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

  Daily Nickel/Stainless Wrap-up

• Official LME nickel closing prices (if not showing prices for 30 April, page should be updated shortly) - posted here  (chart)
• Baltic Dry Index - plus 83 to 9,356. (chart)
• Nickel inventories - if interested in learning about yesterday's movements in LME stored nickel inventories, you can find the statistics here and here
• American equity traders are apparently desperate for any good news. Today, US GDP numbers were released, and they revealed a snail's pace growth of .6% during the first quarter of the year. This was better than the .5% the experts had predicted, and the US equity market responded favorably, although still held in check by the uncertainty of what the Fed will do later today. Their announcement is due at 2:15 pm EST, which means the FOMC announcement will be made after London markets close. Any immediate reaction to the Fed announcement in London base metals trading, will have to wait till tomorrow. The indicator charts show nickel traders weren't near as excited about the news as US traders were, with nickel climbing until the GDP numbers were released, then a quick about face. While the dollar has been quiet today, there was a greater risk of the GDP numbers giving the Fed a reason to leave interest rates alone, thus helping the dollar, thus putting pressure on commodity futures. We will know a lot more in a few hours, but in the mean time, Dow Jones reports three month nickel ended the day, and month, at $12.93/lb .     
• Closing Metals Report from Dow Jones - more
• Saw this being discussed on an investor forum - more

  Thank you!!

• Wanted to thank Pennsylvania based Duraloy for being a site sponsor over the last three months, and faithful readers for many years. If your business is in the market for high-alloy, heat-resistant castings, please consider Duraloy.
• And if you are interested in reaching readers that follow the stainless steel industry, and the metals it takes to make the stainless steel, we welcome applicable sponsors. In a few days, we should be introducing our newest sponsor, a Canadian molybdenum mining company. Thanks again to Duraloy!!

  The Burj Tower in Dubai is still under construction but in July last year it already became the world's tallest building. The facade of the skyscraper is decorated with stainless steel from Germany. - more (and thanks to the reader who sent us this photo yesterday)

Click image to see larger image

  South Africa's electricity crisis dominated the annual shareholders' meeting of ferrochrome producer Merafe Resources on Tuesday, with shareholders expressing their concerns about what the crisis means for their company. - more

  After intense battle of nerves with the steelmakers, the government on Tuesday imposed up to 15 per cent export duty on various steel products to contain rise of prices of the alloy, a move that will hit industry hard. - more

  Sherritt International Corp said on Wednesday its first-quarter profit was flat amid a 41-percent drop in realized nickel prices and marginal revenue growth. - more

  Anglo-Swiss miner Xstrata's chief executive Mick Davis said he would have no issue with the company being bought by another company, provided it brought shareholder value. - more

  It is fashionable to apply physics to investing. One axiom that looks relevant to investment in commodities is Heisenberg’s uncertainty principle. - more (over a week old but we missed it and thought it was worth posting)

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

• Indicators at 7:45 am CST show 3 month nickel selling around $.18/lb higher.  Today, US releases first quarter GDP figures, and more importantly, the Fed will announce any cut in the interest rate in the early afternoon. "Potentially", this could be the pin that bursts the squeeze we have been following (here) and move the price of nickel out of the ever narrowing trend lines. Whether it happens or not, is left to be decided, but remember this. We remain in a 'bull' market, and the market 'wants' to go up.  
• Bloomberg morning metal news - more

  Commodity Comments

• Ed Meir of MF Global Morning Comments - "Metal prices sold off yesterday, with copper leading the way, off by some $110 on the day. Metals were pressured mainly by the dollar, which rose sharply ahead of the Fed meeting later today. At this stage, we think the sell-off in metals still has more room to run today, as the Fed decision-- should it involve leaving rates unchanged, as we suspect it might-- could boost the dollar and pressure commodities further in the process. Even if the Fed were to cut rates by 25 basis points (as is the majority view), we still could see the dollar rally if the accompanying policy statement suggests that the downward move will be the last for a while. Either way, a dollar rally could likely derail the short dollar/long metals play that has been working so well for much of the year....Shanghai stocks for the latest week were reported overnight, (see our table above) as Chinese markets will be closed for Labor Day through to next Monday. ....Nickel is at $28,790, up $140, and quiet."(read Ed Meir's complete morning base metals report here)

  Due to the weak nickel price and demand for stainless steel, Taiwan's Yieh United Steel Co. (Yusco) announced that it was cutting its domestic prices for its 300 series. - more

• In most Asian countries’ stainless steel prices keep increasing due to the high cost of raw materials. - more
• Interfax header only - " Chinese stainless steel makers have agreed to cut their ex-works prices for 300-series austenitic stainless steel products by as much as RMB 1,500 ($214.29) per ton in May, under pressure from market surplus, a Chinese stainless steel company official told Interfax today." (subscription article)
• Market prices of stainless CR sheets in Asia indicate a continued upswing except China's domestic stainless steel market. Having an impact are bullish export deals by stainless steel manufacturers in Japan, South Korea, and Taiwan. - more

  Hyundai Steel Says First-Quarter Profit Surges 35% - (excerpt) "Hyundai Steel also benefited from a ``recovery in stainless steel demand,'' it said. Weaker demand for its stainless steel products contributed to a 14 percent drop in fourth-quarter profit along with higher raw material costs." - more

• Baoshan Iron & Steel Co., China's largest maker of the alloy, said rising demand will keep domestic steel prices at high levels in the third quarter. - more

  It is reported that India plans to add about 4.6 million tonnes per year of stainless steel capacity in 5 years, which could make it the world’s second largest stainless producer after China. - more

• India today scrapped import taxes on pig iron and other steel products to bolster domestic supplies and curb inflation, holding near a three-year high. - more

  Russian metals giant Norilsk Nickel said on Wednesday first-quarter 2008 nickel output rose to 74,572 tonnes from 60,913 tonnes in the same quarter of 2007. - more

  Courtesy Bazaar Bhav - "The Philippines shipped 72% less nickel ore to China in March than a year earlier as prices of refined nickel dropped, reducing the appeal of the cheaper alternative raw material for making stainless steel."

  In the first quarter of 2008, China imported 1.66 million tonnes of chrome ore up by 32.4% YoY as compared to 1.334 million tonnes in first quarter of 2007, with an increase of USD 280 million import value in Q1 increasing 112% YoY. - more

  The industrialization of China is driving Vale Inco's nickel production expansion and North Bay's mining sector is coming along for the ride. - more

  Copyright/courtesy AP - "Universal Stainless & Alloy Products Inc. said Wednesday it will raise base prices on all tool steel products made at its Bridgeville and Dunkirk plants by 5% to 7%, effective May 1 on new orders. Current material and energy surcharges will remain in effect. The company said the new price hikes are necessary to offset sharply higher energy and operating supply costs amid continued strong market demand."

  Stainless steel, an iron-carbon alloy containing chromium and other metals, has a wide range of applications, including cookware, building materials, and medical implants. - more

• 96 years ago, on April 14th 1912, the supposedly unsinkable Titanic hit an iceberg off the Grand Banks of Newfoundland in the Atlantic Ocean and went straight to the bottom of the sea. - more

  London Metal Exchange inventory figures - available here (charts)

  Shanghai Jinchuan nickel price - 236500-240500 minus 1750 (charts) (markets closed May 1-4)

• Official LME nickel closing prices - posted here (chart)
• Baltic Dry Index - minus 71 to 9,273. (chart)  - (article)
• Nickel inventories - if interested in learning about yesterday's movements in LME stored nickel inventories, you can find the statistics here and here 
• Bloomberg started out the business day with bad news, when it reported the S&P/Case-Shiller home-price index dropped 12.7% from a year earlier, not only more than forecast, and not only the most since the figures were first published in 2001, but also the 16th consecutive monthly drop. They stated "Home prices in 20 U.S. metropolitan areas fell in February by the most on record, pointing to an imbalance between supply and demand that shows no sign of ending." In other words, the American family's largest single investment, has been losing value since January of last year, and continues to do so. We could have swore we were reading just a few weeks ago, that some respected Wall Street analysts were saying the bottom was in and things were turning around. Bloomberg kept up the bad news when at 10 am EST it reported "Consumer Confidence in US Falls to Five-Year Low" Ian Shepherdson, chief U.S. economist at High Frequency Economics, told Marketwatch "In short, the numbers are dreadful". Metals trading appeared to continue its "hold pattern" today, awaiting the FOMC decision tomorrow. Indicators show nickel started out heading south, and falling nearly $700/tonne, but late in the trading day began a comeback. According to the Dow Jones report below, three month nickel ended at $13.00/lb .  
• Closing Metals Report from Dow Jones - more
• MSN Money - more
• We get a fair share of mining company's that visit this site daily, and so we thought we would throw this in for them. If your company is interested in mining in Congo, and are personally sent to the country to investigate, wear a cup - more

  BNP Paribas Markets Data - here

  Copyright/courtesy Thomson Financial - "Prices over the coming months are likely to be choppy to weaker, with sliding U.S. economic conditions dictating sentiment," said Pervan at ANZ. "Currency markets may also provide less support for metals, with early signs of a floor in the dollar."

  Sandvik Falls Most in Five Years After Earnings Miss - (excerpt) A slide in the price of nickel last year hurt Sandvik as it was unable to charge customers what had paid for the metal, used to make stainless steel and specialized alloys. - more

  China's largest steel provider, Baoshan Iron and Steel Co Ltd, reported its first quarter net profit rose 16 percent over the same period last year on better performance from its stainless steel sector. - more

  SS producers report improved market conditions in Q1 of 2008 - more (comment - Russian analyst SOGRA recently forecast nickel demand to grow to a record 1.47 million tonnes this year, mostly due to increased demand in China and the increased cost of chrome.)

  In a deal that could eventually encourage fresh mining investment in Indonesia, mining giant Rio Tinto has agreed on long-term tax arrangements for its $US2 billion La Sampala nickel project on Sulawesi. - more

  Reuters' Metal Production Database and Labour Contract Diary - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.27/lb lower. All base and precious metals appear to be down thus far this morning, probably a reflection of the slight strengthening of the dollar. Nickel seems to be taking it on the chin especially hard.
• Bloomberg morning metal news - more

  Reports

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

  Commodity Comments

• Ed Meir of MF Global Morning Comments - "This morning, we have opened slightly lower, with little “new news” to speak of. The strikes in Chile continue, but other than that, it is very quiet. Not surprisingly, prices are off somewhat today, as the void is being filled by apprehension in front of the Federal Reserve decision on interest rates out tomorrow. If, as we suspect, the Federal Reserve stands pat on rates, or signals that it is done for the time being, we could see the dollar strengthen, and lead to another bout of profit-talking in commodities. Right now, the dollar is at 1.5578 against the Euro, up sharply from yesterday’s levels....Nickel is at $28,840, down $450 and still trading within a very narrow band. We remain neutral here pending a clearer move on the charts."(read Ed Meir's complete morning base metals report here)
• Copyright/courtesy Metals Insider - "Speaking to analysts on its Q1 results conference call, VALE dismissed fears that the recent move to low- or no-nickel (ferritic) grades of stainless would be anything other than a temporary phenomenon. “It is not a permanent solution because the end-user will suffer so the stainless steel industry is able to do this from a short-term perspective… but it’s natural that given the lower nickel price and the fact that it’s not technically feasible to promote permanent substitution, the austenitic ratio is gradually moving to its normal level of 75-78%.”

  When Companhia Vale do Rio Doce arrived in the small Canadian mining town of Sudbury a year and a half ago, Mayor John Rodriguez recalls wondering: ``Who are these Brazilians?'' - more

  Steel giant ArcelorMittal said on Tuesday it had signed record long-term contracts with Companhia Vale do Rio Doce for the Brazilian firm to supply iron ore and pellets to its plants. - more

  In a research report, Macquarie says hard coking coal prices have risen to an average of $US285-$US300 ($NZ360-$NZ380) a tonne for Australian and Canadian producers who have recently settled deals with Japanese steel mills. - more

  India’s stainless seamless pipe producer, Suraj Stainless Ltd intends to enlarge its capacity to 26,000 tpy from 12,000 tpy, in a bid to meet the increased demand of stainless steel pipes and tubes. - more

  Rio Tinto Ltd/Plc, under pressure to broaden its reach in commodities as it fights a takeover by BHP Billiton Ltd, said on Tuesday it had agreed to tax clauses with Indonesia needed before it can develop a nickel mine costing $1.5 billion. - more

• Rio Tinto Ltd. said Tuesday it has reached an agreement with Indonesia's government on tax clauses for its proposed $2 billion (1.3 billion euro) nickel project on Sulawesi island. - more
• Courtesy/copyright Asia Pulse - Unaudited net profit of PT International Nickel Indonesia fell sharply 38.72 per cent to US$139.6 million in the first quarter of this year from US$227.8 million in the same period last year. The decline was attributable to 14.93 per cent dive in sales to US$380 million from US$446.7 million, President Arif Siregar of the subsidiary of Canada's Inco Limited said.

  The administrative court should confirm the legality of the pipe of Goro Nickel, in spite of the recourse of two associations ecologists. But, in his delivered conclusions Thursday, the government commissioner approaches the legal consequences D’a classification of the lagoon. - translated article here (original French here)

• Confronted with serious difficulties, L’industrial lets plane the doubt as for its intention to continue the building work of its factory. At six months of the startup effective of the hydrometallurgic complex, situation N’ever was also tended. - translated article here

  Pressure on China's steel mills to concede a price rise to Australian iron ore suppliers which includes a breakthrough freight differential is limited because of big stockpiles at Chinese ports. - more

• China's steel industry still opposes including any freight premium in iron ore prices in negotiations with Australian miners, even as pressure rises to seal a deal in the next two months. - more

  According to a recent survey provided by Wenzhou Fastener Association, the number of fastener companies in Wenzhou has dropped dramatically from over 3000 three years ago to about 2000 this year. - more (original French here)

  US transaction prices are going through the roof with gains over the last four weeks as high as $US145 per tonne for some products and more substantial hikes planned by the mills for June deliveries. - more

• Sky-high production costs, strong demand and tight supplies have pushed global steel prices to new highs so far this year, but a correction may be on the way towards the end of this year, analysts say. - more
• If America and Japan are in recession, nobody told the steel market. The price of hot-rolled coil used in cars and trucks has risen 40pc since Christmas, reaching a record $1,003 a tonne last week. - more
• Courtesy AISI - "In the week ending April 26, 2008, domestic raw steel production was 2,118,000 net tons while the capability utilization rate was 88.8 percent. Production was 2,113,000 tons in the week ending April 26, 2007, while the capability utilization then was 88.3 percent. The current week production represents a 0.2 percent increase from the same period in the previous year. Production for the week ending April 26, 2008 is down 1.6 percent from the previous week ending April 19, 2008 when production was 2,154,000 tons and the rate of capability utilization was 90.3 percent."

  Eramet SA, operator of the world's largest ferronickel plant, said first-quarter sales expanded 38 percent on higher manganese prices. - more

  China's economy may be increasingly affected by the U.S. slowdown and global financial market turbulence, the National Development and Reform Commission said today in Beijing. - more

  Here is a little-known fact. The three-month contract, which has become standard across the financial world from commodities trading through to money markets, derivatives and other more exotic products, has its roots in the Victorian shipping trade. - more

  London Metal Exchange inventory figures - available here (charts)

  Shanghai Jinchuan nickel price - 239000-241500 minus 750 (charts)

• Official LME nickel closing prices - posted here   (chart)
• Baltic Dry Index - plus 15 to 9,344. (chart)
• London Metal Exchange inventory movements posted here (charts)
• One of the more boring days in the way of market news. Except maybe OPEC President Chakib Khelil telling Algerian media that $200/barrel oil is very possible. World markets looked like a fleet of sail boats sitting in a windless lake today. A lot of attention is being paid to the Wednesday FOMC meeting. Dollar gained a little as traders bet the Fed would leave rates alone. The consensus earlier this morning appeared to be the market was betting on a 25 base point cut, down to an even 2%, but that appears to be in doubt. Lowering the interest rate further to address recessionary concerns runs the real risk of exacerbating inflation concerns. Inflation concerns have helped prop up metal prices. Metal indicator charts were about as exciting as the news today, with nickel appearing to trade in a thin range. For the day, according to Dow Jones, three month nickel ended the day at $13.28/lb .  
• Closing Metals Report from Dow Jones - more

  (follow-up to subscription article this morning - with article attached) China's nickel supply shortfall may sink to under 100,000 tonnes this year on the back of increasing domestic nickel production, decreasing exports and expanding nickel pig iron production, analysts said at the 2008 Nickle & Cobalt Industrial Chain Forum held in the Zhejiang provincial capital of Hangzhou last Friday. - more

  Russia's SOGRA forecasts the price of ferrochrome to continue to increase thru 2008, courtesy of increased production of stainless steel, and supply concerns. They are also forecasting a market deficit for 2008 of 300,000 tonnes, compared to a 147,000 tonne deficit in 2007. SOGRA also states that the market is in such a state of confusion, with power cuts in South Africa,  that there is very little to stop further price increases.

  On April 6, 2006, in Alloy Piping Products, Inc., Flowline Division, et al. v. United States, Slip Op. 06-47, ("Alloy Piping II "), the Court of International Trade ("CIT") affirmed the Department of Commerce's (the "Department") Final Results of Determination Pursuant to Remand ("Remand Results "), dated August 16, 2004, and entered a judgment order. - more

 Norilsk develops relations with producers in China Norilsk Nickel Director General Denis Morozov, during his visit to China, met with top managers of the country’s major companies and held a round table discussion that featured participation of heads of major state and private enterprises including TISCO, Baosteel, JISCO, Northeast Special Steel, Tsingshan Holding Group, Sichuan Southwest Stainless Steel Co. and others, Norilsk Nickel said in a press release. - more

  Chinese steel industry officials said on Monday that China's mills are not considering paying a freight premium demanded by Australian iron ore miners BHP Billiton Ltd and Rio Tinto Ltd, denying a media report. - more

  The exports of iron ore are set to come to a grinding halt with the proposed levy of 10 per cent royalty on sales, coupled with a 40 per cent hike in the freight rates. - more

  China's Baoshan Iron and Steel Co reported on Monday a 16 percent rise in first-quarter earnings, beating analysts' forecasts, after rising steel prices offset a surge in raw material costs. - more

  If America and Japan are in recession, nobody told the steel market. The price of hot-rolled coil used in cars and trucks has risen 40pc since Christmas, reaching a record $1,003 a tonne last week. - more

  Reuters Factbox -What is Steel? - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.09/lb lower . Trading is thin, and as Mr Meir's forecasts, is likely to remain so until Wednesday, when the Fed announces what action it might take to combat recessionary concerns, or inflationary concerns. The technical chart that we have been following here might have to adjust the TL4 line slightly up, as trading peaked over the line at one point on Friday, and indicators show it 'might' have done so again this morning, although it appears to be currently trading well within the 'squeeze'. The moving of the line would have little effect on this so-called "squeeze" factor we are watching closely.    
• Bloomberg morning metal news - more

  Reports

• Haywood Metals & Mining Weekly - pdf here
• Two new presentations added to INSG page we linked to last week - Markus Moll and Nickel Institute's Stephen Barnett's presentations added here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - "Metal prices rose on Friday despite a steady dollar, which apparently did not trouble the markets much. Additionally, metals could not help but notice the explosive move in crude oil prices, which made up all of Thursday's losses, and rose sharply on a variety of geopolitical tensions and labor strife... This morning, we are adding to Friday’s gains, as this time, the weaker dollar is helping. The euro rose against the dollar after an industry report showed German consumer confidence unexpectedly rising this past month...We expect commodities in general to remain firm at least through to midweek, as the strong energy complex sets the tone, while the weakness in the dollar should also help. Things could change by Wednesday, where we expect the dollar's rally to pick up steam if the Federal Reserve decides to stand pat on interest rates. This could set off another potentially heavy round of profit taking in commodities, but until then, the markets will be probing the upside a little further....Nickel is at $29,400, up $495, nickel’s trading band seems to be very compressed of late, with prices fluctuating within a $2000 band for practically all of April. We remain neutral here pending a clearer move on the charts." (read Ed Meir's complete morning base metals report here)

  (subscription article - leader only) China's nickel supply shortfall may sink to under 100,000 tons this year on the back of increasing domestic nickel production, decreasing exports and expanding nickel pig iron production, analysts said at the 2008 Nickle & Cobalt Industrial Chain Forum held in the Zhejiang provincial capital of Hangzhou last Friday.

  Finnish steel producer Outokumpu said that uncertainty resulting from the global economic turmoil has increased but has so far not had any major impact on stainless steel fundamentals, but there is an increasing risk that the uncertainty might affect both demand and price development of stainless steel going forward. - more

  It is reported that Taigang itself plans to produce 2 million tonnes of stainless steel in 2008, below original plans to produce 2.3 million tonnes. - more

  In his first public comments on the issue, Oleg Deripaska, a metals billionaire who is one of cash-soaked Russia's wealthiest men, said he considers the U.S. "the last country on the list where we would invest" because of Washington's refusal to grant him an entry visa. - more

  Chrome News

• Chrome ore price has been surging, triggered by robust demand from both domestic and overseas markets. - more
• The majority of second quarter charge chrome and high carbon ferrochrome contracts have been settled, with the prices achieved showing a strong premium for the high carbon material. - more
• The matters to take over ferro-alloy producers by major resources companies, having possessed manganese mines and chrome mines, have been successively materialized on 3 cases from the beginning of 2008. - more

  Domestic steel prices have been rising for the fourth week in China, boosted by growing demand, analysts said. - more

• China has given its first clear indication that it will agree to pay a freight differential to iron ore majors BHP Billiton and Rio Tinto as the cat-and-mouse game over the 2008 contract price continues. - more

  Commodity prices reached an aggregate record for the third consecutive month, led by oil, fertilizer and base metals, Scotiabank vice-president and commodity market specialist Patricia Mohr reported on Thursday. - more

  Thinking of throwing out your old cell phone? Think again. Maybe you should mine it first for gold, silver, copper and a host of other metals embedded in the electronics - many of which are enjoying near-record prices. - more

  London Metal Exchange inventory figures -  available today here (please see site change on weekend update)

  Shanghai Jinchuan nickel price - 240000-242000 plus 750 (charts)

  Mr Luo Binsheng executive vice chairman of China Iron & Steel Association made a speech, at a steel conference, on international and domestic environment facing Chinese iron and steel industry and the developing trend. - more

  Currently, China’s domestic ferrochrome prices are rising because of tight supply, which pushed increasing international quoted price either so that steel mills are in large need of ferrochrome now. - more

  It is reported that About 300 heavily armed Maoists raided Essar Steel's plant near Kirandul in Chattisgarh burning around 53 trucks and three heavy machines. - more

  Base Metals - Week in Review - here

  Institute of Scrap Recycling Industries, Inc. Market Report - pdf here

  National Mining Association Mining Week - pdf here

  "With the cost of iron ore skyrocketing many people will need a low cost alternative. I have found what I believe to be a wonderful solution, partially processed low grade iron ore otherwise known as copper slag." -  forum conversation here (may be nothing but it's an interesting discussion)

• Official LME nickel closing prices - posted here (chart)
• Baltic Dry Index - plus 147 to 9,329. (chart) (article - Steel demand sends shipping costs soaring - more)
• Nickel inventories - if interested in learning about yesterday's movements in LME stored nickel inventories, you can find the statistics here and here
• Based off our remarks on Wednesday, it appears we are still trading within the technical "squeeze" zone, which is growing tighter (chart here). U.S. consumer confidence data released this morning came in lower than expected, and while the Euro didn't immediately gain against the dollar, the sentiment of the dollar losing its recent steam, may have been the primary recent base metals got an afternoon push. PT Inco reported it had produced 12% more nickel the first quarter of 2008 than it had the same period in 2007. Nickel took a rather respectable jump in late afternoon trading, according to indicators. For the day, and week, Dow Jones reports three month nickel closed at $13.38/lb . That gives nickel a 2.37% gain on the week, and it remains 12.34% higher than it ended 2007 at. However, today's close is 19.2% lower than the 2007 average price.  
• Closing Metals Report from Dow Jones - more
• Another movie/tv/sport web site anyone? here And in the double-take department, this article about Greenpeace is interesting here Have a safe and restful weekend!

  As demand for material from stainless steel producers increases and supply decreases the ferrochrome prices in the USA continue to rise. - more 

  Leading global carbon asset developer Camco Group has reached an agreement to buy 1 million tons of CO2 emissions from the world's largest stainless steel producer Taigang Stainless Steel Co by late 2009 under the clean development mechanism (CDM) project. - more

  The holding company controlled by Russia's richest man, Oleg Deripaska, surprised investors Thursday when it announced it had concluded a deal to acquire a sizable stake in Norilsk Nickel—a metals conglomerate controlled by two other billionaires. - more

  Comment - The change we made at the behest of the LME has caused some confusion for some readers, and we apologize for that. When we link to the LME page for the daily official prices in our afternoon update, you will see (i.e. LME Official Prices (US$/tonne) for 25 Apr 2008 (Data >1 day old)) these are the actual official prices for today. You can disregard the 1 day old part. When the LME posts the update, at about 12:45 PM CST, it is already tomorrow in Australian and China markets, and thus, 1 day old, even if the news is current for those of us in the Western Hemisphere. As one Aussie reader told us months ago, "What gets you Yanks all worked up today, is day old news down here".  

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.05/lb higher. Metals trading appears to be very quiet this morning.
• Bloomberg morning metal news - more
• Forbes - more

  Reports

• Presentations by Industry Experts at two International Nickel Study Group seminars - numerous pdf files here (links on speakers names)
• Germany - Damstahl Stainless Steel Report - pdf here
• Standard Bank Morning Comment - here

  Commodity Comments

• Ed Meir of MF Global Morning Comments -  "By one account, the US currency had its biggest daily move against the Euro since 2004 yesterday, and besides base metals, energy, precious metals, and agricultural all came under pressure. The dollar's advance was due to a number of factors. For one thing, poor macro readings out of Europe-- specifically, worse-than-expected business confidence readings out of Germany and France-- coupled with better-than-expected weekly initial claims readings and durable goods numbers out of the US, helped firm up the greenback. Also a positive, are growing perceptions that the Fed will leave rates unchanged when it meets next week. We frankly hope that it indeed, does stand aside; this would only strengthen the dollar further, and perhaps break the upward commodity spirals we are seeing. For all the benefit that rising commodity prices are bestowing on producers, letting the dollar slip into a freefall only stokes worldwide inflationary pressures and could lead to major economic dislocations down the road. This morning, we are off to a mixed start, as most metals are under pressure, with the exception of zinc and tin. The dollar’s strength is again overriding the prevailing bullish headlines of the day. ..For now, it seems that the dollar is going to set the short-term in metals, and we expect that its renewed vigor will last at least until the Fed decision is out on Wednesday. Should the central bank decide to cut rates again, we could see much of the recent gains evaporate, and commodities could be off to the races again. Until then, we would be cautious about the upside and would not be buying the dips....Nickel is at $28,895, down $10, and so far, sitting out the weakness prevalent in the rest of the group.(read Ed Meir's complete morning base metals report here)

  China's unwrought nickel exports in March 2008 stood at 462 mt, which was a marginal 1.8% increase compared with the 454 mt exported in February, but  it represented a sharp fall of 76% from March 2007, the latest figures from the General Administration of Customs of China showed Thursday. - more

  Reuters, citing an official of world’s largest stainless steel maker Taiyuan Iron & Steel Group, reported that China's stainless steel capacity has reached a conservative 12 million tonnes and that growing production could turn China into a net exporter. - more

  Because of rising raw material prices, most Asian countries stainless steel prices rose, only the relatively stable. - (poorly translated article here)

  Vietnam raised its export tax on crude oil to eight percent from four percent starting from Tuesday, and the export tax on coal was lifted to 15 percent from 10 percent, according to the Tax Policy Department under the Finance Ministry. - more

  Brazilian miner Companhia Vale do Rio Doce (Vale) said Thursday that first-quarter net earnings fell 8.8 percent hit by currency volatility and a drop in the price of nickel. - more

• Brazilian mining giant Vale said Thursday it registered a net profit of 2.25 billion reais (1.35 billion U.S. dollars) in the first quarter of 2008, down 55.8 percent year on year - more

  Rusal, the aluminum company majority owned by the Russian tycoon Oleg Deripaska, announced Thursday that it had purchased 25 percent of Norilsk Nickel, the world's largest nickel producer, in a deal that furthers the ambitions of the young Russian billionaire to forge one of the world's largest metals and mining conglomerates - more

  Daily London Metal Exchange inventory figures posted here   (charts)

  Shanghai Jinchuan nickel - 239000-241500 RMB/t, plus/minus 0   (charts)

• Official LME nickel closing prices - posted here (chart)
• Baltic Dry Index - plus 320 to 9,182. (chart)
• Nickel inventories - Recorded movements in LME stored nickel inventories, statistics on two pages - here and here
• US reports came out giving mixed signals this morning. The durable goods index, less freight, was up 1.5%. Unemployment claims came in lower than expected, but new homes sales came in at the lowest level since October 1991, silencing the 'housing market has stabilized' theorists. Dow started out weak, but after Ford reported it actually made money last quarter, the Dow jumped into the green. Yes, Ford. Dollar was stronger against the Euro today when a German business confidence index fell the most since 2001, adding pressure on metals trading. Tin hit a new record high early, before slumping. The rest of the base metals complex experienced a rather humdrum day. Nickel traders apparently were encouraged by the INSG forecast that nickel demand would hit a record high this year. And for the day, Dow Jones reports three month nickel ending the day at $13.09/lb .  
• Closing Metals Report from Dow Jones - more
• Reuters metals article - more
• Quoting from a Dow Jones story today - "Prices of nickel traded on the London Metal Exchange have fallen as much as 52% since the record high of $51,800 a ton in May 2007 due partly to a slowdown in stainless steel consumption and the development of a substitute called nickel pig iron in China."(source) Won't dispute what was written but we might word it a tad differently. "Prices of three month nickel traded on the London Metal Exchange have risen from an average of $2.70/lb in 2001, to a record high of $23.50/lb (May 9, 2007) and are currently selling for around five times the 2001 average. The Chinese, the world's largest consumer of nickel, realizing that they would have to find an alternative source to insure adequate supply, are using a process by which low grade laterite ore, considered by many to be waste material, can be refined."

  Mr Denis Morozov general director of Norilsk Nickel said that the nickel market will begin to stabilize in 2008 as speculators move away, after a highly volatile environment in 2007. - more

  It is reported that Taiyuan Steel has increased stainless steel export offers to South Korea for June 2008 shipment. - more

  Russia's United Company RusAl, the world's largest aluminum producer, said on Thursday it had closed a deal to buy a blocking interest of 25% plus one share in Norilsk Nickel from billionaire Mikhail Prokhorov. - more

• Few people have the means to affect the Russian economy like Deripaska. - more

  Commodity prices should retreat by 10 to 15 percent by the end of 2010, while the Canadian dollar should remain relatively steady around 98 U.S. cents (C$1.02 to the dollar) in coming months, the Bank of Canada projected on Thursday. - more

  Companies mining minerals like gold and uranium on federal lands could find a government royalty tacked onto their operating costs if a group of US senators gets its way. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.06/lb higher. Looking at precious and basemetals indicator prices this morning, it appears metal traders are very quiet. Report for Durable Goods Orders was released about 1/2 hour ago, and came in with very disappointing numbers. Jobless claims and new home sales is also on track for release today. INSG reports demand for nickel will increase this year, but not as much as supply. And yesterday, Outokumpu reported ""Uncertainty resulting from the global economic turmoil has increased but has so far not had any major impact on stainless steel fundamentals. There is however an increasing risk that the uncertainty might affect both demand and price development of stainless steel." Their stainless steel deliveries were up 4.5% compared to the same quarter last year, which was before the latter half slow -down in stainless production in 2007.
• Bloomberg morning metal news - more

  Reports

• Steel Founders' Society of America: Casteel Reporter April 2008 - pdf here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - "We are off to a mixed start at the time of this writing, with copper slightly higher, but ali a touch lower. ...We suspect that the overall price bias in metals could be lower over the course of the next day or so given the surprising rally in the dollar, which has gained ground against the Euro for a second day in a row and is now at $1.5750. The greenback moved sharply higher after reports out of Europe showed that both French and German confidence readings plunging to their lowest levels in 16 and 24 months, respectively. The dollar also rose against the yen as well....Nickel is at $28,740, up $40, and quiet." (read Ed Meir's complete morning base metals report here)
• ScotiaMcLeod Weekly Market Strategy April 21,1008 - "The main driving forces behind the commodity surge are resilient demand and the lack of any supply response. And since the dominant commodity consuming countries do not appear to be as price sensitive as Wal-Mart shoppers, the sweet ride is bound to continue to surprise. However, one could only imagine what would happen should the laws of supply and demand eventually work their way back into the equation."
• Comment (not stainless steel) - Some of our readers use steel and stainless steel fasteners. If you use steel fasteners, you have probably already heard of the 40-50% price hikes coming down the pike. If you use steel all thread rod, not only do you have to worry about the price increases, but you also have to worry about an anti-dumping suit currently being investigated, that will likely result in additional import duties this fall. We've read potential duties of more than 50%. Do the math. Steel all thread rod could become ridiculously expensive. If you have anyway of forecasting usage, you might consider stocking up.  

  World primary nickel consumption is expected to reach a record high in 2008 due to a recovery in nickel-containing stainless steel production around the world, particularly in China, the International Nickel Study Group said Thursday. - more

  The total quantity of primary nickel produced by western countries in the calendar year (January - December) of 2007 remained as unclogged from that in the preceding year of 2006 but that by eastern countries had a substantial increase of 20% compared with that in 2006. - more

  China's unwrought nickel exports in March 2008 stood at 462 mt, which was a marginal 1.8% increase compared with the 454 mt exported in February, but  it represented a sharp fall of 76% from March 2007, the latest figures from the General Administration of Customs of China showed Thursday. - more

  Major Chinese stainless steel producers will not reduce their ex-works prices in May despite growing market stockpiles, due to upward pressure from high production costs, analysts told Interfax today. - more

  There is concern in New Caledonia over the future of the Goro Nickel project which has been affected by protests that have prompted the contractors to stop working on a pipeline for the plant’s effluent. - more

• Confronted with serious difficulties, L’industrial lets plane the doubt as for its intention to continue the building work of its factory. At six months of the startup effective of the hydrometallurgic complex, situation N’ever was also tended. - translated version here

  Allegheny Technologies Incorporated reported net income for the first quarter 2008 of $142.0 million, or $1.40 per share, on sales of $1.34 billion. - more

  Universal Stainless & Alloy Products, Inc. reported today that sales for the first quarter of 2008 were $56.8 million, which is in line with $56.2 million reported in the first quarter of 2007 - more

  According to traders, quoted price of 42% to 44% chips from South Africa at Lianyungang was still at CNY 83 to CNY 85 per tonne, 36% lumpy from Oman was at CNY 60 to CNY 62 per tonne, 46% lumpy from Philippine at Tianjingang was at CNY 90 to CNY 94 per tonne, 42% lumpy were at CNY 112 to CNY 116 per tonne and CNY 115 to CNY 118 per tonne from Pakistan and Turkey respectively and 50% concentrates chrome from India was at CNY 115 to CNY 118 per tonne. - more

  It is reported that Shougang Group plans to jointly explore Cr ore concentrate resource in Philippines with a Xiamen based private enterprise. - more

  Rio Tinto returned fire on BHP Billiton and its critics today, dismissing claims that it was slow to recognise the China boom and suggestions that its argument over relative value to its suitor was losing traction. - more

  Now he's aiming for control of Moscow-based OAO GMK Norilsk Nickel, the world's biggest producer of the metal, as well as Russian oil producer OAO Russneft. - more

  Some think Fed chief Ben Bernanke could halt the roaring commodities rally by keeping rates steady. But most think the Fed will cut rates again. - more

  Serious questions need to be asked about how much of a mining “major” Companhia Vale do Rio Doce (Vale) (RIO) really is the wake of its failed bid for Xstrata . - more (comment - just because we link to a particular article, does not mean we agree with it)

  Daily London Metal Exchange inventory figures posted here   (charts)

  Shanghai Jinchuan nickel - 239500-241000 RMB/t, minus 250   (charts)

• Official LME nickel closing prices - posted here (chart)
• Baltic Dry Index - plus 312 to 8,862. (chart)
• Nickel inventories - if interested in learning about yesterday's movements in LME stored nickel inventories, you can find the statistics here
• Forbes headline "Tin sets new record high on supply concerns, but dollar rebound weighs". Standard Bank analysts Leon Westgate summed up metals trading, as quoted in Forbes, 'Except for tin, base metals have been treading water over the past week, bobbing along with the waves emanating from the currency markets.'  With the other base metals getting much more attention than nickel these days, and news about nickel a little lean, we thought we would share the following.
• This site links to a daily chart, that if you have never visited, is well worth the time, if you are interested in what is happening on the LME trading floor. Trading is a fascinating and confusing art, and for those of who do not trade, but are still directly affected by how they operate, it's helpful to know as much about what motivates them, as we can. Occasionally, you will see this site mention, or a newspaper report, about price movements being 'technically' motivated. Please read this disclaimer first. I have NO official training, don't know any LME traders, never met one, never talked to one. I have seen them visiting the site over the years, but have had, no do I have, any direct contact with anyone affiliated with the London Metal Exchange, or anyone in London, as far as I know. And borrowed from a Barry Ritzhold article, "The author states that no one has any real idea what's going to happen in the future, and hereby declares that any prediction or forecast made on, or linked to, from this site, is merely a wildly unsupported speculation." Are we covered? The following is based on personal observation only and is probably as worthless as boobs on a bull frog. Here is the chart by Nimit Khamar chart, and you can find a link to it daily besides the 'link to the official closing prices'. Chart traders love this type of information, as it can "sometimes" tell them which way the winds may be turning. Last week, we explained why we had felt something might be brewing as the TL4 and TL2 lines were converging and nickel trading's "comfortable" range was getting squeezed . You can check our archives for the entry on the 16th to see what this chart looked like the day before it popped. As you can see by today's chart, which covers the trading range thru yesterday, we are possibly heading into another squeeze, which currently appears to converge around the $28,500-$28,600 mark. I would call this 'weak' support, with Ed Meir's from MF Global, putting strong support at $27,800/tonne, in his daily report. With no major news about nickel making the papers since the Colombia strike, and the inventories that are held in LME warehouses, appearing not to mean nearly as much to traders as they probably should, the market appears to be using the charts, and the Dollar/Euro ratio to guide it. If the market stays true to the chart, nickel should have traded in a range between a low of approx $28,400 to a high of approx $29,700 tonne today (between the  TL2 and TL4 lines). We will have to wait to see tomorrow's chart update to see if it did. And if it did, it's worth watching to see how the market reacts as the price of nickel enters into another 'squeeze". My apologies to those readers who actually study and understand how  these charts work, and might now be wondering from what planet I originate from.
• According to the indicator charts, nickel rose early, lost for much of the day, than recovered slightly at the end. According to the Dow Jones report we have linked to, three month nickel ended the day at $ 12.98/lb .          
• Closing Metals Report from Dow Jones - more

  Uncertainty resulting from the global economic turmoil has increased but has so far not had any major impact on stainless steel fundamentals, but there is "an increasing risk that the uncertainty might affect both demand and price development of stainless steel going forward," Finnish steel producer Outokumpu said Wednesday. - more

  Commodity markets regulator, Forward Markets Commission (FMC), is considering a ban on hedge funds and PE funds from trading on the country's commexes, a top Government official said. - more

  Rusmet reports European stainless steel surcharges for May  were mostly stabile, except for 400 series. 304 stainless surcharges were from up 3.8% to flat, depending on the manufacturer. 316 surcharges were up 1.9% to down 2.1%, while 430 stainless steel surcharges for May rose 11% to 32%.  

  BHP Billiton's takeover battle for Rio Tinto moved into increasingly hostile territory on Tuesday when BHP's chief executive launched an outspoken attack on his mining rival's past underperformance and growth prospects. - more

  (one of the co-owners of Norilsk Nickel) Mikhail Prokhorov -- whose wealth is estimated at around $22 billion -- plans to spend $150 million setting up a magazine, website and television station called Snob, the general director of the new venture told Reuters on Wednesday.- more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.18/lb lower.  
• Bloomberg morning metal news - more

  Reports

• Recycling International Market analysis: Nickel and Stainless, April 2008 - here
• Standard Bank Market Comments - here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - "The dollar breached the 1.60 mark against the Euro yesterday, and led to another round of frenzied buying in many commodity complexes with energy, gold, and base metals all pushing higher....The dollar is stronger today, and back below the 1.60 mark, and this could also be contributing to the pause we are seeing in most metals. However, we see no reason why metals cannot pick up a head of steam again. In this regard, our RSI readings, a measure of overbought/oversold conditions, are still mainly neutral (except for tin). More importantly, the dollar could start to sell off again, as having broken 1.60, speculators could try to drag it down even lower. The only variable we see that conceivably could break the short dollar /long commodities trading strategy that seems to be the modus operandi in the markets these days, is for the central banks to intervene and support the dollar. In the least, this move would wrong-foot the speculators, and force many commodity prices to come back down to earth. Certainly, the wording in the latest G-7 communiqué left the door opened for such a possibility, and we think such a move is long overdue.... Nickel is at $28,710, down $190, and quiet." (read Ed Meir's complete morning base metals report here)
• Markus Moll in Metal Center News - comment - We posted a story last Friday of the presentation Mr Moll gave at the Metals Service Center Institute's Specialty Metals Conference in March. For those of you who might have missed it, Mr Moll brings up some very interesting acts that are worth repeating. As quoted in Metal Center News - “Globalization is not increasing in this business (stainless steel),” Moll said. “On the contrary, it’s going down. It’s more of a regional business, where the majority of the material is being used where it’s produced.....The cost of stainless steel produced in China is actually higher than the cost leader in Europe, when transportation, agent commission and risk factors are taken into account.....Moreover, he said, manufacturers must be able to answer five questions positively before substitution is worthwhile: * Is the price of stainless steel important in production? * Would a new material provide a competitive advantage? * Are there easily available substitution alternatives? * Does the substitution material meet the standards? * And does the price difference outweigh the costs of change? For most companies, the answer to at least one or two of those questions would be no. The waning substitution threat, coupled with the shrinking price gap, is leading to what Moll called, “the renaissance of 304.” (much more in the online version here)

  Outokumpu Oyj, the world's fourth- biggest stainless-steel maker, declined the most in more than six years in Helsinki trading after first-quarter profit missed analyst estimates. - more

  Asian stainless steel cold rolled pricing continues to remain strong; although China’s domestic stainless steel market remains quiet. - more

  BHP Billiton Ltd posted strong quarterly iron ore and oil output figures Wednesday but a mixture of strikes, bad weather and power shortages saw coking coal, nickel and aluminum output fall. - more

  The prices of nickel-based stainless steel scrap ( new clippings ) purchased by stainless steel mills and dealers to collect this scrap during late March to early April were not even depending on areas and have been confused but, in view of an anxiety for production of stainless steel in the near future, a basic tone to weaken price of stainless steel scrap is finally permeating into the market from the beginning of this week. - more

  Daily London Metal Exchange inventory figures posted here (charts)

  Shanghai Jinchuan nickel - 239000-242000 RMB/t, plus 2000  (charts)

  Mumbai nickel price - here

• Official LME nickel closing prices - posted here (chart) (thanks to an employee from Reuters for advising us that LME posts official prices on their own web site about the same time we used to.) 
• Baltic Dry Index - plus 200 to 8,550. (chart)
• Nickel inventories - if interested in learning about yesterday's movements in nickel inventories, you can find the statistics here
• The headline from the International Herald Tribune issued an ominous warning to metals buyers today "Dollar slumps to new record low versus euro". European aircraft builder Airbus announced that the falling dollar and higher metal prices were responsible for it increasing its prices on all its large passenger jets today. The Superjumbo A380 rose by a cool $4 million US dollars overnight. Metals, for the most part, were rather placid early, but the above news gave a boost, and all, precious and base, were trading in the green. Copper was helped by a Chilean strike, while tin hit a new record high on dwindling stocks, as did oil. Nickel went along for the ride, helped by the retreat in the dollar. When we looked at the indicator charts this morning, nickel appeared to be struggling to hold onto prior gains, but after the dollar slumped, the struggle was over, and nickel returned to gaining. According to the Dow Jones daily report linked to below, three month nickel ended the day at $13.09/lb .
• Closing Metals Report from Dow Jones - more
• Thompson Financial metals news - more
• Here is a little cartoon for you Baby Boomers - here

  Copyright/courtesy Dow Jones - "The metals markets are in the early stages of a long-term secular market, says Bradley George, head of global commodities and resources at Investec Asset Management. Notes there will inevitably be short-term downtrends within this period, but the bullish cycle is set to last a further 15-20 years. The fundamentals, and not the funds, are driving commodities, he adds, ....."

  Economic and steel market outlook 2008-2009 - The April ’08 Report from EUROFER’s Economic Committee - pdf here

• MEPS - EU Steel Prices Soar Again Prompting Buyers to Seek Foreign Imports - more

  AK Steel Holding Corp said on Tuesday that first-quarter profit rose more than 60 percent, helped by rising prices. - more

  Spanish stainless steel maker Acerinox posted better-than-expected first-quarter results on Tuesday, painting a bright outlook for the rest of the year. - more

  Courtesy MSN Money - (blurb only) Mechel Steel reports its Q1 operational results; coal rose 60% YoY Co announces its operational results for the first quarter ended March 31, 2008. Coal rose 60% YoY, iron ore concentrate rose 6% YoY, nickel rose 7% YoY, steel rose 5% YoY and electric power generation rose 157% YoY. (comment - recent increases in iron ore and steel were not yet reflected in 1st quarter results)

  Macquarie Capital Securities has forecast that the physical tightness of many commodities is expected to persist into the next decade, keeping prices well above normal for the long term. - more

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

• Indicators at 7:50 am CST show 3 month nickel selling around $.11/lb higher. Indicators show nickel trading went north early on, but has stumbled a few times since, and is fighting to hold onto its gains. BBC News posts delayed prices on all of the LME traded base metals. We have added a new link to the right hand column under the Kitco price graph for those who might find it useful.  
• Bloomberg morning metals news - more
• AFX News morning metals news - more
• Globe and Mail morning metals news - more
• Forbes morning metals news - more

  Reports

• TD Bank Weekly Commodity Price report - pdf here
• IISI March 2008 Crude Steel Production - pdf here
• Standard Bank Market Comment - here
• China Mar Base Metals Trade Table Of Data - here

  Commodity Comments

• Ed Meir of MF Global Morning Comments -"We are making up for yesterday’s puzzling action in today’s session, with metals up impressively...  The dollar is now trading at 1.5950, and not far off the all-time low of $1.5983 reached on April 17. It could receive more direction when March existing home sales data comes out of the US later today, (expected at 4.9 mln units). For now, the prospect of fresh lows in the US currency, coupled with the unsettled Chilean labor dispute, should combine to keep the metals rally going via a stronger copper complex. And, of course, there is no stopping the energy markets, which continue to push higher, casting a bullish shadow over metals.... Nickel is at $28,700, up $250, and quiet; the complex continues to drift in sideways fashion." (read Ed Meir's complete morning base metals report here)

  MMC Norilsk Nickel sold $640 million in nickel to China in 2007 and expects sales to increase in 2008, Norilsk Nickel General Director Denis Morozov said during a meeting in Beijing with officials from stainless steel manufacturers. - more

• General Director of OJSC MMC Norilsk Nickel (Norilsk Nickel or the Company) Denis Morozov made a working visit to the People’s Republic of China (PRC). - more

  Nippon Steel Corp will seek a price increase of nearly 40 percent from automakers and other customers for its main steel products to offset soaring raw materials costs, the Nikkei business daily reported on Tuesday. - more

  In a bid to leverage the increased demand of stainless steel pipes and tubes, Ahmedabad-based Suraj Stainless Ltd plans to set up a new seamless steel pipes and tubes manufacturing plant, the company’s fourth, at Kadi near Mehsana in Gujarat. - more

• The stainless steel industry is keen to not be seen as part of the steel industry, so that it can escape export curbs. The industry body has written to the finance minister and the steel minister explaining how stainless steel makers are not contributing to inflation. - more
• India’s Orissa Mining Corporation has increased its April to June 2008 quarter chromium ore prices by 33% to INR 18,250 per tonne duty paid. - more

  Copyright/courtesy AISI - "In the week ending April 19, 2008, domestic raw steel production was 2,154,000 net tons while the capability utilization rate was 90.3 percent. Production was 2,113,000 tons in the week ending April 19, 2007, while the capability utilization then was 88.3 percent. The current week production represents a 1.9 percent increase from the same period in the previous year. Production for the week ending April 19, 2008 is up 0.9 percent from the previous week ending April 12, 2008 when production was 2,134,000 tons and the rate of capability utilization was 89.4 percent."

  Daily London Metal Exchange inventory figures posted here   (charts)

  Shanghai Jinchuan nickel - 238000-240000 RMB/t, minus 1000   (charts)

  Mumbai nickel price - here

• Official LME nickel closing prices - cash - $12.99/lb 3 month buyer - $13.11/lb 10.08% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 147 to 8,350. (chart)
• LME nickel inventories - plus 24 tonnes from Rotterdam, Netherlands warehouse, minus 66 tonnes from Baltimore, MD, USA warehouse
• Site Update - This site was started with the sole purpose of providing relevant information to those in the stainless steel industry, so that readers could make well informed decisions. Thanks in large part to the actions of a major Canadian nickel mining company, a small daily blog posted on an employer's web site was discontinued, and estainlesssteel.com became the site you see today. As the number of visitors grew, it became more apparent that readers were very interested in what was happening on the London Metal Exchange, the world hub for the establishment of daily nickel prices. While LME publishes numerous prices daily, this site posts the beginning inventory and official prices, well after having obtained the information from publicly available (no password required) internet sites. For instance, LME official prices are usually publicly available before, or shortly after, the morning update is posted. Inventory data is sometimes available 8 hours before it is posted here. This information was posted as a public service as news, and was never meant to "harm" anyone. Apparently it has. I received a call from an individual about a month ago, advising that his website was paying the London Metal Exchange a "million dollars a year" for such information, and advised we would be getting a "cease and desist" order from the LME. Reviewing the web site that this individual claimed he was representing, it was determined that, while well ranked in Alexa (meaning it gets a lot more visitors than this one does), it contained absolutely no original news content, or comment, and was nothing more than a cut-and-paste operation of story's from international news web sites, and "respected" metals web sites (all available for free to the general public on their original sites). And since the LME information on this site was limited to the cut and paste of the daily Dow Jones end of day report that we "link to" under "Closing Metals Report", it was considered to be no more than a prank call. Three weeks later, and last Thursday, I received the following from the London Metal Exchange. "It has come to the LME's attention that a number of LME prices (Nickel Official Prices) and Warehouse Stocks are published on your website on a same-day basis. The LME would like to point out that any redistribution of LME data, irrespective of publication delay, is subject to a data distribution agreement between the distributor (ie your organisation) and the LME. We also note that the LME does not have a redistribution agreement in place with your organisation." Over the weekend, I downloaded the application form but never made it past the pages of rules and regulations. And while I had no idea the prices posted on here were anything but "old news", it is not this site's desire to violate any copyright rules, no matter how overly restrictive they might appear. Nor is it my desire to see this site handcuffed in its analysis of market conditions, nor what it can say about the "few" that determine the direction for the many. And thus, effective tomorrow, Tuesday, April 22nd, this site is forced to discontinue posting the LME daily official prices, and the daily total tonnage/cancelled tonnage numbers. However, by U.S. law, this site can link you directly to other public sites/pages that post Dow Jones Newswire stories that contain far more pricing than we ever have.  I apologize to any readers who might find this change inconvenient.
• Life is far too short to go looking for controversy, and I am old enough to understand, that while our daily lives are spent around financial matters, inevitably in the end, it is faith, family and friends are all that really matter. We will all be fertilizer for the flowers soon enough.
• Daily comment - Analyzing multiple indicator charts, it appears nickel trading drifted in early trading, but was unable to hold on for the duration of the day and closed slightly lower. According to a Dow Jones report, nickel ended the day at $12.90/lb  .   
• Closing Metals Report from Dow Jones - more

  Thanks to the reader from the Nickel Institute that advised us of the typo error SteelGuru.com used in the story we linked to this morning. The feeder line we gave should read "China's largest nickel producer Jinchuan Group aims to produce 120,000 tonnes of nickel products in 2008" not "China's largest nickel producer Jinchuan Group aims to produce 120,000 million tonnes of nickel products in 2008". We corrected the feeder on our end, but be advised, you may see something different on the author's site.

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

• Indications at 7:50 am CST show 3 month nickel selling up around $.02/lb . Nickel is having a hard time finding its footing today, slipping in and out of the red.
• Bloomberg - more

  Reports

• Haywood Securities Metals & Mining Weekly - pdf here
• Institute of Scrap Recycling Industries, Inc Market Report - pdf here
• Standard Bank Meal Comment - more
• (India) Steel World News Digest - more
• Dundee Capital Quarterly Commodity Update - pdf here

  Commodity Comments

• Ed Meir of MF Global Morning Comments -  LME prices ended down on Friday, but off session lows, as a stronger dollar kept the complex under pressure for most of the day. The dollar moved to a seven-week high against the yen and steadied against the euro after a slew of earnings results from the battered US banking sector buoyed the US equity markets....Nickel is at $28,995, up $190; the complex continues to drift in sideways fashion. In fact, the trading range for all of April has been roughly $2,000/MT, which in headier times, would have easily covered the daily trading range.(read MF Global's complete free morning base metals report here)
• SMM Specialists announces results of weekly poll of Chinese metal analysts in regards to their forecast of nickel prices over the coming week. Of 30 who responded, the majority felt the price would fall this week (17 - 56%), while 7 (23%) felt the price would climb, and the remaining 6 (20%) felt the price would stay about the same.

  Japan's top two steel makers, Nippon Steel Corp and JFE Holdings Inc, will likely forecast double-digit percentage falls in profit for the business year that began this month due to soaring costs. - more

• According to statistics, Japanese stainless steel production totaled 272,117 tons in February. - more
• Japanese stainless steel scrap prices have dropped due to restrained buying. - more

  China's largest nickel producer Jinchuan Group aims to produce 120,000 tonnes of nickel products in 2008 up by 6.7% YoY from 112,500 million tonnes produced in 2007. - more

  ISRI Spotlight speakers are bullish on prices - more

  Say the commodity's prices have been under control, unlike that of carbon steel. The domestic stainless steel industry is wary of the possible government actions to check the rising steel prices. - more

Zambia's Munali nickel mine has started ore output and is set to test its mill, crusher and concentrator on April 28 in readiness for official commissioning mid this year, Zambia's state media reported Monday. - more

  Norilsk Nickel supplied nickel worth $640 million to China in 2007 and expects to boost sales to the Asian country in 2008, the Russian metals giant said on Monday. - more

  Iron ore giants Rio Tinto and BHP Billiton are set to play hardball with Chinese steel mills and charge spot prices on contracted tonnage if the steel mills do not agree to pay an extra premium on benchmark pricing by June 30. - more

  MEPS forecasts crude steel production in 2008 at 1420 million tonnes - 5.6 percent up on the outturn in the previous twelve month period. - more

  Spotters working for the Buffalo Rock Mining Company on a dig about 10 kilometres southwest of the Lethbridge airport had a bit of a surprise a few weeks back, when they noticed a structure amidst the rubble unearthed by the company\'s excavator. - more

  The tragic sinking of the Titanic nearly a century ago can be blamed on low grade rivets that the ship's builders used on some parts of the ill-fated liner, two experts on metals conclude in a new book. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 90 tonnes = 35,976 tonnes (3.19% - 1146 tonnes cancelled warrants/ 34,830 net stock level) (charts)
•   Shanghai Jinchuan nickel - 239000-241000 RMB/t, minus 2000   (charts)

• Official LME nickel closing prices - cash - $12.99/lb 3 month buyer - $13.06/lb (9.66% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 165 to 8,203. (chart)
• LME nickel inventories - plus 36 tonnes from Rotterdam, Netherlands warehouse, minus 18tonnes from Baltimore, MD, USA warehouse
• Metals were mixed today, with some gainers and some losers. Nickel ended on the down side, falling over $1000/tonne at one point. Most analysts agree that the strength, or weakness of the dollar, is the primary driving factor many recent metal price moves. For the day and week, three month nickel ended at $13.07/lb ($28,805/tonne)  
• Closing Metals Report - more
• Have a safe and enjoyable weekend!!

  News Bites

• Purchasing Magazine - Davidson’s analysis concluded with a global nickel market that she said trending towards a “small” surplus of around 16,000 metric tons this year, thus suggesting that nickel stocks “will remain high.” As for a price forecast, LME cash nickel is expected to average $13.91/lb in ‘08 with the potential for a range next year of $14.80 and $18.00 before a growing supply surplus forces prices “sharply” lower by 2010. - more
• Shipping - The cost of shipping commodities by sea may climb as an increasing number of vessels are sailing to Brazil's two largest iron ore ports, cutting supply elsewhere, Sempra Metals said. - more
• Australia - Oxiana Ltd managing director Owen Hegarty says the company is looking at nickel properties in Indonesia as it aims to become up to a 100,000 tonne per year producer of the metal. - more
• Tropical Storm/Typhoon Alerts - China typhoon map here / New Caledonia tropical storm map here (comment - New Caledonia has already been inundated with rain this season, and it has had an adverse effect on nickel production on the island.)

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

• Indications at 7:50 am CST show 3 month nickel selling down by around $.29/lb . Lot of interesting news below considering it's a Friday. We typically put most stories under "New Bites" and feature one of real importance or interest. Today we feature 4 stories.
• Bloomberg - more

  Reports

• South Africa Steel News - Quarter 1 20008 - pdf here
• Canada Mineral Production - February 2008 pdf here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - next report issued Monday, April 21st. Mr Meir is traveling.
• SSINA - Remarks by SSINA counsel David A. Hartquist to American Metal Market Stainless & Its Alloys Conference on April 15, 2008. - pdf here

  Stainless body warns of entry of substandard material into South African market

• The Southern Africa Stainless Steel Development Association (Sassda) has advised that there have been cases of substandard and underspecification stainless steel being imported and sold in South Africa. - more

  Metals - Base metals post losses as dollar rebound discourages buying

• Base metals headed lower in late morning trade as the dollar firmed against the euro on hawkish talk from the Federal Reserve overnight and higher U.S. bond yields, and after well-received first-quarter results from Citigroup Inc. - more

  Stainless Weathers 2007 Storm - Do More Dark Clouds Loom?

• Analyst Markus Moll says prospects for the worldwide stainless market are heavily dependent on the U.S. economy’s run-in with recession. - more

  China Is Anticipated To Increase Imports Of Ferro-Chrome In 2008 To 2 Million Tons

• While China imported 1,388,000 tons of ferro-chrome in the calendar year (January - December) of 2007, which had a remarkable increase of 3 times compared with that in the preceding year of 2006, major producers of ferro-chrome have a view that China is anticipated to import 2,000,000 tons per annum of ferro-chrome in 2008. - more

  News Bites

• China - City officials laid out an ambitious series of measures on Monday that will freeze construction projects, slow down steel production and shut down quarries in and around this capital during the summer in an attempt to clear the air for the Olympics - more
• Base Metals - Demand for base metals in the United States has been falling sharply on the back of the U.S. housing debacle, and the trend is likely to worsen with expected slowdowns in commercial and industrial building. - more
• New Caledonia - Disgruntled truck drivers have blocked the access to a construction site in New Caledonia’s north where the Koniambo nickel plant is to be built. - more
• Papua New Guinea - There have been calls from two quarters for the Papua New Guinea Government to ensure waste from the huge Chinese funded Ramu nickel smelter is not dumped in the environmentally important Basamuk Bay. - more
• China - Investment in China's mining sector has never been an easy business, and recently, more prospects have dried up for foreign investors following legislation changes and the development of a capital market. - more
• Philippines - Toledo Mining Corp. Plc. said production and shipments at its Berong Nickel Mine were impacted by excessive wet conditions, due to the La Nina weather phenomenon which is impacting the whole of the Philippines. - more
• Taiwan - Skyrocketing prices of iron ore and coal have moved China Steel Corp., Taiwan`s leading upstream supplier of steel products, to raise its steel prices of by an average of NT4,200 per metric ton, for a record hike of 18%, in Taiwan in the second quarter of this year. - more
• USA - (not metals related) The traditional face of survivalism is that of a shaggy loner in camouflage, holed up in a cabin in the wilderness and surrounded by cases of canned goods and ammunition. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 54 tonnes = 52,170 tonnes (1.61% - 840 tonnes cancelled warrants/ 51,330 net stock level) (charts)
•   Shanghai Jinchuan nickel - 241000-243000 RMB/t, minus 2250  (charts)

• Official LME nickel closing prices - cash - $13.34/lb 3 month buyer - $13.43/lb (12.76% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 71 to 8,038. (chart)
• LME nickel inventories - plus 402 tonnes into Rotterdam, Netherlands warehouse, minus 96 tonnes from Rotterdam warehouse, minus 42 tonnes from Baltimore, MD, USA warehouse
• CNN - "The dollar hit record lows against the euro Thursday for a second consecutive day, but regained some ground after a European Union official said the common currency was heading in an "undesirable" direction." In concert, metals were mostly higher in early trading, but by afternoon, had backtracked into the red. Nickel lost much of yesterday's technical buying gains, as the bounce proved unable to stick.  After rising to around $3.70/lb, nickel fell thru much of the day to near $13.20/lb. For the day, three month nickel ended at $13.27/lb ($29,250/tonne)
• Closing Metals Report - more

  Commodity Comments

• Comment - Where are we at and where are we heading on nickel, molybdenum, and ferrochrome (in brief).
• Nickel has been selling in the $12-$15/lb range since last August. While inventories have built, traders appear to be convinced that when stainless steel demand picks up, any gains could evaporate as the world demand/supply picture remains tight. Production of pig nickel has become a major source for China, and traded nickel prices must remain at a profitability level for these producers. If it were to fall below, that source would dry up, and we could see increased demand for refined nickel imports into China, and the tight demand/supply picture tighten even further. The high side of the price range appears to be primarily speculation on demand, or supply, or technical buying, that does little more than confuse and make stainless steel producers hesitant. We see little reason to believe that nickel prices will move out of the aforementioned price range in the near future.
• Molybdenum demand remains strong, supplies remain tight, and thus we see no reason for molybdenum prices to fall in the coming year. According to Bloomberg, moly has averaged $32.83 a pound this year, and three analysts they polled, felt the price could reach $34/lb. China usage of molybdenum rose 36% in 2007 over 2006. Molybdenum mine production is forecast to increase by 4% this year.
• Ferrochrome doesn't get the media attention nickel gets, primarily because it is not traded on an exchange, but if it were, it would be getting a lot of attention these days. With the power problems in South Africa, coming on the back of additional export duties placed on chrome ore from India, ferrochrome prices have soared this year. Chrome contracts were around $.60/lb a few years back, this quarter they are a shade under $2/lb. Open market spot prices are over $5/lb. Don't expect these prices to fall anytime soon, with some believing we have yet to peak out in price. Ferrochrome is used in all stainless steel types and grades.
• Trump Card's - While there are many so-called trump cards that could dramatically affect any of the prices above, the most immediate one we are tracking is the Olympics late this summer. Pollution is a serious problem in China and officials there are very concerned about air quality during the games. Manufacturing plants, power plants, and mines/smelters have, or will be shut down by Chinese officials in the coming months, in an attempt to clear up the air. This week it was announced a molybdenum mine/smelter would probably be closed next month. It has been rumored a major pig nickel producer will have to shut down. The supply/demand picture is incredibly tight on all of the metals above, and any supply disruption of any significance, could potentially put more pressure on current prices. Other things we are watching closely - continued South Africa power problems for ferrochrome, potential power problems in Chile for molybdenum, upcoming labor contract talks in Norway, Canada and Dominican Republic for nickel.    

  News Bites

• SSINA - Remarks by SSINA counsel David A. Hartquist to American Metal Market Stainless & Its Alloys Conference on April 15, 2008. - pdf here
• South Africa - The global commodities boom is claiming another casualty: Africa's already-shaky power grid. - more
• South Korea (courtesy/copyright Dow Jones) South Korea's state procurement agency has bought 200 metric tons of nickel cathode at premiums of $514 and $549 a metric ton over the London Metal Exchange spot contract, a senior official at the agency said Thursday. Daewoo International won a tender to supply 100 tons of nickel to the port of Busan at a premium of $514 and another 100 tons to Incheon port at a premium of $549, said Chang Kyung Soon, director of the Public Procurement Service's raw material stockpiles division. The cargoes were bought on a cost and freight basis and are to be shipped before June 10.
• Russia - Russian billionaire Vladimir Potanin has acquired his former business partner Mikhail Prokhorov's stake in KM-Invest, making him the largest shareholder in major Russian companies OAO Norilsk Nickel - more
• Philippines - President Gloria Macapagal-Arroyo ordered the military to secure mining companies in the southern Philippine region of Caraga, noting that these companies are "big temptations to terrorists." - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.09/lb . After an initial strong start, nickel has since started backing off.
• Bloomberg - more

  Reports

• Standard Bank Market Comment - here
• Standard Bank Weekly Commodity Research - pdf here
• Behre Dolbear Global Mining News - pdf here
• World Steel in Figures 2007 - pdf here
• Asia Miner Magazine - online magazine here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - next report issued Monday, April 21st. Mr Meir is traveling.
• Copyright/courtesy MarketWatch - ""The strength in commodities, combined with weakness in global equity markets, suggests investors are looking for a global slowdown but not a collapse in growth," said Tower of Covered Bridge Tactical. "If growth merely slows down globally, it still keeps the pressure on commodity prices."

  News Bites

• France - Eramet's financing capacity allows it to consider further "very substantial acquisitions" in all its business lines, both to strengthen its strategic positions and to broaden the range of products it offers customers, Patrick Buffet, chairman of the French manganese and nickel miner, told the AGM. - more
• China - China's imports and exports trade of mining product continue to increase in 2007 with a total value of imports and exports for trade of 494.2 billion USD, growing by 28.7% than the previous year, according to Bulletin of China Land and Resources 2007 issued on April 16, 2008. - more
• South Korea - Prices of raw materials jumped 52.4 percent in March from a year ago, marking the sharpest annual growth in more than 10 years, the central bank said Thursday. - more
• United States - North American stainless sheet buyers appear to have forced producers to withdraw a 5% base price hike. Buyers tell Purchasing.com that purchases have been so soft that buyers are holding back on orders rather than accept higher prices. - more
• China - China's largest nickel producer Jinchuan Group aims to produce 120,000 mt of nickel products in 2008, up 6.7% from 112,500 mt produced in 2007, the company said in a statement late-Wednesday. - more
• Courtesy China Steel Corporation - China has become the world's largest importer of chrome ore. In 2005, China imported 3.02 million tons, in 2006, 4.32 million tons, and in 2007, China imported 6,090,300 tons of chrome ore. China's imports of chrome ore primarily came from the following countries in 2007 - South Africa at 1,963,900 tons, from Turkey at 1,082,800 tons, from India 984,500 tons, from Oman 337,300 tons, and Pakistan 295,100 tons. Power problems have impacted imports from South Africa and Zimbabwe so far in 2008, as have export duties from India. Nickel ore imports increased from 3.79 million tons of nickel ore in 2006, to 15.5639 million tons in 2007. Analyst warning of South Africa considering raising export duty on chrome ore, and warn if this happens, we could see a second round of price increases. (source)
• Courtesy Bloomberg (quoted in Russian media) - Top 10 nickel producers in 2007
  1. Norilsk — 289 thousand tonnes.
  2. Vale — 226 thousand tonnes.
  3. BHP Billiton — 136 thousand tonnes.
  4. Xstrata — 117 thousand tonnes.
  5. Jinchuan Group — 110 thousand tonnes.
  6. Eramet SA — 60 thousand tonnes
  7. Sumitomo Metal Mining — 53 thousand tonnes
  8. Cubaniquel — 42 thousand tonnes
  9. Pacific Metals — 33 thousand tonnes
  10. Sherritt International — 31 thousand tonnes

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 264 tonnes = 52,224 tonnes (1.56% - 816 tonnes cancelled warrants/ 51,408 net stock level) (charts)
•   Shanghai Jinchuan nickel - 243500-245000 RMB/t, plus 3750  (charts)

• Official LME nickel closing prices - cash - $13.60/lb 3 month buyer - $13.74/lb (15.37% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 10 to 7,967. (chart)
• LME nickel inventories - minus 78 tonnes from Rotterdam, Netherlands warehouse
• Inflation was back in the news today, but even more so than we predicted. Europe actually beat the US to the punch with the inflationary news this morning, and the euro, oil, and tin all hit record high's in today's trading, with gold and copper coming close. US new housing starts fell to a 16 year low. Three month nickel had a big day, gaining nearly $1,300/tonne at one point.  It ended the day at $13.54/lb ($29,850/tonne) 
• Closing Metals Report - more

  Comment

• Analysts are saying much of today's rise in nickel trading is due to "technical" buying. What exactly does this mean? We don't dare claim we understand the market, but here is our theory, and why we said last week, something was getting ready to happen. Sucden's Nimit Khamar publishes a candlestick daily chart of LME nickel activity. Here is a segment of that chart, showing nickel trading so far in 2008. (chart going back to 1997 is available to Sucden subscribers) As you can see on this chart, the trading price of nickel has been squeezed between the TL2 and TL4 lines recently. These lines crossed at about $28,500/tonne, and thus, as the market closed in on this "flash point" we felt something was going to happen. We didn't dare forecast which way it was going to go, we just felt a sudden jump up or down was in the offing. Today, that pressure popped, and with help from a few outside factors, i.e the dollar falling, and the WBMS report, the direction was determined. Charts don't always accurately forecast movements, but in this case, they accurately predicted today was bound to happen.

  Nickel/Stainless War Brewing?

• According to a story issued by Rusmet overnight, David "Skip" Hartquist, Senior Partner with the law firm of Kelley Drye & Warren LLP, and Counsel for Specialty Steel Industry of North America, is suggesting the U.S. Office of Foreign Assets Control investigate China's violation of the US embargo on Cuban nickel. Under US law, the use of Cuban nickel by US citizens is illegal, and thus the import of stainless steel or other products containing Cuban nickel, is illegal. The SSINA reports that China imports more than 98% of Cuban exports of nickel and cobalt. According to SSINA, China imported 23000 tons of Cuban nickel and cobalt in 2006 and approximately 30000 tons in 2007. (comment - we have not yet confirmed this story with a second source, but his remarks may have been made at the American Metal Market's Stainless & Its Alloys Conference in Pittsburg, PA on Monday or Tuesday where he was scheduled to talk on just this.)

  Commodity Comments

• Copyright/courtesy Dow Jones - "LME nickel's rally has been spurred by technicals - a break of trendline resistance - and fundamental factors, says JP Morgan. Notes talk of reduced pig iron production plus a newswire story suggesting that the US might look to add restrictions on Chinese exports of stainless steel due to the fact that much of it contains Cuban nickel. Technically, the break of $29,000 a metric ton could see nickel push up towards the $32,000/ton area, "but this is where we would look to sell given that the medium-term outlook remains distinctly bearish."
• Copyright/courtesy Dow Jones - "The supply-side will dictate relative price performance of the base metals, says Stephen Briggs of Societe Generale. Says demand will "hold up" because demand in the US last year was already "terrible." Adds prices will be supported by rising production costs due to shortages of labor and equipment, coupled with producers' desire to preserve high prices....LME nickel prices are seen trading down toward $20,000 a metric ton in the longer term, says Stephen Briggs of Societe Generale. Says pig iron and supply growth from "conventional" mines will weigh on nickel prices."

  News Bites

• Canada - Vale Inco Limited teamed up with the Sudbury and District Unit of the Canadian Cancer Society to raise more than $60,000 for prostate cancer research through the third Vale Inco Shines event at the New Sudbury Centre last weekend. - more
• India - A row has been aroused between the Commerce Ministry and Finance Ministry over the ban of iron ore exports for containing spiralling steel prices in the country. - more
• Cuba - (please keep in mind this blog is very anti-Cuba biased) We received this very interesting document recently and have decided to transcribe it and publish it. It's self-explanatory. Links and Bold Emphasis are mine. Some additional commentary below the fold. - more

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

• Indications at 7:40 am CST show 3 month nickel selling up by $.50/lb . Curious to see if this is short covering on third Wednesday prompt, or traders all excited about the news out of WBMS that, even though LME nickel inventories gained during the period, the world was in a 5,700 metric ton deficit during January and February. Don't ask us to explain it - we have never figured out how the WBMS comes to their figures. Then again, the dollar hit a new all time record low against the Euro this morning, which has pushed all metals, precious and base, into the green. Dow Jones quotes London trader as saying "buying is via electronic systems which suggests "black box" or technical, rather than consumer, buying." This would be a bounce off the resistance we mentioned late last week. It was bound to snap, one way or the other, and with the dollar down today, the snap appears to have gone to the positive side. Whatever gets the brunt of the blame today, it appears the day is shaping up to be the "perfect storm".  
• Bloomberg - more

  Reports

• World Bureau of Metal Statistics  January to February Metal Balances - pdf here
• Rand Merchant Bank Base Metal Report - pdf here
• Fortis Asian Metals Monthly - pdf here

  Commodity Comments

• Ed Meir of MF Global Morning Comments - next report issued Monday, April 21st. Mr Meir is traveling.

  WBMS: Global Nickel Mkt In 5,700 Ton Deficit In Jan-Feb 2008

• The global nickel market recorded a deficit of 5,700 metric tons during January and February 2008, the World Bureau of Metal Statistics said Wednesday. - more

  News Bites

• China - It is reported that recently, Jiugang Hongtai trading company and a well known European company signed the first contract for the export of stainless steel. - more
• Papua New Guinea - Ramu NiCO Management Company, the operator of the Ramu nickel and cobalt mine, has promised not to endanger any environment or marine life with its proposed deep sea tailings placement (DSTP). - more
• Japan - It was notified on the 10th of April by Nippon Steel & Sumikin Stainless Steel that the Company negotiated with South African producers on price of charge chrome for shipments to Japan in the second quarter ( April - June ) of 2008 and has finally settled the price by a rise of 71 US-Cents per lb. of Cr in comparison with that for shipments in the preceding quarter of January - March. - more
• North America - North America is the world's new merger-and-acquisition hot spot when it comes to metals, fuelling a global boom in that sector that saw the total value of deals shoot up 67 per cent last year. - more
• Mergers - Deal making in the global metals sector soared to "unprecedented levels during 2007" up 67% on the previous year, despite the impact of the credit crunch, PricewaterhouseCoopers said in a mergers and acquisition sector study report Tuesday. - more
• Canada - The Jinchuan Group Ltd. (JNMC) announced today that they have chosen Toronto as the site of the company's Canadian subsidiary offices set to open in spring 2008. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 78 tonnes = 51,960 tonnes (1.76% - 912 tonnes cancelled warrants/ 51,048 net stock level) (charts)
•   Shanghai Jinchuan nickel - 240000-241000 RMB/t, plus 500 (charts)

• Official LME nickel closing prices - cash - $12.98/lb 3 month buyer - $13.08/lb (9.82% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 4 to 7,957. (chart)
• LME nickel inventories - plus 978 tonnes into Singapore warehouse, minus 66 tonnes from Rotterdam, Netherlands warehouse, minus 6 tonnes from Liverpool, England warehouse, minus 42 tonnes from Baltimore, MD, USA warehouse
• Associated Press - "Inflation at the wholesale level soared in March at nearly triple the rate that had been expected as the costs of energy and food both climbed rapidly." Metals did not respond as usual to this inflationary news. Except for tin, which rose to a new record high today, both precious and base metals failed to respond with any particular interest. Reason? The dollar rebounded to a seven week high after the U.S. Producer Price Index rose 1.1%, and the New York Federal Reserve Bank's Empire State Manufacturing Index unexpectedly rose. The euro also came under pressure after the German ZEW business confidence survey for April showed an unexpected drop. As the EU zone's largest economy, Germany is watched closely for clues to the overall health of the EU economy. Nickel bounced back and forth today, with only $450/tonne separating its low and high point. For the day, three month nickel ended where it started, at $13.11/lb ($28,895/tonne)
• Closing Metals Report - more
• How times have changed - 1965 "An IBM guidance computer is used on all Gemini flights, including the first spaceship rendezvous, with Gemini 6 (Astronauts Walter Schirra and Thomas Stafford) and Gemini 7 (Astronauts Frank Borman and James Lovell). Weighing just 59 pounds and occupying only 1.35 cubic feet of space, the onboard system performs some 7,000 calculations a second to bring the two vehicles nose-to-nose, 120-feet apart, 185 miles above Hawaii. The computer features a memory system capable of holding nearly 20,000 bytes of information." (1 megabyte is 1 million bytes) Today - " Scientists predict 500,000GB mp3 player" (a gigabyte is 1 billion bytes)

  Outokumpu sees strong demand continuing -CEO

• Finnish stainless steel company Outokumpu expects strong demand for its products to continue, Chief Executive Juha Rantanen said on Tuesday. - more (from a follow-up article "He would not comment on steel prices but said in February stainless steel prices were moving higher and that global economic uncertainty had yet to affect the sector.")

  Commodity Comments

• Copyright/courtesy Dow Jones - "The bearish case in nickel and zinc is increasingly gaining traction in the months ahead, says JP Morgan, advocating selling toward $34,000 in LME nickel ...... Nickel suffers from poor demand, "some of the recently announced increase in stainless steel prices are not 'sticking' while nickel in pig iron capacity remains responsive enough to gear up on any nickel price rally," the bank says."
• Copyright/courtesy Commonwealth Research - "As we noted in the last lead article on nickel, the relatively narrow trading range for the nickel price has reflected the presence of competing pressures, that have tended to create both a floor and a ceiling to the nickel price. The floor to the nickel price has been partly a result of the relatively high cost of nickel pig iron production and, increasingly, worries about constraints on nickel pig iron production. Nickel pig iron production (nickel content) accounts for less than 10% of total nickel production, but is necessary if the nickel market is to remain in balance/surplus. Therefore, the nickel price should remain mostly at a level that leaves sufficient nickel pig iron production economic. ...Anticipation of increased stainless steel-related nickel demand, even though it has been slow to arrive, has also remained a supportive factor for the nickel price. On the other hand, the upside to nickel prices has been capped by the fact that nickel supplies have remained fairly plentiful.......On the demand side, we are expecting a strong recovery in stainless steel-related nickel demand in 2008, which is likely to continue in 2009. On the supply side, there should be continued growth in nickel production in 2008, albeit at a much more moderate rate than in 2007, with nickel production rising more strongly again in 2009. ...We expect the nickel market to remain in surplus in 2008 and 2009, but the expected market surpluses are much smaller than that recorded in 2007....In this context, we expect that, through to late-2008, the nickel price will move mostly within a broad band not very different to that which has existed over the past six months. We have modestly lifted our price forecasts over the period to end-2009, as we have trimmed our estimates of nickel production growth. We believe the nickel price might push higher over the course of the June quarter, or possibly the September quarter, as growth in stainless steel related nickel demand becomes more apparent. We would not expect the nickel price to spike far above the USD35,000/t level, with stocks being sufficient to ensure market conditions do not put a squeeze on the nickel price of the type that occurred in the first half of 2007. However, we do not expect the gains in the nickel price to be sustained. A continued market surplus, although smaller than in 2007, and still comfortable level of stocks should see the nickel price ultimately return to under USD30,000/t territory. ....Of course, there are significant uncertainties surrounding the outlook for nickel prices. It will be particularly important to monitor the trend in nickel production. If nickel production comes in short of our expectations and/or higher energy costs continue to lift nickel pig iron production costs (a key risk) then nickel prices could hold at a higher level then we have projected. Conversely, if nickel consumption growth this year falls short of our expectations, then nickel prices may come under further downward pressure." (thanks to a reader for quote - full 21 page report available for Commonwealth Bank customers) 
• Copyright/courtesy Scotia Capital - "We are now bullish on the coking coal, iron ore, copper, zinc, aluminum, molybdenum, oil, methanol, DAP, urea, soybean, and hardwood pulp sectors. We are neutral on wheat, corn, potash, ethylene, steel, and nickel. We are cautious on paper products on a relative basis from a China perspective." (thanks to a reader for quote - 33 page weekly report available from Scotia McLeod broker)

  News Bites

• Finland - MMC Norilsk Nickel plans to increase its production capacity of Finnish enterprises Harjavalta to 66,000 tons a year by 2009
• New Caledonia - The positions solidify and the tone goes up, around L’machines South Saturday, approximately 300 people moved with L’Ouen island, with L’call of the usual buildings. A wood taboo was set up and a requirement posed : no the pipe before the verdict of L’UNESCO, in July. - poorly translated article here  (original French here)
• Papua New Guinea - Ramu NiCo Management Company, the operator of the [Chinese- backed] Ramu nickel and cobalt mine, has promised not to endanger any environment or marine life with its proposed deep sea tailings placement (DSTP). - more
• Zambia - The Mineworkers Union of Zambia (MUZ) has expressed sadness that some mine companies are not respecting the provisions of the recognition and collective agreements, which they signed with the union. - more
• Australia - Stainless Steels - Glossary of Stainless Steel-Related Terms by Stirlings Australia - more
• Australia- Stainless Steel – Types of Corrosion that Affect Stainless Steels by Stirlings Australia - more
• Australia - The logic behind BHP Billiton Ltd.'s (BHP.AU) bid for rival Rio Tinto Ltd. remains undimmed despite a slew of recent industry developments, including a tripling of coking coal prices and talk of a Chinese raid on BHP, that have raised the stakes amid the ongoing war of words between the two companies. - more

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

• Indications at 7:45 am CST show 3 month nickel selling flat with no gain/loss . Large 978 tonne nickel shipment into LME's Singapore warehouse had to have gotten traders attention this morning, but they have apparently shrugged it off. In the WTH column this morning, we link to a story out of Papau that claims they Chinese are sneaking workers into the Ramu nickel mine in shipping containers. That has to be a pleasant trip. Chrome news of any quality is hard to come by and we link to a detailed report from Japan on the forecast for chrome in 2008. Worth the read if you are a user. Not really sure the majority of stainless steel users realize just how bad the recent increase in ferrochrome is going to have on stainless steel prices down the road. Nor do steel users realize just how bad it is going to get with the recent increases in iron ore, and coking coal. Even if nickel and molybdenum prices stabilize, stainless steel prices are heading up, courtesy the increases in prices mentioned above.
• Bloomberg - more

  Reports

• BMO Capital "The Goods" - pdf here
• Canada Commodity Price Update - pdf here
• TD Bank Weekly Commodity Price Report - pdf here
• The World Bank Commodity Price Data (Pink Sheet) - pdf here
• Behre Dolbear Global Mining News - pdf here

  Tisco sets $214/ton stainless steel hike

• Good demand and increasing raw material costs have prompted China’s Taiyuan Iron and Steel Co. (Tisco) to increase prices on stainless steel products. - more

  Commodity Comments

• Ed Meir of MF Global Morning Comments - LME metals lost ground yesterday despite a stunning selloff in the dollar, whose gains faded rapidly in the aftermath of the weekend G-7 announcement. The falling dollar succeeded in lifting many metals off their lows, but apparently did not do enough to push the sector into the black. Energy prices, on the other hand, were more responsive, with crude erasing earlier losses and pushing ahead to strong gains. Metals are mixed at the time of this writing, with copper up slightly, while the rest of the group is showing minor losses. The dollar is not doing much today, down very slightly against the Euro at $1.5828....For the time being, we still expect metals to continue to take their cue from the dollar. In this regard, currency players seem to testing the resolve of the G-7 to intervene, as evidenced by their selling into the dollar rally yesterday. In fact, we would not be surprised to see the bears push the dollar to new lows against the Euro in an effort to see how far they can go. We still expect to see central bank intervention come in the event of renewed dollar selling, but until then, the dollar will remain under pressure. This, of course, should be bullish for metals, although tugging the other way, is the continued weak US macro outlook and the likelihood that the US slowdown could now be starting to spread more aggressively elsewhere. Chart patterns are mixed at best, with the double-top in copper still very prominent....Nickel is at $28,675, down $225, with prices drifting down to set up a test support at $27,800 on the charts.

  World steel demand to grow 6.7 pct in 2008 - IISI

• World steel demand will grow by 6.7 percent year-on-year to 1.28 billion tonnes in 2008, research group the International Iron and Steel Institute said on Monday. - more

  Outlook For Chrome Market By Dr. Konchar, Chairman Of Kermas

• Doctor Danko Konchar, who is CEO and Chairman of Kermas Limited as the parent company of Samancor Chrome in South Africa, came to Japan and had an interview with our pressman (Mr. H. Saitoh) on the 7th of April at the Peninsula Hotel in Tokyo. - more

  News Bites

• South Africa - Merafe Resources expects ferrochrome prices to continue reaching record highs because of power shortages, increasing demand from the stainless steel sector and rapid cost increases. - more
• Albany - Albanian Chrome ACR has started successfully the production of high carbon ferrochromium (FeCrHC) at its ferrochromium plant in Elbasan, after completing a series of investments for the rehabilitation of the first furnace of the plant. - more
• China - ShengdaTech, Inc. a leading manufacturer of nano precipitated calcium carbonate and coal-based chemical products in the People's Republic of China, today announced it has successfully started production and shipment of products from its three new stainless steel NPCC lines with an annual capacity of 60,000 MT NPCC at the Xiangyang City factory in Shaanxi Province. - more
• China - It is reported that Taiwan’s Walsin Lihwa is going to invest USD 700 million at Wujin in Changzhou in China to build up its new stainless plant. The construction project will be started in October and it will be commissioned in 2011. - more
• Papua New Guinea - Illegal Chinese immigrants are allegedly entering the country in large numbers in shipping containers bound for the Ramu nickel mine. - more
• China - China customs on its website posted that China exported 4.16 million tonnes of finished steel products in March 2008 up by 33.8% YoY. - more
• China - China's demand for steel products may top 520 million tonnes in 2010, an official with China Metallurgical Industrial Planning and Research Institute (CMIPRI) predicted on Monday. - more
• Scrap - Although the adage says that what goes up must come down, soaring scrap prices may never return to previous levels, according to Canaccord Adams analyst Eric Glover. - more
• World - World steel demand is expected to grow strongly this year, despite concerns about the performance of the US and European Union economies, according to the industry's world body. - more
• China - Construction will halt, heavy industries will close, and even spray painting will stop in order to clean Beijing's polluted air for the Olympics — an issue that suddenly has taken a back seat to political protests. - more
• England - Overview of Xstrata Success, 2008 - pdf here (primarily for stockholders, but contains interesting stats)
• Courtesy AISI - "In the week ending April 12, 2008, domestic raw steel production was 2,134,000 net tons while the capability utilization rate was 89.4 percent. Production was 2,113,000 tons in the week ending April 12, 2007, while the capability utilization then was 88.3 percent. The current week production represents a 0.9 percent decrease from the same period in the previous year. Production for the week ending April 12, 2008 is up 1.6 percent from the previous week ending April 5, 2008 when production was 2,099,000 tons and the rate of capability utilization was 88.0 percent."

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 864 tonnes = 52,038 tonnes (1.49% - 774 tonnes cancelled warrants/ 51,264 net stock level) (charts)
•   Shanghai Jinchuan nickel - 239500-240500 RMB/t, plus 750  (charts)

• Official LME nickel closing prices - cash - $12.97/lb 3 month buyer - $13.02/lb (9.32% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 72 to 7,961. (chart)
• LME nickel inventories - plus 60 tonnes into Gothenburg, Sweden warehouse, minus 378 tonnes from Rotterdam, Netherlands warehouse, minus 24 tonnes from Singapore warehouse, minus 36 tonnes from Baltimore, MD, USA warehouse
• Dow Jones - "The Reuters/University of Michigan consumer sentiment survey for the middle of April saw the overall index decrease to 63.2, from 69.5 in March, with high food and fuel prices to blame. The index was last that low in 1982." For the most part, metals, both precious and base, backed off a little today. We will see the Producer Price index released in the US tomorrow,  followed by the Consumer Price Index on Wednesday, which could bring inflationary concerns back into the media spotlight. Brazil announced it has found what could be the largest oil reserve discovered in the last 30 years. We expect China to offer to buy the entire country of Brazil any day now. Ok maybe not. But Brazil is proving it is destined to become a major economic force in the 21st century.
• MF Global has technical support for nickel at $27,800 and we would place a very important, yet weaker technical support at $28,500/tonne ($12.93/lb). Traders are trying desperately to stay above this level, and if they are successful, we could see the sentiment shift from nervous and pessimistic, back to optimistically nervous. If they fail, we could very well see MF's strong support level tested within a few days. This Wednesday is "third Wednesday prompt" which sometimes causes traders who have bet long, to make an attempt to catch their short trader counterparts, short. Nickel bucked the down trend today, and ended the day at $13.11/lb ($28,900/tonne)
• Closing Metals Report - more

  Commodity Comments

• Copyright/Courtesy Dow Jones - "The selloff in Chinese equities and bearish tone out of G7 seem to have spooked trading in Asia overnight, dampening sentiment toward base metals, says BNP Paribas analyst David Thurtell. In January, February base metals moved higher when equities sold off as people sought better relative value plays. However power problems in South Africa at this time could have been behind LME metal strength, so it's difficult to tell how LME metals will react to equity market weakness seen this week. A sharply downward turn to leading indicators in China and the Central Bank governor indicating a monetary tightening policy does not bode well for metals demand at current near-record prices."

  News Bites

• Russia - So who is the largest producer of nickel in the US? In 2007, it was Norilsk Nickel at 289,000 tonnes. Second place went to Vale with 226,000 tonnes. And BHP rounded out the top 3, with 136,000 tonnes.
• Japan - NSSC follows EU stainless steel producers and accepts 55% price increase in ferrochrome. According to insiders, this will mean stainless containing 18% chromium, will increase in price by 28800 yen per ton (approx $284/tonne).
• China - China's largest producer of nickel has decided to build a factory to manufacture austenitic stainless steel with a capacity of 400000 tons per year.
• United States - US Open Market Prices from last week - Ferrochrome (Cr = 60-65%) $2.25 - $2.35/lb Ferrochrome (Cr = .05%) $5.10 - $5.20/lb Ferrochrome (C = .1%) $4.90 - $5.00/lb
• China - Tsingshan Holding Group Corp. could commission a 300,000-tonne-a-year nickel pig iron operation in Fuan City, Fujian province by years end
• United States - Stainless and Nickel Alloys, a division of ArcelorMittal, today announced a new partnership for North America. Centric Alloys will be the U.S. sales and distribution channel for the nickel alloy bar and wire rod products supplied to the North American market. - more
• China - Sales of laterite nickel ore for use in the production of pig nickel is stabile, along with prices. Chrome ore prices, on the other hand, continue to escalate.
• Australia - IT IS not just mining giants BHP Billiton and Rio Tinto getting rich from the resources boom. Full-time mining workers are, on average, making just over $90,000 a year, an increase of more than 7% in the year to August 2007. - more
• Philippines - The Philippines' mining sector is expected to grow five-fold over the next four years, Environment and Natural Resources Secretary Joselito Atienza said Friday - more
• Canada - In 2008, for the first time in human history, more than half of the global population will be living in cities. - more
• Tires - On the plant floor at RDH Tire & Retread in Cleveland, N.C., about 60 workers do nothing all day but retread giant tires that have come off of mining equipment—giant meaning 12 feet tall, 40 feet around, and 13,000 pounds - more
• New Product - EnduraMet 32 stainless, a new grade of high-quality, low-nickel reinforcing bar (rebar) is now available as a lower cost alternative to stainless Alloy 2205 and AISI 316LN. - more
• Double Take - "China National Nuclear Corp (CNNC), the biggest nuclear power plant builder in China, is looking for Canadian acquisitions or partners to help enrich uranium reserves and its plans to sell reactors in North America, Shanghai Daily reported." - more (opinion - how the world has changed) and "China's foreign debt amounted to US$373.62 billion by the end of 2007, up 15.68% over a year ago, said the State Administration of Foreign Exchange (SAFE) on Wednesday." - more

From Nov 2007 INSG presentation pdf here

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.03/lb . Nickel recently took a $700/tonne jump, but has since backed off.
• Bloomberg - more

  Reports

• Fortis Metals Monthly April 2008 - pdf here
• Haywood Securities Metals & Mining - pdf here
• GFMS Nickel Market Analysis - here
• New Cantech Molybdenum Monthly - pdf here

  Commodity Comments

• Ed Meir's Morning Comments - "Metal prices finished slightly higher on Friday, except for nickel and ali. ...It is a far different story this morning in metals, where we are sharply lower in light of a stronger dollar (now at 1.5650 against the Euro). The greenback is rising in light of weekend remarks made by the G-7 suggesting that the dollar's decline is of increasing concern to the group. In their communiqué, the G-7 stated, “Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability. We continue to monitor exchange markets closely, and cooperate as appropriate.” The last sentence is what has presumably made currency markets nervous, as it suggests that the possibility of coordinated intervention --something we alluded to in recent commentary-- cannot be ruled out. In addition to weaker base metals prices, we are seeing energy and precious metals off today as well, while equity markets are wobbly after the US weakness seen on Friday....For the time being, we expect metals to continue to take their cue from the dollar. Certainly, today’s move higher in the greenback is unlike other snap-backs, as the G-7 statement will be viewed as a “shot across the bow” which dollar bears (and metal bulls) may find hard to brush off. Metal rallies could therefore, be more tempered than what we have seen in the past, as the reliable dollar “prop” is now vulnerable....Nickel is at $28,500, and unchanged, but prices seem to be drifting down to set up a test support at $27,800 on the charts (red line); this is quite a change from last week, when the complex was on the verge of taking out a down-channel and moving higher.

  Nickel price predicted to be drop in Q3 this year

• Mr Liu Boya an analyst of Macquarie Bank said in a meeting that nickel price predicted to be drop in the third quarter this year.Mr Liu Boya an analyst of Macquarie Bank said in a meeting that nickel price predicted to be drop in the third quarter this year. - more

  News Bites

• Colombia - "Colombia's ferronickel exports reached US$1.68bn in 2007, up 51.8% over 2006"
• India - Amid concerns that the government may curb exports to contain rising inflation, stainless steel makers today said there is no dearth of the commodity in India and as such they should not be treated at par with carbon steel industry which is facing flak for raising prices. - more
• Japan - The extraordinarily risen price of low carbon ferro-chrome has at last resulted in having exceeded that of chrome metal. Therefore, in order to cope with scarce cargoes and soared price of low carbon ferro-chrome, special steel mills of Japan are moving to purchase low grade chrome metal produced in China as a substitutive material for low carbon ferro-chrome ( to use for adjustment of Cr content ). - more
• New Caledonia - New Caledonia’s Kanak Rheebu Nuu group has set up a totem pole on a sand bank in the lagoon surrounding the main island in a bid to firm up its opposition to the Goro Nickel project. - more
• Russia - Russia's richest man, Oleg Deripaska, is gearing up for a legal battle against Arsenal shareholder Alisher Usmanov and another rival oligarch for control of the world's largest nickel and palladium miner, Norilsk Nickel. - more
• IISI - The International Iron and Steel Institute (IISI) forecasts 2008 will still be another strong year for the steel industry with apparent steel use rising from 1,202 million metric tons (mmt) in 2007 to 1,282 mmt in 2008, an increase of 6.7%. New projections for 2009 suggest a global growth rate of 6.3%. - more
• Australia - Just as the Arabian tale tells of a sheik lost in the desert who would trade his kingdom for a glass of water, steel mills appear to be prepared to pay whatever it takes to meet their needs for coal and iron ore. - more
• Indonesia - Indonesia plans to limit the area that metal and coal miners can explore to prevent domination by a few companies, a legislator said on Monday, a move analysts said could hurt already poor levels of investment. - more
• England - Today, Metals Forum announced the appointment of David Baron as chairman of the 12-strong trade association alliance representing the metals industry. - more
• Russia - Keynote welcome address by Denis Morozov, General Director, MMC Norilsk Nickel, at the EuroNickel Conference, Moscow, 8-9 April 2008 - pdf here

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 378 tonnes = 51,174 tonnes (1.48% - 756 tonnes cancelled warrants/ 50,418 net stock level) (charts)
•   Shanghai Jinchuan nickel - 238500-240000 RMB/t, minus 2000   (charts)

• Official LME nickel closing prices - cash - $12.92/lb 3 month buyer - $13.06/lb (9.66% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 66 to 7,889 (chart)
• LME nickel inventories - minus 18 tonnes from Liverpool, England warehouse, minus 240 tonnes from Rotterdam, Netherlands warehouse, minus 72 tonnes from Tyne & Wear, England warehouse, no inbound recorded
• Three month nickel ended the day and week at $12.93/lb ($28,500/tonne) Strong support is at $27,800/tonne, although nickel is presently at a weaker support level.
• Closing Metals Report - more
• Video - Carnegie Mellon Professor Randy Pausch recently delivered a one-of-a-kind last lecture that moved an overflow crowd at Carnegie Mellon. Dying of pancreatic cancer, Professor Pausch's inspiring 75 minute lecture has been watched by millions on Youtube. It's worth watching. Video here Have a safe and restful weekend.

  News Bites

• Brazil - "Brazilian mining giant Companhia Vale do Rio Doce SA, or Vale, plans to invest $2.1bn in projects to generate electricity by 2011. Tito Martins, Vale's director for corporate affairs, said the company already has invested $760m in producing electricity for its own sites." Vale's plans are focused on raising output from coal-fueled thermoelectric plants, Martins said.
• Colombia - BHP reports the 33 day strike at Cerro Matoso cost it 6,000 metric tonnes of nickel in production and $100 million dollars in revenue
• South Korea - South Korean steel maker POSCO posted a forecast-beating 5-per cent rise in quarterly profit on Friday, as higher steel prices helped it offset rising costs and weak sales of stainless steel products.
• Investor - Natural-resources mutual-funds have outperformed every other fund category over not just three or five years, but 10 and 15 years as well. To make good money, all a resourceful fund manager needed was a stake in commodities, energy, coal, industrial metals and other assets that are hard to get and in demand. - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.07/lb . Nickel appears to be meandering this morning, looking for a direction. Strated down, then moved into the green, and has now drifted back into the red.
• Bloomberg - more

  Commodity Comments

• Ed Meir's Morning Comments - LME prices staged a significant reversal yesterday, but again, there was little in terms of sector-specific news behind the decline. Rather, we believe the retrenchment was part of a general commodity selloff that set in when the dollar recouped its earlier losses after the release of some minor macro statistics out of the US....This morning, other metals are generally higher (except for zinc) on the back of a weaker dollar, which is apparently not seeing any support coming out from the upcoming G-7 meeting this weekend. Lots of Chinese date was also out today, but not having much impact on price....We will have to wait and see what the rest of the day brings, but today's modest price rise in metals could fade as the day wears on. For one thing, the dollar could see some relief as we head into the weekend ahead of the G-7 meeting, while a soggy opening on Wall Street (courtesy of a big miss by General Electric in its quarterly and yearly earnings) could also hit metals via weaker equity markets. The stronger monthly Chinese import data, at least so far, seems to have failed to deliver, as imports alone cannot allay concerns about the strength of Chinese end-user demand. This is partly reflected by the continued pressure we see in the arbs (see our charts prepared by our Hong Kong Officer at the end of our reports). It is quiet on the macro front today, with only US confidence readings scheduled for release....Nickel is at $29,200, up $200. Our charts show that the downchannel that was on the verge of being taken out yesterday, held after all, as earlier gains above the line fizzled. We expect a slight retracement from here.

  China Molybdenum Expects Supply Shortfall to Last

• China Molybdenum Co., the nation's second-biggest producer of the metal used to toughen steel, said a global shortfall will last for three years because of rising demand for corrosion-resistant oil pipes. - more

  News Bites

• China (courtesy Rusmet) - Production of stainless steel in China on the basis of the current year will grow by about 25% to 9 million tons. Jiang told a Sinfan, President Tsingshan Holding Group, the largest private producer of stainless steel in the country. "Production of nickel iron in China maintains stable growth in production of stainless steel. This will be facilitated by the growth of domestic consumption and 10% a year" - Sinfan said Jiang. 
• Zambia - Zambia's Munali nickel mine will produce its first concentrate this month and plans to raise annual output by 20 percent to about 10,500 tonnes at full production in 2009, the mine's owners said on Thursday. - more
• Forecast - Commodity prices will rise from this year's records as producers battle to meet demand buoyed by China and other emerging economies, Barclays Capital forecast. - more
• Venezuela - President Hugo Chavez said Thursday that his government has approved funding to build an iron and nickel foundry with Cuba. - more
• Base Metals - China and India led the world in consumption of aluminium, copper, nickel, lead and zinc in 2007. This year, demand is expected to rise further despite a looming U.S. economic recession. - more
• China - (courtesy China Mining) - China's crude steel output is estimated to reach 520 million to 540 million tons in 2008, an increase of 30 million to 50 million tons, or 6.3 percent to 10.4 percent, over the figure for 2007, said Luo Bingsheng, vice-chairman of China Iron & Steel Association here Thursday."
• Brazil - After a spectacular takeover of Corus, Tata Steel has made a hostile offer to acquire Brazilian iron ore miner AVG, which is owned by global mineral giant MMX. - more
• India - India unveiled details of a new mining policy aimed at opening this resource-rich country to increased private investment in mineral exploration and production. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 330 tonnes = 51,552 tonnes (2.20% - 1,134 tonnes cancelled warrants/ 50,418 net stock level) (charts)
•   Shanghai Jinchuan nickel - 240500-242000 RMB/t, minus 2250   (charts)

• Official LME nickel closing prices - cash - $13.35/lb 3 month buyer - $13.45/lb (12.93% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 63 to 7,823 (chart)
• LME nickel inventories - minus 18 tonnes from Chicago, IL, USA warehouse, minus 120 tonnes from Rotterdam, Netherlands warehouse, minus 48 tonnes from Tyne & Wear, England warehouse, no inbound recorded
• Three month nickel ended the day at $13.38/lb ($29,500/tonne) but was sliding during the last half of day.
• Closing Metals Report - more

  News Bites

• USA - David A. Hartquist, Counsel to the Specialty Steel Industry of North America (SSINA), will discuss China and Cuban nickel; Chinese government subsidies to stainless producers; China's manipulated currency; the outlook for antidumping and countervailing duty cases against China; and the Doha Round of WTO negotiations during the session, "Stainless Supply Outlook" at the American Metal Market Stainless & Its Alloys Conference in Pittsburgh, Pennsylvania. - more
• USA - DJ US Feb Nickel Imports -7.2% From Jan-Apr 10 - more
• USA - DJ US Feb Nickel Exports -5.6% From Jan, +55.0% From Yr Ago - more
• Australia - Cia. Vale do Rio Doce, the world's biggest iron-ore producer, Xstrata Plc and global competitors will study acquisitions in Australia, spurred by record metal prices, UBS AG said. - more

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

• (we are a little early this morning - busy day ahead) Indications at 7:30 am CST show 3 month nickel selling up by $.09/lb . After an early morning gain, nickel fell back into the red for a moment, before starting another move up.
• Bloomberg - more

  Commodity Comments

• Ed Meir's Morning Comments - "Metals rebounded sharply yesterday, working off early losses and starting a steady climb over the course of the day. There was nothing sector-specific to spark the advance, and even an unexpected strike at Chile's Codelco Norte division lasted barely a day before being called off....It was interesting to note from yesterday’s action that neither a weaker US equity markets nor gloomier macro forecasts did anything to stop yesterday’s advance. In the latter case, the IMF said yesterday that world economic growth will slow to 3.7% in 2008 and 2009, a full 1.25% lower than last year. The downturn will be led by the US, which the IMF believes will go into a “mild recession” this year. Asia’s growth is expected to decelerate to a still strong 7.5% in 2008 compared with 9.1% last year. Growth in China is projected to moderate to 9.3% in 2008, while India is expected to expand by 7.9% in 2008. Growth in South Korea, Taiwan, Hong Kong, and Singapore is expected to slow by about 1.5% to 4% in 2008 before reviving in 2009. More ominously, the IMF sees a 25% chance of a worldwide slump, and said that the US authorities should do more to do fight growing weakness, while also calling on the ECB to lower rates. This morning, we are sharply higher once again in base metals, as a weaker dollar is boosting the overall commodity complex higher. Both tin and copper are on the verge of sailing into record territory, pulling the group higher in their wake....Nickel is at $29,850, up $500; Our charts show that the downchannel could be on the verge of being taken out, and this could possibly lead to an advance towards the top end of the trading range (i.e. toward the $32,000-$33,000 mark)."
• Forecast - (equal time to yesterday's bubble theory) Commodity Bull Ready to Charge Again- more
• Singapore - (interesting photo) Adrian Douglas, GATA Bureau Chief in Jakarta to Angoracom forum - I flew from Kuala Lumpur to Jakarta this weekend. I was completely gob-smacked by the flotilla of tankers and cargo ships lining up to get into the Singapore port. I took this photograph from the plane. For as far as the eye can see there are ships and you can hardly put a pin between them. It was a phenomenal sight. I think we can surmise that that the Asian economy is NOT on the verge of recession! - photo here

  News Bites

• New Caledonia - There is a warning in New Caledonia that demonstrators could turn violent if the mining company, Goro Nickel, restarts work on its waste pipe. - more
• China - The Hebei Development and Reform Commission (Hebei DRC) announced last week that it is set to suspend production at a total of 42 polluting enterprises in the province, in preparation for the 2008 Beijing Olympic and Paralympic Games.- more
• China - Golden Phoenix Minerals, Inc. reported today that Asia's top producer of molybdenum has said that worldwide prices will remain high due to strong demand around the globe. - more
• China - It is reported that the first self-made 220×1,600mm stainless arc-shape slab continuous casting machine has produced the first tap of billet at Taishan Iron and Steel Group, which lies in province Shandong, the east of China. The single-strand caster has a capacity of 800,000 tonnes per year. - more
• India - Seeking to allay apprehensions of steel industry on iron ore availability, the Mines Ministry on Thursday said the country has enough ore to last for 200 years and mineral-rich states would not lose their say on allocation of mines in the New Mineral Policy 2008. - more
• South Korea - South Korea's POSCO, the world's fourth-biggest steelmaker, raised its prices by as much as a fifth on Thursday as it seeks to pass on soaring raw material costs, but its shares fell as the market had expected a bigger price increase. - more
• Australia - BHP Billiton Ltd. said Thursday it is not aware of any move by China to take a substantial stake in the miner, responding to a media report that helped boost the company's shares one day ago. - more
• CRU - A new analysis by CRU predicts that iron ore prices, at all-time highs this year, will trend down after 2009, when supply matches up with demand. And after 2010 "prices will fall off moderately, but they won't necessarily drop dramatically," said Helen O'Malley, consultant in steelmaking raw materials at CRU.
• China - According to the customs-statistics released in China, the imports of chrome ore into China in February of 2008 were as per the table attached hereto. - more
• Platt's - The rise in ferrous scrap prices is turning the traditionally regional US processing industry into a global one. US processors are shipping larger quantities of scrap to more customers over greater distances than before.
• India - Indian Metals & Ferro Alloys Ltd (IMFA), India's largest producer of ferro alloys, recorded a 31% increase in ferro chrome output at 169,947 tonne, an all-time record, for the year 2007-08 compared with 129,848 tonne during the previous fiscal. IMFA's good show coincides with a bullish outlook for alloy on the back of strong demand. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 186 tonnes = 51,882 tonnes (2.66% - 1,380tonnes cancelled warrants/ 51.696 net stock level) (charts)
•   Shanghai Jinchuan nickel - 242500-244500 RMB/t, plus 3000   (charts)

• Official LME nickel closing prices - cash - $13.11/lb 3 month buyer - $13.22/lb (10.1% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 6 to 7,760. (chart)
• LME nickel inventories - plus 24 tonnes into Gothenburg, Sweden warehouse, minus 12 tonnes from Rotterdam, Netherlands warehouse, minus 18 tonnes from Baltimore, MD, USA warehouse
• When we posted out morning briefing there was a difference in the direction precious and base metals were trading. Now, both classes of metals are trading in the green, thanks in part, to the Dollar trading lower. The commodity bubble buster theorists are back in force today, and we have posted a couple of the better written below. We have a hard time buying into this theory, primarily because we were so wrong during the first three years of this bull run. If nickel prices were to fall back to January 1st levels, a 10% drop, we would not classify this as a bursting bubble. And there really is no reason to believe they will fall back any further than that for the foreseeable future. As we have said repeatedly, it our firm belief that the nickel market has not been held captive to strict supply/demand parameters for sometime now. And while we agree with the author who states nickel prices are 20% more than justified, we also have accepted the fact, that with fund money looking for a home, this in itself will keep the price higher, until the supply/demand picture becomes so obscene, the market will have no reason to justify itself. That, or the equity market suddenly becomes so outrageously attractive, much of the fund money starts to divert itself. It's a new world, new economics, and new rules. Fund brokers used to trade government retirement funds and wealthy people's money. These days, they have billions of individual retirement funds to invest. This money has to go somewhere, and right now, with so much uncertainty in the air, commodities offer an attractive option. As stainless steel users, we can afford to hope the bubble busters are right someday. But as 'seasoned' stainless steel users, we have learned to take these types of theories with a grain of salt. For today, three month nickel ended stronger, closing at $13.31/lb ($29,345/tonne)   
• Closing Metals Report - more

  Commodity Comments

• Copyright/courtesy Dow Jones - "LME base metals prices over the coming months are likely to be "choppy to weaker," with sliding US economic and financial market conditions dictating sentiment, says ANZ. However, says currency markets are likely to provide good support for metals, "as it is too early to call a floor in the US dollar....Adds nickel could be the positive surprise on signs stainless steel order books in Europe and Asia are returning to normal levels after a drop off in demand in 07."

  News Bites

• Forecast - Commodity prices are unsustainably high, and the bubble is about to burst. The day of reckoning is not far off. Our best estimate is that the balloon will deflate by midsummer. - more
• Forecast - For once in history, Russia appears to be on the right side of a global price trend. As one of the world's major producers of commodities -- not least oil and gas -- the country is reaping a windfall as commodity prices soar worldwide. - more (comment - this article approaches the question from a different perspective)
• Kazakhstan - Eurasian Natural Resources Corporation, the world's biggest producer of ferrochrome and a major iron ore exporter, reported record results today, with profits up 36% in 2007. - more
• China - Tensions between Australia and China are set to rise as Kevin Rudd arrives in Beijing today amid revelations that China is preparing to buy a multi-billion-dollar stake in BHP Billiton - more
• Russia - Norilsk Nickel, Russia's largest nickel, copper and precious metals producer, is creating its own fleet of up to five vessels which will carry 1 million metric tons of cargo a year beginning in 2009, the company said Wednesday.
• Russia - Norilsk Nickel's shareholders voted to retain the company's current board of directors Tuesday, striking a further blow to the chances that Oleg Deripaska's United Company RusAl will succeed in acquiring Mikhail Prokhorov's blocking stake in the firm. - more
• USA - Watts Water Technologies Inc. said Wednesday it has agreed to acquire Blucher Metal AS, a Danish company that makes stainless-steel drainage systems, for $183 million.
• India - During the Cold War, leaders from China and India liked to polish their Third World cred by emphasizing their ties with countries in Africa. - more

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

• Indications at 7:50 am CST show 3 month nickel selling up by $.14/lb . Interesting mix this morning. As of 7:50 am CST, all base metals are trading in the green, while all precious metals are trading in the red. Nickel was quiet until the last hour, when it started stretching its legs, and as of our update time, the gains appear to be holding.  
• Bloomberg - more
• Forbes - more

  Reports

• Rand Merchant Bank Base Metal Weekly - pdf here
• Rand Merchant Bank Base Metals Monthly - pdf here

  Commodity Comments

• Ed Meir's Morning Comments - A slightly stronger dollar weighed on a host of commodity complexes yesterday, with oil and precious metals all lower. In the case of base metals, copper was down the most, as an advance to near-record highs earlier in the week failed to gain much traction, leading to a round of profit-taking instead. This morning, we are off to a very quiet start, with most complexes slightly lower, with the exception of ali, which is up slightly. The Shanghai overnight session was equally subdued, and there were no major surprises in any of the stock data....The dollar is slightly weaker today, and in the absence of any major metals news, its fluctuations should continue to set the trading tone for a variety of commodity complexes, base metals included. In this regard, central bank interest rate decisions out throughout the week could set the pace for the greenback....Nickel is at $28,850, down $25, and quiet; we are still neutral on the complex, pending more direction on the charts."
• Scotia Capital China Update - "Over the past two months, amid the snowstorms in China, we kept pointing out that China’s economic activities are likely to rebound sharply in early spring, when weather conditions improve. We had forecast two drivers for the rebound – rebuilding efforts for the snowstorm-damaged infrastructures and, more importantly, new construction project launches funded by the huge new loan additions registered in January 2008. It looks like our call for a spring revival has turned out to be correct.....On sectors, we are now bullish on the coking coal, iron ore, copper, zinc, aluminum, molybdenum, oil, methanol, DAP, urea, soybean, and hardwood pulp sectors. We are neutral on wheat, corn, potash, ethylene, steel, and nickel. We are cautious on paper products on a relative basis from a China perspective."

  Price Of Low Carbon Fe-Cr For Shipments To Japan In Q2 / 08 Is Settled By Doubled Rise

• The negotiations with Japanese consumers on price of low carbon ferro-chrome for shipments in April - June quarter of 2008 have finished by the end of last week and, reflecting the soared price of this ferro-alloy in Europe, the price of low carbon ferro-chrome for Japan has been settled by a rise of about 2 times compared with that in the preceding quarter of January - March. - more

  News Bites

• South Africa - South Africa's ferroalloy producer Samancor plans to restart smelting operations at its IC3 ferrochrome production plant in South Africa in May or June, a source close to the company said Wednesday. - more
• South Africa - It is reported that Minmetals Development, a listed subsidiary of Chinese trading house and steel mill equipment supplier Minmetals Group, plans to acquire exploration rights to the Naboom ferrochrome mine in South Africa at a cost of USD 6.5million. - more
• China - Reports that China may soon move to acquire stake in Australian mining giant BHP Billiton on order to block a merger with Rio Tinto caused a buzz in the market today, with insiders revealing that the task will likely fall on a Chinese company already involved in mining projects in Australia. - more
• China - A source close to top management at China's Baosteel Group said on Wednesday he was not aware of any move to buy a stake in global miner BHP Billiton  - more
• Russia - The $60 billion battle for control of Norilsk Nickel is beginning to resemble a Politburo power struggle as some of Russia’s most powerful men manoeuvre against each other. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 6 tonnes = 52,068 tonnes (2.18% - 1,134 tonnes cancelled warrants/ 50,934 net stock level) (charts)
•   Shanghai Jinchuan nickel - 239500-241500 RMB/t, minus 500   (charts)

• Official LME nickel closing prices - cash - $12.89/lb 3 month buyer - $13.00/lb (9.33% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 13 to 7,757. (chart)
• LME nickel inventories - plus 102 tonnes into Genoa, Italy warehouse, minus 18 tonnes from Rotterdam, Netherlands warehouse, minus 24 tonnes from Chicago,  IL, USA warehouse
• While metals were generally weaker in early London trading, the announcement that "(courtesy Forex)U.S. pending home sales index, a key indicator of future sales, slumped to 84.6 in February from 86.2 in January, the lowest point in the current housing downturn and well below forecasts for a slight increase to 86.3" initially hurt the dollar, which generally helps metals. But as the dollar calmed down, traders turned their attention to this afternoon's release of the US Federal Open Market Committee minutes, and  metals returned to their negative posture. The warning by the IMF that said global credit losses could total $1 trillion dollars also sobered markets. While down for the day, nickel recovered much of its early morning losses, and appears to be trying to establish a new support level. MF Global still has strong support at $12.61/lb, so if you follow the markets based on charts, there is still more room for the price to fall. While the last two days have been down, they have ended with strong afternoon rebounds. A candlestick chart analysis, while showing a downward trend, could be read as giving a nickel investor cause to stand ready for a stronger buy signal. Trading computers are apparently picking up on weaker support levels, reflecting the PM rebounds. On the other hand, if the market is unsuccessful in staying in the range of the last two days, we could see MF Global's support level become a reality. Next Wednesday is Third Wednesday and traders love to catch their counter parts short. For today, three month nickel ended down at $13.08/lb ($28,850/tonne)   
• Closing Metals Report - more
• Watch a History Channel documentary on the attempted overthrow of President Roosevelt by the super wealthy of America - video here (more)

 From Friday's ISSF Report

• Opinion - There have been lots of news stories on the ISSF report that came out last Friday, but very few are covering a key part of this report. At the bottom of the report (here) the writers touch on the shift from nickel laden austenitic to manganese laden austenitic and 400 series martensitic stainless steel during 2007. From the first quarter of 2007, to the final quarter, production of 300 series, the grade that uses the most nickel, shifted from a 65.7% market share, down to 50.7%. 400 series, using no to little nickel, saw its market share grow from 25% to 34.7% during the same period. And the new manganese 200 series, using less nickel, saw its share of the market, grow from 10% to 14.6%. Not only did stainless steel production fall in 2007 worldwide, but the share of stainless requiring nickel fell even harder.

  China and India driving world metal demand

• Demand for copper, zinc, aluminum, nickel and all other nonferrous metals has scaled new heights in the last four years. Prices have sky-rocketed and traders are turning in huge profits. This demand for 12 years has been driven by China and now also, in the last four years, by India. - more

  Global Stainless Steel Output Down, but China's Output Keeps Strong in 2007

• Global stainless steel production declined by 2.9% in 2007 compared to 2006, with only China and the wider Asia region increasing production last year, the International Stainless Steel Forum (ISSF) announced on April 4. - more

  News Bites

• China - Jinduicheng Molybdenum Group Co, Asia's top producer of molybdenum, expects prices of the metal to remain high due to strong demand around the globe, executives said on Tuesday. - more
• Finland - Russian metals company Norilsk Nickel plans to increase the capacity of its Harjavalta refinery in Finland to 66,000 tonnes a year in 2009, a senior Norilsk official said on Tuesday. - more
• India - BHP Billiton and Arcelor Mittal have agreed for a 220% hike in coal contracts. Media reports earlier suggested that steel companies may not accept that price hike. - more
• Russia - Norilsk Nickel shareholders ask where the cash for the new deal will come from - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.25/lb Except for palladium, precious and base metals are in trading in the red this morning. Tuesday is generally a busy news day for metals, so as we do daily, we have posted those we feel are relevant, or might be of interest to our stainless steel and nickel related readers. If you appreciate the news this free site brings you daily, please consider joining Duraloy and becoming a monthly sponsor.
• Reuters - more

  Reports

• Brook Hunt Nickel Monthly Report - here
• Monthly Moly Letter - pdf here
• TD Bank Weekly Commodity Price Update - pdf here
• Canada Commodity Price Update - pdf here

  Experts: Stainless steel industry cutting back nickel use

• The stainless steel industry is beginning to use less nickel for production and looking at new alloys to minimize use of the metal, sector expert Jairo Herrera told BNamericas. - more

  Commodity Comments

• Ed Meir's Morning Notes - "This morning, we are lower in most complexes. A weaker dollar, which has hit one week-lows against the Euro, is not doing much to boost the complex today either. Instead, the weakness we are seeing has been due mainly to a sluggish Shanghai copper market, which did not rally on the back of yesterday's strong LME move. In fact, the Shanghai discount to the LME continues to widen, further evidence of relatively weak demand conditions on the spot market....Nickel is at $28,430, down $600, and very quiet; we are still neutral on the complex here pending more definition on the charts."

  China SS output to rise by 23% in 2008 - Macquarie

• It is reported that an analyst with Macquarie Group Ltd said that China, the world's biggest producer of stainless steel, may raise output 23% in 2008 because of strong domestic demand and plant expansions. - more

  General Review Of Stainless Steel In 2007 And Its Outlook For New Year

• According to the official statistics compiled and released by the Ministry of Economy, Trade and Industry (METI), the total quantity of stainless steel products produced in Japan for the calendar year (January - December) of 2007 came to 3,494,000 tons, having increased by 4.1% compared with that (3,354,000 tons ) in the preceding year of 2006. - more

  News Bites

• South Korea - South Korean Posco announced to raise its domestic prices for austenitic and ferritic stainless products by 350,000-400,000 won/ton, and the new price will be effective from 14 April contracts. - more
• South Korea - POSCO, the nation's leading steel maker, is expected to raise prices of steel products as raw materials prices are going up. - more
• Russia - Russia exported in January-February 39,800 metric tons of nickel, 13% more than in January-February 2007, the federal customs service reported Tuesday. - more
• Japan - Japan imported 11,333 tons of stainless steel products in February, up by 10.2 percent from last month and below 45.3 percent than 20,751 tons in the same time of last year. - more
• South Korea - BHP Billiton is poised to win a tripling in hard coking coal contract prices from Japanese steel giant Nippon Steel after South Korean steel maker Posco confirmed it had agreed to a record price of about $US300 a tonne. - more
• Russia - Shareholders in the world's largest nickel producer, Russia's OAO Norilsk Nickel, have retained its board and voted against changes to the company's charter at an extraordinary general meeting, the company said. - more
• Russia - Russian financial holding Interros said on Tuesday it was prepared to consider buying the shares of metals giant Norilsk Nickel from billionaire Mikhail Prokhorov, if his deal with RusAl is cancelled. - more
• Scrap - High levels of steel scrap prices will push consumers to shift to using other materials such as pig or liquid iron, a senior industry figure said on Monday. - more
• Scrap - Rust, junk and bent metal are proving a rich seam for scrap merchants, the modern-day Steptoes who have become millionaires thanks to soaring metal prices and tightening of rules on recycling. - more
• Iron Ore - Global prices of metals and minerals, particularly those of iron ore, will continue to rise despite the current credit crisis and a potential growth slowdown, a senior industry official said Tuesday. - more
• Indonesia - Rio Tinto Group, the world's third- biggest mining company, said a $2 billion Indonesian nickel project may produce twice as much metal as estimated and a contract may be signed by midyear. - more (opinion - if the reports from Rio Tinto over the past years in regards to this mine are any indication of the credibility of this company, then stockholders would do wise to sell to BHP. Rio would do better not reporting anything on this supposed mine until they have actually started digging a hole in the ground.) 
• India - Criticising the Railways of hiking freight by almost 300 per cent in the last three years, the mining industry on Monday demanded a long term freight policy to make it more cost-competitive to enable miners contribute in containing inflationary trends within the economy. - more
• Courtesy AISI - In the week ending April 5, 2008, domestic raw steel production was 2,099,000 net tons while the capability utilization rate was 88.0 percent. Production was 2,113,000 tons in the week ending April 5, 2007, while the capability utilization then was 88.3 percent. The current week production represents a 0.6 percent decrease from the same period in the previous year. Production for the week ending April 5, 2008 is down 2.0 percent from the previous week ending March 29, 2008 when production was 2,144,000 tons and the rate of capability utilization was 89.9 percent.

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 60 tonnes = 52,074 tonnes (1.82% - 948 tonnes cancelled warrants/ 51,126 net stock level) (charts)
•   Shanghai Jinchuan nickel - 240000-242000 RMB/t, minus 250  (charts)

• Official LME nickel closing prices - cash - $12.98/lb 3 month buyer - $13.09/lb (9.9% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 4 to 7,741. (chart)
• LME nickel inventories - plus 1,170 tonnes into Rotterdam, Netherlands warehouse, minus 60 tonnes from Rotterdam warehouse, plus 1,008 tonnes into Singapore warehouse, minus 54 tonnes from Chicago, IL, USA warehouse
• Metals were mixed in early morning trading, but by late afternoon, except for nickel, were trading in the green. Nickel prices went negative from the opening, after LME reported two more large shipments came into their warehouses on Friday. They regained some of the earlier loss in late afternoon trading. In metals news, Mincor in Australia , Western Area, and Albidon in Botswana announced new nickel discoveries over the weekend, at least two of which were sulphide discoveries. Ferrochrome contracts for the second quarter have been formalized - up 60$ to $1.95/lb. China agreed to a 125% increase in thermal coal over the weekend, and Posco agreed to a 200%+ increase in the price of coking coal. This comes just a month after many producers agreed to a 65% increase in iron ore prices. Stainless prices are heading up. AK Steel published new surcharges for May - 304 up $.2158/lb over April, and 316 stainless steel up .2453/lb. Allegheny has yet to publish. Unless nickel or molybdenum tank in the next 3 weeks, and we wouldn't suggest holding your breath, we will see surcharges for June rise on iron and chrome increases. Three month nickel ended the day at $13.17/lb ($29,025/tonne)
• Closing Metals Report - more
• And a reminder from this morning, if you buy or sell steel or stainless steel of any type, you should read the notice we posted in this morning's briefing from a meeting of fastener distributors. For steel fastener consumers, some of the increases coming down the pike are staggering (30-50%) more.

  European Q2 ferrochrome prices jump 60 pct

• Contract ferrochrome prices in Europe for the second quarter of 2008 surged by 60 percent to $1.92-$1.95 a pound from the previous quarter on tight supply from biggest producer South Africa amid power shortages, producer sources said on Monday - more

  News Bites

• Zimbabwe - While the world waits for news about the outcome of Zimbabwe's elections, Zimbabwean newspapers at the weekend reported that Robert Mugabe's Zanu-PF planned to seize foreign-owned mines to win over votes. - more
• Germany - Outokumpu’s new identity, encapsulated in the slogan “Activating Your Ideas,” got its first physical manifestation at the company booths in the major international Tube & Wire 2008 trade fair in Düsseldorf, Germany (31 March – 4 April 2008).  - more
• South Africa - THE Competition Commission said yesterday it had imposed a R146m fine on scrap metal company New Reclamation Group for its involvement in collusion and price-fixing in the ferrous and non-ferrous scrap metal markets. - more
• Metal Center News - "Use of stainless in appliance designs continues to grow. “Demand for stainless kitchens probably won’t wane for a number of years,” says Wellnitz, who maintains that stainless steel’s highly adaptable, “brilliant neutral” look continues to be trendy, with no obvious substitute in sight. “Some people are talking about oil rubbed bronze, but I don’t think it will replace stainless. There are a lot of ways to utilize stainless and a lot of different finishes, including matte and finger-print resistant finishes.” - more
• Opinion - The price of metals has skyrocketed recently, but don't place all of the blame on investors' speculations. - more (opinion - this article does not express an opinion shared by all when it comes to nickel)
• USA (not metals related) - When Wall Street's almost 1,800 equity analysts figured U.S. earnings growth for the third quarter of 2007, they were 8.2 percentage points too high. Forecasts for the fourth quarter were wrong, too, over-estimating profits by 33.5 percentage points, the biggest miss ever. - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by $.31/lb . Two shipments of over 1000 tonnes each of nickel were received Friday into the Rotterdam and Singapore LME warehouses. If you by fasteners (bolts, nuts, screws, etc) of any material, you might find these notes from a recent meeting of fastener distributors interesting - pdf here
• Reuters - more

  Reports

• Haywood Security Metals & Mining - pdf here

  Nickel Falls in London as Stockpile Jump Indicates Weak Demand

• Nickel fell after stockpiles tracked by the London Metal Exchange rose to the highest in more than eight years, indicating demand hasn't yet recovered. - more

  Commodity Comments

• Courtesy Bloomberg - "Nickel demand has not recovered,'' Citigroup analysts including Craig Sainsbury in London said today in a report. "It seems more long-term demand destruction may have taken place.''
• Courtesy MarketWatch - "Goldman Sachs said it's taken an attractive view on the metals and mining sector, up from neutral, as it said prevailing high base and platinum group metal prices along with higher-than-forecast bulk metal contract settlements will lead to record cash flows this year.

  News Bites

• South Korea - Posco, Asia's third-biggest steelmaker, agreed to a tripling in benchmark contract prices for coal, setting a record for the steelmaking material after floods in Australia reduced global supplies. - more
• AK Steel - has advised its customers that a $405 per ton surcharge will be added to invoices for electrical steel products shipped in May 2008. - more  our surcharge page
• Top Steel Exporters - According to statistics from Iron and Steel Statistics Bureau, China having jumped from 5th to largest exporter in 2006, it recorded a further 33% growth in exports in 2007 to 65.2 million tonnes. - more
• China - It is reported that China will continue to exhibit strong demand for iron ore in next few years and would increase its share of consumption to 56% by 2011. - more
• China - It is reported that during the 9th Asian Ferro Alloys conference recently held at Hong Kong, the overall outlook for Asian ferroalloy demand was upbeat for the year 2008 especially with strengthening in Chinese demand. - more
• Japan - Xstrata, the world's largest thermal coal exporter, has settled thermal coal contracts with Japan's Chubu Electric for the business year starting this month at $125 a tonne, up 125 percent, a source close to the deal said on Monday. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 2,064 tonnes = 52,014 tonnes (1.41% - 732 tonnes cancelled warrants/ 51,282 net stock level) (charts)
•   Shanghai Jinchuan nickel - 240500-242000 RMB/t, plus 2250  (charts)

  National Mining Association MIning Week - pdf here

  It is reported that Mr Fu Zhongzhe GM of BaoSteel told a conference call that Baosteel has an action plan to turn round the net loss it made in its stainless steel operations last year. - more

  Due to the nickel price fluctuation, Taiwan’s Yieh United Steel Corp has announced to raise prices again in April. As a result, the domestic prices are increased by around TWD 2,000 to TWD 4,000 per tonne. - more

  A tie-up between the Russian metals giants Rusal and Norilsk Nickel may be in jeopardy after signs that the feuding oligarchs with large stakes in Norilsk may have settled their differences. - more

  Norilsk Nickel’s extraordinary meeting on Tuesday will be a key test of whether Vladimir Potanin, the Russian billionaire owner of Norilsk, has managed to settle his differences with his former business partner Mikhail Prokhorov and stay on top in Russia’s biggest takeover battle. - more

  A Power Generating Unit is being built in Moa to support the forthcoming production of ferronickel, a new item of the Cuban nickel industry. - more

  After the depressing margin loan revelations of the past week, we have been searching for something positive to report, and we think we have found it in what many may consider the most unlikely of places: Papua New Guinea. - more

  Kyodo News reported that negotiations between Nippon Steel Corp. and BHP Billiton are likely to result in a 210% spike in the price of coking coal in the next business year. - more

  BHP Billiton and Rio Tinto are to deliver a crippling blow to Asian steel firms this week by demanding a 200 per cent increase in coking coal prices that their customers will have no choice but to accept. - more

• Official LME nickel closing prices - cash - $13.03$/lb 3 month buyer - $13.11/lb (10.07% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 47 to 7737. (chart)
• LME nickel inventories - minus 72 tonnes from Rotterdam, Netherlands warehouse
• Bloomberg report - "The dollar fell against the euro and dropped the most versus the yen in a week as a report showed the U.S. lost jobs for a third straight month in March, increasing concern the economy is falling into a recession." With the falling dollar, metals, which were mostly quiet this morning, ended the day showing price increases. The US stock market appeared to be in a state of denial this week, rising on continual bad news. This, along with the bubble bursting forecasts last weekend, kept some fund money idle. Many had predicted a fresh batch of fund investments into commodities for the second quarter, but it has yet to materialize. While we would love nothing better than to think the Dow has turned bullish, we are afraid the enthusiasm seen on the markets this week, is doomed to falter as recessionary evidence grows.
• Two big reports out today and yesterday by ISSF and MEPS in reference to worldwide stainless steel production and demand. We posted the reports on their respective release dates, and Dow Jones gives a good abridged analysis under comments below. Nickel, which struggled early, started to climb after the U.S. jobs report was released, and the dollar slumped. Three month nickel ended the day at $13.25/lb ($29,200/tonne). For the week, three month nickel ended down 4%.
• Closing Metals Report - more
• Have a safe and restful weekend!

  Commodity Comments

• Dow Jones - Global stainless steel production fell 2.9% on the year to 27.6 million metric tons in 2007, with drops across most regions and countries except for China and the Asian region, the International Stainless Steel Forum said Friday.....ISSF estimates that the real use of stainless steel grew by 7% during the second half of 2007 despite a steep drop in production. The higher demand was met through a "massive stock draw, the likes of which has not been seen before," the forum said. - more
• Dow Jones - Global stainless steel production is likely to rise nearly 4% to 29 million metric tons this year compared with 2007 as Chinese demand continues to grow and the U.S. restocks its inventories, steel pricing and consultancy group MEPS said late Thursday....U.S. mills are also likely to produce more stainless steel than in 2007 after depleting their inventory levels, but MEPS doesn't expect production to reach the levels of the 2006 boom year. - more

  News Bites

• China - China's top steelmakers' association has warned Australian mining companies could face "revenge" for "aggressively" pursuing higher prices for iron ore, a report said Friday. - more
• Metallurgical coal - U.S. coal company Massey Energy Co said on Friday it expects metallurgical coal prices over the next three years to be significantly higher than it previously forecast and is raising spending to take advantage of the opportunity. - more
• Congo - Security forces in Democratic Republic of Congo's Katanga province have intercepted a truck transporting radioactive mineral ore bound for export, local authorities said on Friday. - more
• China - Jinchang, Gansu will build China's largest nickel production base network - poorly translated article here
• Kazakhstan - Kazakh metals major ENRC said on Friday it had completed a purchase of a controlling stake in Russian ferrochrome producer Serov for $210 million, its first acquisition as a public company. - more
• Investors - Investors in the mining sector may have been too busy salivating to notice, but metal commodity prices haven't been the only thing going through the roof. - more

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

• Indications at 7:50 am CST show 3 month nickel selling at no gain/loss . While metals are generally down this morning, nickel has recently bounced back to the price it started the day. Market sympathy appears bearish though. China markets were closed last night for holiday, but before they left, Chinese officials released more details on steel factory shut down's before and during the Olympics.
• Bloomberg - more

  Commodity Comments

• MF Global Ed Meir Morning Comments - "Metal markets seem to be torn between rallying on the back of a weaker dollar on the one hand, and selling off on those occasions when the realization sets in that slowing growth, (which is driving the dollar lower in the first place), has the potential to knock demand back. How this tussle eventually plays out remains to be seen, but we have been arguing for some time, (with limited success), that the demand component will eventually prevail and exert downward pressure on metals. This will be especially true if the US slowdown we are seeing starts to spread into Europe, Japan, and then on to Asian economies as we suspect it is now doing....nickel is now at $28,675, down $325; charts are not showing much apart from sideways trading; we still prefer being neutral on the complex.
• Dow Jones - Supply and demand factors remain price supportive for commodities even as "new fundamentals" add to gains seen in agricultural products, oil and base metals, Lehman Brothers commodities experts said Thursday. - more

  Nickel Heads for Weekly Drop on LME as Steel Mills Cut Usage

• Nickel headed for a weekly decline, the biggest among all metals traded on the London Metal Exchange, on speculation that stainless-steel producers will use less as they cut production and rely on stockpiles. - more

  2007 stainless steel production down after nickel-price collapse

• According to preliminary figures released today by the International Stainless Steel Forum (ISSF), global stainless steel production was 27.6 million metric tons (mmt) in 2007, a decline of 2.9% compared to 2006. - more (or in pdf)

  News Bites

• China - The Australian Financial Review reported that Chinese steel makers has confirmed boycotting some Australian iron ore imports and has also warned that Australia is jeopardizing billions of dollars in iron ore sales by pushing for large contract price rises. - more
• China - It is reported that China which plans to shut down factories in Beijing during the Olympic Games will also target other big time polluters in the neighboring municipality Tianjin as well as the provinces of Hebei, Inner Mongolia, Shanxi and Shandong. - more
• France - The Duval family, the top investor in French mining group Eramet, is seeking to free itself from a shareholder pact with French nuclear energy group Areva so that it can sell shares, Les Echos reported on Friday. - more
• Japan - (excerpt) While prices of low carbon ferro-chrome to be offered from Russia for shipments to Japan in April - June quarter were marked to see, a major supplier has proposed their prices. Namely, the prices of Russian low carbon ferro-chrome with carbon 0.1% max. as offered are in the range of US$4.65 - 4.75 per lb. of Cr CIF Japan and the negotiations to rise to these prices have commenced from this week. - more
• South Africa - A key industry consortium has described as "staggering" the impending demand for infrastructure in South Australia - home to the massive Olympic Dam mine - and deemed essential that its early development proceeds if the State is to fuel the prospective mining boom for at least the next two decades. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 72 tonnes = 49,950 tonnes (1.21% - 606 tonnes cancelled warrants/ 49,344 net stock level) (charts)
•   Shanghai Jinchuan nickel - closed for Qingming Festival overnight (charts)

• Official LME nickel closing prices - cash - $13.05/lb 3 month buyer - $13.15/lb (10.41% higher than 12/31/07) (chart)
• Baltic Dry Index - plus 35 to 7,690. (chart)
• LME nickel inventories - minus 12 tonnes from Rotterdam, Netherlands warehouse, minus 48 tonnes from Liverpool, England warehouse, minus 24 tonnes from Vlissingen, Netherlands warehouse, minus 120 tonnes from Tyne & Wear, England warehouse
• The employment report out of the US initially hurt equities trading, which in turn gave funds some motivation to put their money back into commodities. The bubble burst theory, that got so much media attention over the weekend, has so far panned out to be nothing more than a minor correction, and this could be inspiring fund money to take another look at commodities. The Institute for Supply Management's March report on the services sector proved better than forecast, with its non-manufacturing index rising to 49.6% in March, better than expected. Metals ended the day much similar to where they were this morning, a mixed bag. MEPS was positive on stainless steel growth this year (see below). Nickel ended the day a gainer, after some initial morning hesitation. Nickel inventories have slumped over the last two days, but have yet to fall back below 50,000 tonnes. Three month nickel ended the day at $13.11/lb ($28,900/tonne)  
• Closing Metals Report - more
• To our readers on the other side of this litle planet, have an enjoyable and restful weekend!

  Another Record Stainless Steel Output Forecast for 2008

• Global stainless steel production is still expected to reach a record level of 29 million tonnes this year. During the first quarter, most markets across the world have been quite soft. This was the result of unexpectedly large increases in steelmaking during the final trimester of 2007 in the EU and China. - more

  News Bites

• Japan - Japan has removed its import duty for high-carbon ferrochrome with over 4% carbon content effective from April 1, an official at the Ministry of Finance said Thursday. - more
• Rusmet - SMR Marcos Moll is quoted as predicting chromium prices may increase by 80% from today's level during 2008 at a stainless steel seminar in Dusseldorf.
• Brazil - Vale CFO Fabio Barbosa told reporters today that any deal to buy Anglo-Swiss mining group Xstrata "is dead."
• Brazil - Brazil's state development bank BNDES said on Tuesday it had approved 7.3 billion reais ($4.2 billion) in loans for mining giant Vale to invest in the country through 2012. - more
• Philippines - A Philippine government plan to draw in billions of dollars to revive a once-mighty mining sector could be tripped up by rising costs, competition and gloomy financial markets. - more
• Commentary - When it comes to metals, risky is the new safe. At least it seems to be for the fund managers that have invested millions in these volatile markets. - more

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

• Indications at 7:45 am CST show 3 month nickel selling up by $.05/lb . Metals are a mixed bag this morning, most lower. Nickel is bouncing around, in both the plus and negative columns, but appears to be favoring the plus side. It has traded as low as $100/tonne off yesterday's close so far this morning, and at one point, gained nearly $600/tonne in trading. Nothing of major supply/demand news value. BHP says it will be at least a month before its Cerro Matoso mine will reach full production. (note - US jobless claims was just released and is not good. (Copyright AP - The number of new people signing up for unemployment benefits last week shot up to the highest level in more than two years. It's fresh evidence of the damage to the national economy clobbered by housing, credit and financial crises. The Labor Department said Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29. The increase leaves claims at their highest point since Sept. 17, 2005. )
• Bloomberg - more

  Reports

• Standard Bank Market Comment - here

  Commodity Comments

• MF Global Ed Meir Morning Comments - "Some of yesterday’s excesses in metals are being rolled back today, with the dollar again being the prime reason for the move lower...The macro readings out of the US were mixed yesterday; U.S. factory orders fell a worse-than-expected 1.3% in February, although this was less than the 2.3% decline seen in January. Mortgage application volume also tumbled 28.7% in the week ending March 28, but the ADP payrolls report surprised to the upside, coming in at 8,000 jobs vs. an expected loss of 45,000. Later today we get initial jobless claims readings (expected at 365,000) and the February Institute for Supply Management index for the service sector, (expected at 49)....Nickel is now at $28,500, up $150, but like ali, nickel had a weak session yesterday despite the strength in copper; no change is detected in the sideways drift.
• MEPS - "It is now clear that the day of the non-nickel stainless steel has come. These grades will take a greater share of the market in years ahead. The LME nickel price hiatus through 2006 created a permanent change in the potential for ferritic grades. Nickel producers have lost a substantial volume of future business as a result." March 3, 2008

  Mills, buyers disagree on future of stainless steel prices

• USA - There is considerable debate about the future direction of stainless steel flat-rolled in the U.S. market. AK Steel this week says it plans to increase transaction prices for stainless steel sheet, strip and continuous mill plate products by adjusting the functional discount rate, which will equate to an increase in base prices of approximately 4% to 6%, depending on the grade. - more

  China Commodities Weekly - Shortage of chrome and coke expected to result in further growth in stainless costs

• Last week, Macquarie attended the 9th Asian Ferro Alloys conference held by Metal bulletin in Hong Kong. Overall, the outlook for Asian ferroalloy demand was upbeat for the year 2008, especially with strengthening in Chinese demand.- more

  News Bites

• Papua New Guinea - "The junior partner in Papua New Guinea's new Ramu nickel mine has defended it from accusations it will harm the local people and environment." - more
• Colombia - "BHP Billiton Ltd/Plc's Cerro Matoso nickel mine in Colombia could need about a month or more before returning to full production following a month-long strike, a company spokeswoman said on Tuesday." - more
• USA - Driven by rising natural gas costs, North American Stainless Inc., will introduce energy surcharge on its products.
• USA - Reliance Steel & Aluminum Co. has purchased Dynamic Metals International LLC for an undisclosed amount. - more
• Philippines - The Berong Nickel Corp. (BNC), a mining company operating a large-scale nickel ore extraction project in the southern municipality of Quezon in Palawan, had criticized its host local government unit for claiming the company was covering up the environmental damages created by the mining project. - more
• Commentary - IN an operational sense, metallic ore can be defined by the cut-off grade; i.e. the concentration of the primary metal in a rock that means it can be mined economically, given of course many other parameters such as equipment capacity. - more
• Europe - In the context of increased steel price volatility, mills will have to move towards floating benchmark-based pricing and disclose details of raw material purchases, a senior executive at wind turbine maker Vestas told Platts Monday. - more
• USA - US ferrous scrap prices jumped this week as steel mills stepped up to make April purchases in a fast-changing market characterized by continued supply tightness and strong export demand. - more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 204 tonnes = 50,022 tonnes (1.15% - 576 tonnes cancelled warrants/ 49,446 net stock level) (charts)
•   Shanghai Jinchuan nickel - 238000-240000 RMB/t, minus 3000   (charts)

• Official LME nickel closing prices - cash - $13.09/lb 3 month buyer - $13.20/lb (10.83% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 235 to 7,655. (chart)
• LME nickel inventories - minus 60 tonnes from Rotterdam, Netherlands warehouse, minus 60 tonnes from Baltimore, MD, USA warehouse, and minus 24 tonnes from Vlissingen, Netherlands warehouse
• Metals were a mixed bag today. Copper was today's winner, and nickel was the loser. Ed Meir with MF Global has support on nickel at $27800, with resistance at $34000. Sucden agrees with Mr Meir on the primary support level and puts secondary support at $25600. If nickel continues heading the way it has the last few days, we might see support levels tested. Three month nickel ended todays trading at $12.84/lb ($28,300/tonne)
• Closing Metals Report - more

  Commodity Comments

• Copyright/courtesy Dow Jones - "LME base metal losses this week isn't a trend reversal, but rather a round of constructive consolidation, says Barclays Capital."
• Copyright/courtesy Dow Jones - While financial markets are stumbling, "the commodities cycle is just beginning," said Greg McCoach, editor of The Mining Speculator investment research newsletter. "We're only in a small correction," McCoach said, speaking at the Base Metals Investment Summit 2008 conference. "This thing is going to last for years." McCoach sees a commodities bull market for at least 10 years, perhaps 20, as Asian nations grow wealthier and have an increasing appetite and ability to pay for middle-class amenities and the commodities they require. "
• U.S. Federal Reserve Chairman Ben Bernanke to to Congress' Joint Economic Committee yesterday - “It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly.” (comment - and the markets ended up 391 points? Was anyone actually listening yesterday?)

  News Bites

• South Africa - Preliminary reports indicate that South African ferrochrome producers may have agreed to $1.95/lb for a second quarter chrome price. These initial reports have not yet been confirmed.
• Courtesy/copyright RTT - According to the survey by the China Federation of Logistics and Purchasing the PMI in China increased to 58.4 in March, up from 53.4 in February. Separately, a report from the NTC Economics revealed the headline CLSA Chinese Purchasing Mangers' Index for manufacturing sector rose to 54.4 in March from 52.8 in February. The index signaled acceleration in the growth rate for the first time in three months and the highest index reading since last October, the report stated.
• Copyright/courtesy Asia Pulse - PT Obi Prima Nikel, a nickel mining company in South Halmahera shipped its first exports of nickel to China last week. OBI, one of three nickel mining companies operating in that district exported 3,000 tons, Deputy Regent of South Halmahera Rusli A Wally said. 
• Russia - Interfax reported that MMC Norilsk Nickel closed the fourth quarter of 2007 with net profit of RUB 49.224 billion to Russian accounting standards in the fourth quarter of 2008 up by 14.3% from the third quarter. - more
• Euro-Inox - New Meets Old - Stainless Steel in Renovation and Building Volume 12 - pdf here
• China - Current minimum wages in China - translated site here
• United States - Landfills contain tons of commodities that could be recovered. While much of the technology needed for mining landfills is already proven, the process is not yet economically feasible. But thanks to record commodity prices this may soon change. - more
• United States - Some homes worth less than their copper pipes - more

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

• Indications at 7:45 am CST show 3 month nickel selling down by $.16/lb . Nickel took a serious drop in one of the early morning rings, and slipped under $29,000/tonne, but has been climbing back since.
• Bloomberg - more

  Reports

• Reuters Metal Weekly - pdf here
• ScotiaBank Commodity Price Index - pdf here

  Commodity Comments

• MF Global Ed Meir Morning Comments - "This morning, the swing in the pendulum seems to have stopped in its tracks, with the tone mixed. Metals are down slightly after being up earlier, but energy markets are holding on to modest gains. The dollar is a tad weaker, as currency markets wait for Fed Chairman Bernanke’s testimony later today, as well as February factor orders (expected at -.8%) and the ADP payrolls report (expected to show job losses of 45,000)....Also out today, are forecasts suggesting that the US slowdown is spreading. In this regard, the International Monetary Fund cut its forecast for global growth this year to 3.7%, the slowest rise since 2002, and more alarmingly, pegs the odds of a worldwide recession at 25%. In addition, the Asian Development Bank lowered its economic growth forecasts for the region; excluding Japan, Asian growth is predicted to expand 7.6% this year, less than a September estimate of 8.2%. In light of higher inflation readings out of Europe this week and the “in-line” set of macro numbers we have seen come out of the US in recent days, we except to see this week’s dollar and equity rally continue for a little while longer, thus pressuring commodities lower at least for the balance of the week....Nickel is now at $29,00, down $350; no change on the charts, as the sideways drift continues." (see daily report in left column)
• copyright Financial Times - "A favoured trade for hedge funds this year has been to bet on the dollar falling and commodity prices rising but dealers said some of these trades were being reduced as funds cut back on leveraged positions at the start of the second quarter."
• copyright BNP Paribas - (March 28 report) "In another set of bearish data, CRU estimates that the ratio of nickel-containing grades in stainless steel production fell to less than 60% in 2007 from over 70% five years earlier. The 2007 data doesn’t even reflect the full impact of US$50,000/tonne+ prices. Now that the speculative bubble appears to have burst in base metal markets, we expect nickel to trade with less price volatility, drifting towards the US$25,000/tonne mark over time. A gradual increase in stainless steel demand should moderate the bearish tone."

  Case To Increase Production Of Ni-Contained Pig Iron In China Faces Wall Of Soared Reducer Price

• There is a strong view in the market that China should have produced 70,000 - 85,000 tons on material base as the total quantity of nickel-contained pig iron and low grade ferro-nickel in the calendar year ( January - December ) of 2007. - more

  News Bites

• Bloomberg released the following figures for March 2008 - Average price of cash nickel - $31,225.26/t / with a high of $33,605/t and a low of $28,285/t. Average price of three month nickel in March was $31,471.05/t, with a $33,605/t high and a low of $28,500/t.
• Papua New Guinea - Financing is being finalized for the Ramu nickel and cobalt project’s accelerated construction and operations, expected to formally take place in three months’ time.- more
• China - China's steel product prices will remain at a high levels throughout this year, as rising raw material prices keep production costs high amid generally balanced supply and demand fundamentals, a senior official from the China Iron and Steel Association (CISA) said in Beijing on Tuesday. - more
• China - China's economic growth will moderate to about 10 percent this year and 9.8 percent in 2009, the Asian Development Bank (ADB) said in a report on Wednesday. - more
• Australia - Chinese steel maker Shougang and its Hong Kong partners have been embarrassed by being ordered to hand back a near 20 per cent stake in iron ore miner Mount Gibson after the Australian takeover regulator ruled yesterday that they had broken Corporations Law. - more
• China - Chinese minerals trader Sinosteel’s hostile bid for Australian iron ore miner Midwest has signaled that now Chinese companies are gearing up to take the gloves off and make a more aggressive play for Western corporations.- more
• India - The city chapter of The Institute of Indian Foundrymen has asked the Centre to ban export of pig iron and ore as it is having a cascading effect on the prices of pig iron and steel scrap used by foundries.- more

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - minus 144 tonnes = 50,226 tonnes (1.16% - 1146 tonnes cancelled warrants/ 49,644 net stock level) (charts)
•   Shanghai Jinchuan nickel - 241000-243000 RMB/t, minus 1000  (charts)

• Official LME nickel closing prices - cash - $13.09/lb 3 month buyer - $13.20/lb (10.83% higher than 12/31/07) (chart)
• Baltic Dry Index - minus 191 to 7,890. (chart)
• LME nickel inventories - plus 798 tonnes into Rotterdam, Netherlands warehouse, minus 342 tonnes from Rotterdam warehouse, minus 90 tonnes from Baltimore, MD, USA warehouse, plus 138 tonnes into Antwerp, Belgium warehouse
• Bloomberg headline from a few hours ago - "Dollar Rises Most Versus Euro This Year". In the US, The Institute for Supply Management's manufacturing index increased to a reading of 48.6 from 48.3 in February, instead of falling, as expected. The equity markets seemed to be betting the worst might be behind us, and many were trading up today. On the other hand, metals were down, across the board, but losses were generally limited to less than a 2% range. Pressure on nickel was not limited to the rising dollar.
• Opinion - In our opinion, whoever has been shipping nickel into the LME warehouses during the last few weeks, has to be causing some concern. We aren't sure if LME traders are privy to where this nickel is coming from, but we aren't. But the size of these shipments, during a period when 4% of the world's supply was taken off the table by a strike in Colombia, is jaw dropping. It appears, and this is only our opinion, that someone stopped shipping during the early weeks of the strike, knowing this would drive prices higher, and started shipping this stockpile during the last few weeks. If you want to know why we think this, look at last month's figures. On March 17th, nickel inventories had fallen to 46,866 tonnes, after receiving no nickel for 10 of the prior 11 shipping days, the period immediately after the strike began. On the 18th, plus 462 tonnes, 19th, plus 300 tonnes, none for day before and after the 4-day Easter holiday break, 26th, plus 1128 tonnes, 27th, plus 912 tonnes,  28th, plus 768 tonnes, none yesterday, and another 798 tonnes today. And this is just monitoring inbound activity into Rotterdam. With today's gain, the quantity passed over the psychological 50,000 tonne mark. According to some estimates, there is now an 8 week supply of nickel available. Considering we were down to a 2 day supply at one point last year, the quantities appear to be adequate to calm any market fears of shortages. While some still believe nickel demand will pick up with a resumption in a strong stainless steel market, which we believe is true, we also believe the production of pig nickel is the great equalizer. Its a market Catch-22. Traders drive the market up on demand hopes, and this helps their nemesis, pig nickel, become more financially viable. Prices fall, and pig nickel viability comes into question, thus resuming the hopes for an increase in demand for refined nickel. Whatever you believe, it is hard to deny the fact that the recent up's-and-down's in the price of nickel is not grounded on the market fundamentals of supply and demand, and are completely speculative. If a major disruption to the world's supply like the recent strike in Cerro Matoso doesn't have a more negative effect on inventories, then what will it take for these speculators to get the message? Buyers were burnt too badly last year, to fall for any "price is going up, better buy heavy" scheme. We have been saying it for months, and will repeat, that until the market stabilizes, buyers will buy only what they must. Exchange traders may not make any money in a stabile market, but nickel producers and nickel consumers can find the harmonious price range that both can live with, and where both can make money at. Until exchange traders calm down, we will never discover where that threshold is. For the first day of the second quarter, three month nickel ended the day at  $13.29/lb ($29,300/tonne)   
• Closing Metals Report - more

  AK Steel Announces Price Increases for Stainless Steel Products

• AK Steel said today that it will increase transaction prices for stainless steel sheet, strip and continuous mill plate products in the 200, 300 and 400 series, as well as duplex grades, effective with shipments on April 6, 2008.  The price increases will be accomplished through a two percentage point reduction in the functional discount rate, which equates to an increase in base prices of approximately 4% to 6%, depending upon the grade.- more (this does not include changes in surcharges effective today, and follows a similar notice from Allegheny Ludlum, which was announced late Friday.)

  Commodity Comments

• Stainless steel fasteners - Taiwanese fastener manufactures advise US customers of following increase in prices of stainless steel wire from mills. 304 and 302HQ stainless steel wire increased 10.8% as of today April 1st. 316 stainless steel wire has increased 9.49%. Regretfully, this is not a April Fool's joke, with the blame for the increase blamed on March increases in nickel, stainless steel scrap, copper, and chrome. This is the third price increase in just the last 4 weeks.  
• Courtesy Scotia Capital China Update - "On sectors, we are now bullish on the coking coal, iron ore, copper, zinc, aluminum, molybdenum, oil, methanol, DAP, urea, soybean, and hardwood pulp sectors. We are neutral on wheat, corn, potash, ethylene, steel, and nickel. We are cautious on paper products on a relative basis from a China perspective."

  News Bites

• New Caledonia - copyright/courtesy The Hindu - "Bharat Heavy Electricals Limited on Monday bagged a Rs. 550-crore export order from Koniambo Nickel SAS, an overseas joint venture of Switzerland-based mining group Xstrata PLC and a local company in New Caledonian for supply of 2 x 135 MW environment-friendly circulating fluidised bed combustion boilers and auxiliaries. New Caledonian is an island in the South-West Pacific Ocean." (used in power plant)
• China - Chinese authorities have released 150,000-200,000 tonnes of Australian iron ore, which had been stranded at ports for about a month because of delays in issuing import permits, industry sources said. - more
• Brazil - The market fundamentals have been very good to Brazilian mining and metals group Vale, the world's largest iron ore producer, over the last few years. But some analysts and industry players have begun to question how long the current scenario will last. - more
• USA - On March 5, 2008, the Department of Commerce ("Department") received a petition concerning imports of steel threaded rod from the People's Republic of China ("PRC"), filed in proper form by Vulcan Threaded Products, Inc. ("Petitioner"). - more

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

• Indications at 7:50 am CST show 3 month nickel selling down by about $.27/lb . Metals are down across the board this morning, as the dollar strengthens. LME nickel inventories rolled over the 50,000/tonne level today, as another 936 tonnes was gained, minus 432 tonnes outbound. This is the first time since December 1999 that London Metal Exchange authorized warehouses have held over 50,000 tonnes of nickel. This gain, on the back of the Cerro Matoso strike ending, is putting downward pressure on nickel trading.
• Bloomberg - more

  Reports

• Behre Dolbear Global Mining News - pdf here
• TD Economics Weekly Commodity Price Report - pdf here

  Posco Plans to Raise Stainless Steel Prices on Costs

• Posco, Asia's third-biggest steelmaker, will raise prices of its stainless steel products by as much as 23 percent this month after costs increased for materials including ferrochrome and nickel.. - more

  Commodity Comments

• MF Global Ed Meir's Morning Comments - Metals ended on a subdued note yesterday, but according to Reuters calculations, copper still managed to notch up its second best quarterly performance ever, up some 26% in the first quarter of 2008. In fact, our table below shows just how attractive commodities have been as an investment this part quarter, with gains ranging from 6-26%. This stands in stark contrast with the negative returns seen in most other complexes, with Chinese stocks being the worst performer, down a whopping 34% on the quarter....On the US macro side, we get the Institute for Supply Management report out later today; this should lend metals further direction. The median forecast is for the index to come in at 47.5, down from 48.3 in February. February construction spending is also due out today, expected to decline by -.9%. Out of Europe, German unemployment fell to 15 1/2 year lows in March; its seems that global labor markets still constitute a relative bright stop, and have not yet felt the full impact of the credit contagion and the spreading US slowdown. ...Nickel is now at $29,500, down $255; charts suggest a continued drift lower from here. SUPPORT: $27800 / RESISTANCE: $34000
• Delays at nickel mines around the world will force big industrial consumers like stainless steel makers to rely on low-grade nickel pig iron for years. - more
• Copyright/courtesy Thompson Financial - "Looking ahead, players will track the dollar's movements and watch markets for any more bad news over the economy to gauge its impact on future metals demand. With the release later today of the ISM numbers and U.S. Fed chairman Ben Bernanke's testimony to Congress tomorrow, players are likely to sit on the sidelines until the data is released."

  News Bites

• Colombia - Union at Cerro Matoso told Dow Jones reporter that production would resume today at the mine and exports should resume on Wednesday.
• Colombia - BHP Billiton Ltd/Plc's Cerro Matoso nickel mine in Colombia could need about a month or more before returning to full production following a month-long strike, a company spokeswoman said on Tuesday. - more
• Colombia - The strike organized by employees of the Cerro Matoso nickel complex owned by BHP Billiton ( in Colombia has come to an end, leaving the company with losses of US$109mn, a union official told BNamericas. - more
• Indonesia - (excerpt) In Makassar in Sulawesi, students confronted the PT Inco Company, notorious for land evictions and pollution of land and waters. - more
• China - The purchasing manager's index for the manufacturing sector rose to 58.4 points in March from 53.4 in February, the China Federation of Logistics and Purchasing reported Monday.
• Australia - In a spectacular exercise of client power, BHP Billiton has summarily ditched its South African banker, Standard Bank, after the bank's chairman suggested that the mining giant's Hillside aluminium smelter should be shut down to save electricity in the power-starved country. - more
• Australia - The standoff between Chinese steelmakers and Australian iron ore miners has seen annual price negotiations extend beyond the March 31 deadline, as Rio Tinto Ltd and BHP Billiton Ltd. push for a freight premium for their ore. - more
• United States - The United States International Trade Commission determined that that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports from China of welded stainless steel pressure pipe... - more
• Japan - Sumitomo Metal Mining Co, Japan`s largest nickel producer, will boost production of the metal by 18% this fiscal year as increased raw material supply allows the company`s refinery to operate at full capacity. - more
• China - China's steel output will rise 11.5 pct this year, easily outpacing an expected global average increase of 6.8 pct, according to Qi Xiangdong, vice secretary-general of the China Iron and Steel Association. - more
• Brazil - Cia. Vale do Rio Doce, the world's largest iron-ore exporter, wants to maintain annual talks to set benchmark prices, defying demands by smaller competitors Rio Tinto Group and BHP Billiton Ltd. to abandon the system. - more
• United States - courtesy AISI - "In the week ending March 29, 2008, domestic raw steel production was 2,144,000 net tons while the capability utilization rate was 89.9 percent. Production was 2,073,000 tons in the week ending March 29, 2007, while the capability utilization then was 86.3 percent. The current week production represents a 3.4 percent increase from the same period in the previous year. Production for the week ending March 29, 2008 is up 1.2 percent from the previous week ending March 22, 2008 when production was 2,118,000 tons and the rate of capability utilization was 88.8 percent."

  Beginning LME nickel inventory / Overnight Shanghai closing price

•   London Metal Exchange - plus 504 tonnes = 50,370 tonnes (1.43% - 1146 tonnes cancelled warrants/ 49,650 net stock level) (charts)
•   Shanghai Jinchuan nickel - 242000-244000 RMB/t, minus 2000   (charts)

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INSG - The London Metal Exchange acts as a barometer of nickel supply/demand world-wide. Trading on the LME takes place in two daily sessions (morning and afternoon). The two sessions are each broken down into two rings made up of five minutes trading in each contract (cash and 3-months). The official prices for the day are assessed after the second ring of the morning session by a "quotation committee" in light of the dealings and prices quoted during the day's morning session. LME official nickel prices are used as bench mark prices by the international trade.

All prices, unless marked official closing prices, are indications only of LME 3 month buyer traded prices and courtesy newswire services. To understand what our prices mean, see "A Guide To LME Trading"...pdf here or "The ABCs of a Metals Exchange" ...pdf here (Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless) (all ton listings are metric tons = 2204.622 pounds ) Updated daily before 8 am CST and before 1 pm CST weekdays, with weekend updates - Disclaimer Daily closing price listed uses afternoon kerb trading price. Original content and opinions copyright www.estainlesssteel.com