless steel October 2011 - The anticipated pick-up in stainless steel product demand was struggling to materialize in the early part of the fourth quarter amid persistent uncertainty over economic prospects on both sides of the Atlantic. - more

  Posco Freezes Stainless Steel Domestic Prices For November - Posco said Friday that it will freeze stainless steel prices for November despite a fall in nickel prices, as higher purchasing costs due to a weaker won offset the decrease. - more

  More Pressure On Weakening Molybdenum Market = New open-pit production to start on schedule at Climax = Molybdenum oxide price dropped further to US$13.30/lb last week. It may well be that, despite the weakness, the market will continue to be exposed to a pressure from supply side for quite some time. - more

  Russia Norilsk plans $35 bln in investments to 2025 - The board of Russian miner Norilsk Nickel has approved a strategy that envisages investing $35 billion in 2011-2025 to expand its resource base and raise output, Norilsk said on Thursday. - more

  First Nations must have a say - As Ontario cabinet ministers were sworn in Oct. 21, Matawa First Nations were demanding the environmental assessment (EA) process on the Ring of Fire development must be changed — and they want an answer by Tuesday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 27

• Baltic Dry Index - minus 54 to 2,091. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) EU Sets 50% Greek Writedown, $1.4T in Rescue Fund // Sarkozy to Seek China Aid as EU Expands Rescue Fund // Barclays, Mizuho Predict China Policy Easing as Premier Wen Signals Change // HSBC’s Thailand Chief Readies for Flood as Toyota Evacuates Expat Families // Bank of Japan Expands Stimulus as European Debt Crisis Pushes Up Yen // Papandreou Says Greece Will Nationalize Some Greek Bank Shares // Euro Strengthens to Seven-Week High After EU Agreement; Dollar, Yen Fall // European Stocks Advance on Sovereign Debt-Crisis Deal; Banks Lead Gains // Fed Won’t Share Internal View Underlying Risks // U.S. GDP Expands at Fastest Pace in a Year // S&P 500 Extends Best Month Since ’87, Euro Rises on Debt Accord
• The Euro is trading 2% higher against the US Dollar. NYMEX crude is up 2.9% and trading at $92.81/barrel. Gold is up nearly 1/1% and silver is up over 5-1/2%. Base metal ended the session higher as well. Indicator charts show nickel was fairly volatile today, but trended higher. For the day, Dow Jones reports three month nickel ended the session at $9.02/lb . Stockpiles of nickel stored in LME worldwide approved warehouses rose for a third time in the last four days and now totals just over the 88,100 tonne level. Markets are higher today on news the EU finally came up with a plan to solve the European sovereign debt concerns, and although no one actually believes the plan WILL solve the debt crisis, it is giving many traders that warm and fuzzy feeling. With the Euro jumping 2% in one day against the US Dollar, commodities couldn't have fallen if they wanted to, in our opinion. Not that they had any desire to do so. Walter de Wet of Standard Bank said in a note about copper this morning, ""To us [this is] a sign that much of the price activity we are witnessing is speculative in nature, rather than a rise in real demand due to the lower copper prices." To that, we agree wholeheartedly. The question is, will the speculation continue - or will pessimism return with a vengeance? Stay tuned.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (MF Global) Reuters reports that China's demand for refined nickel is weakening as stainless steel mills cut purchases of spot metal, "We expect demand to fall. Stainless steel mills hold high inventories now because they could not sell all of their production," a manager at a trading firm in the eastern province of Jiangsu told Reuters. An executive at another trading house in Shanghai said one of the firm's clients, a large stainless steel mill, was cutting production of high-nickel 304 grade. Premiums for melting grade refined nickel in Shanghai were being offered at about $230 to $250 a ton over cash LME.
• Companies Less Certain, Spending More - more
• Just How Powerful Are China’s State-Owned Firms? - more
• How the economic slowdown has changed consumer spending in America - more
• The State of Young College Grads 2011 - more
• No Surprise: Distrust Leads to Money Moving - more
• Who Is Getting Richer ? Poorer? ALOT Richer? - more

  Nickel set to rebound on increasing Chinese demand - Nickel - the second-worst performing metal on the London Metals Exchange in the past six months - seems ready for a change in fortune, and is set to rebound as Chinese steelmakers lead a recovery in demand. - more

  BIR world mirror on stainless steel October 2011 - BIR: The following article is based on the latest Stainless Steel & Special Alloys World Mirror produced by the BIR world recycling body for the benefit of its members. - more

   Vale Shows Record Profit on Rising Iron Ore & Nickel Volumes - Vale, the world’s largest iron ore producer has recently had to contend with a slow down in the global economy that could weigh on steel demand, consequently hurting the demand for iron ore, and concerns over pricing contracts as major buyers have balked at existing contracts. - more

  Xstrata Smelter strike suspended for now - Workers at Xstrata’s Lydenburg ferrochrome smelter had decided to suspend their strike, the National Union of Mineworkers (NUM) said yesterday. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.35/lb higher, with all London traded base metals higher as well. The Euro is currently trading over 8/10 of 1% higher against the US Dollar. NYMEX crude futures are up nearly 3% and trading at $92.84/barrel. Gold is down slightly , while silver is up 9/10 of 1%. In overnight trading, Asian markets ended higher, with China up nearly 1/4 of 1%. European markets are trading much higher this morning , and US futures imply a very bullish opening on Wall Street. Nickel stockpiles rose for the third time in four days.  
• Bloomberg morning -  Copper Advances for a Second Day on European Debt-Crisis Plan Agreement - more
• LME Morning - Base metal rally continues on improving sentiment - more
• Reuters - Copper up 4 pct on EU debt deal, China growth hopes - more

  Reports

• Steel Founders' Society Of America Casteel Report - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - We had another very choppy day yesterday in the metal markets, particularly in copper, which surged by as much as 5% at one point before paring its gains nearly in half by the close. The rest of the group finished mostly mixed, as did several other commodity complexes. The retreat was mainly attributable to continued concern about whether the Europeans were close to striking an agreement. In fact, as we thought about putting together today's note, we thought it would mostly consist of the latest blow-by-blow account on where the remaining differences lay. Instead, working late on Wednesday night and into Thursday, the Europeans did reach a comprehensive agreement. Under the accord, investors will take a 50% write-down on their holdings of Greek debt, in effect making a fresh contribution of some $140 billion in terms of Greek debt relief. The full program is expected to be finalized by early December and investors are supposed to swap their bonds in January, at which point Greece will become the first Euro-based country that could default on its debt. Importantly, the firepower of the Euro-zone bailout fund will also be increased to around $1.4 trillion, almost triple what it is now in order to insure that there is enough money in reserve to check any spreading contagion. The Chinese are expected to be solicited as potential investors in the expanded fund, and we suspect they likely will contribute given the trading relationship they have at stake with the continent. A tentative agreement was also reached to recapitalize the banks. From what we read on the wires last night, capital ratios would be raised to 9%, with the banks having a relatively short period -- until the end of June 2012 -- to meet the new requirements. They will have to try to raise the money by restructuring or converting debt into equity, and if that does not work, they could ask for government support or tap the EU bailout fund, but only as a last resort. Banks that lack sufficient capital will be prevented from paying dividends and bonuses. Understandably, markets are up across the board, with stocks soaring in both Europe and Asia. A Western European index of swaps on 15 government bonds dropped 17 basis points to 317, its lowest reading since early September, as did a European index of 50 companies with mostly high-yield credit ratings. European bank shares — which had fallen sharply recently — posted particularly strong gains, with Societe Generale and Deutsche Bank both up by about 12%. In the currency markets, the Euro is now back over the $1.40 mark, and while US bond futures are sharply lower, Dow futures are pointing to a 200 point opening gain. Commodities are up across the board as well, with strong gains seen in energy, gold, and base metals. All in all, the fact that the leaders reached an accord and put aside their policy differences was impressive - and somewhat mandatory given the punitive state of the markets. The question now is whether the markets will retreat given that they have been rallying for some time now in anticipation of such an agreement. It seems to us that the bullish impact of this announcement will not fade that quickly and may carry at least into the early part of next week before markets move on to other equally pressing concerns. For the next few days, however, the outlook suggests that some of the darker clouds seem to be lifting. In other developments, we suspect markets will be relieved to see that third quarter US GDP showing a gain of 2.5% and coming in slightly ahead of estimates. We suspected the figure to come in on the stronger side given the spate of better macro data seen over the last few weeks. Yesterday, for example, orders for U.S. durable goods, excluding transportation, rose in September by the greatest amount in six months, increasing by 1.7% and coming in well ahead of the -1% decline expected. ... Nickel is at $19,875, up $750; the complex has broken out of its short-term trading range for some time now and seems to be on track to head towards $20,200, which was the previous trading range low.(Daily Metals Report here)
• (Yieh) South Korean Posco predicted that the stainless steel prices would present weak in the Q4 due to sluggish global economy.
• (Interfax) Weakening demand at home and abroad has seen China's steelmakers cut prices and output as they brace for a bumpy ride in the fourth quarter (Q4), an analyst told Interfax Oct. 27.
• (Reuters) China spot nickel demand falls as steel mills slow buying
• (SSY) The world export price for Hot Rolled Band (HRB) continued its recent decline, falling to a year-to-date low of $656/t on the late October level, down by 4% from two weeks ago, according to the latest SteelBenchmarker produced by World Steel Dynamics. HRB prices in China fell to an 11-month low of $555/t at the end of October, down a massive 9% in just two weeks. In western Europe, the HRB price slipped 1% over the same period to a year-to-date low of $698/t, while US prices declined by 3% to $732/t.
• (China) China's industrial profits growth slows - more
• It’s Consumer Spending, Stupid - more
• Global Outlook Sees 'Clear & Present Danger' to Economic Rebound - more

  Albanian Minerals: Stainless steel production to hit 40 million tons in 2012 - Global stainless crude steel production in the ten months of 2011 reached an all-time high . - more

  Norilsk Nickel Plans New Ore-Enriching Factory, Interfax Says - OAO GMK Norilsk Nickel, the world’s largest producer of nickel, plans to build a new ore-enriching plant of up to 7 million metric tons annual capacity in the town of Norilsk, Interfax said, citing Vladimir Dyachenko, head of the company’s scientific development department Vladimir Dyachenko. - source

  Ferrochrome Industry - In Search For Measures of Regeneration (Part 2) = Green/brown-field plans to come on stream in 2013; Cr ore export ban calls may end with no effective measures = In China there are a lot of green/brown field plans (including several desk plans) of ferrochrome production, despite that some domestic smelters are operating in red. - more

  ENK reports first nickel production from pilot plant  - ENK has announced the first nickel production from its pilot plant in the Philippines. - more

  Sherritt earnings double in Q3, nickel sales flat - Mostly thanks to a rise in oil prices, net earnings of Sherritt International Corp., Cuba’s largest foreign private investor, doubled during the third quarter compared to the same quarter last year. - more

  Eramet sees full-year profit dip on lower prices - French mining group Eramet forecast a lower current operating profit this year due to falling nickel and manganese prices in the second half. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 26

• Baltic Dry Index - minus 16 to 2,145. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Wen Fuels Speculation China to Ease Policy as Global Recovery Threatened // Crisis of 2012 May Be Harder on China Than U.S.: William Pesek // Asian Stocks Pare Loss as China Easing Speculation Tempers Europe Concern // Europe Struggles for Crisis Cure Ahead of Summit // European Banks Warn of Credit Drought // Turkey More Than Doubles Banks’ Overnight Borrowing Cost to Curb Inflation // Italy Sells 10.5 Billion Euros of Debt as Borrowing Costs Rise in Auction // Impasse on Greek Debt Relief Threatens Deal // Draghi Urges Immediate Implementation of Bailout Fund to Stop Debt Crisis // European Stocks Advance for Third Day in Four Before EU Debt-Crisis Summit // Euro Retreats, Stocks in U.S. Fluctuate on Europe Debt Talks; Oil Slides // U.S. Economy: Durable Goods Orders Help Sustain Expansion Hurricane Rina Moves Toward Yucatan Peninsula on Path to Skirt Oil Regions // ‘Incensed’ Moynihan Pushes Back at BofA’s Critics With Localized Campaign //
• The Euro is now trading over 1/2 of 1% lower against the US Dollar. This has hurt afternoon commodity trading. NYMEX crude is down nearly 2% and trading at $91.33/barrel. Gold is up over 1-1/4% and silver is up 9/10 of 1%. Base metals ended the session mixed, with copper a  winner, and nickel a loser. Indicator charts show nickel opened lower, and was choppy but did little for the first 3/4 of the session, then falling hard late. Dow Jones reports three month nickel ended the session at $8.68/lb , back to where it ended last Tuesday. Stockpiles of nickel stored in LME approved warehouses slipped on Tuesday and now total just under 87,600 tonnes. The European Union leaders have started another highly anticipated meeting and without any announcement's this afternoon, we could see markets following rumors again today. Wall Street jumped early but has since backed off, and the Dow appears destined to go negative. With no definitive decision from Europe, markets remain in limbo.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• ‘Complexity’ Predicts Nations’ Future Growth - more
• Vital Signs: Consumer Confidence Tumbles - more
• Why Don’t Gas Prices Fall When Oil Does? - more
• Income Growth of Top 1% Over 30 Years Outpaced Rest of U.S. - more
• Confidence Falls Most Among High-Income Consumers - more

  Pig Iron’s Pain Proves Boon for Nickel Miners: Commodities - Nickel, the second-worst performing metal on the London Metals Exchange in the past six months, is set to rebound as Chinese steelmakers lead a recovery in demand. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.04/lb lower, with other London traded base metals mixed and mostly quiet. NYMEX crude futures are up 1/3 of 1% and trading at $93.48/barrel. Gold and silver are both up slightly. In overnight trading, Asian markets ended higher, with China up 1%. European markets are trading higher this morning as traders bet the EU leaders will announce something today that will fix the sovereign debt problem. After falling yesterday, US futures point higher this morning. Nickel stockpiles fell on Tuesday.
• Reuters morning - Copper gains ahead of EU Summit - more
• LME Morning - Market unconvinced on EU meeting outcome, choppy trading expected - more

  Reports

• SSINA Releases Market Data for July 2011 - pdf here
• ThyssenKrupp Nirosta November Stainless Steel Surcharge - more
• Allegheny Ludlum November Stainless Steel Surcharge - more
• AK Steel November Stainless Steel Surcharge - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices fell yesterday, as participants took a dim view of European developments after a finance minister’s summit got cancelled at the last minute. Importantly, a leadership summit will still go ahead later tonight, but EU finance chiefs will now meet at some undetermined date after the leadership meeting in order to work on technical details of an as-of-yet unratified agreement. The fact that the leadership meeting will proceed without this critical advance work being agreed to strikes us as a bit odd and suggests that we very well may get an inconclusive result later tonight as well. As things now stand, there still is no agreement on how much to reduce Greece's debt by, while uncertainties also remain over the size of a planned bank recapitalization and the scope for leveraging the EFSF. Chancellor Angela Merkel said she wants to put to a vote the proposed increase in the European rescue fund’s capacity, and in this regard, Reuters calculates that she has the votes to win a narrow majority of her supporters. Meanwhile in Rome, Prime Minister Silvio Berlusconi's centre-right coalition was split after the cabinet failed to agree on raising the retirement age, a key reform demanded by the EU. There is even talk that the issue could force early elections if the government's coalition partner balks in supporting the legislation. We will have to see what happens later tonight, but markets are up right now, perhaps encouraged by remarks made by the chairman of the Euro group, Jean-Claude Juncker, who said late on Tuesday that the leaders would be making “groundbreaking” decisions shortly. Base metals are mostly higher, led mainly by copper, but energy is mixed, showing small net changes on the day. The Euro is up as well, now at $1.3920 and US stocks are expected to open modestly higher. Copper is also stronger than the rest of the group on account of Freeport McMoRan Copper & Gold declaring force majeure at its strike-hit Grasberg copper mine in Indonesia. Dwindling LME stockpiles have also been supportive, as has been the decline in Shanghai holdings, which may help explain the 300-yuan premium that November is fetching over January. In spite of policy disagreements, we think the enormous pressure that the markets will bear on EU leaders should they fail to deliver will eventually force them to come up with an agreement. There is simply too much at stake for politics to derail an accord and the markets will take every opportunity to remind the tone-deaf politicians of exactly that. Later today out of the US, we September durable goods data (expected at -1%), as well as September new home sales (expected at 300,000). Yesterday’s numbers were not that great, with the Case Shiller 20-city home price index dropping more than expected, while an October consumer confidence reading plunged to a thirty-one month low. ... Nickel is at $19,702, down $48, and quiet. (Daily Metals Report here)
• (Interfax) Abundant production capacity and slimmer margins due to high raw material prices have sparked a trend for diversification into logistics among China's major steelmakers, an industry consultant told Interfax Oct. 26.
• (CBN) China's imports of laterite nickel hit 6.33 mln tons in Sept
• (PR) Toledo Mining has confirmed that the MV Vinalines Brave sailed for China with 52,350 wet metric tonnes of nickel ore thereby completing the second shipment of high grade, 1.8% nickel grade material from the Berong mine. High grade shipments to date now total 105,950 wmt.
• (ATA) The American Trucking Associations' advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.6% in September after falling a revised 0.5% in August 2011. August's decrease was more than the 0.2% drop ATA reported on September 27, 2011. The latest gain put the SA index at 115.8 (2000=100) in September, up from the August level of 114.
• (China) Illegal land use gives year-end GDP boost - more
• La Niña slowly consolidating in the Pacific - more

  DJ Nickel Prices To Take Support From Falling NPI Output -Panoramic Executive - Nickel prices will take support in the short to medium term from falling nickel pig iron production in China, an executive from ASX-listed nickel miner Panoramic Resources Ltd. (PAN.AU) told Dow Jones Newswires Tuesday. - more

  Stainless steel hit by falling nickel prices, weak demand  - In tandem with weakening nickel prices and a moderate-to-low demand, stainless steel prices have continued with a downward trajectory, shedding on average $120 per ton in China since early October. - more

  Mechel Announces Launch of Experimental Industrial Ferronickel-Producing Complex in Southern Urals Nickel Plant - Mechel OAO, one of the leading Russian mining and metals companies, announces that Southern Urals Nickel Plant OAO launched an experimental industrial complex to produce ferronickel. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, October 25

• Baltic Dry Index - plus 8 to 2,161. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Hong Kong’s September Exports Decline for First Time in Almost 2 Years // Hedge Funds Hike Bullish Commodity Bets // China’s Stocks Rally for Biggest Two-Day Gain Since December; Vanke Jumps // Reserve Bank of India Raises Rates, Signals End to Cycle on Growth Concern // China Boom-to Bust Concerns Revealed in Agricultural Bank Slide Since IPO // Thai Floodwaters Threaten to Overwhelm City’s Defenses as Levee Work Slows // Turkey Seeks Quake Survivors as Snow Nears, Death Toll Increases to 366 // Oil Enters Bull Market With Advance to 12-Week High on Rising Demand Signs // Deutsche Bank Joins UBS in Signaling More Jobs at Risk as Crisis Persists // Bigger Bailout Fund for Europe Needs Work as Germany Faces Parliament Vote // Cameron Overcomes Biggest Tory Revolt in Vote on EU Referendum // Italy Pressured by EU to Boost Economy // European Stocks Fall From 11-Week High; STMicroelectronics Drops // Apple TV Effort Said to Be Led By ITunes Creator // Consumer Confidence Falls to Two-Year Low // Stocks in U.S. Decline on Earnings, Confusion Over European Rescue Effort
• The Euro is now trading slightly lower against the US Dollar. NYMEX crude is up over 2.8% and trading at $93.86/barrel. Gold is up 2.7% and silver is up 4-1/4%. Base metals ended a choppy and confused session mostly lower. Indicator charts show nickel bounced up and down much of the session. For the day Dow Jones reports three month nickel closed at $8.96/lb . Nickel trading was erratic and nervous today, as the market saw volatile turns of up to $450/tonne in just minutes.Traders are trying to bet on what will happen tomorrow and news reports and rumors today set the market into immediate motion. Movement of nickel stored in LME warehouses took a semi break on Monday, falling only slightly with totals now sitting just over the 87,800 tonne mark. In our opinion, until the EU announces something tomorrow, the market is going to play guessing games and trade erratically. Depending on what the EU announces and how the market takes it, we could see a large movement tomorrow. Direction is to be determined, but the trend favors the bulls, while a skeptical and cynical market favors the bears.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Reuters) The acceleration in the HSBC China Flash PMI signals two things -- the third quarter slowdown in the economy was just temporary and demand for commodities in the world's largest consumer will remain strong. The flash Purchasing Managers' Index rose to 51.1 in October from September's final reading of 49.9, climbing above the 50-level that separates (DJ) expansion from contraction for the first time since July.
• Nickel prices will take support in the short to medium term from falling nickel pig iron production in China, an executive from ASX- listed nickel miner Panoramic Resources Ltd. told Dow Jones Newswires Tuesday.
• Felix Zulauf: The Die is Cast - more
• Vital Signs: Struggling European Manufacturing - more
• Economists Predict Scant Growth in 2011 - more
• Is the growth tide turning? - more

  Nickel company fears worker shortage in Nfld. - A Vale official says the Brazil-based mining giant is having trouble finding all the skilled workers it needs to build a nickel processing plant in Long Harbour. - more

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

• Indicators at 6:55 am CST show 3 month nickel trading around $.03/lb lower, with other London traded base metals mixed and mostly quiet. The Euro is trading only slightly higher against the US Dollar at the moment. NYMEX crude is up nearly 3.2% and trading at $94.17/barrel. Gold is up 1/4 of 1% while silver is down slightly. In overnight trading, Asian markets ended higher, with China up nearly 1.9%. European markets are trading slightly higher this morning, and US futures imply a positive opening for Wall Street. Markets await news of tomorrow's EU summit meeting. Nickel stockpiles fell slightly on Monday.
• LME Morning - Market to remain choppy, nervous and volatile in run-up to EU summit - more

  Reports

• China Nickel Imports and Exports Data September 2011 - more
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here
• The 3rd Americas Nickel Conference - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - We had another stunning surge in metals yesterday, with copper exploding by nearly 7% to its highest level in nearly a month; in the past two full trading sessions alone, the complex has tacked on roughly $1000/ton. We were not surprised to see a stronger tone set in over most markets, as we expected to see a degree of strengthening heading into the European debt negotiations. However, metals stumbled along the way, as was the case last Thursday when they inexplicably fell apart, but the fact that they regrouped underscored the upward pull the European debt talks have on the markets. Of course, yesterday's rally was also encouraged in large part by the favorable Chinese PMI readings, discussed in Monday’s commentary. Right now, we are seeing modest declines in most metals. Earlier gains after a second limit-up session for copper in Shanghai have receded, as investors wait for some kind of European announcement tomorrow. The topic that seems to be receiving the most debate right now is a proposal to boost Europe’s bailout fund. Here, German Chancellor Angela Merkel said she will support expansion of the fund, but will ask German lawmakers to go on record and vote for its approval as well. There are two leveraging models under consideration that could be used to boost the fund’s firepower, estimated to reach about €1 trillion; the first would be to increase capacity by insuring a fraction of countries’ funding requirements, while the second combines capital from European and non-European investors. The two are said not to be “mutually exclusive,” and so we likely will see a hybrid proposal emerge. The head of Merkel’s Free Democratic coalition partner indicated support for the fund when it comes up for a vote later in the week, explaining that: “Two conditions of the deliberations are vital for us: the upper limit of Germany’s 211 billion Euros in guarantees can’t be increased, and the EFSF must not get a bank license. These conditions have been retained” the FDP leader told reporters. In addition, German lawmakers said that they will insist on a full parliamentary vote on any measures negotiated, a move that will likely extend the formal ratification process beyond Wednesday. In other markets, oil prices are mixed, with WTI sharply higher, while Brent is down, as the spread between the two contracts continues to erode. The Euro is steady, trading at around $1.3930, and finally moving higher late in the day yesterday after a fairly restrained start to the week US stocks are expected to open modestly lower after a good showing yesterday; Dow futures are pointing to a 20-point decline. We suspect that we could push higher still in metals very short-term, but the bulk of the move is likely behind us, as the markets will have more or less have discounted the European debt stabilization by tomorrow, allowing investors to focus more on ongoing macro developments. Here, things to be very mixed -- US macro readings are recovering rather impressively from September’s more somber tone, but European data is showing greater deterioration. China remains an enigma in that growth readings are still fairly robust, but there are pockets of concern that confront the authorities. Later today out of the US, we get the Case-Shiller 20-city price index for August (expected at -3.5%), as well as October consumer confidence readings (expected at 46). In other news, money manager BlackRock sees "massive opportunity" in oversold mining stocks, the firm's resources investment division chief Evy Hambro told reporters on Tuesday. Investments in mining by the company account for roughly $36 billion, making the holdings one of the world’s largest single exposures to the sector.  .... Nickel is at $19,900, down $95, and quiet after a very good run on Monday. We did breach $19,500 yesterday, a fairly significant resistance point on the charts, and another close above this level today (likely) will send prices towards the mid $21,000 mark.  (Daily Metals Report here)
• (SMM) Jinchuan Group Raises Ex-Works Nickel Prices to RMB 140,000/mt on October 25
• (ACNB) Poseidon Nickel to Double Mine Throughput
• (Reuters) Manila's Nickel Asia 9-mth net more than doubles y/y
• (CMMW) Nickel miner Mirabela has reported record third-quarter nickel concentrate production, with output rising by 36% from the previous quarter.
• (MBN) China's nickel ore imports up nearly 20% in Sep
• (China) Home prices decline in suburbs - more

  Ferrochrome Industry - In Search For Measures Of Regeneration (Part 1) = Producers are badly-off despite growth in demand; No effective measures? = The Q4 benchmark prices of South African charge chrome for Europe and Japan have both rolled over. - more

  Surigao nickel mines back in business soon after NPA attack - The nickel mines in Surigao del Norte which communist rebels attacked last Oct. 3 have resumed normal operations, Nickel Asia Corp., parent of Taganito Mining Corp., said Tuesday. - more

  S.Africa union, Xstrata agree to end dispute within days - South Africa's National Union of Mineworkers said on Tuesday it had agreed with Xstrata to resolve within 7 days a dispute over an employee share ownership programme that has disrupted production of coal and alloys over the past week. - more

  Courtesy AISI - In the week ending October 22, 2011, domestic raw steel production was 1,782,000 net tons while the capability utilization rate was 71.9 percent. Production was 1,629,000 tons in the week ending October 22, 2010, while the capability utilization then was 67.3 percent. The current week production represents a 9.4 percent increase from the same period in the previous year. Production for the week ending October 22, 2011 is down 4.3 percent from the previous week ending October 15, 2011 when production was 1,862,000 tons and the rate of capability utilization was 75.1 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, October 24

• Baltic Dry Index - plus/minus 0 to 2,153. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Turkey’s Worst Quake Since 1999 May Have Killed 1,000 Near Iranian Border // China Central Bank Aide Jailed for Six Years After Leak of Economic Data // China Stocks Rise First Time in Week on Manufacturing Outlook; Banks Rally // Asia Economic Resilience Seen in China Manufacturing Gauge, Japan Exports // Berlusconi Pressed by Europe Leaders on Budget Deficit, ECB’s Bini Smaghi // Swiss Banks May Pay Billions to U.S., Disclose Client Names // EU Outlines Bank Plan as Summit Reaches Halfway // European Stocks Rise on China Growth // Jobs Outlook in U.S. Worst Since 2010: Survey // Caterpillar Net Beats Estimates as Mining Equipment Demand Gains // Federal Reserve Likely to Increase Stimulus, Pimco’s Mather Says // Treasury Eyes First New Debt Type Since TIPS // Stocks, Commodities Rise on Caterpillar Earnings, Debt Progress in Europe
• The Euro is now trading nearly 2/10 of 1% higher against the US Dollar. NYMEX crude is up 3.7% and trading at $90.62/barrel. Gold is up nearly 1/2 of 1% and silver is up 1/3 of 1%. Base metals ended the first trading session of the week higher - across the board. Indicator charts show nickel opened higher, and rose throughout the day. For the day, Dow Jones reports three month nickle ended the session at $9.07/lb . A few days ago we were trading near the bottom of the months range, and today, we rose above $9/lb for the first time since September 21st. Stockpiles of nickel stored in LME warehouses rose for only the third time this month on Friday and now total just over 87,700 tonnes. Some analysts are dismissing this as no more than a relief rally and short covering. We aren't convinced. With the Dow breaking out of its recent range (above 11,700) this bull run has room to roam, as long as the European Union doesn't squash it with unexpected bad news. We wouldn't be surprised if things don't get better for awhile, before next spring hits, and things go up for grabs again. Let's hope we are right - at least on the first part.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Robry Monday Morning Economic Assessment - more

  Commodity/Economic Articles and Comments

• (10/19) (Dow Jones) The global nickel market was in surplus by 900 metric tons in the first eight months of the year, the World Bureau of Metal Statistics said Wednesday.
• Number of the Week: GDP 6.7% Below Potential - more
• Night Sweats of a Money Manager - more
• China ‘flash’ PMI survey signals expansion - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.17/lb higher, with all London traded base metals trading higher as well. The Euro is trading 1/3 of 1% lower against the US Dollar. NYMEX crude is up 1/2 of1% and trading at $87.83/barrel. Gold is up 9/10 of 1% and silver is 1/3 of 1% higher. In overnight trading, Asian markets ended higher, with China up 2-3/4%. European markets are trading slightly higher, and US futures show Wall Street may open timidly higher. Markets will be watching Wednesday's EU summit meeting closely. Nickel stockpiles rose on Friday.
• Bloomberg morning - Base Metals Extend Biggest Rally Since 2009 on China Manufacturing Outlook - more
• LME Morning - Renewed optimism boosts prices, Wednesday's EU summit main focus - more
• Reuters - Copper gains on EU debt deal hopes, China data - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here
• SMM Nickel Price Forecast (Oct. 24-28) - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - In an incredible reversal, copper rallied strongly on Friday, rising almost 6% on the day and practically making up all of Thursday's 7% plunge. Many of the other metals rallied in sympathy as well, although most did not do as well as copper did in erasing their losses. There was no particular news behind Friday's about-face, but we suspect that a round of bargain hunting set in after Thursday's steep plunge, as many may have viewed the decline as excessive and an unusual aberration given that most other markets were reasonably steady that day. The net result of the past two very volatile sessions was roughly unchanged for metals -- a rather appropriate result given that we were heading into a very uncertain weekend as far as Europe was concerned. As it now stands, most markets seem to be relieved by the progress made over the weekend by European leaders. Metals are building on Friday’s decent gains and there are modest advances in many other complexes as well, including energy and some of the ags. However, the advance in metals is outpacing the gains we are seeing elsewhere, since the group is also teeing off somewhat disproportionately on news that China’s PMI expanded moderately in October to break three months of declines. In this regard, the flash PMI -- designed to give an early snapshot of the month's factory activity -- rose to 51.1 in October from September's final reading of 49.9, and came in well above the 49.9 estimate. The data also showed Chinese factory pricing pressures easing in October, with the input price sub-index falling to 54.3 from 58.8 in September. Offsetting the Chinese news somewhat, was data released out of Germany showing that the country’s manufacturing sector contracted in October for the first time in two years. Markit's composite output index, which combines service activity with manufacturing output, rose marginally to a reading of 51.2 from 50.5 in September, but in our view, the deterioration in the country’s manufacturing sector overrides the gains in services. With regard to weekend European developments, although no "grand bargain" was formally announced, there was a working agreement on some key issues, with the loose ends expected to be tied up by Wednesday, which is when another summit meeting will be held. Among the issues tentatively agreed on is that holders of Greek bonds will likely have to take much bigger losses than the 21% originally agreed to in July, with discounts of between 50%-60% now being proposed. (This is a far more realistic haircut anyway given where Greek paper is trading on the secondary market). Since many banks, particularly French ones, will take a bigger capital hit in light of these steeper write-offs, a parallel plan for boosting their capital was also agreed to. In this regard, around 108 billion Euros would be used to recapitalize banks, somewhat on the low side of estimates given the IMF's recent projection that at least 200 billion Euros would be needed. However, this was in line with what the European Banking Authority told ministers that its emergency tests showed were needed. Banks in bailout countries account for almost half the capital shortfall, but German, French, Italian, and Spanish banks will also be required to find new capital. UK banks were spared for the time being. Banks were told to raise funds from private investors, their governments, or as a last resort, tap the EFSF rescue fund. The ministers made more limited progress on a third issue, namely, how to increase the firepower of the EFSF rescue fund. German Chancellor Angela Merkel is firmly opposed to French suggestions that the fund should get a banking license that would enable it to borrow from the ECB. The Germans are instead proposing that more money be put into the fund, but this would mean a greater French commitment and a likely downgrade of France's coveted AAA credit rating. Plans to increase the fund’s firepower through an insurance scheme, which would use the EFSF to guarantee bond losses, runs into a similar problem in that it saddles France with too many liabilities. A second option is to set up an EFSF-insured fund that would seek outside investment for troubled bonds, with China likely being asked to be one of the investors. Greece’s deteriorating economic outlook was also apparently the subject of intense discussions. In this regard, the ministers agreed to release the majority of loans worth 8 billion Euros to prevent the country from defaulting, but much time was spent discussing what debt levels the Greeks could comfortably service given their rapidly deteriorating economic outlook. In sum, the Irish Prime Minister summed it up well when he said "There was clearly an understanding that the world is watching Europe and that there isn't any point in doing this in a half-hearted fashion." The markets apparently agree, which is why we are slightly higher right now, although the Euro is not doing much of anything, now trading at $1.3850 and pretty much unchanged from Friday. We expect the markets to work higher perhaps through to Wednesday, but we think that most of this "expectation rally" will likely be fully priced in after that. Investors will then look to the credit markets to see if various European bonds are indeed holding up in light of the new plans and if they are, focus will gradually revert towards the more worrying global macro outlook. Although the Chinese numbers are offering some relief, as least judging from today’s PMI reading, we doubt the country will be able to escape its own version of a “slow growth patch” given that a number of its export markets are slowing. With respect to US macro numbers, nothing will be released on Monday, but on Tuesday, we get the Case-Shiller 20-city price index for August (expected at -3.5%), as well as October consumer confidence readings (expected at 46). On Wednesday, we get September durable goods (expected at -1%) and September new home sales (expected at 300,000). Weekly initial claims data comes out Thursday (expected at 403,000), followed by the most important release of the week, which is third-quarter GDP (now expected at 2.2%, almost double the previous quarter). August pending home sales also comes out Thursday (expected at -1%), while personal income and spending for September comes out Friday (expected at .3% and .6%, respectively). Finally, we get Michigan consumer sentiment readings (expected at 57.5) Out of China, more detailed import and export metals trade data was released for September and we reproduce the various components in our attachment. We will run our usual charts on this data later in the week: Finally, Reuters has completed its latest analyst survey poll on metal prices for 2012 last week. The average mean forecasts may be useful for modeling and/or budgeting purposes, and may be preferable to relying on only one forecasting source. The table is reproduced in our attachment. .... Nickel is at $19,095, up $295, and moving in towards the top end of the trading range. (Daily Metals Report here)
• (Fastmarkets) Nickel  ..... Inventories increased 906 tonnes to 87,726 tonnes.
• (Yieh) Taiyuan Iron&Steel Group (Tisco), the largest stainless steel manufacturer in China announced that its stainless steel output in the first nine months of this year totaled 2.2295 million tons, surged by 6.74% year on year.
• China Imports and Exports of Base Metals in September 2011 - more
• (Interfax) China's crude steel output fell 3.49 percent on a monthly basis in September to 56.70 million tons, reflecting the wider slowdown in the world's second largest economy in the third quarter, according to monthly production figures released by the World Steel Association (WSA) Oct. 21.
• (China) Double-dip recession unlikely in China - more

  Russia Norilsk 9-mo nickel, palladium output down - The world's top nickel and palladium producer, Russia's Norilsk Nickel , said on Monday output of these two metals declined in the first nine months of this year from the same period a year ago, but did not explain the decline. - more

  China Molybdenum Imports/Exports; August 2011 = Back again to export surplus after two months' import surplus = China's trade balance of molybdenum in August, 2011 was export surplus, i.e., on molybdenum metal content basis, exports: 2.10 million pounds, imports: 1.88 million pounds. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, October 21

• Baltic Dry Index -  minus 8 to 2,153. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Stocks Drop for Biggest Weekly Loss in Five Months; PetroChina Falls // Sugar Traders Most Bearish in Three Months on Glut: Commodities // Japan to Sell $10.4 Billion More Debt to Pay for Earthquake Reconstruction // Saab’s Survival Chances Drop as Chinese Investors Cut Investment Pledges // Libyans Cheer Qaddafi’s Death as Step Toward Democracy After 42-Year Reign // EU Considers Wielding $1.3T to Break Debt Impasse // EU Officials Said to See Risks Amid Call for Talks // German Business Confidence Drops to 16-Month Low as EU Tackles Debt Crisis // European Savings Wars Drive Bank Costs Higher // Stocks Advance in Europe Before Euro Area Debt-Crisis Summit; Valeo Jumps // Transport Shares May Outperform as U.S. Consumer Spending Rises // Payrolls Declined in 25 U.S. States, Led by NC // Stocks, Euro Gain on EU Bailout Hopes
• The Euro is now trading 6/10 of 1% higher against the US Dollar. NYMEX crude is up nearly 2.2% and trading at $87.94/barrel. Gold is up less than 1% while silver is up 1-1/2%. Base metals ended the session solidly higher after an early morning rush set a positive tone for the day. Indicator charts show nickel jumped early and hard, and continued to climb for most of the session. For the day,. Dow Jones reports three month nickel ended teh session and week at $8.53/lb . Stockpiles of refined nickel stored in LME approved warehouses fell sharply on Thursday and now total just over 86,800 tonnes. The loss of 1,668 tonnes in one day was the biggest since August 31st. Markets were up sharply today, both commodities and equities on the hope European leaders are finally able to come up with something big to fix their sovereign debt problems. We have seen the market get hopeful before - and just as quickly, have those hopes dashed. Whatever happens, we could see some sharp volatility next week.
• Have a safe and relaxing weekend! 

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (MFG) World nickel production was 136,800 tons in August, exceeding consumption of 129,900 tons the International Nickel Study Group said in a statement out yesterday.
• (Barry Ritzhold) Note that this does not reflect a shift in my economic expectations, and we still believe a recession is more likely than most economists expect. Nor does it change our longer term secular market view, which remain negative. Before all is said and done, I expect markets will go lower than where they are right now.
• Is Bank of America preparing for a Chapter 11? - more
• First look at US pay data, it’s awful - more
• Which States Are Poised for Jobs Growth? - more
• Debt Crisis Overshadows Brighter Data - more
• Driller wins approval to halt water to Pa. town - more

  Xstrata debacle another blot on SA’s landscape - SA’s allure as an investment destination has been further tarnished by global resources company Xstrata’s announcement that it has suspended negotiations with some workers at its South African operations, over its voluntary offer of an employee share ownership plan. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.35/lb higher, with all London traded base metals higher this morning. Markets in commodities and equities are betting that something positive comes out of the European Union leaders meeting this weekend. The Euro is nearly 2/10 of 1% higher against the US Dollar.  NYMEX crude is up over 8/10 of 1% and trading at $86.78/barrel. Gold is up over 1% and silver is higher by more than 1.4%. In overnight trading, Asian markets ended lower, with China off 1/2 of 1%. European markets are downplaying the rift growing between France and Germany over EU bailout plans, and are trading higher. Wall Street looks set to open higher as well. Nickel inventories took their biggest hit of the month yesterday.   
• LME Morning - Prices rebound but volatility expected in run-up to EU bailout announcements - more
• Reuters - Copper stages rally, but caution dominates mood - more

  Reports

• September 2011 Crude Steel Production - more
• Outokumpu November Stainless Steel Surcharge - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here
• October 2011 Business Outlook Survey - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Markets finished generally mixed yesterday in very choppy trading yesterday, as focus remained locked on the goings-on in Europe. However, metals were trapped in their own world for much of the day and hardly participated in the modest recovery we saw set in over a number of other markets. The biggest casualty was in copper, where prices lost a whopping 6.5% by the close, setting off substantial weakness in lead, zinc, nickel, and aluminum, with all four metals crashing to fresh 2011 lows. Incredibly, we have snapped back almost as sharply today --copper is now up by almost $370, making up most of yesterday’s losses, and there are broad-based recoveries in the rest of the group as well. The sharp moves are a testimony to the incredible volatility that likely will the more normal state of affairs going forward. We hope to see reduced volatility going forward once there is a semblance of clarity coming out of Europe, but for now, that does not seem to be the case. France and Germany said that while a Sunday summit will still go on, nothing official will be announced until perhaps a second summit meeting takes place on Wednesday. Clearly, the European authorities are trying to "guide" the markets away the expectation that a make-or break session will take place this weekend and are, instead, hoping the markets will give them additional time to get something sorted out. We doubt investors will be that patient as they would want to see at least the profile of an agreement emerge by Sunday, which perhaps explains why we are seeing some details being leaked today. In this regard, Bloomberg reports that European governments may unlock as much as E940 billion ($1.3 trillion) to fight the debt crisis, while possibly merging the European Union’s temporary and permanent rescue funds. Furthermore, a ceiling on bailout spending will be scrapped. Finance ministers meet in Brussels today from about 2 p.m. to further flesh out ideas in advance of the Sunday and Wednesday summit meetings. In the meantime, Greek Prime Minister George Papandreou won a parliamentary vote late yesterday on further austerity measures. Riots and strikes continue to rock Athens, with one man dying in yesterday’s protests. With respect to action in other markets, we are seeing oil prices up by about $1/brl, and the Euro poking above $1.38. US stocks are expected to open higher following a stronger tone in Europe and Asia and the continued strong earnings that are coming in. However, the Chinese stock market has gone the other way entirely, ending down 0.6% today, and hitting a fresh 31-month low in the process. For the week as a whole, the Chinese market was off some 4.7%, weighed down by worries over the country's economic picture. In fact, this is the reason why we are seeing such disproportionate downward pressure on metals -- even on days when the rest of the markets are stabilizing, investors cannot muster the same degree of buy-side enthusiasm for the complex given lingering concerns over the Chinese outlook. On the US macro front, it was reported yesterday that sales of existing homes dropped 3% in September, this according to the National Association of Realtors, dampening some of the optimism generated initial jobless claims falling by 6,000. Later in the day, we got factory activity readings in the US mid-Atlantic region coming in at 8.7 in October, its highest reading in six months. Given the spate of stronger than forecast US numbers out in recent weeks, economists may be revising their Q3 GDP numbers upwards to between 2.3% and 2.7%, almost double the tepid 1.3% increase seen in Q2. No numbers are slated for release today. ..... Nickel is at $18,725, up $720, and still holding onto its trading range.  (Daily Metals Report here)
• (MNP) Nickel miner Panoramic Resources expects to deliver up to 18,500 tonnes of nickel in concentrate from its Western Australian operations in 2011-12 and has come in slightly above guidance in the latest quarter.
• International Nickel Study Group predicted in early October that the global nickel would be oversupplied by 30 thousand tons this year.
• (BW) China's Jinchuan Group Ltd. is poised to acquire a stake in Ipilan Nickel Corp., a joint venture of Toledo Mining Corp. Plc. and local firm Nickel Laterite Resources.
• (PR) Mirabela Nickel Limited is pleased to advise that the remaining 3,653 tonnes of nickel hedges have been closed out for a cost of approximately US$5 million. The Company has now closed out all of its hedge positions.
• Marius Kloppers declines to comment on Ferrous Resources, says targets cheaper - more
• Relocated Porgera Villagers Killed In Tribal Clash - more

  LME must keep unique trading blend for sale to work - Leading London Metal Exchange shareholders will insist on retaining key elements of the 134-year old exchange's unique trading and business model as a condition to agree any sale, they told Reuters. - more

  Authorities Confiscate 100,000 Units Of Supor's Cookware - The Harbin Administration of Industry and Commerce conducted checks and found that stainless steel cookware costing less than 200 yuan produced by Zhejiang Supor (002032) contained excessive levels of manganese and insufficient nickel, reports China Business News. - more

  Xstrata needs more time to meet cadmium limit - Roger Brisson said he admires Xstrata Nickel officials for being so upfront with residents about how the company’s operations impact on their lives. - more

  Court resumes hearing in dispute between Norilsk Nickel and Rusal - An appeals court in Krasnoyarsk has resumed a hearing on an appeal filed by MMC Norilsk Nickel against a lower court order to submit business documents to MMC's minority shareholder Rusal, the court told the Russian Legal Information Agency. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 20

• Baltic Dry Index - plus 21 to 2,161. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Regulator Says Shadow Banking Risks Will Be ‘Strictly’ Controlled // Coal Mine Explosion in China Leaves 13 Dead, Three Rescued, Xinhua Reports // China’s Stocks Fall to 31-Month Low on Economic Slowdown, Europe // Japan May Spend Extra $52 Billion to Cope With Yen Gains, Documents Show // Thai Floods Threaten Inner Bangkok as City Uses Canals to Help Drain Water // Taiwan Referendum Needed Before Peace Talks With China, President Ma Says // Rescue Fund Overhaul May Lead to Aid for Spain, Italy as Germany Objects // Euro Advances for Third Day Amid Crisis-Deal Optimism; Dollar Index Falls // U.K. Retail Sales Unexpectedly Increase Most in Five Months // Qaddafi Reported Held as Libyan Fighters Hoist Flags Over Center of Sirte // Greeks Told to Forget ‘Miracles’ as Aid Depends on Austerity // Merkel Cancels EFSF Speech to Assembly // EU Aid Fund May Allow ’Enormous’ Credit Lines // European Stocks Drop as Leaders Split on Rescue; Schneider, Actelion Fall // Wall Street Has Worst Quarter Since Crisis // Philadelphia Economic Index Unexpectedly Rises // Stocks, Commodities, Euro Slide Amid Discord Over European Bailout Plans
• The Euro is now trading over 4/10 of 1% lower against the US Dollar. NYMEX crude is down nearly 1-1/2% and trading at $84.84/barrel. Gold is down over 2% and silver is off over 3.4%. Base metals ended the day lower, most taking a pretty good thumping. Indictor charts show nickel opened much lower this morning, did very little in the first 3/4 of the trading session, then slumped further late. For the day, Dow Jones reports three month nickel ended the day at $8.16/lb . That ties it with Sept 26th as the second lowest close of the year, with only Sept 30th's close of $7.98/lb, lower. Stockpiles of nickel being stored in LME approved warehouses fell hard again yesterday and now total just under 88,500 tonnes. In the 14 recording days so far this month, stockpile total have fallen 8,586 or nearly 9%. This during a period of slowing stainless steel sales, strong worldwide nickel production, and strong "pig" nickel production in China. Just recently, analysts were still calling for a surplus of nickel in the last quarter of 2011 and into 2012. But the growth in LME warehouses has yet to materialize and in fact, we are witnessing an acceleration in the declining numbers. Cancelled warrants have remained in the 7%+ range for much of the month, implying further withdrawals are in the cards. So what gives? No one seems to have the answer to that, although their are theories, some of which we have posted in previous posts. In US government report news today, new claims for unemployment eased slightly but remain above the 400,000 level. The Philly Fed index rose unexpectedly, and raised some eyebrows amongst those who were taking the Economic Cycle Research Institute's dire forecast from a few weeks ago as gospel. The ECRI stated on 9/30 that “We are going into a recession. The U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.” Considering their track record, one cannot dismiss them as alarmists, but for their dire prediction to come true, we should not be seeing a recovery in any of the Fed's indexes. Sales of existing homes fell 3% in September. And finally, the Conference Board leading indicators revealed that growth in the US has softened, but remains positive.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Emerging Economies Have Long Way To Go On Business Climate - more
• Pay Raises Trail Behind Even Mild Inflation - more
• Vital Signs: Construction Gains in Apartment Buildings - more
• Understanding Federal Debt & Presidential Budgets, Fiscal Year Edition - more
• U.S. Public Debt: Going Greek - more
• Beltway Earnings Make U.S. Capital Richer Than Silicon Valley - more
• John Malone Now Biggest Landowner in the U.S. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.26/lb lower, with all other London traded base metals lower as well. The Euro is presently trading up over 1/4 of 1%. NYMEX crude is up nearly 1/2 of 1% and trading at $86.52/barrel. Gold is down 1.3% and silver is off 1-2/3%. In overnight trading Asian markets ended lower, with China down 2.4%. European markets are trading lower this morning, but US futures show Wall Street may return to its bull run after yesterday's loss. Nickel stockpiles fell sharply again on Wednesday.  
• LME Morning - Metals tumble as eurozone woes weigh, lead and zinc hit weakest since mid-2010 - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Commodity prices staged a sharp retreat yesterday, with earlier gains eroding on signs of continued discord coming out of Europe. Things got off to a bad start after European officials denied a Guardian story that France and Germany had agreed on a €2 billion stabilization fund, as well as on a rough outline for a bank recapitalization program. As the day wore on, the concerns only mounted-- French President Nicolas Sarkozy abruptly flew off to Germany to consult with Chancellor Merkel, ignoring waiting reporters (and apparently leaving his pregnant wife behind in Paris to deliver on her own). The fact that Moody’s also moved to slash Spanish debt on Tuesday by two notches only underscored the gravity of the situation and the need for the two European powerhouses to reach some kind of working consensus – and soon. The macro items we saw yesterday did not help stabilize the markets much. Although US housing starts came in on the stronger side during September, with sales rising at their fastest annual pace in 17 months, the news was partly offset by the fact that permits for future construction fell to a five-month low. Later in the day, the selling resumed in all the markets after the Fed's "Beige Book" came out, referencing the fact that the US economy only experienced minimal growth in September amid a very tepid business environment. Oil prices faded in the last hour of trading, with Brent shedding almost $3/brl. The Dow Jones gave up an earlier gain to finish with a 72 point decline, while base metals, which were already weak, only added to their losses. Right now, things are looking ugly again for the bulls, although energy seems to be holding its own and is currently flat on the day. Copper is getting pounded after a limit-down move in Shanghai and is now below the $7,000 mark. There are steep declines in zinc and lead as well, with both crashing through their recent lows. We are hearing that European leaders are still struggling to resolve their differences ahead of the weekend summit and although the European Commission President expressed optimism that the leaders will reach an agreement, the markets are not impressed with the last-minute theatrics. Things are not being helped much by reports that the IMF may now delay its next payment to Greece on account of overly optimistic EU debt projections. There is also talk that a private sector stake in Greece’s debt will now have to be forced through at a higher haircut rate as opposed to the voluntary contribution being considered earlier at a much lower one. In the meantime, Greek protesters marched on parliament today, and a number of strikes are in process. At least six protesters and 15 police officers were injured, with 15 more arrested. In other markets, the Euro is holding up surprisingly well, and is actually up for the day, but gold is down sharply, as the perceived safe-haven is perhaps not considered safe enough during these uncertain times. We also suspect that funds are liquidating profitable gold holdings in order to free up cash. In the equity markets, US stock futures are pointing to an opening gain, likely buoyed by good earnings reports that have been trickling in all week. Bloomberg reports that 70% of the 66 companies in the S&P 500 that have reported earnings thus far have beaten profit estimates. Microsoft and AT&T are among 32 S&P members that are due to release results later today. Despite the shaky performance of the past 24 hours, we would advise not to get short ahead of the European debt talks this weekend. We are still expecting to see some sort of agreement to emerge and as a result, markets could open sharply higher on Monday. Having built up a sense of anticipation (perhaps a wrong move in retrospect), we believe the Europeans have too much at stake for them to show up empty-handed come Monday. .... Nickel is at $18,245, down $555, and unlike lead and zinc, is still holding on to its trading range.  (Daily Metals Report here)
• (Reuters) Nickel market in 13,000 T deficit Jan-Aug'11-INSG
• Zambia suspends issuance of new mining licences - more
• Iron Ore’s Worst Rout in 15 Months Seen Deepening as China’s Growth Slows - more
• Gloom Grips Consumers, and It May Be Home Prices - more
• (CEN) China - The National Energy Administration (NEA) announced Tuesday that the country's electrical power consumption rose 12.2 percent from a year earlier in September.
• Time for China to dump US debt? - more

  Outokumpu Cuts 1,300 Jobs Amid Overcapacity - Outokumpu Oyj , a Finnish maker of stainless steel, plans to cut 1,300 jobs as excess capacity and weaker demand hurt profits. The shares jumped. - more

  Xstrata cancels SAfrica share scheme, strike on - Global miner Xstrata said on Wednesday it had withdrawn its offer for an employee share ownership programme at its South African operations due to a strike that hurt production of coal and ferrochrome. - more

  Antam files lawsuit on overlapping areas - State mining company PT Aneka Tambang (Antam) is suing the regent of North Konawe, Southeast Sulawesi, for issuing decrees authorizing two private companies to continue mining nickel in Antam’s concession. - more

  Manitoba mine worker dies in accident - A Vale employee has died from a workplace accident at the company's nickel mining operation in northern Manitoba. - more

  North Maluku to become nickel industry center - North Maluku (Malut) Governor Thaib Armayin said the province was expected to become a nickel industry center in Indonesia as two nickel plants worth Rp84 trillion would be built in Halmahera island. - more

  Australia's Western Areas sees 10% drop in Qtr nickel output - Australia's Western Areas on Thursday reported an 10 percent drop in September quarter nickel production to 7,658 tonnes versus the previous quarter. - more

  Japan: Imported Ferroalloys Market Report October 14, 2011 = Shaken by weaker resource-based currencies = Market outlook of the imported ferroalloys as of October 14, 2011 is as follows: - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 19

• Baltic Dry Index - plus 4 to 2,140. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Becomes Apple’s Second-Largest Market as ‘Sky’s the Limit,’ CEO Says // Years of Wal-Mart Violations Forced China Government Action, Official Says // Most Accurate China Forecaster Sees No Sudden Ease as Growth Cools to 9.1% // China’s Stocks Drop on Economic Slowdown; Automakers Decline // Asia Family Offices to Triple as Millionaire Ranks Swell, Citigroup Says // Spain’s Rating Cut for Third Time Since 2010 by Moody’s Amid Debt Crisis // BOE Voted Unanimously to Expand Stimulus to $380 Billion on Slow Economy // Papandreou Vows Further Austerity as Strikes Shut Greek Schools, Hospitals // EU Rescue Fund Insurance Plan May Not Translate Into Debt Crisis ‘Bazooka’ // Trichet, Sarkozy, Merkel Meet in Frankfurt in Bid to Break Crisis Gridlock // European Stocks Gain on Rescue-Fund Reports; Commerzbank Climbs // Housing Starts in U.S. Rise 15%, Beat Forecast // Travelers Profit Falls 67% on Irene Costs // Wall Street’s 1% Meets 2 Billion Seeking Answers: William Pesek
• The Euro is now trading 3/10 of 1% higher against the US Dollar. NYMEX crude is flat at $88.35/barrel. Gold is down over 1/2 of 1% and silver is lower by 2.1%. Base metals ended the session mostly lower, with only tin pulling off a gain for the day. Indicator charts show nickel spent most of the day just under the break even line, until late in the session when it slumped. For the day, Dow Jones reports three month nickel closed at $8.53/lb . Stockpiles of nickel held in LME approved warehouses was hit hard yesterday and now total just over 89,450 tonnes. With little more than a wing and a prayer to bet on, US markets are higher, and quickly approaching the Dow 11,700 level. We feel this is an important 'resistance' number, as the range we are currently trading in has already been hit three times in the last two months, before falling back sharply, so breaking thru is necessary for this bull run to grow legs. A lot will depend on whether the Europeans can make some real progress in solving some of their financial woes - or will the can just kicked further down the road. At present, metals traders are not as enthusiastic as Wall Street appears to be.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• What Percent Are You? - more
• Next Generation of Homeowners Are Freaked Out - more
• Pace of Demand Will Control Factory Outlook - more
• Vital Signs: French vs. German Credit Risk - more
• Fraudclosure Errors Destroying Americans’ Property Rights - more

  Xstrata tells unions to take it or leave it - XSTRATA has threatened to pull out of its proposed employee share ownership plan (Esop) for South African workers after a labour dispute related to the scheme had culminated in a protected strike. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.07/lb lower, with most base metals lower as well. The Euro is currently trading nearly 1/2 of 1% higher against the US Dollar. NYMEX crude is up over 1/10 of 1% and trading at $88.48/barrel. Gold is down 1/3 of 1% and silver is lower by more than 8/10 of 1%. In overnight trading, Asian markets ended higher, with China off 1/3 of 1%. European markets are trading higher this morning, while US futures have yet to decide an opening direction. Stockpiles of nickel fell hard yesterday.  
• LME Morning - Off lows, but weak demand picture and economic uncertainty weigh on prices - more
• Reuters - Europe debt jitters push copper lower - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Oil and the US stock markets both finished higher yesterday, but LME metals, gold, and some of the ags did not participate as much given the below-consensus GDP number out of China referenced in yesterday’s note. In fact, all the markets were dragged lower initially by the Chinese data, but US equities turned positive later in the day, as focus reverted to what the Europeans were going to announce this coming weekend. In this regard, Britain’s Guardian may have gotten an early scoop, reporting that France and Germany will apparently agree to boost the Eurozone financial rescue facility to two trillion Euros ($2.76 trillion) as part of a beefed up fund that would hopefully have enough financial firepower to fight the spreading debt crisis. However, the Guardian says that the $2.76 trillion will not be all in cash, but leveraged in order to reach that mark. Whatever the case, this is finally a serious allocation of money for what is a very serious problem, and if the Guardian article is correct, investors may breathe a bit easier in the days ahead. The paper also reports that Europe's banks will be recapitalized at higher capital ratios that the European Bank Authority is insisting on after it examined the debt exposures of roughly 70 "systemic" institutions. While French and German banks are thought to be capable of meeting the new ratios on their own, other countries may need help from the expanded fund. None of this has been helping metal markets right now, as we are down again. One reason for a lack of follow-through is that a number of European officials have said that the Guardian report is incorrect. Thankfully, this is not leading to a broad-based rout (yet) as investors are waiting to see what kind of plan will indeed be introduced this weekend. In addition, other stories have cropped up that have held back any fresh buying; Moody’s last night slashed Spanish debt by two notches, saying that slowing growth for the Eurozone would make it more challenging for Spain to reach its ambitious fiscal targets, while out of Germany, the German Center for European Economic Research announced that its ZEW index of investor expectations tumbled to minus 48.3 points in October from minus 43.3 points in September, its lowest reading since November 2008. Out of the US later today, we get September CPI (expected at .3%), as well as September housing starts and permits data (expected at 595,000 and 610,000, respectively). The Federal Reserve's “Beige Book” also comes out Wednesday. The few macro items we got yesterday were mixed in terms of impact; the Labor Department said its seasonally adjusted price index increased by a rather high 0.8% last month after being flat in August and came in well ahead of the 0.2% increase expected. However, the bulk of the spike came from gasoline, and this component could recede next month. In housing news, home-builder sentiment rose to its highest level in nearly 1-1/2 years in October, although it remains well below levels consistent with improving market conditions, this according to the National Association of Home Builders. In other markets, energy market are slightly lower, while the Euro is holding up surprisingly well, and is actually trading over $1.38 right now. US stocks are expected to open higher. Despite the conflicting stories of what plan the Europeans will ultimately cobble together, we remain rather positive on most markets for the balance of the week as we think the sense of anticipation heading into the weekend will prevent massive short positions from accumulating. However, we could see a broad-based retreat early next week, as a case of "buy the rumor, sell the news" sets in. Metals will also be held back by the gnawing questions about China and whether things there need to slow down more before the authorities allow a measure of easing to be introduced. However, for the moment, all eyes will be on Europe to see if the ideas being proposed will be bold enough to keep the flood waters from rising. ....  Nickel is at $19,000, down $150, and holding steady.  (Daily Metals Report here)
• BHP posts record WA ore shipments - more
• China warns of 'grim situation' in foreign trade - more
• Preoccupied by Wall Street - more

  South Korea's PPS Buys 200 Tons Nickel From Eramet - Stratton - French nickel producer Eramet SA (ERA.FR) won a recent tender to supply 200 metric tons of nickel to South Korea's Public Procurement Service, a state commodities stockpiling agency, according to commodity trading firm Stratton Metals Resources Ltd. - more

  Year Over Year Growth In Service Center Shipments Continues - September 2011 service center shipments remained above 2010 levels for steel and aluminum products in both the US and Canada. Inventory positions remained near August levels for both metals in both countries. - more

  E United Group to Build Nickel-iron Alloy Plant in Fujian, China - E United Group, one of Taiwan’s two integrated producers of steel products, will invest in a nickel-iron alloy plant in Ningde, Fujian province, China. - more

  Weaker Rand May Encourage South African FeCr Expansions = Background of Q4 benchmark agreement = After long-run discussions, the benchmark for the charge chrome shipments from South Africa to Europe during the fourth quarter of 2011 was finally agreed as unchanged at US‘120/lb ddp. The proposal by a major supplier to raise it by US‘5/lb was turned down by the consumers, the stainless mills. - more

  National gov’t owns Philnico equipment, PMO says - The Privatization and Management Office (PMO) warned that the pieces of mining equipment that the city government of Surigao is scheduled to auction off next week could not be sold as the government was pursuing ownership through a case pending in court. - more

  Palmer blamed for "hijacked" BHP deal - Mining magnate Clive Palmer may be forced to share the profits from his Yabulu nickel refinery after he “hijacked” a deal between Gladstone Pacific Nickel and its former owner BHP Billiton. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, October 18

• Baltic Dry Index - minus to 2,136. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China’s Economy Expands at Slowest Pace in Two Years on Drag From Europe // China’s Stocks Drop Most this Month After Economy Slows More than Expected // Euro Leaders’ Crash Crisis Campaign Bogs Down // German Investor Confidence Dropped to Three-Year Low in October on Crisis // France Risks Losing Top Grade on Bailout Fund // Merkel Said to Say Crisis Plan Moving by Millimeter // European Stocks Fall on Debt Crisis, China Concern; BHP Drops // Rhode Island Governor Follows Christie to Seek Curbs on Public Pensions // Wholesale U.S. Prices Rise More Than Forecast // U.S. Stocks Rise, Led by Banks
• The Euro is now trading slightly higher against the US Dollar. NYMEX crude is up over 2-1/3% and trading at $88.42/barrel. Gold is down 1% but off session lows, while silver is up 1/2 of 1%. Base metals ended mostly lower, with only one winner for the day. Indicator charts show nickel fell early, but shortly after our morning briefing, the price began a solid stretch of gains. For the day, Dow jones reports three month nickel ended at $8.68/lb . Stockpiles of nickel stored in LME approved warehouses fell again on Monday and now total just over 90,400 tonnes. Wall Street lagged early but has resumed its bull run. Baltic Dry Index is down for a second day, while nickel stockpiles have only seen two days of gains all month. That oversupply all the analysts predicted can start anytime now. Another hit like yesterday and we could see an under 90,000 tonne total.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Marketwatch) Goldman Sachs analysts said on Tuesday that while losses fell at all five credit card firms it tracks, delinquencies, payments more than 30 days late, rose at all the firms for the first time in almost two years.
• Vital Signs: Factory Output Rises - more
• 86% of Workers Obese or Have Other Health Issue - more
• Minimum Wage and Unemployment  - more
• Debt by nation - more

  Nickel Asia to meet target despite Taganito raid - Nickel Asia Corp. president and CEO Gerard H. Brimo told reporters on Tuesday that despite the recent attack by insurgents on NAC subsidiary Taganito Mining Corp.in Surigao del Sur, the parent company has been able to stay on track to meet its target tonnage for 2011. - more

  Toledo ships nickel from Berong - Toledo Mining has announced that the MV ZHE HAI 522 has now sailed for China with 52,800 wet metric tonnes of nickel ore from its Berong mining operation in the Philippines thereby completing the third and final shipment of lower grade ore. - more

  Commenting period now open - The Canadian Environmental Assessment Agency has just launched the first of three public consultation periods for a federal environmental assessment of Cliffs Natural Resources' Black Thor chromite deposit in the Ring of Fire area of northwestern Ontario. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.17/lb lower, with all London traded base metals lower as well. The Euro is trading over 4/10 of 1% lower against the US Dollar at the moment. NYMEX crude is down 2/3 of 1% and trading at $85.84/barrel. Gold is down nearly 1.9% and silver is off nearly 3-1/2%. In overnight trading, Asian markets ended lower with China down 2.8%. European markets are trading lower this morning and US futures show Wall Street may see another bearish day. Nickel stockpiles fell on Monday.
• Bloomberg morning - Copper Falls for a Second Day as Chinese Growth, German Confidence Weaken - more
• LME Morning - Metals weak as China data dulls sentiment further, copper slides more than 3 pct to one-week low - more
• Reuters - Copper falls on Europe anxiety, China GDP - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices retreated from a three-week high yesterday, leading the rest of the metals lower after Germany's Finance Minister blindsided investors by saying that an upcoming EU summit may not produce a "definitive solution" to the Euro zone debt crisis. While that possibly may be true, we find little merit in the minister publicly formulating such a negative conclusion in advance of the formal unveiling of the long-awaited proposals. All his statement did was to sap confidence from already fledgling markets, leading to the abrupt reversals we saw. In addition to metals selling off, the Euro also gave up an earlier advance to finish lower, as did the US stock market, with the Dow losing a stunning 250 points on the day. Less-than stellar earnings reports from the likes of Wells Fargo and Citigroup only amplified the equity losses. In terms of US macro news, the numbers that came out yesterday did not play a prominent role in influencing sentiment in either direction. Although a gauge of manufacturing numbers out of New York State contracted for a fifth month in a row in October, September's national industrial production increased by 0.2%, still showing that the US economy is still chugging along, albeit slowly. his morning, metals are down sharply once again, but this time it is due to increasing concern about the global macro outlook. In this regard, Bloomberg reports that China’s economy grew 9.1% in the third quarter from a year earlier, its slowest rate of gain since 2009. Chinese stocks got hammered on the release, selling off by 2.3% for their steepest loss in a month. The GDP gain was less than the consensus forecast of 9.3% and follows a 9.5% increase in the previous three months. Others numbers showed industrial production rising by 13.8% in September, slightly ahead of estimates, while retail sales held steady, up 17.7% year-over-year vs. a similar rise seen in August. China’s money supply expanded at its slowest pace in almost a decade last month, while new lending was the lowest since December 2009. Of course, none of these numbers in and of themselves are anything to snicker at, but investors are clearly looking at the decelerating trend and wondering how much more of a slowdown there is to go. This is perhaps why the metals are taking the brunt of the selling today compared to other commodity complexes, as investors sense that that accelerating Chinese metal demand that was so prevalent in prior years may now give way to decelerating demand, something that may not support a scenario of higher metals prices over the medium-term. Outside of metals, the tone in other markets is also weak on account of Moody’s Investors Service saying that France's triple-A rating is at risk. The CAC 40 was down 1.6% earlier in the day, the second-biggest drop in the European equity markets, as French banks are again under pressure. Credit-default swaps on French sovereign debt rose 11 basis points to 193, but are still short of the 202.5 record hit on Sept. 22. Out of Germany, we had reports that the German investor sentiment index fell to its lowest level in three years in October, this according to the ZEW monthly survey. This was the eight consecutive monthly decline and the lowest reading since Lehman Brothers went bust. What’s worse, ZEW’s chief economist thinks that Germany may be in recession already. The German markets will next focus on the more influential Ifo business sentiment index that comes out Friday. US equities are called to open lower, while oil prices are down slightly. The Euro is at $1.3670, off from yesterday’s intraday high of $1.3910 reached before the German minister's remarks hit the wires. Later today, we get US September producer prices (expected up .2% on the overall rate), as well as the NAHB housing market index for October (expected at 14). Despite the current weakness, we think markets will reverse course over the course of the week as we head into a key weekend where the Europeans have to come up with something convincing to show investors. The authorities know they cannot come in short, a message undoubtedly delivered to them by the steady stream of G-20 ministers who trooped into Paris last weekend.  ..... Nickel is at $18,675, down $300.  (Daily Metals Report here)
• (Reuters) ThyssenKrupp has not yet made a decision on whether to spin off or float its stainless steel division, its chief executive told Reuters on Monday. "All options remain open," Heinrich Hiesinger said at an event in Frankfurt.
• (Interfax) China's daily crude steel output fell 0.27 percent month-on-month to 1.89 million tons in September, the lowest level this year, according to figures released by the National Bureau of Statistics (NBS) Oct. 18.
• (AMM) Xstrata Nickel increased third-quarter nickel production by 15% year-on-year after the ramp up of its Falcondo ferro-nickel project in the Dominican Republic, the company said on Tuesday
• (ATI) Effective with shipments beginning December 1, 2011, a surcharge of $508 per ton ($25.40/cwt) is being added to grain-oriented electrical steel invoices. This surcharge is subject to monthly adjustment.
• (SM) The American Forest & Paper Association released its September 2011 U. S. Containerboard Statistics Report today. Containerboard production decreased 2.3% when compared to August 2011, however, the month over month average daily production, was up 1.0%.
• China's Q3 GDP grows at slowest pace in 2 yrs - more
• Cass Freight Index - more

  China copper output falls 7.5 pct in Sept, nickel at record - China's refined copper output fell 7.5 percent in September from August after three straight months of record output as some smelters briefly shut for regular maintenance, but should pick up again this month. - more

  Nickel Asia says attack to delay Philippine plant - Philippine miner Nickel Asia Corp said an attack by Maoist rebels on its Taganito mine earlier this month will push back by a couple of months the planned mid-2013 launch of a $1.4 billion nickel processing plant adjacent to the mine. - more

  Xstrata Coal Mines, Ferrochrome Smelters Disrupted by Strike - Xstrata Plc, the world’s largest exporter of coal used in power plants, said all of its coal operations in South Africa were affected by a strike that also hit production at the company’s ferrochrome smelters. - more

  China's Nickel Imports/Exports; August 2011 = Ore imports continue to increase, partly due to advanced shipments ahead of Philippine rainy season = According to China's customs statistics, imports and exports of nickel bearing materials including ores during August was as per the attached table hereto. - more

  Courtesy AISI - In the week ending October 15, 2011, domestic raw steel production was 1,862,000 net tons while the capability utilization rate was 75.1 percent. Production was 1,629,000 tons in the week ending October 15, 2010, while the capability utilization then was 67.3 percent. The current week production represents a 14.3 percent increase from the same period in the previous year. Production for the week ending October 15, 2011 is up 1.6 percent from the previous week ending October 8, 2011

  Next big thing looms in Minnesota's Iron Range - On a warm fall day, in a clearing cut into the evergreen and birch forest, a drill rig roars as it bores deep into northeastern Minnesota bedrock. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, October 17

• Baltic Dry Index - minus 13 to 2,160. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Wal-Mart China Chief Resigns During Pork Probe // Germany Shoots Down ‘Dreams’of Swift Euro Crisis Solution // Hedge Funds Add to Commodities Wagers // Wall Street Protests Spread to Four Continents // Central Banks Selling Most Treasuries Since 2007 Prove No Barrier to Rally // BOE New Stimulus May Not Be Enough as U.K. Outlook Worsens, ITEM Club Says // European Stocks Drop; Greek Lenders Retreat as BP Shares Jump on Payment // Kinder Bets on Gas With $21.1 Billion El Paso Buy // U.S. Industrial Production Barely Increases // Stocks, Euro Fall as Germany Damps Optimism
• The Euro continues to trade 3/4 of 1% lower against the US Dollar. NYMEX crude is down nearly 3/4 of 1% and trading at $86.17/barrel. Gold is down more than 1/2 of 1% while silver is lower by nearly 1.2%. Base metals ended the session mostly lower, with Germany's quick fix remark reversing early gains in some metals. Indicator charts show nickel opened higher, but fell on the German remark, then recovered back some of the losses late. For the day, Dow Jones reports thre month nickel ended the day at $8.60/lb , up $.05/lb from Friday's close. Stockpiles of nickel stored in LME approved warehouses returned to their falling ways on Friday, after a one day jump and now toal just over 90,900 tonnes. The US Dow is currently down 200 points as hopes of a quick resolution to the European debt crisis dwindle. In the good news department, Robry in his weekly assesment states "The summer micro-recession appears over as industrial natural-gas scheduling finally ignited last week on the heals of three-straight weekly gains to the consumption index." He cautions the metals industry though "Steel-group scheduling, however, remained flat for the week... an indication that the emerging uptrend has yet to hit the durable-goods sector." We post a link to Robry's blog each monday when he posts a weekly wrap-up.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Robry Monday Morning Economic Assessment - more

  Commodity/Economic Articles and Comments

• Number of the Week: Millions Cut Off Without Unemployment Extension - more
• Consumer Sentiment on Government Policy at All-Time Low - more
• After the Tape: Main Street Volatility - more
• Occupy Wall Street Must Occupy Congress, AG offices - more

  NICKEL-Major market developments in September - Nickel prices recorded heavy losses in September, but have since steadied helped by optimism that the euro zone's debt crisis will be dealt with successfully, but further weakness could prompt higher cost producers to act. - more

  Japan Q4 ferrochrome price at $1.28/pound, flat from Q3 - The term price for ferrochrome to Japan for the October-December quarter has been agreed at $1.28 per pound, unchanged from the previous quarter, a Japanese company official said on Monday. - more

  Çaldag( nickel mine’s new owner dismisses claims of harming the environment - Turkish mining company OreMine Madencilik, which has recently signed a deal to take over a nickel mine in Manisa’s Çaldag( district – the operation of which is currently suspended -- from UK-based mining company European Nickel (ENK), on Monday said earlier claims that the operation of Çaldag( would harm the environment and that the operation of the mine must be prevented from restarting were “without merit.” - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.03/lb lower, with other London traded base metals mixed and quiet. The Euro is trading nearly 3/4 of 1% lower against the US Dollar. NYMEX crude is up nearly 1/10 of 1% and trading at $86.88/barrel. Gold is up more than 1/4 of 1%, while silver is up 4/10 of 1%. In overnight trading, Asian markets started the week ending higher, with China up 1/2 of 1%. European markets are trading slightly higher this morning and so far, US futures are quiet and have yet to hint at a Wall Street directional opening. Nickel stockpiles fell on Friday.  
• LME Morning - Base metals supported by supply concerns, improved market confidence - more
• Reuters - Copper at 3-week peak on prospects of EU deal - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• U.S. Exports of Stainless Steel Mill Products - more
• US Imports of Stainless Steel Mill Products - more
• Commodity Trends - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Most markets continued to push higher on Friday, with the 19-commodity Reuters-Jefferies CRB index ending up 2% on the day and 4.5% on the week, its biggest weekly gain since December. In metals, although most of the metals sat the rally out, copper soared to its highest level in more than two weeks on both tamer Chinese inflation readings, as well as constructive US retail sales data. In the latter regard, it was reported that September retail sales rose at its fastest clip since February, up 1.1% from an upwardly revised 0.3% in August. The consensus estimate had sales increasing by 0.6%, so the increase was welcome news and further pulls the US economy away from the recessionary brink. Vehicle sales provided the bulk of the gains; auto sales exceeded 13 mln in September for the first time since April. Declining stock level and ongoing supply issues also aided copper’s advance on Friday. In the latter regard, a Peruvian union said it had pulled out of negotiations with Freeport-McMoRan to end a 16-day-old walkout on Friday, and members are now threatening to go on a hunger strike to press their demands for a pay increase. For its part, the government has been trying to broker a deal between both sides for weeks, but castigated the company on Thursday for replacing striking workers with volunteers. Freeport said it is operating in accordance with the law and that output has not been materially impacted.
• Moving on to more current news, there was quite a bit that came out of over the weekend out of Europe, and this seems to be putting the markets on a steadier footing as we head into the new week. Metals were up across the board earlier in the day, but are now mixed, while oil is steady, as is the Euro, which is pretty much holding on to Friday’s $1.38 level. Gold is also up, now at a three-week high and trading at just under $1700. Out of Europe, the G-20 summit of finance ministers concluded their meeting in Paris on Saturday, promising that they would outline detailed plans by next weekend. (UK Chancellor George Osborne upped the sense of anticipation, telling reporters that next weekend “is the moment people are expecting something quite impressive.”). However, some general ideas are already surfacing; among the initiatives under consideration, is using the IMF's resources to be used alongside any European fund. In case there a drain starts to form on the IMF's $390 billion in reserves, there is talk of asking member countries to increase their donations. Another idea centers on writing down Greek bonds by as much as 50%, while establishing an increased capital buffer for the banks. The write-down in Greek bonds and the accompanying bank recapitalization plan will likely be accompanied by a pledge to rule out debt restructurings in other countries in order to show investors that the authorities have "ring-fenced" Greece and will not repeat a similar exercise elsewhere. This is a major gamble in our view given that Spain and Italy still look wobbly, but one that the EU has to take, especially now that it will soon bring additional firepower to the table. Officials are also considering ways of strengthening Europe’s stabilization fund, either by enabling it to borrow from the ECB, or using it to insure bonds issued by distressed governments. The ECB has ruled out the first method, making bond insurance the likely option. In the meantime, the Greek parliament is expected to pass measures in the coming week that include pay cuts and thousands of layoffs in the public service sector. A 48-hour general strike has been called by Greece's two main union federations and is expected to shut down much of the country in tandem with the parliamentary vote on Wednesday and Thursday. Meanwhile, at least two of Prime Minister George Papandreou's deputies have said they would vote against part of a new package, but the government's slender majority is expected to carry the bill. We expect the stronger tone in metals to prevail at least for much of this week, but the markets could sell off slightly once the European proposals are announced, allowing the focus to revert back to macro headlines. Given the lingering global soft patch we seem to be in, the macro side of the equation cannot be "managed" as easily as the debt crisis, and the bulls may find additional upside progress increasingly difficult to achieve in such circumstances.  .... Nickel is at $18,762, down $113; charts continue to look relatively restrained, with $19,500 figuring as resistance.  (Daily Metals Report here)
• (Dow Jones) China's nickel pig iron output this year is on track to reach 250,000 metric tons, up 55% compared with 2010, or more, Bank of America-Merrill Lynch said in a research note Monday.
• (Yieh) It’s reported that Nippon Steel & Sumikin Stainless Steel Corp. (NSSC), the largest stainless steelmaker in Japan decided to cut the domestic prices of 300 series stainless steel sheet by ?10,000/ton, reaching the lowest level over the past six months.
• (Interfax) Vale SA offered China's steelmakers a revised price structure after Chinese mills balked at accepting shipments from the Brazilian iron ore miner amid low spot prices, a source with a major steelmaker told Interfax Oct. 17.
• (MB) China's nickel pig iron smelters have started to cut output from late September as nickel prices fell, delegates at the APOL 2011 Nanjing Conference said.

  China has global pricing power of nickel - Since 2005, China's nickel production has increased from a small amount to 30 tons per year, which can meets the needs of this country, according to the Asian Pacific Organization for Lateritic-Nickel-Ore in the 2011 Conference in Nanjing. - more

  India's Ministry Of Steel Plead For Cr Ore Export Ban = From the current partial ban to a total ban = Following the move in South Africa for an export restriction of chrome ore, India's Ministry of Steel set out to work on legislating a total ban of exports of chrome ore. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, October 14

• Indicators at 7:10 am CST show 3 month nickel trading around $.10/lb higher, with other London traded base metals mostly higher. The Euro is trading higher against the Euro, but by less than 1/10 of 1% at the moment. NYMEX crude is up 1.4% this morning and trading at $85.39/barrel. Gold is up over 1/2 of 1% while silver is up over 1%. In overnight trading, Asian markets ended lower, with China off 1/3 of 1%. European markets are trading higher as G-20 finance ministers and central bankers prepare to meet. Futures show Wall Street will not have its bull run denied and should open much higher. For those who might question if this bullish turn in equities has no legs, the 10 year Treasury bond chart here is interesting. It is hard to believe we will see any major increase in equities though, without base metals joining with some enthusiasm.
• Nickel stockpiles recorded only their second gain this month yesterday and now total just over 91,450 tonnes. We are traveling today so there will be no afternoon update. Have a safe and restful weekend!
• Bloomberg morning - Copper Climbs, Set for Second Weekly Gain on Lower Inventories, China Data - more
• LME Morning - Metals edge higher on BRIC bailout assistance hopes ahead of G20 meeting - more
• Reuters morning - China inflation optimism boosts copper - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals fell sharply yesterday, as the complex was never able to shake off the impact of the soft Chinese trade numbers. Trade figures also came out of the US, showing the August deficit narrowing marginally, although the gap with China widened to a record high. Other markets finished lower as well, with crude oil seeing its first decline in six sessions, while US stocks finished mixed, erasing earlier losses. It is a far different story today, as copper has again flip-flopped back into positive territory, although the rest of the metals are far more subdued. The trigger for today’s move was yet another macro release, this time inflation data out of China that showed annual consumer prices moderating to a 6.1% rate in September, off from a peak of 6.5% hit in July. We are not surprised to see inflation readings starting to come down, as the steep interest rate hikes in a number of emerging markets are finally slowing things down and alleviating pricing pressures in the interim. Furthermore, the recent decline in energy should also work itself through the system, but the process will not be that straightforward and may take time to unfold. In this regard, Indian wholesale inflation numbers, also released today, showed that September’s wholesale price inflation index remained stubbornly high (at 9.72%) this despite weakening domestic growth. The figure was only slightly lower than the 9.78% peak hit in August and likely not enough of a decline to persuade the Indian central bank to lower rates. Other markets are higher right now; crude oil is up by $1.60 a barrel, with Brent now at $112.70, while the Euro is stronger and now crossing over the $1.38 mark. Gold is up by about $10 an ounce. US stocks are expected to open higher, with Dow futures showing a 100 point opening gain after a stronger-than-expected third-quarter earnings report from Google; the stock is up some 6% in premarket trading. In the meantime, the focus continues to be on Europe. S&P downgraded Spanish debt late last night by one notch, citing weaker growth, tightening fiscal conditions, and high private sector debt. However, the markets seem to be taking this in stride, with the spread on Spanish 10-year government bond yields versus German bunds unchanged, while Spain's equity index was hardly affected either. The rate cut follows Fitch’s move yesterday, targeting a number of bank stocks. In this regard, UBS's long-term rating was cut to A from A+, and the agency also said that it is reviewing ratings for Barclays, BNP Paribas, Credit Suisse, Deutsche Bank, Societe Generale, Bank of America, Morgan Stanley, and Goldman Sachs. Out of Slovakia, the country finally approved Europe’s bailout fund yesterday, completing ratification across all 17 Euro countries. Enhancing the powers of the EFSF would now allow the fund to buy the debt of stressed nations, aid troubled banks in the region, and offer credit lines to governments. The fund would also be able to deploy €440 billion for its activities, up from €250 billion available previously. However, European officials still need to work on guidelines on how the money can be spent. Among the issues being debated, is how bond purchases will be structured and what kind of collateral governments would need to furnish in return for any money they receive. In other news, finance chiefs from outside the Eurozone are meeting their European counterparts today in Paris, with most expected to give the Europeans an earful about getting their house in order. The meeting will likely refer to the euro crisis in a closing news conferences on Saturday evening, but little else of substance will follow given that a major EU summit will be held later in the month. Greece continues to hover in the background as well, with the talk now being that banks will have to take a 60% haircut on their Greek holdings as opposed to the 21% write-off they took in the summer. Out of the US, we get September US retail sales, likely the most important release of the week, and later in the day, Michigan sentiment readings (expected at 60, and practically unchanged from the month prior). We still are of the view that metals are going to be pushing higher over the short-term and heading into various European and G-20 summits. However, as illustrated by yesterday’s action, the trend will be quite choppy and prone to significant setbacks. ..... Nickel is at $18,750, up $295 and quiet; the market lost more than $600/MT yesterday (Daily Metals Report here)
• China mills offered cheaper iron ore pricing options-sources - more
• (China) Policy shift unlikely despite ease in inflation in Sept - more
• (Vietnam) Steel exports to increase 44.5% this year - more

  Platts weekly dealer moly oxide assessed at $13.30-13.50/lb - The Platts weekly dealer molybdenum oxide price was assessed Thursday at $13.30-13.50/lb, down from $13.70-13.90/lb a week earlier. - more

  Russia Ni-based SUS Scraps Export Steadily Recovering On European Buys = 47,120 tons of total exports during January through July, up 2.7 times year-on-year = Until 2006, Russia's exports of nickel based SUS scraps had been in the range of 200,000 - 300,000 tons per year and were a fairly big source for Europe, but decline started in 2007 to reach the bottom at 25,000 tons in 2010. This year, however, is a year of rebound for the Russian exports. - more

  Xstrata Faces South African Strike Over Share-Ownership Plan - Xstrata PLC faces a strike by thousands of South African workers next week in a dispute over the terms of a planned share-ownership program, the mining company said late Thursday. - more

  Zimbabwe: Chrome Ore Export Ban Leaves Producers in Debt - The ban on all chrome ore exports has left producers in debts totalling more than US$9 million, borrowed mostly from banks. - more

  North Maluku Will Be Nickel Hub, Governor Declares - North Maluku governor Thaib Armayin said the province would become a nickel industry center in the next decade, with two nickel plants slated to be built on Halmahera island. - more

• Inco expands operations for sustainability - PT International Nickel Indonesia (Inco), now known as PT Vale Indonesia, started operating the Karebbe hydropower plant on Tuesday with an output of 130 megawatts (MW). - more

  Sudbury expertise needed for Vale's Voisey facility - The Long Harbour Development Corp. in Newfoundland wants to import the expertise of Sudbury’s mining supply and services companies. - more

  Former Palawan governor Joel T. Reyes faces P5-M mining damage suit - Farmers from the southern Palawan town of Narra have filed a P5-million damage suit against former Gov. Joel T. Reyes, several other officials and a foreign mining company for mine tailings pollution in their rice fields and violation of the country’s mining regulations. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 13

• Baltic Dry Index - plus 28 to 2,155. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Exports Slow on ‘Severe Challenges’ // Copper Stockpiles in China Reach a Record 1.9 Million Tons at End of 2010 // Chinese Banks’ Bad Debt May Hit 60% of Equity Capital, Credit Suisse Says // Biggest U.S. Free-Trade Accord Since ’94 Passed // Thailand’s Floods Threaten Bangkok, May Cut Deeper Into Economic Expansion // Berlusconi Calls for Confidence Vote to Prove He Has a Governing Majority // Protesters to ‘Occupy’ London Stock Exchange // EU Bank Risks ‘Rapidly’ Growing, Andersson Says // German Banks Said to Prepare for Up to 60% Loss on Greek Debt // European Stocks Decline From Two-Month High as Roche, Bank Shares Retreat // Fed May Link Stimulus to Economic ‘Mileposts’ // U.S. Foreclosure Filings Decline 34% //
• The Euro continues to trade about 4/10 of 1% lower against the US Dollar. NYMEX crude is down 2.2% and trading at $83.70/barrel. Gold is down more than 8/10 of 1% and silver is 3% lower, Base metals ended the session lower as well. Indicator charts show nickel fell early and hard, but spent the last half of the session stable. For the day, Dow Jones reports three month nickel ended at $8.37/lb , only two cents above the months low. Stockpiles of nickel stored in LME approved warehouses fell for an eighth straight session and now total just over 91,000 tonnes.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) U.S. nickel exports fell 13.5% in August from the previous month, and was down 25.4% from the previous year, the Commerce Department reported Thursday.
• (Dow Jones) U.S. nickel imports rose 13.5% in August from last month, and was up 14.6% from the previous year, the Commerce Department reported Thursday.
• (SMM) According to data from the China Iron and Steel Association, average daily crude steel output at medium and large steelmakers was 1.64 million mt in the last 10 days of September, up 0.61% from the preceding 10 days.
• Tomorrow’s Entrepreneurs: Willing but Are They Able? - more
• Vital Signs: More Unemployed Per Job Opening - more
• Student-Loan Debt Among Top Occupy Wall Street Concerns - more
• Hard Hit States Having Fewer Children - more
• Natural Disasters in the United States, 1980 – 2011 - more
• Florida AG Takes Orders, Money from Fraudclosure Firm - more

  Great Wall is crumbling - Parts of China's famous Great Wall are being damaged by illegal mining for minerals. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.07/lb lower, with all London traded base metals lower, The Euro is trading nearly 4/10 of 1% lower against the US Dollar. NYMEX crude is down 1.4% and trading at $84.37/barrel. Gold is off 1/4 of 1% and silver is lower by more than 1-1/2%. In overnight trading, Asian markets ended higher, with China up 2/3 of 1%. European markets are trading lower this morning and US futures show Wall Street may open lower. Nickel inventories dropped again on Wednesday.
• LME Morning - Base metals drop as euro softens against dollar, bearish tone dominates - more
• Reuters - -Chinese trade data drains copper market sentiment - more

  Reports

• Damstahl Stainless Steel Report October 2011 - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices rose sharply on Wednesday, practically reversing Tuesday's equally big drop as intense volatility continues to grip the markets. The weaker dollar helped yesterday’s advance, with the Euro surging to a one-month high on signs that the debt crisis in Europe was receding - at least for now. In this regard, the Slovakian parliament quickly proceeded with a revote on the rejected stabilization fund after defeating it the day before, and there was more talk of recapitalizing the European banks. Markets were also relieved to see favorable macro data come out of the Eurozone, where industrial production came in much stronger than expected in August, rising 1.2% month-on-month for a 5.3% year-on-year increase. Economists polled by Reuters had expected a 0.7% and a 2.2% year-on-year increase respectively, so the stronger numbers will likely mean that Q3 activity will not be as weak as initially feared. However, the September readings will be of far more interest since the bulk of the recent weakness is concentrated in this period. Metals have also been stronger for much of this week both on account of short-covering and growing anticipation about the sharp decline noted in inventory positions, as talk surfaces that a sizable restocking effort is underway. This may explain the big jump reported overnight in Chinese September copper imports --up 11.8% from the month prior. Specifically, the country imported 380,526 tons of anode, refined copper, alloy and semi-finished copper products in September, the highest since May 2010 and up 3.3% from September 2010 levels. Of this amount, Reuters estimates that about 263,0000 tons could be refined copper. Imports of copper scrap increased 10.5% to 420,000 tons after a fall of 11.6% in August. We have to believe that some of these imports were replacing sharply receding inventory levels, while the balance could be attributable to arbitrage related buying. The notion that end-user demand is accounting for both the declines in stock levels and the increase in imports does not seem to make too much sense to us given signs that Chinese growth is slowing somewhat. Whatever the case, the numbers failed to impress the markets today. Copper is off sharply, and has given up most of yesterday’s gains. There are declines seen in the rest of the group as well. Outside of metals, crude oil is off by about $1.10, and may snap a six-day winning streak if it closes down today. The weaker tone in the markets is attributable to the broader Chinese trade numbers, which show the country’s trade surplus narrowing for a second straight month in September to $14.5 billion. The bulk of the decline was attributable to the halving of exports going to the troubled EU markets. September's surplus was also smaller than Augusts’ $17.8 billion and less than half of the $31.5 billion recorded in July. In other commodities, crude oil imports fell 12% from a year-earlier level after holding steady in August, while the growth in iron ore imports more than halved to 15% compared to August levels, although the volume of shipments was at an eight-month high. Outside of copper, imports of primary aluminum, alloy and semi-finished aluminum products fell 6.8% on the month to 66,163 tons after posting monthly gains in August and July. Aluminum scrap imports rose 10% to 220,000 tons after posting a fall of 9.1% in August. Alumina imports also rebounded to 80,000 tons in September from a record low of 40,000 tons in August. On the US macro scene, we just got weekly initial claims data coming in at 404,000 (expected at 406,000), and pretty much a non-event. US stocks are expected to open lower in the aftermath of the Chinese trade data and an earnings report from JP Morgan showing lower third-quarter net income. For now, however, the focus will remain on European developments. Most markets have done quite a bit over the past few days and may due for a pause here. However, we have to suspect that the anticipation surrounding a potential European package should provide an element of stability going into the balance of the month. .... Nickel is at $18,450, down $630, and faring quite poorly.  (Daily Metals Report here)
• (Reuters) Local communities are to acquire a 10 percent stake in Implats' Zimbabwe unit Zimplats , Implats Chief Executive David Brown said on Wednesday.
• (CMW)  Nickel miner Western Areas on Thursday rejected speculation that it planned to buy the Lounge Lizard deposit, which Kagara Mining put up for sale after a strategic review of its nickel assets.
• (Interfax) China's steel consumption is expected to grow 7.5 percent on a yearly basis in 2011, a slight reduction on 8.5 percent growth last year, the World Steel Association (WSA) forecast Oct. 12.
• Will We Talk Ourselves Into Another Recession? - more
• The Ceridian-UCLA Pulse of Commerce Index® (PCI®), issued by the UCLA Anderson School of Management and Ceridian Corporation fell 1.0 percent in September on a seasonally and workday adjusted basis, following a 1.4 percent decline in August and a 0.2 percent decline in July. - more

  Molybdenum Price Weak Despite Strong Steel Production - There is currently a dichotomy between the price for steel and the metals critical for the steel alloys. - more

  Nickel refinery laments lower carbon tax compo - Queensland Nickel owns the Yabulu refinery, north of Townsville in the state's north, which exports about 32,000 tonnes each year. - more

  Rusal Says Norilsk Buyback Is Void Without State Permission - United Co. Rusal said a letter from Russia’s antitrust watchdog confirms that a planned share buyback by OAO GMK Norilsk Nickel can’t go ahead without consent from the state. - more

• Norilsk Nickel shares jump on FAS approval bypass - Norilsk Nickel shares jumped on Thursday morning after the company revealed that its share buyback plans would not require approval from the Federal Anti-Monopoly Service, with subsidiaries not taking a greater than 10% stake in the company. - more

  Geologists warning over metals shortage - Geologists have sounded the warning bells over shortage of some metals owing to an insatiable demand for consumer goods. - more

  Courtesy AISI - In the week ending October 8, 2011, domestic raw steel production was 1,833,000 net tons while the capability utilization rate was 74.0 percent. Production was 1,629,000 tons in the week ending October 8, 2010, while the capability utilization then was 67.3 percent. The current week production represents a 12.5 percent increase from the same period in the previous year. Production for the week ending October 8, 2011 is up 2.9 percent from the previous week ending October 1, 2011 when production was 1,781,000 tons and the rate of capability utilization was 72.8 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 12

• Baltic Dry Index - plus 21 to 2,127. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Senate Triggers China Backlash With U.S. Measure Against Undervalued Yuan // China’s Stocks Rise Most in Year on Increased Government Support Prospects // Asia Girds for Europe Fallout With Indonesia Rate Cut, Philippine Stimulus // U.K. Unemployment Jumps to Highest in 15 Years // Greece’s Credit-Default Swaps May Pay Out If the Agreed Losses Exceed 21% // European Stocks Rise to Two-Month High; Greek Lenders, ASML, Burberry Gain // Manufacturers See Less U.S. Recession Risk // Wall Street Will Cut Bonuses in 2012, New York Comptroller DiNapoli Says // Job Openings Fell in August, Hiring Climbed // Dow Erases Decline for Year as Europe Presents Plan to Recapitalize Banks
• The Euro is now trading 1-1/4% higher against the US Dollar. NYMEX crude is up nearly 1/4 of 1% and trading at $86.00/barrel. Gold is up 1.1% and silver is over 2% higher. Base metals ended the session higher as well, as European debt crisis concerns lessened - at least for today. Indicator chart show nickel jumped early then traded in a slight uptrend for much of the session. For the day, Dow Jones reports three month nickel ended the session at $8.65/lb . Stockpiles of nickel stored in LME approved warehouses fell for a seventh straight session yesterday and now total just under the 91,800 tonne level. Checking the MarketWatch website to see if there is any late breaking news, we notice the site "Bulletin" reads 'Dow industrials turn positive for 2011". If that doesn't get you all warm and fuzzy inside, then you must have one of those non working Blackberry's this morning. Politicians in Slovakia announced they had reached an agreement to approve Europe’s enhanced bailout fund, the last EU country to do so.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Reuters) Shares of South African Merafe Resources jump more than 2 percent after the country's largest ferrochrome producer says prices will remain stable at $1.20 per pound in the fourth quarter.
• Fast Enough? China’s Currency Record - more
• The Kind of Chinese Currency Manipulation the U.S. Likes - more
• Moody’s Analytics: Risk of New U.S. Downturn 40% - more
• Vital Signs: Falling Global Activity - more

  Nickel producer PTI builds another power plant in S. Sulawesi - Nickel producer PT International Nickel Indonesia (PTI), also known as Inco and Vale, has built a hydroelectric power plant in Karebbe, its third plant in South Sulawesi, increasing its total power to 365 mega watts. - more

  French steel assoc sees caution but no demand hit - The steel sector in France is not seeing signs of a significant decrease in demand, despite some caution created by an uncertain economic environment, the country's steel federation said on Wednesday. - more

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

• Indicators at 7:05 am CST show 3 month nickel trading around $.10/lb higher, with all London traded base metals higher. The Euro is trading 9/10 of 1% higher against the US Dollar, giving a boost to commodities. NYMEX crude is up 4/10 of 15 and trading at $86.15/barrel. Gold is up 1.2% and silver up 1.9%. In overnight trading, Asian markets ended higher, with China up 3.6%. European markets are trading higher this morning, while US futures show Wal Street will open bullishly. Nickel stockpiles continue to fall.
• Bloomberg morning - Copper Advances as Contracting Stockpiles in Asia Indicate Steady Demand - more
• LME Morning - Metals climb on weak dollar, Chinese equity strength - more
• Reuters - Copper gains on weak dollar, Europe crisis eyed - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments - Metals were unusually weak yesterday, ignoring the steadier tone we were seeing in many other markets. Copper led the advance lower, finishing with a substantial 3% loss on the day. In other markets, the US stock market held on to Monday’s massive gains and there was a good advance in oil as well. The Euro also held its own against the dollar on reports that Greece was likely going to get its next tranche of aid. However, none of this was enough to prevent a rather sharp sell-off in the LME metals, which seemed to be more sensitive to the goings-on in China than they were to the still-unfolding European debt crisis. In this regard, yesterday’s move to prop up four of China’s leading banks by a unit of the country’s sovereign wealth fund was a signal that all is not well in the country’s banking system. We are higher in metals right now, with copper making up most of Tuesday’s losses. There are good gains in the rest of the group, except for aluminum, which is flat on the day. Oil prices are up by about $.40/barrel, while the dollar is sharply lower, getting to $1.38 against the Euro at one point. Gold is higher as well, and now at $1690/ounce. US stocks are expected to open up despite a disappointing earnings report from Alcoa (more on that later). There were several developments that broke late in the day yesterday that should shadow the markets over the balance of the week. The first was the rather bizarre story of an alleged Iranian plot to assassinate Saudi Arabia's ambassador to the US. Two Iranian men have apparently been charged in the scheme, one of whom has been arrested, while the other is thought to be a member of the elite Iranian Quds Force and now in Iran. The assassination attempt unfolded on May 2011 when one of the men arrested tried to recruit an individual in Mexico to help, but that person turned out to be an informant for the US Drug Enforcement Administration. In the least, the incident will surely raise tensions between Saudi Arabia and Iran, whose relations are already strained to begin with, and explains the resiliency we are seeing in Brent, with prices pushing over the $112 earlier. Markets also have to come to terms with news out of Slovakia that the parliament there rejected plans yesterday to expand the European Financial Stability Facility. This was not unexpected, as one of the coalition parties announced earlier that it would not be voting for the measure in an effort to bring down the government -- its original intention all along. However, with the help of the opposition, the proposal is expected to be resubmitted and will likely pass in a revote likely to take place on Thursday. Nevertheless, the exercise reminds us of just how perilous achieving European consensus can be. In this case, a country which contributes no more than 1% of the entire region’s GDP is conceivably in a position to hold a key rescue effort, as well as the fate of many markets, basically hostage. Lastly, the US Senate, by a 63-35 vote, passed a bill aimed at punishing China for keeping the Yuan undervalued, triggering a backlash from Chinese officials who warned the measure would damage trade relations and undermine the global recovery. The measure faces an uncertain prospect in the House where Speaker John Boehner has called the bill “dangerous” and is resisting pressure to bring it to a vote. On the macro scene, we get the Fed minutes released later today, but otherwise there are is no major data coming out. Earlier in the day, an HSBC quarterly index revealed that emerging economies grew at their weakest pace in over two years in the July-September quarter as manufacturing output turned negative after expanding for nine straight quarters. South African, Taiwanese, and Brazilian manufacturers saw marked rates of output declines, while those in China and Singapore had a more modest rate of reduction. Indian factory output dropped to a 2-1/2-year low. Tellingly, business confidence slipped to a record low in China, while Russian service sector firms were the least optimistic they have been in some 10 quarters. If there was a silver lining in all this, HSBC notes it is in the fact that inflationary pressures are decreasing. However, slowing economies may not necessarily prompt governments to initiate another stimulus program. "It's probably a case of 'once bitten, twice shy' with many policymakers fearful of generating another wave of inflationary pressures" HSBC concluded. Our general view of the markets remains unchanged for the moment from what we have been saying in recent commentary. We continue to suspect that we will be moving higher over the very short-term, teeing off the better tone in the equity markets and cautious optimism that some sort of comprehensive package will come out of Europe. Although this may not necessarily “fix” the debt crisis, it could hopefully convince investors that the politicians are recognizing the seriousness of the issues they face by bringing the appropriate financial muscle to the table.  (Daily Metals Report here)

• (Yieh) A German market analyst forecasted that the European stainless steel production will drop by 20% this year compared with the level in 2006 before financial crisis.
• (Interfax) China's second largest nickel producer, Jilin Ji'en Nickel Industry Co. Ltd. (Ji'en Nickel), plans to set up a Hong Kong investment vehicle to acquire mining interests in Southeast Asia, the firm said Oct. 12.
• (VT) The diesel-electric ice-class container ship Zapolarniy owned by MMC Norilsk Nickel has arrived at its destination - the port of Shanghai, the company said Tuesday. The vessel laden with 9,000 tons of copper and nickel of Norilsk Nickel’s Arctic Division left Murmansk port on Sep. 12 and called at the port of Dudinka on Sept. 17.
• (MBN) Baosteel 'likely' to stop buying nickel pig iron
• (CBN) China Nickel Resources buys 80% of Indonesia-based iron-nickel firm for HK$ 2.07 bln
• The World Steel Association (worldsteel) today released its October 2011 Short Range Outlook (SRO) for 2011 and 2012. worldsteel forecasts that apparent steel use will increase by 6.5% to 1,398 mmt in 2011, following growth of 15.1% in 2010. In 2012, it is forecast that world steel demand will grow further by 5.4%.  - more
• China buys Japan debt as crises in West grow - more
• Pacific reaches La Niña thresholds - more

  Supply to send nickel lower medium term-Wood Mackenzie - The global nickel market will move into over-supply from 2012/2013, pushing prices for the metal lower in the medium term as a host of new projects come on line and build up to capacity, Wood Mackenzie said on Wednesday. - more

  Nickel Production Curtailment Is Necessary = Norilsk comments "100,000 tons in 2012" = An executive of Norilsk commented that the crash of LME nickel price which happened on September 21 through 22 made about 10% of the nickel producers operate without profit, i.e. at the price level of US$18,000 - 18,500/ton. "Production cut of 30,000 tons during the October - December quarter of 2011, and further 100,000 tons of cut will be required in 2012, he added. - more

  China's Jilin Nickel to start 11,700 mt/year Canada mine in 2012 -  China's Jilin Nickel expects to start its 11,700 mt/year nickel mine in Quebec, Canada, by 2012, the producer based in northern China's Jilin province said Wednesday. - more

  Aquino: Mining firms to stay in the Philippines despite attack - No mining companies have pulled out investments from the country despite an attack of communist New People’s Army (NPA) rebels on operations in Surigao del Norte last week. - more

  Court Overturns C$36-Million Damages Award in Environmental Class Action - In a unanimous judgment, the Ontario Court of Appeal has overturned a decision which had awarded members of an environmental class action C$36-million against Inco Limited (now Vale) for contamination arising from authorized historic industrial activity. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, October 11

• Baltic Dry Index - plus 72 to 2,106. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China’s Banks Rally as State Investor Buys Shares After Valuations Slump // China to Extend Tax on Oil, Gas Resources Nationwide to Reduce Consumption // China Adds Japanese Debt for First Time in 10 Months Amid Global Turmoil // Indonesia Unexpectedly Lowers Interest Rate to Bolster Economic Expansion // Asian Stocks Rise, Led by Chinese Lenders; Japan Stocks Climb // Trichet Sees Risk as Greek Writedowns Split EU // Venizelos Says Greece to Keep Creditor Promises as Deeper Debt Cut Looms // Greek $11B Loan Payment Likely in Early Nov. // U.K. Manufacturing Output Declines More Than Forecast as Economy Struggles // European Stocks Drop on Slovakia Uncertainty; Greek Banks Tumble // Banks May Still Face Fraud, Municipal Lawsuits After Foreclosure Agreement // Americans in Poll Back Taxing Rich to Reduce Deficit // Treasuries Fall, Stocks Reverse Early Losses
• The Euro is now trading only slightly lower against the US Dollar. NYMEX crude is up 4/10 of 1% and trading at $85.75/barrel. Gold is still trading lower by more than 8/10 of 1% and silver has now turned up slightly. Base metals ended the session lower. Indicator charts show nickel crept lower in the first part of the session, while doing little in the latter part of the day. For the day, Dow Jones reports three month nickel closed at $8.55/lb , giving back all of yesterday's gains, plus a few cents. Stockpiles of nickel stored in LME approved warehouses fell for a sixth straight session yesterday, and now totals just over 92,500 tonnes. With little news to base trading on today, we feel we are witnessing a goal line stand by Wall Street bears in an attempt to defend a technical resistance line. In our opinion, the odds are against them as we see the Dow testing 11,700 in the next few weeks. Considering nickel inventory numbers continue to fall, nickel's inability to gain ground in price is a testament to the negative economic perception traders have of the immediate future.     

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) An LME data feed problem, which resulted in its warehouse inventory figures reporting millions of tons of increases across the board Tuesday, has "spooked the market a little," says Standard Bank analyst Leon Westgate.
• Small-Business Confidence Sees Modest Gain: The Start of a Trend, or a Blip? - more
• Watch What Escapes From Under the Ring Fence - more
• Downgrading Triple-B Recovery to Triple-C Crisis - more
• Russia's Worsening Demographic Crisis - more
• CR Index: Some hopeful signs emerge, but problems persist - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.25/lb lower, with all London traded base metals lower. The Euro is trading 4/10 of 1% lower against the US Dollar at the moment. NYMEX crude is down over 1/2 of 1% and trading at $84.95/barrel. Gold is down more than 8/10 of 1% and silver is lower by 1.9%. In overnight trading, Asian markets ended higher, with China down 2/10 of 1%. European marekts are down this morning, and US futures imply Wall Street may open lower. Nickel inventories continue to fall.
• Bloomberg morning - Copper Drops Most in a Week on Concern About Demand in Top Consumer China - more
• LME Morning - Prices tick over but lack direction despite more upbeat sentiment - more
• Reuters - Copper slips on euro zone crisis concerns - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals rose yesterday, but the advance was not as convincing as what we saw in other markets, particularly in US equities, where the Dow tacked on 329 points, while the S&P and NASDAQ each finished the day with a 3.5% advance. Oil gained almost $3 a barrel, while the Euro had one of its best sessions in recent weeks, ending up almost $.03 higher at one point against the dollar to almost reach $1.37. The reason behind yesterday’s surge had very much to do with growing feeling that the European debt and banking crises were finally getting the focused attention they deserve from the EU's leadership. In this regard, and as we mentioned in yesterday’s note, German Chancellor Angela Merkel and French President Nicolas Sarkozy pledged that they would do “everything necessary” to ensure that Europe's banks were adequately capitalized, while also saying that they would present a comprehensive plan by November 3rd. Of course, the fact that no details were revealed opens the door for potential disappointment if expectations are not met, and some second thoughts are possibly setting in right now, as markets begin to assess whether anything is even possible with less than three weeks to go. (One analyst wrote that it was like hoping for the "Fairy Godmother" to show up and fix the mess). Despite legitimate reasons for being skeptical, we suspect the markets will give the politicians a bit more time to see what they can come up with. This in turn should allow a better tone to set in over the next few weeks in the run-up to the November 3rd marker. In fact, we have been expecting something of a "relief rally" for some time now, but what was notably missing was a trigger to set it off. While not perfect by any means, the joint weekend Sarkozy/Merkel press conference at least sets a deadline, and while the ultimate package may very well disappoint, it is unlikely that investors will turn massively short in advance of its unveiling. Right now, the Euro is down only $.60, while oil is off by less than one dollar a barrel. Asian stocks were sharply higher, while US futures are showing only modest losses in line with a restrained tone in the European markets. However, metals are down much harder, as we suspect that the complex is focused more on the goings-on in China, and less with the zigs and zags of the European debt crisis. With respect to China, not only are there growing concerns about growth prospects, but renewed attention is being placed on the state of Chinese banks and the billions of dollars of nonperforming loans that they are carrying. Shares of bank shares have slumped in recent months, and it is for this reason that a unit of the Chinese sovereign wealth fund has started to buy stock in leading bank names overnight, triggering a broad-based rally in Chinese financials. The investment company doing the buying did not provide details about how much it has invested, but from what the banks report, total purchases amounted to $31 million. This is hardly enough to make much of a difference. If anything, the “too little, too late” strategy of propping up sagging bank shares may have raised unsettling questions of how extensive the problem of nonperforming loans is and the need for a more sizable commitment going forward. In terms of US macro news, nothing comes out today except for the latest FOMC minutes. More importantly, today marks the official start of the US earnings season with Alcoa set to report results after the close. Mining companies will also report in the days ahead, and there will be much interest not only with respect to the numbers, but what these enterprises will say about prospects going forward. Out of Europe, attention is being focused on the parliamentary vote in Slovakia where the outcome is still somewhat in doubt, although from what we read, a second vote could be possible. As things now stand, a junior partner in Slovakia’s ruling coalition said it would abstain in a vote to ratify the proposed stabilization fund, which means that the government will need opposition votes to get the measure through. We suspect that the measure will ultimately pass, as there is simply too much at stake for a relatively new member to hold the rest of the bloc hostage. (Malta’s parliament passed the measure yesterday, so Slovakia is the last holdout). .... Nickel is at $18,975, down $405. (Daily Metals Report here)
• (MFG) Nickel prices would need to fall below $18,000 per ton for a substantial period of time before major producers are prompted to cut output, this according to a Reuters article canvassing opinion of analysts.
• (Interfax) The president of Anshan Iron & Steel Group Corp. (Angang), one of China's largest steel firms, was chosen as chairman of the World Steel Association (WSA) at the global body's annual meeting in Paris this week, an Angang representative confirmed to Interfax Oct. 11.
• (SMM) Bearish Sentiment and Limited Transactions in Nickel Ore Market
• (RFCM) Russia’s copper and nickel export down 73.5% and 41.6% over eight months
• (Xinhua) China's steel and mining associations on Monday officially published their first iron ore price index, which is expected to better reflect the domestic market and give the country a greater say in global pricing. The China Iron Ore Price Index was compiled by the China Iron and Steel Association, the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters and the Metallurgical Mines' Association of China.
• (China) City's Wal-Marts to close for 15 days - more
• Jon Stewart: How Is Occupy Wall Street Not Like The Tea Party? - more

  Market Price Of Ni-system Cold Stainless Sheets In Asia = There is a possibility for its price to dip below $3,000 C&F - Yieh United Steel (YUSCO) of Taiwan decreased its domestic price of Ni-system cold-rolled stainless steel sheets by NT$3,000 (just under $100) for October shipment. - more

  BHP could be eyeing Kagara nickel mine - BHP Billiton may be among potential buyers for Kagara Ltd's non-core Lounge Lizard nickel mine in Western Australia, which is expected to be sold by the end of the year. - more

  China's Nickel Smelting Projects In Indonesia = Export ban of nickel ore from Indonesia to be enforced in 2014 prompts Chinese smelting projects = Projects of smelting nickel in Indonesia are in rush for governmental approval, before the year of 2014 when exports of nickel ore will be basically banned in accordance with the New Mining Act. - more

  Chan: Aust mining investment secure - Mining minister Byron Chan has reassured his Australian counterpart Martin Ferguson that Australia’s investment in the mining sector in PNG will not be deterred by the proposed amendments to the mining act. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, October 10

• Baltic Dry Index - plus 32 to 2,032. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China’s ‘Golden Week’ Home Sales Volume Falls as Monthly Prices Decline // China’s Stocks Drop to Two-Year Low After Banks, Property Developers Slump // China’s Yuan Strengthens Most Since July 2005 Amid U.S. Currency Pressure // Asia Stocks Rise as Germany, France Pledge Support for Banks Amid Crisis //Merkel, Sarkozy Pledge Bank Recapitalization // Short Selling Rises Most Since 2006 // Euro Chiefs Push Back Debt Crisis Summit Amid Tension Over Greek Writedown // Stoxx Europe 600 Index Posts Biggest Four-Day Jump Since 2008 on Bank Plan // Corporate Profit Rebound Loses Steam // Stocks Rally, Euro Strengthens on Merkel Pledge
• The Euro is now trading over 2.1% higher against the US Dollar. NYMEX crude is up 3.3% and trading at $85.71/barrel. Gold is up 1.9% and silver is over 3% higher. London traded base metals were ignoring the stronger Euro early on, but when US equity markets opened higher, and held on, base metals caught fire. For the day, Dow Jones reports three month nickel ended the day at $8.79/lb , all of the gains coming in the last few hours. That is nickel's best close since Sept 21st. Stockpiles of nickel stored in LME approved warehouses fell hard again on Friday and now total just over 93,350 tonnes. After five consecutive losses, nickel has averaged a fall of 562 tonnes per day so far this month, and their lowest readings since February 2009. The Europeans to do whatever is necessary to protect their banks in the case of a default and world markets are reacting positively.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• LME Metals Seminar 2011 - London presentations - more
• Robry Weekly Economic Assessment - more

  Commodity/Economic Articles and Comments

• Recession Officially Over; US Incomes Kept Falling - more
• Feldstein: ‘About as Bad an Expansion as I’ve Ever Seen’ - more
• Slow Crawl Out of 6.6 Million-Job Hole - more
• Austerity Bites - more
• Long-Term Joblessness Likely to Spur Unemployment Extension Fight - more

  Oil spill feared from attacked mining site in Surigao - The Philippine Coast Guard (PCG) is looking for signs of an oil spill at a mining site in Surigao del Norte that was attacked by communist rebels on Monday. - more

• 9 killed as Philippine troops clash with rebels - Army troops battled communist guerrillas in a running gun battle Monday that killed eight rebels and a soldier in the mountainous northern Philippines in the latest flare-up in the 42-year insurgency despite on-and-off peace talks. - more

  Steel firm assails Customs exec over leave - A steel company assailed the reported move by the head of the Bureau of Customs’ Run After the Smugglers or RATS unit as a “clever circumvention” of Malacañang’s 90-day suspension order. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.01/lb  higher, with all London traded base metals mostly dead in the water with little movement this morning. The Euro is up nearly 1-1/2% against the US Dollar. This should be giving commodity trading a boost, but not yet for base metals. NYMEX crude is up over 1.7% and trading at $84.40/barrel. Gold is up nearly 1-1/2% while silver is up nearly 2.7%. In overnight trading, Asian markets ended higher, with China returning from a one week holiday and falling nearly 1%. European markets are trading higher this morning, and futures show Wall Street should open on a very positive note. Nickel inventories took another large hit on Friday.
• LME Morning - Prices tick over but lack direction despite more upbeat sentiment - more
• Reuters - Copper steadies on weak dollar, Europe policy pledge - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - LME thoughts from this past week: Each year, attending LME week gives us a welcome chance to meet some of our clients and assess what they are seeing in their respective businesses. Invariably, there is an overriding tone to the gathering, with people either being mostly bullish or bearish, but this is the first year where the general view has been one of general confusion. Even the outlook at the October 2008 event was far easier to read in that the credit crisis and the seizure in the credit markets cast a universally bearish pall on the gathering. This time around, participants were not necessarily rushing to such dire conclusions, as they were not seeing an implosion in metals demand or freezing of credit lines. Rather, what they are seeing is a slowing in demand – but a hesitant one at that –brought on mainly by the ongoing European debt crisis, a largely exogenous event that no one seems to know how to properly assess in terms of its ultimate impact. “It doesn’t feel like 2008" many people told us, and on the surface, that seems to be true. European enterprises tell us that sales volumes are still up year-on-year, while in the US, various companies tell us that business is chugging along, although at a much slower pace. Freeport-McMoRan told the Financial Times last week that it is still expecting the US copper rod market to still grow next year, while US service centers are (according to a recent article in AMM) are also seeing a pick-up in light of lower prices. Premiums for refined copper metal may have dropped, but not drastically. Codelco is offering European customers $90, down from $98 last year. Negotiations with the Chinese have not begun yet, but traders are expecting premiums of $105-$110, down only slightly $115 last year. Further upstream, although copper concentrate treatment and refining charges (TC/RCs) have dropped to the lowest in a year at about $35/3.5c, annual contracts are likely to be settled in the same range as last year.Despite all this, the note of cautious optimism was not universally shared, and we came away with the distinct impression, that things are slowing down in China. There are reports that there is much scrap piling up at Chinese ports, (particularly in Guangdong), where importers are apparently waiting for new import rules that the central government has yet to unveil, some say purposely so. Others point to the fact that the buying has eased up on account of the fact that higher priced contracts have yet to be fully paid for, although we did not hear of mass cancellations on the scale that was evident in 2008. Finally, there is anecdotal evidence of a slowdown in Chinese scrap demand; this was evident when one scrap trader who this writer typically meets for lunch every year received only two phone calls over a two-hour period, vs. the 7-10 he typically would get in previous years. The outlook for other metals was equally mixed. A US-based nickel trader we met saw quite a bit of interest generated by the lower nickel numbers over the last week, as some US distributors seemed to be stepping up to take advantage of lower prices. However, a key nickel producer told us he was far more pessimistic, expecting restrained prices and premiums going into next year. On tin, one Chinese trader based in Germany was seeing little interest in forward buying, restricting himself mainly to spot sales. This suited him fine for now, as he was reluctant to offer 2012/2013 tonnage anyway since he had no idea where to pitch the numbers. "It was much easier before", he told us wistfully. No one seemed to have any notable reaction to our suggestion that the Chinese could possibly enter the markets if prices continue to fall and buy metal for their own account, as they did in 2008/2009. Such a move does not seem imminent just yet, and will likely require even lower prices before possible interest is drawn out. What is being watched more closely is whether or not a spate of mergers and acquisitions will now follow given the sharp retreat in many mining names, many of which have dropped far more than the underlying metals they are representing. So far, apart from a few select deals and expressions of interest, we have not seen a wave of activity, as companies are not keen to acquire cheap assets in the current uncertain environment. Nevertheless, up until now, M&A activity has been good. The Financial Times quotes Mergermarket as saying that the mining industry has concluded about $85 billion in deals thus far, and if buying picks up in Q4, the year has a shot of matching the record $114.4bn set in 2006. In the meantime, there has not been much new that has transpired in the European debt situation this past week apart from even more talk. Key leaders still differ on how best to approach the issue of plunging bond values and struggling banks. The French are pushing for the proposed European financial stabilization fund to lend money to banks that are in trouble, while the Germans are adamant that these resources are to be tapped only as a last resort. This past weekend, German Chancellor Angela Merkel and French President Nicolas Sarkozy said European leaders will do “everything necessary” to ensure the banks have adequate capital. (That declaration was not enough to help Belgian bank Dexia, as it was nationalized this weekend). At a joint press conference in Berlin, Sarkozy set a deadline of Nov. 3rd, which is when the G-20 meets, at which time he expects that there will be a plan for both the crisis in Greece as well as the issue of structural defects in the rest of the 17-nation Euro area. For her part, Merkel provided no details either, only saying that a report from a "troika" inspector team later this month will help provide a “durable solution” for Greece to remain within the Euro. So far, markets seem to like what they hear, as the Euro is up sharply right now, up almost $.02 and trading at just under $1.36. European equities are higher as well, while US stock futures are pointing to a 110 point opening gain on the Dow. However, the devil is in the European details, and the markets can very well be disappointed again if the proposals fall short. In our markets, metals are mixed right now, perhaps more concerned with what is happening with China. Last week was a very volatile period for the complex, in that although the group finished sharply higher, copper, aluminum, and zinc, all put in fresh lows before turning around. Oil prices are up by about $1/brl right now, as is gold, but the precious metal clearly has been struggling of late in what should have theoretically been fertile ground for a move higher. We suspect that gold has been hit by a round of profit-taking that has taken place by some funds seeking to free up cash in order to support other losing positions. In addition, outflow from gold ETF's has been heavy; Reuters reports that half a million ounces of gold has fled global exchange traded funds in September alone. Speaking of funds, John Paulson’s Advantage Plus fund lost 19.35% in September, bringing the year-to-date loss to a whopping -47%. Meanwhile, investors are weighing a decision as to whether to pull out of the fund entirely by the Oct. 31 notice deadline. .... Nickel is at $18,885, down $20. Prices are working gradually higher, but there seems to be good top-end range resistance at $19,500.  (Daily Metals Report here)
• (BL) Finally, among the base metals, there is nickel. Old nickel pig iron (NPI) plants are gradually being phased out, and more modern plants call for higher-grade nickel ores. Worse, stodgy nickel prices and rising metallurgical coal prices have rendered many Chinese NPI plants unprofitable. So, the structural changes are fundamental as China's demand for better qualities of stainless steel rises steadily, leading to rising demand for refined nickel. - (source)
• (Interfax) China Nickel Resources Holdings Co. Ltd. (CNR) has agreed to acquire an 80 percent stake in Indonesian iron-nickel ore firm PT Yiwan Mining (PT Yiwan) for HKD 2.07 billion ($265.95 million) in a bid to lockdown raw material supplies, the company announced Oct. 10.
• ENK deal to sell Caldag nickel project now legally binding - more
• China IPOs shrink 40% in Jan-Sept amid bear market - more
• No Recession for U.S. as Forecasts Improve - more
• (Cass) Freight shipments and expenditures both increased in September, in line with the expected seasonal rise. Other economic indicators, however, remain bleak.

  China Nickel Resources to buy majority stake in Indonesian miner - Hong Kong-listed China Nickel Resources is set to acquire an 80 percent stake in Indonesian iron-nickel miner Yiwan Mining for HKD2.067 billion from Easyman Assets Management Ltd and East Grow Management Ltd. - more

  Philippine army says mining firms need militias - The Philippine army said it cannot defend mining projects on troubled Mindanao island against attacks from Maoists given stretched resources, and so has asked private companies to hire military-organised militias to guard their businesses. - more

  Talvivaara Has Record Drop on Nickel Output, CEO Resignation - Talvivaara Mining Co., the owner of a Finnish nickel mine, fell the most on record in London trading after cutting its output estimate, warning of a strike and announcing the departure of Chief Executive Officer Pekka Pera. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, October 7

• Baltic Dry Index - plus 33 to 2,000. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Asian Stocks Head for Biggest Two-Day Gain Since 2009 on European Outlook // German Industrial Production Fell Less Than Forecast in August // Crop Death Seen Boosting Sugar as Stockpiles at 37-Year Low: Commodities // EU Leaders Under Investor Pressure to Devise Bank Rescue Plan Before G-20 // British Bank Ratings Lowered by Moody’s // Italy, Spain Have Ratings Cut by Fitch // Regional Shopping Mall Vacancies in U.S. Increase to Highest in a Decade // ‘Significant’ Cracks on 767 Spur FAA to Expand Checks // Payrolls Beat Forecast as Concerns Ease // Stocks in U.S. Slump After Three-Day Rally as Financial Companies Retreat
• The Euro is now trading 4/10 of 1% lower against the US Dollar, after a Fitch downgrade. NYMEX crude is off 2/3 of 1% and trading at $82.07/barrel. Gold is down 1/4% and silver is lower by 3-1/2%. Base metals ended the session mixed. Indicator charts show nickel opened higher, fell, then rose again as a US jobs report appeared favorable, then fell again with the Fitch downgrade. For the day and week, Dow Jones reports three month nickel closed at $8.57/lb , down $.03/lb for the day, up $.59/lb from a week ago, and down $1.30/lb from a month ago today. Stockpiles of nickel stored in LME approved warehouses fell for a fourth straight session on Thursday and now total just over the 94,250 tonne level. Markets are volatile today on news of a Fitch downgrade, after opening bullishly on a rather discouraging jobs report, that was somehow made to look good by the media. Speaking of volatile, it appears the politicians are drawing lines in the sand once again. The Republicans, after being taught a valuable and costly lesson by one Ross Perot years ago, embraced the Tea Party movement at its outset. After President Obama stated he sympathized with the Occupy Wall Street movement yesterday, Republican House Minority Leader called them a mob today. Founders of both the Tea Party and the Occupy Wall Street are probably wondering how their anger for Washington and Wall Street has been turned into another PR tool for the politicians. Your author knows little about what either of these two organizations really stand for, except a mutual distrust and anger at the way the country is being run. A few days ago, we listened to a public radio story about the Occupy Wall Street movement and one of the interviewed protesters, a former Marine, was asked what he hoped to accomplish. His answer, starting with the phrase 'overthrow the government' had to have raised some eyebrows among listeners, as it did ours. Politicians forced Americans to care what happens on Wall Street when they encouraged business' to do away with pensions and made 401K's and IRA's the employee's future. Is Main Street angry? You bet. But let's chill on the treasonous chatter.
• Have a safe and restful weekend!

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• (Platts) German basic metals output falls in Aug by 4.5% on month, according to federal statistics office Destatis
• Smaller-Sized Firms Plan Less Hiring, Some Price Increases - more
• Vital Signs: Rising Financial Stress - more
• Widening Gap Between Sentiment and Action - more
• Cantor Decries ‘Growing Mobs’ as Wall Street Protests Reach U.S. Capital - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.12/lb lower with other London traded base metals mixed and mostly quiet. The Euro is trading just slightly higher against the US Dollar at the moment. NYMEX crude is down over 1/2 of 1% and trading at $82.15/barrel. Gold and silver are also up slightly. In overnight trading, Asian markets ended higher, with China returning from a week long holiday next week. European markets are up slightly, while US futures are slightly lower at teh moment. Markets are awaiting for the release of September's US payroll report. Nickel inventories fell on Thursday.
• LME Morning - Base metals edge higher but quiet ahead of US non-farm payrolls data - more
• Reuters - Copper holds onto gains, U.S. data eyed - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - next report posted Monday
• (Dow Jones) The price of nickel is nearing break-even point for many high cost producers, and while this could begin to spark production stoppages in some regions the high cost of halting mine output may deter some companies for the time being, an executive at Russian miner OAO Norilsk Nickel said Thursday.
• (Dow Jones) Australia-based Albidon Ltd. has embarked on an ambitious project aimed at fixing operational issues that have hampered output at its Munali Nickel Mine in Zambia since May, the company said Thursday.
• (Yieh) According to the statistics, Japan’s stainless steel exports totaled 96,895 tons in August, dropped by 9.8% year on year while increased by 8.3 percent from July.
• (MB) Nickel Asia Q3 shipments surge 71% as Chinese appetite grows
• (SBB) Asian stainless prices down another $50/t amid muted trading
• (JMB) Decreased Ni Series Stainless Cold Sheet Market Price around Osaka
• Mirabela Nickel partially closes out nickel hedge - more
• AAR Reports Gains for September Rail Traffic - more

  First Quantum eyes year-end restart of Ravensthorpe nickel mine - First Quantum Minerals Ltd said nickel production is set to resume by the end of 2011 from Australia's Ravensthorpe mine following a two-year redevelopment programme. - more

  CEO exits as Talvivaara cuts output on weak demand - Finnish miner Talvivaara became one of the first miners to cut its output in the face of uncertainty over demand and announced the surprise departure of its CEO, pushing its shares to a two-and-a-half-year low. - more

  H’lands Pacific stays confident on Ramu - Highlands Pacific said last Friday that it was “confident” the appeal against the use of the deep sea tailings placement (DSTP) system at its US$1.5 billion Ramu nickel project in Madang would fail and that the project would proceed to commissioning in the coming months. - more

  Steel maker Rautaruukki cuts 2011 outlook - Finnish steel maker Rautaruukki Oyj cut its business outlook for 2011 on Friday, saying the European debt crisis was hitting its sales. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, October 6

• Baltic Dry Index - plus 59 to 1,967. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Lone Star Found Guilty of Stock Manipulation as Korea Exchange Is Cleared // Bank of England Expands Bond Buying Program // ECB Holds Rate at 1.5% at Trichet’s Final Meeting // EU Readies Coordinated Bank Aid Push // Euro’s Teutonic Fault Line Finds German-Speaking Italians Savoring No Debt // European Stocks Climb for Second Day as BNP Paribas, BHP Billiton Advance // Strategists See Biggest S&P 500 Gain Since ’98 // Apple’s Steve Jobs Dies at 56 // Jobless Claims Climb Less Than Forecast // U.S. Stocks, Oil, Euro Retreat on ECB Debt Plans
• The Euro is now trading 1/3 of 1% higher against the US Dollar. NYMEX crude is up nearly 1-3/4% and trading at $81.06/barrel. Gold is up slightly while silver is up nearly 3.4%. Base metals ended the session higher. Indicator charts show three month nickel opened higher, and traded sideways within a narrow $300/tonne band for the entire session. For the day, Dow Jones reports three month nickel ended the day at $8.60/lb . That is the highest close in three days, but still not up to Monday's close. Stockpiles of nickel stored in LME approved warehouses fell for a third consecutive session and now total just under 94,900 tonnes. Marketwatch reported that "European Central Bank President Jean-Claude Trichet spoke of increased downside risk to the region..." but that "the central bank would revive its purchases of covered bonds and resume yearlong loans for banks in an effort to inject liquidity into the financial system." Along with Bernanke's remarks earlier in the week, this helped lower fears of any potential 'bank runs' should Greece default. Jobless claims were up last week in the US, but not as much as feared. So with these two pieces of 'less bad' news, and a market bouncing off bear market territory, equity markets are up today.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Nearly Half of U.S. Lives in Household Receiving Government Benefit - more
• ECRI Explains Its Recession Call - more
• Europe’s Ship of Fools - more

  Communists threaten more mine attacks - Maoist guerrillas on Thursday threatened more attacks on foreign-operated mines in the southern Philippines, targeting those who they say pollute the environment and have displaced indigenous people. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.18/lb higher, with all London traded base metals solidly higher this morning. The Euro is currently trading over 4/10 of 1% lower against the US Dollar. NYMEX crud eis up 8/10 of1% and trading at $80.32/barrel. Gold is off nearly 1/10 of 1% and silver is over 1% higher. In overnight trading, Asian markets ended higher, with China markets still closed. European markets are trading higher this morning, while US futures show Wall Street should open on the positive side. Nickel stockpiles continue to fall.
• LME Morning - Metals rally on uptick in economic optimism - more
• Reuters - Copper near one-week high, Europe steps reassure - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - next report next Monday
• (Yieh) It’s reported that Taiwanese Tang Eng announced to cut the export prices of cold rolled (CR) stainless steel sheet and coil by US$160/ton for October delivery, reflecting the lower nickel prices and weak demand
• (WSJ) Zambia's newly elected government has suspended exports of copper and other minerals, including cobalt, gold and nickel, ahead of new guidelines aimed at improving revenue collection and transparency in the mining sector, officials said Thursday.

  Russian Imposes Nickel Export Tax at $2,100 a Ton on Dec. 5: IFX - Russia’s progressive export tax on nickel will come into effect at $2,100 a metric ton from Dec. 5, Interfax said, citing an unidentified government official. - source

  Philippines' Benguet says bags nickel supply deal - The Philippines oldest miner, Benguet Corp , said on Thursday its nickel subsidiary will sell 2 million tonnes of nickel ore to a unit of Hong Kong-based Dunfeng Holdings Inc, its second deal with a Chinese group in just over a month. - more

  Market Report On Imported Ferroalloys To Japan As Of September 30, 2011 = Repercussion seen from gloomy outlook of European economy = Market outlook of the imported ferroalloys as of September 30, 2011 is as follows: Overcast economy outlook in Europe as derived from monetary crisis is adversely affecting the ferroalloy market. One of the adversities is the sharp drop of LME nickel price on September 23 (down to below US$8/lb, a low level ever since the Lehman's Fall), which is symbolizing a direction for the other metals including ferroalloys to follow. - more

  Philippine troops clash with communist rebels after mine attacks, 1 soldier killed, 3 wounded - Troops clashed with communist rebels in the southern Philippines Thursday amid a hunt for hundreds of guerrillas who attacked three nickel mining complexes, alarming the local mining industry. - more

• 2 top military officials in Surigao del Norte sacked due to ‘serious lapses’ - Two military officials were relieved from their posts after “serious lapses” were seen in their command which resulted to the attack on three mining firms in Surigao del Norte on Monday, Armed Forces Chief General Eduardo Oban said. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, October 5

• Baltic Dry Index - plus 23 to 1,908. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Copper Rout Unlikely to Halt Chile’s $67 Billion Bet on Mines: Commodities // Asian Stocks Decline as Italy Downgrade Overshadows Bid to Protect Banks // IMF Sees Europe Bank Plan as Moody’s Warns // Honeymoon Over as Euro Loses Gloss for Slovaks // Greeks Strike Against Job Cuts as Aid Delayed // Merkel Signals More Greek Investor Losses // Italy Rating Cut Three Levels by Moody’s on Debt Crisis, Matching S&P Move // Announced U.S. Job Cuts Rise 212% in Year // Office Rents in U.S. Rise to Highest Since 2009 as Occupied Space Climbs // Dollar Surges as Treasuries Defy S&P Downgrade // U.S. Service Industries Grew at Slower Pace in Sept. // U.S. Stocks Pare Gains as Financials Decline
• The Euro is presently trading over 1/4 of 1% lower against the US Dollar. NYMEX crude is up nearly 3-3/4% and trading at $78.49/barrel. Gold is up over 1% and silver is over 8/10 of 1% higher. Base metals ended their session mixed and for the most part, fairly uneventfully. Indicator chart show nickel began to slump early and pretty well did nothing the latter half of the day. For the day, Dow Jones reports three month nickel ended the day at $8.35/lb . Stockpiles of nickel stored in LME approved warehouses fell over 1000 tonnes yesterday, and now total just under the 95,400 tonne level. In reference to this, we asked yesterday why nickel stockpiles were still falling, even though we had been warned, and should be in, a surplus situation. A long time reader from Southeast Asia wrote us the following. "I had a chat with the person in-charge of our operations in China. He mentioned that a lot of companies in China are now in a credit and power crunch. Take our company for example, we have been told by the local authorities that we would be rationed electricity 4 days a weeks, meaning we would have not supply of electricity for 3 days. We are then forced to pay more to borrow electricity from another factory nearby which does not use as much. Compound that with the tightening of credit by banks, it is almost impossible for small, medium-sized companies to get any kind of credit facilities from the banks. All this would mean that the demand of industrial products would shrink and hence put further pressure on metals. But, this also affects the ability of small mills to refine nickel from pig iron. Hence, although things look really bad, it is hurting the pig iron smelters more that Chinese stainless steel mills are now forced to buy more nickel as supply of low grade nickel diminishes. Just a thought for your reference." Fascinating stuff. This confirms China is still experiencing some serious electrical shortages, and the additional comment about credit tightening in China, is concerning as well. Anyone else have anything to offer as additional reasons nickel stockpiles continue to fall? We would like to share anything we receive with all our readers, but as in this case, you can remain anonymous if you like.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• LME Metals Seminar 2011 - more
• Commodity Business Awards 2011: Vote Now - thank MF Global for sharing their daily industrial metals report free - here

  Commodity/Economic Articles and Comments

• (RI) Liberty Mines of Toronto plans to restart production at its Timmins operations in Q1 2012. Mining and milling was suspended in February 2011 due to maintenance and tailings pond issues.
• CBO: Deficit Would Be One-Third Lower if Economy at Full Potential - more
• We Can’t Ignore Housing Anymore - more
• Buffett: Recovery Is Still Under Way - more
• Personal Bankruptcies Decline - more
• Apple’s Textbook Bounce “Saves” the Market - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.10/lb lower, with other London traded base metals mixed and quiet. The Euro is trading over 1/10 of 1% lower against the US Dollar at the moment. NYMEX crude is trading 2-3/4% higher and at $77.76/barrel. Gold is down 2/3 of 1% and silver is lower by over 3-1/2%. In overnight trading Asian markets ended lower ,with China still closed for a week long holiday. European markets are trading higher this morning, and US futures show Wall Street may open higher as well. Nickel inventories fell hard yesterday.
• LME Morning - Metals turn mixed, corrective bounce runs out of steam - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Posted as soon as received - next report next Monday
• Western Areas jumps on nickel hits - more
• Commodities Climb From 10-Month Low as Bernanke Vows Steps to Boost Growth - more

  China's Exports/Imports Of Molybdenum July 2011 - Excess Of Imports = Exports at 1.53 million pounds vs. Imports at 1.78 million pounds = According to China's Customs Statistics of July 2011, July balance of trades of molybdenum was excess of imports, following June. Exports were 1.532 million pounds, while imports were 1.785 million pounds. Details during the seven months from January to July 2011 together with the figures of the single month of July 2011 are as per the attached table hereto. - more

  Deal on Ramu project up for review - A review of a deal between stakeholders involved in the Ramu nickel and cobalt mine project has been scheduled for next week by the Mineral Resources Authority. - more

  Philippines' Nickel Asia resumes mine operations after attack - The Philippines' top nickel producer Nickel Asia Corp has resumed operations at its biggest nickel mine, Taganito, after a raid by communist rebels early this week and expects to ship ore in the next three weeks, its chief said on Wednesday. - more

  Nickel Asia attacks - One of the biggest—and scariest, if one considers the stakeholders—reports in yesterday’s papers was the one about the simultaneous attacks staged by some 300 New People’s Army (NPA) rebels—that’s the size of a battalion—on three mines operating in Claver, Surigao del Norte, killing three security guards. - more

• Surigao mining attacks likened to Pearl Harbor - Attacks by the communist New People’s Army on three mining firms in Claver, Surigao del Norte province, are causing jitters in the mining industry and sending the message that investments might not be safe without tight security, the Mines and Geosciences Bureau (MGB) said Tuesday. - more
• Japan, Australia worry over Filipino mine attacks - Australian and Japanese officials have expressed concern over an attack by more than 200 communist guerrillas on three mining compounds in the southern Philippines. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, October 4

• Baltic Dry Index - minus 1 to 1,885. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) View: China’s Fall, Not Its Rise, Is the Real Global Threat // Azumi Demands Europe Make Greek Bailout Transparent to End Euro Weakness // South Korean Stocks Decline Most in Asia Amid Export, Manufacturing Data // German Bunds Advance Amid Investor Concern Losses on Greek Bonds May Climb // Billionaire Mordashov Adds Steel Mills as Mittal Retrenches: Commodities // Deutsche Bank Scraps Profit Goal, Will Cut 500 Jobs on ‘Unabated’ Slowdown // EU Signals Investors May Have to Take Bigger Losses in Second Greek Rescue // Dexia Joins BNP Resisting Losses on Greece Three Times Worse Than Booked // European Stocks Drop for Third Day on Debt; Dexia Sinks, Air France Tumble // S&P 500 Below 1,100 Puts Bear Market in View // Bernanke: Fed Can Take Action to Boost Growth // Stocks Reverse Drop, Euro Strengthens
• The Euro is trading nearly 8/10 of 1% higher against the US Dollar, after Bernanke had little positive to say about the US economy in testimony before Congress today. NYMEX crude is down 1/2 of 1% and off session lows, and trading at $77.22/barrel. Gold is down over 2-1/2% and silver is off nearly the same, as the precious metals begin to lose some of their inflationary hedge lustre. Base metals ended mostly lower today, with only tin pulling off a solid gainer. Indicator charts show nickel opened lower, rose sharply with the Euro in early afternoon trading, then plummeted nearly $700/tonne before ending the session. For the day, Dow Jones reports three month nickel closed at $8.48/lb . Stockpiles of nickel stored in LME warehouses fell on Monday and now total just over the 96,450 tonne level. Wall Street fell like a rock when it opened this morning, but appears to be profiting from another Bernanke bounce, with NASDAQ trading in the green.  Bernanke had little positive to say, except to say he could protect US banks from a bank run should Europe go belly up, and that his Operation Twist announced at the last Fed meeting, deserves more respect than its getting. Greece said it had enough cash to get by until mid November, so the European debt can will be kicked down the road a few more weeks. Chinese markets remain closed and the London Metal Exchange is on day 2 of its LME week meetings. If anyone at the show is reading this, we have some readers that are trying to figure out why all the metal analysts were forecasting a surplus of nickel in the last half of 2011, and yet here we are in the fourth quarter, with LME warehouse numbers still falling pretty consistently. We have no clue what to tell them so if you hear any solid reasons from the show, we would appreciate hearing them.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here

  Commodity/Economic Articles and Comments

• Rabobank’s monthly outlook - “The sharpest pullback has been in consumer confidence measures, prompting the simple recession probability models we run for the US and Eurozone to rise to uncomfortable levels.”
• Heritage: Repatriation Tax Holiday Wouldn’t Create Jobs - more
• World-Wide Factory Activity, by Country - more
• Economics in the Next Ten Years? - more
• Vital Signs: Commodities Taking a Hit - more
• 10 Questions for the Bulls - more
• "Class War" and the Lessons of History - more

  Lack of SA electricity sends plant to China - Plans to shift the construction of a ferrochrome smelter from Rustenburg to China was a blow not only to local beneficiation but also to jobs and economic growth, minerals company Tharisa, industry players and analysts said on Friday. - more

  Customs’ anti-smuggling team sacked - Eight officials of the Customs’ Run After the Smugglers team, including its chief, were ordered suspended after a Binondo-based steel company accused them of conducting an illegal raid on the company. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.31/lb lower, with all LME traded base metals lower as well. The Euro is currently trading slightly higher against the US Dollar.  NYMEX crude is down over 2-1/2% and trading at $75.65/barrel. Gold is down by more than 9/10 of 1% and silver is  lower by 4/10 of 1%. In overnight trading, Asian markets ended lower, with China closed this week for holiday. European markets are trading much lower this morning, and US futures show the Dow may open over 150 points lower. Nickel inventories fell on Monday. Greece default worries appear to be growing, while in Washington DC, U.S. Fed Chairman Ben Bernanke will testify this morning before the Joint Economic Committee.   
• LME Morning - Metals tumble again, economic woes prevail and euro buckles - more
• Reuters - METALS-Copper slips on demand worries, strong dollar - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - next report Monday, October 10. Ed at LME Week
• (Dow Jones) DJ Goldman Sachs Cuts 12-Month Nickel View 8.7% To $21,000/Ton
• ((MW) For 2011, Credit Suisse cut its copper forecast 6% to $4.03 a pound, aluminum down 4% to $1.13/lb, zinc down 5% to $1.03/lb, lead down 7% to $1.09/lb, and nickel down 4% to $10.5/lb.
• (JMB) NSSC Lowers Ni Cold Stainless Sheet and Plate Price by 10,000 Yen/t in Oct
• (MNP) The appeals hearing against the use of a deep sea tailings placement system by proponents of the $US1.5 billion ($A1.57 billion) Ramu nickel mine in Papua New Guinea started today in the country’s Supreme Court.
• Commodities May Rally 20% on Emerging-Markets Growth, Goldman Sachs Says - more

  DJ Nickel Asia: Pending Nickel Shipments Through Year-End Unaffected By Attack - Nickel Asia Corp.'s nickel shipments won't be affected by an attack Monday by communist rebels on the company's Taganito mine in southern Philippines, Chief Financial Officer Emmanuel Samson said Tuesday. - more

• Three killed in Maoist attack on Philippine nickel mine - Hundreds of Maoist guerrillas killed three men, took hostages and torched equipment and facilities in an attack on a major nickel mine in the southern Philippines on Monday, security officials said. - more
• Nickel Asia to divert output after raid, price impact limited - Nickel Asia Corp , the Philippines' top nickel producer, will divert output from two mines to cover ore shipments from its Taganito mine damaged in an attack by communist rebels, a company official said on Tuesday. - more
• Philippines to Increase Troops in South After Mine Attacks - The Philippines will increase troops in the southern part of the country after at least 200 Maoist rebels yesterday attacked several mines, including a nickel project of Sumitomo Metal Mining Co. - more
• NPA rebels behind mining attacks raise four demands - Leaders of the New People’s Army (NPA) group that launched the attacks have laid down a number of demands to concerned government agencies and the mining industry. - more

  Economic Uncertainties Unsettle Global Stainless Steel Markets - Stainless steel sales typically pick up in September, particularly in Europe and North America, as consuming sectors return to work after the summer vacation period. - more 

  New Move In South Africa On Cr Ore Export Restriction = NUM suggests review of China's role in SA economy = A new move is seen in South Africa regarding export restriction of chrome ore which has been long in dispute. NUM (The National Union of Mineworkers), a union having strong influence over the country's policy-making and economy, now synchronizes on the issue with ferrochrome producers and appeals to the government to review legislation. - more

  $1.5bn PNG nickel mine to go ahead - Australian miner Highlands Pacific says its $US1.5 billion ($A1.54 billion) Ramu nickel project in Papua New Guinea will start production next year, despite local threats to shut it down. - more

  Courtesy AISI - In the week ending October 1, 2011, domestic raw steel production was 1,781,000 net tons while the capability utilization rate was 72.8 percent. Production was 1,699,000 tons in the week ending October 1, 2010, while the capability utilization then was 70.2 percent. The current week production represents a 4.8 percent increase from the same period in the previous year. Production for the week ending October 1, 2011 is down 3.8 percent from the previous week ending September 24, 2011 when production was 1,851,000 tons and the rate of capability utilization was 75.7 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, October 3

• Baltic Dry Index - minus 13 to1,866 . (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Asian Economies Weaken as European Debt Crisis Crushes Investor Confidence // Japan Manufacturer Sentiment Below Pre-Quake Levels Signals Muted Recovery // Asia Stocks Drop, Euro Weakens Before Crisis Meeting // Greece Pledges $8.8 Billion in Austerity // Euro Drops to Eight-Month Low Versus Dollar Before Europe Crisis Meeting // EU Said Near Deal on Demand for Greek Collateral // Stocks, Euro Fall as Concern Over Debt Crisis Outweighs U.S. Economic Data // Falling U.S. Wages Threaten Consumer Spending // ISM Manufacturing Index Rises, Defying Forecasts // Stocks, Euro Fall as Concern Over Debt Crisis Outweighs U.S. Economic Data
• The Euro is now trading nearly 1% lower against the US Dollar. NYMEX crude is down nearly 1% as well, and trading at $78.43/barrel. Gold is up 2%, while silver is up 2-3/4%. Base metals ended the first session of the last quarter fairly quiet and mixed, except for nickel. A comment by Norilsk that some miners were mining nickel below their cost, and an attack in the Philippines, sent nickel higher early, and short covering helped exacerbate the gains for the day. For the day, Dow Jones reports three month nickel ended the session at $8.63/lb . Trading should be quiet over the next few days, with China markets closed for holiday, and many metals traders attending LME Week in London. Stockpiles of nickel stored in LME warehouses registered a gain on Friday and now sit just under 97,100 tonnes. Cancelled warrants remain higher than normal. Nickel trading was volatile the first few days of last years LME Week, before they settled back down. And besides today's US PMI unexpectedly increasing, in the good news arena, read Robry's Weekly Natural Gas report below. According to natural gas flows, we just might have turned a corner a few weeks back. Then again, we may not have, but we will take good news anywhere we can find it.  

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• MF Global Monthly Commodities Commentary - pdf here
• Robry Monday Morning Economic Assessment - more

  Commodity/Economic Articles and Comments

• (WSJ) The board of the London Metal Exchange is unlikely to present a potential bid to acquire the exchange to shareholders until at least the end of the first quarter next year, the chief executive of the LME said.
• Number of the Week: The Economy’s Housing Albatross - more
• The U.S. Politics of Dealing With China - more
• What Happens When S&P500 is Down 5 Months In A Row? - more

  Nickel jumps over 5%, traders cite short-covering - Nickel rose more than 5 percent on Monday, which traders attributed to short-covering and comments from Norilsk Nickel on output, although they said low volumes could be exaggerating - more

  Prices eating into cost curve for many metals: Barclays Capital - Rising operating costs in the metals industry should limit the potential downside to prices in the current economic uncertainty, Barclays Capital said in its latest "Metals Magnifier" report. - more

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

• Indicators at 7:00 am CST show 3 month nickel trading around $.31/lb higher, with other London traded base metals mixed and much quieter than nickel. The Euro is trading 1/3 of 1% lower against the US Dollar at the moment. NYMEX crude is down 1-1/4% and trading at $87.21/barrel. Gold is up over 2.1% and silver is higher by 4.2%. In overnight trading, Asian markets ended lower, with China closed this week for holiday. European markets are trading lower this morning, and US futures show Wall Street may open lower as well. Nickel stockpiles rose on Friday. Nickel is busting an overall downtrend this morning, most likely on the rebel attack on a nickel mine in the Philippines, story below.
• LME Morning - Copper continues downslide as LME Week kicks off - more
• Reuters - Copper hits 14-mth lows on Greece worry, China data - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - next report on Monday 10
• Commodities Tumble to 10-Month Low, Extending Deepest Decline Since 2008 - more
• Steel price slump may hit iron ore orders - more
• Mwana Africa to Raise Stake in BNC - more
• Glimmers of hope in the mining gloom  - more
• The Great Copper Crash of 2012 - more

  The vital statistics of nickel - Benchmark nickel prices have been falling since around the middle of the year on worries that softening demand will tip the market into over-supply. - more

  Norilsk sees debt crisis cutting world nickel output  - About 10% of world nickel producers are losing money at current prices and could cut output by as much as 30 000 t in the fourth quarter of this year, Norilsk Nickel's head of marketing, Viktor Sprogis, said in an interview. - more

  Outotec To Build FeCr Plant In China For Mintal Group = 300,000 tons per year plant in Inner Mongolia = Finland's Outotec Oyj. has announced on September 26 (Finland time) that it agreed with Mintal Group Co., Limited on constructing a new plant whose annual capacity is 300,000 tons of ferrochrome, and on licensing of technology regarding ferrochrome smelting as well as chrome ore pelletization by steel-belt sintering - more

  Rebels Raid Sumitomo Metal Mining’s Philippines Nickel Mine - Sumitomo Metal Mining Co., Japan’s largest nickel producer, said rebels raided its Taganito nickel mining project in the Philippines today. - more

• Philippines' Nickel Asia suspends operations after attacks - Nickel Asia Corp , the Philippines' largest nickel producer, said on Monday it suspended mining operations and nickel ore loading activities at its Taganito Mining Corp (TMC) unit following an attack by an armed group. - more

  Mine reader - Pacific Nickel Philippines, which for the past 15 years has been feasting on the 25,000-hectare Surigao mineral reservation in Mindanao, has resumed shipment of minerals to China despite the DENR suspension of its mining license. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

September Archives

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