5-28 |
LME nickel bucked the trend of most metals hit by pre-weekend profit
taking, and gained to close at $5.53/lb.
* Weekly Round-up - Nickel rose this week for a number of reasons.
First, the dollar fell against the Euro and was at an eight week low yesterday.
A weak dollar is good for metals. Second, Norilsk had to shut down shipments
for the annual floods on the Yenisei River. While an annual event, the tight
market is nervous about the extent of this closure and the impact it will
have on inventories. Speaking of inventories, our number 3 reason is LME
inventories have fallen for about 2 weeks straight now, falling below the
12M tonne mark yesterday. Fourth, investors that panicked that China was
shutting down shop a few weeks ago, are now realizing the efforts to slow
the economy seem to be slow and gradual, meaning China will still remain
a large consumer of nickel. And finally, economic news from various regions
of the world remain strong, meaning nickel consumption will continue to grow
strongly. While estimates of the world deficit have fallen since the beginning
of the year, the anticipated market still remains in the deficit.
* US metals markets close at noon today, and LME will be closed Monday
for the holiday weekend.
* On Wednesday,. Inco announced that its new Goro Nickel Mine startup
date had been pushed into 2007. Originally planed for a 2006 opening, this
new delay is making traders nervous about an already tight nickel market,
with the Goro opening the first large new mine to potentially alleviate a
deficit situation. While we expect the initial impact off this announcement
to be minor, it does have the potential to keep the world in a deficit situation
longer than orgianlly thought, which could keep nickel prices up through
2005, and now potentially, 2006. Good news for nickel stock holders but not
good news for stainless steel users.
* LME nickel inventories fell to 11,844 tonnes yesterday. This
is not going to help bring nickel prices down, with the world's largest producer
not shipping due to a closed port and annual spring floods.
* While every nickel mine has its own production costs, we saw
one estimate this week that the average cost to produce a pound of nickel
is approximately $2.41/lb.
* Steel fastener buyers shouldn't expect to see prices come
down anytime soon. China Steel Corp just announced new price increases in
steel wire for June.
* South Africa, the world's largest supplier of ferrochrome,
announces it will double production this year to an estimated 120M/tonnes.
* LME nickel opened the morning at $5.44/lb. |
|
|
5-27
 |
LME nickel ended the trading day at $5.49/lb.
It appeared stainless steel prices should be coming down... this recent increase
of nearly 10% in a few weeks, while lower than earlier high's, will give
steel makers reason to keep stainless prices up.
* LME nickel inventories fell to 12M tonnes yesterday and traders
are noticing.
* Carpenter Technology raising prices on all stainless steel products
by 3-10% effective June 1st. Also adding manganese to surcharges.
* LME markets were at $5.31 in early trading. |
|
|
5-26 |
LME nickel ends the day at $5.30/lb.
* Posco of South Korea is advising China shouldn't be counted out when
it comes to stainless consumption and it estimates nickel will probably stay
in its current price range for the remainder of the year.
* Scrap Magazine is reporting Jim Lennon of Macquarie Research told
those attending a scrap convention last week that he thinks the current dip
in nickel could be temporary and still estimates pricing to average $6.25/lb
for the year.
* LME nickel inventories continue to slide - now nearing 12M/tonnes.
* LME markets opened with nickel selling for $5.33/lb. |
|
|
5-25 |
LME nickel ended the trading day at
$5.27/lb.
* LME nickel opened higher this AM...at $5.30/lb. Prices fell shortly
thereafter. |
|
|
5-24 |
LME nickel closed off its earlier high's as rising oil prices brought
profit takers to the floor. Inco also reported no disruptions in supply were
expected in Indonesia. Closed at $5.27/lb.
* LME nickel stocks fall for 7th straight day, at
12,636/tonnes.
* Oil prices back up - barrel only 12 cents cheaper than 21 year record
high hit MOnday last week.
* Various news agencies are reporting some Canadian and Australian
workers have left the Indonesian mine and Canadian and Australian embassies
have issued travel alerts for Indonesia.
* Another factor driving the nickel price higher is being reported
by Bloomberg. Inco's International mine workers in Indonesia have received
death threat's, possibly from Islamic militants. Hundreds of Indonesian police
have been sent to the area to guard the mine and Inco has offered expatriates
the option to leave. With shipments from Norilsk halted due to floods, the
market can not risk any further disruptions in an already tight supply.
* Rescue units in Russia's Siberia have been placed on flood alert
as the Yenisei River has exceeded the critical level and continues to rise.
* Man Metals Research is reporting nickel imports into China have
fallen 47% so far this year, compared to the first 4 quarters of last year.
During the same period exports of nickel from China have increased 107%.
This has helped stabilize nickel prices during the last few months.
* LME nickel opened strong this AM, selling at $5.36/lb. |
|
|
5-21 |
Nickel had the buyers sentiment today as news from Norilsk, along with
a falling dollar, led LME nickel upwards; the London market closing their
trading day at $5.24/lb.
* Barrel of oil costs $39.90 today, compared to a record high $41.85
on Monday.
* Molybdenum oxide continues to fall, although still well over 2003
levels - at $12.25/lb.
* Well - we were right - for a moment. After we predicted the rally
wouldn't last, nickel dived. Now its spiking again because Norilsk, the world's
largest supplier of nickel, announced a few moments ago they were shutting
down shipping in anticipation of the annual floods at their port in Dudinka.
This is an annual occurence, as ice breaks up on the
Yenisei
River, and stops shipments for 30 to 45 days. Low LME nickel inventories,
with this disruption in supply, are making traders nervous.
* Nickel on the LME opened up this morning, selling at $5.17/lb. This
came on the heels of news from China that stainless steel consumption was
only expected to rise 10% in China this year, compared to 31% last year.
According to Reuters, Li Ching, executive president of the Stainless
Steel Council of China Special Steel Enterprises Association is making this
gloom prediction. We don't expect this price rally will last long. |
|
|
5-20 |
As the world celebrated Ascension Day today, LME nickel prices seemingly
symbolically paralleled the story of the holiday. Early morning trading saw
profit taking , with nickel prices experiencing a slow death - falling to
$4.85/lb. Then investors jumped in, resurrecting the price. Within hours
nickel had climbed to a weekly high of $5.03/lb. After peaking the market
returned to normal, closing where it did yesterday - at
$4.99/lb. (ok, I tried to make it work)
* LME nickel inventories fall below 13M/tonnes
* As we mentioned in April, and officially beginning on April 28th,
Canadian officials have begun a 60 day anti-dumping investigation of stainless
steel fasteners into Canada from Taiwan and China. The original complaint
was filed by Leland Industries. The interesting part of the official statement
includes a paragraph stating that if they find sufficient evidence of injury,
they hold the right to impose retroactive duties to the April 28th date.
For those purchasing and selling stainless steel fasteners in Canda, stay
tuned.
* LME nickel opened lower this morning, opening at $4.91/lb. |
|
|
5-19 |
LME nickel took a short bounce today after China's vice president was
quoted as stating the Chinese leadership would continue to encourage economic
development and promote stabile monetary policies. The governor of China's
central bank also denied that immediate interest rate hikes were planned.
Traders were encouraged that the Chinese economic slow-down may not be as
dramatic as first feared, and jumped into the market, with nickel closing
the day at $4.99/lb. LME nickel inventories continue
to decline.
* War in Iraq cost to date
here.
Tribute to the 790 soldiers who have given their lives
so
far.
* Nickel opened LME trading at $4.90/lb |
|
|
5-18 |
LME nickel strengthened a little today, ending the London trading day
at $4.90/lb.
* For you steel buyers, the steel makers are still playing games with
your numbers. AK Steel advised today it was lowering the surcharge by 4$/ton
next month, but, will raise the transaction price by $50/ton. Nucor Steel
announced earlier that it was cutting next month's surcharge by $25/ton but
increasing the base price by $20/ton in July.
* Sympathy for traders in nickel market appears to be very negative,
which is good news for stainless steel users in the long term. One thing
that is worth watching is LME inventories of nickel, which are seeing consistant
drop's. Yesterday they fell to 13,448 tonnes. Two months ago, this would
have been seen as further proof of the predicted world deficit in nickel
production and raised nickel pricing. Now with sentiment so nervous about
China's attempt to slow its economy, terroism threats, record high oil prices,
and US interest rates, this negative seems to be forgotten. Stay tuned, but
as of today, stainless steel prices appear to have peaked. With molybdenum
still high, there remains room for 316 stainless steel prices to see potential
further increases.
* South Korea's largest stainless steel producer announces cuts in
300 series stainless of 8%, effective on new orders taken as of tomorrow.
* Reuters is reporting an official from one of China's first stainless
steel producers, as warning the stainless steel market in China is showing
signs of a definite slow-down.
* LME nickel opened lower this AM, opening at $4.76/lb. |
|
|
5-17 |
LME nickel took a beating today as copper dragged down all other metals.
It ended the day at $4.79/lb. Invesotrs are nervous
as China is selling a lot of copper on the world market, leading some to
believe China is lowering their raw material inventories.
* China's central bank is warning investor's that investment in China's
iron and steel industry soared by 107.2% in the first quarter of 2004, and
96.6% in 2003. It also warns then when all these projects are complete, China's
supply could exceed demand. US steel makers are already watching China wearily,
with fears a government forced slow-down in the Chinese economy, could
re-introduce cheaper import steel into the US market.
* International Stainless Steel Forum reporting worldwide crude stainless
steel production increased 10.4% in 2003, compared to a 7.8% increase in
2002. They are also forecasting an additional 6.8% increase for 2004. The
ISSF sees no forseen supply risks ands states the price increases in nickel
earlier this year was unjustified. Nearly 72% of stainles steel produced
in the world is 300 series stainless, with 400 series making up nearly 21%
and most of the the balance 200 series. Duplex stainless makes up less than
1/2 of 1%.
* Expect higher electric rates this year, as coal prices increase
hit 25% over last year.
* LME nickel opened lower this morning, asking price at $4.85/lb. |
|
|
5-14 |
LME nickel closed the week at $4.91/lb.
* According to the American Iron and Steel Institute, American steelmakers
shipped 8.6% more in the first quarter of 2004, than in the preceeding
year.
* LME nickel opened at $4.87/lb this AM. Traders await economic news
from the US and a possible increase in the interest rates in China. |
|
|
5-13 |
LME nickel took a beating again today, ending the trading day at
$4.87/lb. As seen above, late nickel trading continued
to slide. Justified or not, there is a lot of pessimism surrounding nickel
at the moment. Good news for stainless steel buyers.
* The Financial Times is reporting nickel imports into China have fallen,
due in part, to the closing of nearly 3,000 electroplating workshops (nearly
20%) who could not remain profitable when nickel prices soared.
* LME nickel opened this morning at $4.89/lb. |
|
|
5-11 |
LME nickel spent most of the day in the $5/lb range until the end of
the day, when it plunged and closed at about where it did yesterday at
$4.80/lb.
* One of the world's large producer's of low carbon ferrochrome in
Zimbabwe has shut down 3 of its 6 furnaces in a dispute with its government
over foreign exchange regulations.
* Chinese business publications are stating steel prices for construction
projects have fallen approximately 17% in the last 6 weeks, although they
are still about 30% higher than last year.
* LME nickel opened higher this morning, quoted at $5.11/lb at 7 am
CST.
Molybdenum was selling at $13.25/lb yesterday, down from last month's $16.25
but still nearly double what it was this time last year. 316 users can expect
further increases. |
|
|
5-10 |
LME nickel closed slightly higher, after a see-saw day that saw pricing
hit a seven month low for a moment. Closed at
$4.83/lb but late trading is up.
* AK Steel joined the crowd today, announcing it is increasing prices
on all 200, 300, and 400 series stainless steel sheet, strip and plate
by approx 6% effective May 17th.
* An East Jordan, Michigan foundry was stunned to find a live World
War 1 aerial bomb in the pile of scrap they had purchased. US Army bomb disposal
personnel were called in to remove it.
* The Record of Hackensack is reporting highway guardrails are
mysteriously disappearing at night, with salvage thieves sawing thru the
fasteners and making off with several miles of the aluminum rails. Besides
the cost of replacement, New Jersey officials are concerned about motorist
safety.
* For users of stainless steel, a slow-down in China will be good
news for 2 reasons. First, the metals used to make stainless will show less
of a demand, and prices will drop (we've seen this in the last few weeks
on the fears by investor's of this). Secondly, while China is the largest
user of stainless steel in the world, it is also one of the leading importers.
In 2003, of the 4.2 million tons of stainless it used, 2.9 million tons of
this was imported. Countries like Japan, India, Korea, Taiwan, etc are reaping
the benefits of this sizzling economy. If it slows, these countries will
look elsewhere to sell their surplus stainless, which could bring world prices
down hard. Steel producers are reaping the benfits of high prices and low
inventories today, but the road ahead may be far less profitable for them.
* Special thanks to Kitco Metal for allowing us to provide the above
"live" price chart of LME nickel trading, and Mr Powers, CPA and metals investor
from Dallas, TX for introducing us to this site.
* The Hindu Business Line is quoting Barclays Capital, in its
latest report, Base and Precious Metals, as predicting metals prices
may slip another 10-20%, but caution the bull run may not be entirely over.
* After early morning trading dipped LME nickel as low as 4.76/lb,
prices had returned to $5.03/lb by 7 am CST. |
5-7 |
And our last entry for the week. High mineral prices got you down? Well look
at the bright spot... your body is worth a little more if you ever want to
scrap yourself. The average human body contains approx 9 milligrams of
molybdenum, 10 milligrams of nickel, and between 3 and 5 grams of iron ore.
We'll leave the magnetic personality and plug nickel jokes to someone else.
Nickel prices were stalled most of the day and then got erratic by day's
end. LME nickel ended the day and week at $4.96/lb.
* One Forbes analyst says sell your mining stocks - her article
here.
On the other hand, Jubak of MSN Money says long term, nickel is still a good
bet. His column
here
* SSINA is reporting a healthy increase in the use of stainless steel
in the US as of February 2004. Figures released today and reported by Yahoo
News, show overall stainless steel product lines increased by 7% from this
time last year, with stainless plate increasing by 31%, while consumption
of stainless bar and rod fell by 10%. Overall import penetration into the
US market fell, potentially reflecting the heavy Chinese demand.
* LME nickel stocks fell for the third day, shedding 764 tonnes to
14,862 tonnes.
* Norilsk Nickel announces profits increased from $330 million during
the first quarter of last year, to $600 million this last quarter. Norilsk
produces approximately 20% of the world's nickel.
* LME nickel was selling at $5.02/lb this AM. |
|
|
5-6 |
After original fund buying, profit taking set in after positive employement
figures from the US bumped up the dollar. LME nickel prices fell to close
at $5.01/lb.
* (Commentary) While it has yet to return to its early 2003 level's,
nickel has fallen substantially from its January 5th high of $7.76/lb. Since
nickel accounts for up to 60% of the cost of stainless, we wonder if the
most recent price increases by the steel-makers are an attempt to "get it
while the gettin's good". Further increases in 316 are to be expected with
the volatility of molybdenum, but 304 should be dropping, or at the very
least, have stabilized. History has taught us, that inevitably someone will
be forced to blink, and only then will we see stainless prices head downward.
In the mean time, the consumer will suffer. This could also explain why oil
prices are at a 13 year high, but the price you are paying at the pump is
an all time record high.
* Allegheny Ludlum announces 6% price increase on hot and cold rolled sheet
and strip effective May 17. This came shortly after Universal Stainless announced
a 4% price increase on all bar products effective May 15th.
* LME nickel jumped early this morning on fund buying, climbing as high as
$5.20/lb, but has since softened to $5.08/lb. |
|
|
5-5 |
LME nickel ended the trading day at
$5.05/lb.
* Scrap dealers in Poland report business is brisk with the higher
prices and are seeing everything from handrails, parts of phone booths, manhole
covers, traffic signs, and even crucifixes and efficigies of Christ stolen
from cemeteries, being turned in for cash. South Carolina police are
investigating the theft of over $30M worth of road signs, that had yet to
be installed. Police in Great Britain are experiencing the theft of installed
road signs and fear that motorists are being put at grave risk.
* February issue of Monthly Labor Review projects job growth over the
next 8 years in machine shops, turned products, and nut, bolt and screw
manufacturing to add 15,000 jobs (less than 1% per year).
* LME nickel is struggling this morning, repeating yesterday's morning
bounce, and is currently at $4.96/lb. |
|
|
5-4 |
Nickel ended today's trading at $4.92/lb.
* LME markets re-opened this morning after a 3 day weekend and nickel
is looking for direction. After an initial slump, and then a slight jump
up, prices are currently at $5.10/lb. |
|
|
5-3 |
* New York Times writes on the double edged sword of a Chinese
steel slow-down
here.
* Institute of Supply Management released its April Report on Business
with a PMI at 62.4%. It also reported the country has completed 11 consecutive
months of growth in the manufacturing sector, and 30 consecutive months of
overall economic growth. Listed among commodities in short supply - Fasteners,
for the second month. Stainless Steel, for the seventh month. For the complete
report,
visit
here.
* Molybdenum dropped to $13.75 last Friday, from $15.60 the week prior.
While down, these prices are still nearly 4X higher than early 2003. Don't
expect to see 316 stainless prices dropping in the near future, though higher
pricing is a safer bet.
* Norilsk Nickel's Vladimir Potanin is in the news again. After rumors
surfaced last week, that he had been arrested, Norilsk stock plummeted, losing
$2 billion dollars on paper in one day. While it turned out the rumor was
false, Potanin may have recently "crossed the Kremlin line" with the African
gold mine deal (we mentioned last month), and a lot of Russian press are
now predicting his days may be numbered.
* LME markets are closed in celebration of International Labour Day |
|
|
4-30 |
LME nickel ended the day, week and month at
$5.06/lb.
Activity next week is expected to be light as much of the world will celebrate
holiday's. May 1st is International Labor Day, and is celebrated in most
of the world - the US celebrates Labor Day on September 1st.
* For all you U.S. steel buyers, here is your salesman's next excuse
for raising your price - Venezuelan steelmaker Sidor has been on strike for
8 days and announced today it will be forced to suspend all shipment's until
the strike is over.
* Phelps Dodge reported earnings of $185 million for the last 3 months,
compared to a loss of $15 million during the first 3 months of 2003.
* Norilsk Nickel announced today that its 1st quarter profits had
increased to $597 million, up from $328 million the quarter before.
* Reuters is reporting that China has ordered all development projects
to be reviewed and that some may be cancelled. It also quotes the Xinhua
news agency as reporting "no new steel, aluminum or cement projects would
be approved this year."
* Scrap prices eased in April, relieving some of the cost pressure
on U.S. steel manufacturer's. Coke, which remains in short supply due to
export limits from China, also has seen prices come down a little. Analyst's
are split on the near future of steel prices. Some believe the price spike
still has not been reached, while others feel prices will moderate over the
next few months.
* LME nickel is trading softly this morning, falling back to $5.08/lb. |
|
|
|
 |
Photo courtesy of Moscow News
What was once a 90 meter tall radar tower at a top secret Russian military
installation is now scrap metal in our most recent and ongoing example of
what people will steal to sell for scrap during this metal crunch. For details,
visit our daily archives.
From manhole covers to complete steel bridges, from aluminum stadium seats
to copper conduit, if it isn't guarded closely, there is a chance it might
disappear. |
|
May 2003 comparison figures
Average LME nickel price - $3.78/lb
Allegheny Ludlum Surcharges for May
| 1 |
1 |
Nickel |
Chrome |
Moly |
Iron |
2003
2004 |
304 |
.173
.4056 |
.0085
.075 |
NA |
0
.0514 |
2003
2004 |
316 |
.2163
.5069 |
.0076
.0666 |
.0369
.1464 |
0
.05 |
arrow denotes price comparison to prior month
courtesy
Allegheny
Ludlum
|