Thursday, April  30

• Baltic Dry Index - plus 14 to 1,786. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Bank of Japan Says Economy to Resume Growing in 2010 After Shrinking 3.1% // Asian Stocks Rise on Japan Output; MSCI World Set for Best Month Since '89 // European Stocks Post Record Monthly Rally; Stoxx 600 Erases 2009 Decline // Chrysler Will File for Bankruptcy, Paving Way for Fiat to Take 20% Stake // Emerging-Market Stocks Rise Most in Month Since 1989; Ukraine Leads Gains // U.S. Consumer Spending Declines More Than Forecast as Job Losses Take Toll  // Stocks in U.S. Erase Advance on Exxon Mobil's Lower-Than-Estimated Profit
• The US Dollar is now trading 1/3 of 1% higher against the Euro, and NYMEX crude is down 3/4 of 1%, but still above the $50/level. Inventories of crude oil in the US are at their highest since September 1990, but gasoline inventories continue to fall. Gold is down 1% and silver is down nearly 3%. Base metals ended mostly higher, although indicator charts reflect some pretty choppy trading with many of them. Dow Jones reports three month nickel ended the day and month at $5.30/lb . Considering three month nickel ended March at $4.47/lb, April was very kind to nickel investors. LME stocked inventories were up slightly, as was the Baltic Dry Index, up 14 points, with 2 of the 3 sub-indexes in the green. In today's dose of government economic reports, the Commerce Department reported that personal consumption in March fell at a seasonally adjusted rate of 0.2% compared to the month before. It was the fourth decline in six months. Employment numbers for the week came in better than expected, 'only' 631,000 people losing their jobs last week, but continuing claims in the April 18 week jumped 133,000 to 6.271 million, another record level and the 15th straight increase. Personal income fell 0.3 percent, following a 0.2 percent dip in February. The Chicago Business Barometer index rose to 40.1% from 31.4 in March. It was the largest one-month increase in the index since 1983. Until recently, Wall Street was looking to end the month trading solidly in the green, but in the last hour, the market has soured and the Dow is actually in the red, at the moment. Unless the market tanks today, April 2009 will still go down in the record books as one of the best ever for the S & P.
• Many markets around the world will be closed tomorrow for May Day, and the London Metals Exchange will be closed on Monday for Early May Bank Holiday. For those beginning an extended weekend, we wish you a safe and relaxing one.  

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Dow Jones) Madagascar's government is conducting a review of the country's mining contracts, although it doesn't plan to cancel any contracts, Prime Minister Monja Roindefo said in an interview Thursday.
• The outlook for the restaurant industry improved in March, as the National Restaurant Association’s comprehensive index of restaurant activity rose for the third consecutive month. The Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 97.7 in March, up 0.2 percent from February and 1.3 percent during the last three months

  Russia's Norilsk Q1 09 nickel, palladium output fall - The world's top nickel and palladium producer, Russia's Norilsk Nickel said on Thursday its output of nickel fell by 7 percent to 69,357 tonnes in the first quarter of 2009 from a year-ago level. - more

  Base-metal firms soak up cash - The window is open for base-metal companies to raise money through equity financing, and they are rushing to get it done before the door closes and liquidity dries up in the summer. - more

  2009 A Tough Time For Steel, Iron Ore - The Australian and world steel industries are struggling as demand continues to weaken and sales, cashflows and profits dry up. - more

  China's iron ore demand in 2009 to drop by 60 million mt: CMMA - China's iron ore demand in 2009 is estimated to drop by 60 million mt year on year, according to Zou Jian, chairman of the China Metallurgical Mines Association (CMMA). Zou was speaking at the 7th Far East Steel conference held in Beijing on April 28-29. - more

  Russian steel workers resort to growing potatoes - Steel workers in Russia's industrial heartland are returning to the land to dig themselves out of an economic crisis that has pushed national unemployment rates to an 8-year high. - more

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

• Indicators at 7:35 am CST show 3 month nickel trading around  $.10/lb higher, with other base metals mostly higher, off session highs and showing signs of faltering. The US Dollar is only slightly weaker against the Euro this morning, by less than 1/10 of 1%. NYMEX crude futures are up nearly 1-1/2% and over $51/barrel. Gold is down nearly 2% and silver is off by 2-1/4%. In overnight trading, Asian markets ended much higher after industrial output in Japan rose in March for the first time in six months; the S & P Asia 50 Index ending over 5% stronger. European markets are trading higher this morning, and US futures reflect Wall Street should open stronger this morning. We have already had a few reports issued this morning. Initial claims for unemployment fell 14,000 last week to 631,000 and the total number of Americans receiving state jobless benefits set a record for the 13th straight week rising 133,000 to 6.27 million. Consumer spending fell 0.2% in March after gaining 0.9% in January and 0.1% in February, and nominal incomes fell 0.3% in March as wages and salaries slid 0.5%. Wall Street is calling a bankruptcy for Chrysler imminent.
• Bloomberg morning base metal news - more

Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Danske Commodities Daily - pdf here
• Commodity Watch - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metal prices were sharply higher yesterday, as US equity markets refused to break down after a rather dismal first quarter GDP reading out of the US.  ... Metal prices are higher as of this writing, as another advance in global equity markets, coupled with inventory drawdowns, particularly in copper, is setting the stage for the gains we are seeing. However, with the uncertainty surrounding the FOMC meeting fading, we could see a slight retrenchment in metal prices set in over the balance of the week and into next week. ... Nickel is at $11,600, up $295, and doing well to absorb the sizable LME stock increase seen yesterday. Inventories are up again today, but by a very modest amount. Nevertheless, our charts look uninspiring, and there is nothing to indicate that nickel will break out of its broad trading range anytime soon." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) French mining company Eramet SA (ERA.FR) Thursday said it has hedged some of its nickel output for the second, third and fourth quarters of 2009 at an average price of $10.50 a pound.
• (SBB) Yusco leaves May stainless prices unchanged
• China's energy consumption rises by 3.04 pct year-on-year in Q1 - NBS - more
• Federal Reserve Press Release - "Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower."
• Josh Shapiro, chief U.S. economist at MFR Inc. - "The only major difference between today's statement and the previous one on March 18 is that today's cited the fact that most evidence points to a slowing rate of economic decline. Anyone with two eyes and a brain knows this to be the case."

  Quantities Of Stainless Steel Scrap Supplied And Consumed In South Korea For CY 2008 = Purchases From Domestic Sources Increased, Its Consumption Decreased By 3.5% From That In 2007 - According to the steel statistics compiled and released by Korea Iron and Steel Association, the quantities of stainless steel scrap purchased and consumed by South Korean stainless steel mills in the calendar year (January - December) of 2008 were as per the table shown below. - more

  Eramet Forecasts ‘Very Significant’ Operating Loss  - Eramet SA, operator of the world’s largest ferronickel plant, forecast a “very significant” first-half operating loss because of declining demand for steelmaking raw materials. - more

  Sherritt's brush with nature - The Toronto-based miner behind one of the biggest nickel projects in the world must contend with plummeting prices, political instability and the humble lemur - more

  Moody's: Global base metals industry outlook negative - The outlook for aluminium, nickel and zinc is weaker than the outlook for copper, but all metals are likely to be challenged over the next twelve to eighteen months as end markets continue to remain weak, according to Moody's. - more

  China steel market oversupplied in Q1 on lower exports: CISA - China's steel market was oversupplied in the first quarter following the sharp fall in net exports while domestic steel output remained steady, the China Iron and Steel Industry Association said late Tuesday in a statement. - more

  European steel makers cry foul over safeguard duty - European steel makers have protested India’s move to safeguard the domestic steel market through anti-dumping duties even after endorsing the country’s commitments to avoid protectionism at the recent G-20 summit. - more

  In a follow-up to a report we posted on Tuesday, November 4th, we forecast that the low for 2008 could come in December, based strictly off 20 years of LME history. And depending how you look at it, the formula worked, or it didn't. The average monthly low did come in December, when nickel averaged under $10,000/tonne. But, the daily low came on October 24th, amongst the stock market panic of that month, when nickel momentarily slipped into the $3/lb range. We would like to take credit for being right, but it was more dumb luck than our analysis formula. While we imagine professional analysts would look at numbers on a monthly or annual basis, we were actually analyzing the numbers on a daily basis. Thus, the daily low for 2008 came in October and not December, as the last twenty years had shown would most likely happen. And next month, we could find out how part two of the finding begins to shape up. Based on the same analysis, we showed the best chance for the high 'daily point' of 2009, would come in May. Typically, in a normal market, the annual shutdown of Norilsk for two weeks of flooding during May, would raise supply concerns. With many nickel producers already shut down because of low prices, that will likely not be an issue this year, so history could be seriously put to the test.   

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, April  29

• Baltic Dry Index - minus 18 to 1,772. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Yen, Dollar Decline as Evidence Global Slump Easing Reduces Safety Demand // South Korean Current Account Surplus Surges; New Zealand Exports Jump 17% // Asian Stocks Rise as Sinopec, Samsung SDI Fuel Profit Optimism; ANZ Slumps // German Government Predicts Return to Growth in 2010; Economy to Swell 0.5% // European Stocks Climb on Earnings; Siemens, Sanofi, Royal Bank Shares Rise // U.S. Economy Shrinks More Than Forecast in Worst Recession in Half Century // Fed Finds at Least Six of 19 Biggest U.S. Banks Need to Raise More Capital //
• The US Dollar continues to trade lower against the Euro, now 1-1/3% lower. NYMEx crude is still trading about 1-1/3% higher on the day, and in the mid $50/barrel range. Gold is 1/2 of 1% higher, and silver is up nearly 2-1/4%. Base metals all ended soundly in the green, and nickel was no exception. Indicator charts show nickel spent most of the day in a slow climb, and didn't show signs of faltering until late trading. Dow Jones reports three month nickel ended the day at $5.13/lb , making up most of yesterday's losses. So what happened? The news for nickel was not particularly good from the fundamental side. Major steel companies, including the world's largest, reported dismal first quarter earnings, and their outlooks for the immediate future were cautious, at best. Inventories of nickel in authorized LME inventories took such a big jump overnight, that if we hadn't found a second source verifying the numbers, we wouldn't have believed them. And while the London Metal Exchange frowns on publication of their top secret proprietary information, since MarketWatch published the numbers in an earlier article, the cat is already out of the bag for the day. Nickel inventories bounced over 14%, gaining 7,974 tonnes, and now sit over 114,000 tonnes. The one positive point from the fundamental angle today was the lowering of the US Dollar. On the technical side, the market was reflecting a heavily oversold condition for nickel, and with equity markets much higher today, nickel investors weren't about to be left behind. Sucden's day old chart show nickel's slump, before today's rally (here). The Baltic Dry Index slumped overnight, down 18 points to 1,772, with all three sub indexes still in the red. The GDP for the first quarter in the US was released earlier today and came in much lower than economists had forecast. One note of interest in the US Dept of Commerce report was "Private businesses decreased inventories $103.7 billion in the first quarter, following decreases of $25.8 billion in the fourth quarter and $29.6 billion in the third." Economists for Bank of America's Merrill Lynch told MarketWatch "Businesses will need to slash far more inventories in the months to come." Most analysts, however, looked at this news as positive. Sung Won Sohn, of Smith School of Business and Economics, noted "This is good news. With lean inventories, production will be cranked up in order to restock the depleted shelves in coming months." Millan L. B. Mulraine of TD Securities added "Also of note is the fact that the massive draw-down in inventory may mean that this component could add favorably to output in the near future." Richard F. Moody with Forward Capital warned "...the details of the first-quarter report suggest a much smaller contraction, if not a modest advance, in real GDP during the second quarter. This should not, however, be taken as a sign that the recession has run its course. Clearly this is not the case, and there are plenty of downside risks still facing the U.S. and global economies." The optimism in inventory numbers is grounded, in our opinion. If you are driving cross country, and your half way there and you only have a quarter tank of gas left, you are going to have to stop for fuel soon. That is, unless you don't have any money, the car breaks down, or you take up residence in the next town. The market looked past any bad news that a horrible GDP number might have implied, and more to the signs of hope, primarily personal consumption expanding at 2.2%, and news that Fox-Pitt analysts had upgraded US banks to 'marketweight, or hold, after five years of rating them underweight, or sell. Wall Street is following Asian and European markets higher, as the bulls make a strong charge in a field of green "sprouts", and incredulous bears chase after them screaming "Did you read the d--n report?". We still feel the bulls are setting themselves up for a quick trip to steer town, but we have thought that for a week now. If anyone actually tells you they understand what is going on with any of the market these days, have them checked for a fever. And finally, speaking of fevers, it was only a matter of time before someone turned the swine flu epidemic into a game - here 
• Still looking for any aspiring cartoonists to contact us. Please don't make us draw. It won't be pretty!

  Reports

• Commodities Daily - pdf here
• 1st quarter 2009 GDP report - pdf here
• Metropolitan Employment Report for March 2009 - pdf here (El Centro, Calif. tops the list of unemployed with a rate of 25%)

  Commodity/Economic Comments

• (Dow Jones) Molybdenum prices will average $10 a pound this year and $12 a pound in 2010, Dahlman Rose & Co. said in a research note Wednesday, lowering that forecast from $12 and $15.
• (Reuters) Moody's says outlook for aluminium, nickel and zinc weaker than for copper ... Current downturn expected to go well beyond a typical cyclical downturn, and metals and mining companies are likely to face challenges in complying with financial covenants by third quarter of 2009
• (Mineweb) The situation is slightly different with aluminium and nickel. Hefty producer cutbacks do at least seem to have brought about some nickel price stabilisation in the first quarter of 2009, with some 21% of world production sliced away, but the metal still faces an onerous inventory mountain with a stock-to-inventory ratio of more than twelve weeks. RBS is looking for a surplus to be sustained even through to 2011 despite producer cutbacks. - source
• (Dow Jones) The stainless steel market is also showing signs of improvement, with nickel prices "initiating recovery," the company  (ArcelorMittal) said.
• Econompic chart on today's GDP release - here

  Minor metals body to report on EU stockpile quickly - The Minor Metals Trade Association will meet the European Union to discuss stockpiling of critical raw materials on June 3 and report back to the membership by the end of that week, it said on Wednesday. - more

  Steel producers offer bleak financial results, vague outlook - The outlook for Asia's steel industry isn't that bright at the moment, but it won't stay that way for too long, according to some analysts. - more

• Evraz Sees U.S. Stimulus Helping Economy, Steel Demand Recover - Evraz Group SA, the biggest steel supplier to U.S. and Russian railroads, expects President Barack Obama’s stimulus package to help kick-start the world’s largest economy by the year’s end, bolstering metals sales. - more

  (Marketwatch) GDP falls 6.1% in first quarter on record drop in investment - Real gross domestic product - the inflation-adjusted, seasonally adjusted value of all goods and services produced in the United States - fell at a 6.1% annualized rate in the first quarter, nearly matching the 6.3% decline in the fourth quarter of 2008. The two-quarter contraction is the worst in more than 60 years. Since the 1947, the economy had never contracted by more than 4% for two consecutive quarters. With a 0.5% drop in the third quarter of 2008, it's the first time the economy has contracted for three consecutive quarters since 1975.

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

• Indicators at 7:45 am CST show 3 month nickel trading around $.08/lb higher, with all base metals trading in the green this morning. The US Dollar is supporting base metals trading, as it is currently trading nearly a full percent lower against the Euro. NYMEX crude futures show oil is trading over 1-1/2% higher and over the $50/barrel level, thanks in part to higher equity pricing. Gold is trading 2/3 of 1% higher while silver is over 1% higher. In overnight trading, Asian markets ended solidly higher, and so far today, European markets are also trading higher. US futures reflect a stronger opening on Wall Street also. ArcelorMittal , Severstal, and China Steel reported lousy first quarterly earnings overnight. LME nickel inventories grew at a double take amount overnight, and we posted an article explaining the nearly 8000 tonne one day gain. We get the first quarter GDP numbers this morning, as well as a Fed announcement. Texas advises the US has lost its first victim to the H1N1 swine virus, a 23 month old child. Eurozone consumer confidence rose to minus 31 this month from minus 34 in March, according to a report and eurozone manufacturers’ confidence rose to minus 35 in April from a minus 38 reading in March.       
• Bloomberg morning base metal news - more

  Nickel Stocks Up On Bagged Briquettes Deliveries-Indus - The large jump in London Metal Exchange nickel stocks Wednesday is the result of bagged briquettes now being available for delivery for the first time, brokers and warehousing companies told Dow Jones Newswires.  LME stocks are up by a net 7,974 metric tons to 114,426 tons, with 8,226 tons of bagged briquettes going on-warrant in Singapore to take total stocks there to 14,418 tons.- more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Preliminary U.S. Imports for Consumption of Steel Products March 2009 - more
• India Notification No. 38/2009 -Customs - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals ended lower yesterday, but off their worst levels of the day, as a recovery in the US stock market and a pair of relatively decent US macro numbers helped limit the declines.  ... This morning, we are sharply higher in metals, as a rebound in global equity markets coupled with another hefty drop in copper inventories, has steadied the complex across the board. A weaker dollar is also adding support, as is a slight rebound in energy markets, where prices are back over the $50 mark. Finally, markets are cautiously optimistic ahead of the Fed interest-rate announcement scheduled for later today.  ... Nickel is at $11,010, up $90, but we did approach $10,600 support level earlier in the day (getting to a low of $10,750) before bouncing off it. Nevertheless, our charts look weak, and the bias seems to be lower from here. LME stocks pushed sharply higher this morning, up by almost 8,000 tons, which constitutes the sharpest one-day increase so far this year. Given the size of this move, perhaps there are more increases to come in the days ahead." (read Ed Meir's complete morning base metals report here)
• Russian sources are reporting that Indian producer Jindal Stainless is backing out of a joint venture with PT Aneka Tambang. The two had agreed to work together in the construction of a ferronickel plant in Southeast Sulawesi, Indonesia. There is no confirmation on PT Aneka's website of any such development, however, a statement dated 4/3 notes "Inline with Antam’s intention to grow and deliver solid returns to its shareholders and stakeholders, including the local community, Antam had initiated several joint venture projects with international strategic partners to develop Indonesia mineral deposit. Regrettably, two of Antam’s joint venture projects, a stainless steel project with Tsingshan Holding Group of China at Obi, South Halmahera, and a stainless steel project with Jindal Stainless Limited of India at North Konawe, Southeast Sulawesi, currently face challenges due to mining licence issues."  
• (Interfax) Jinchuan Group, China's largest nickel producer, has signed a nonbinding letter of intent with Canada-based nickel miner Belvedere Resources Ltd. and its wholly-owned subsidiary Finn Nickel Oy to convert all outstanding debts owed by the latter two parties to Jinchuan into equity stakes in Belvedere and Finn Nickel, Belvedere announced on April 28. - more
• Baoshan Steel Expects First-Half Profit to Plunge - more
• ArcelorMittal Q1 disappoints, sees Q2 pick-up - more
• Monetarism Defiant - Legendary economist Anna Schwartz says the feds have misjudged the financial crisis. - more

  International Ferro CEO sees prices rising in Q4 - International Ferro Metals Ltd (IFM) said on Tuesday contract prices for ferrochrome should stabilise in the third quarter, and rise in the fourth quarter driven by a resurgence in demand. - more

  World Steel Prices Continue to Slide but Rate of Decline has Slowed - There are no positive signals in the US flat products market. - more

  Steel demand pick up seen sluggish at best in 2009 - Any revival in demand for steel late this year will be sluggish at best and may not become strong until 2012, analysts told a scrap metal conference on Tuesday. - more

  European stainless steel surcharges for May 2009

• Arcelor Mittal - pdf here
• ThyssenKrupp Nirosta - here
• Outokumpu - pdf here
• Nierdzewka - here
• Acerinox - pdf here
• Ugitech - pdf here

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, April  28

• Baltic Dry Index - minus 49 to 1,790. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Bank of China Profit Falls 14% on Loan Defaults, U.S. Mortgage Writedowns // Asia Stocks Fall on Concern Citigroup, Bank America Need Funds; Yen Gains // Daimler Has First Consecutive Losses in 10 Years as Mercedes Sales Decline // Italy Police Seize $620 Million of Assets From Banks Arranging Milan Swaps // European Stocks Retreat on Bank Capital Concerns, Swine Flu; BNP Declines // Home-Price Drop Moderates in 20 U.S. Cities, May Be Sign of Stabilization // Consumer Confidence in U.S. Jumps Most Since 2005 Following Stock Recovery  // U.S. Economy Will Expand Later This Year, Pimco’s Gross Says //
• The US Dollar is now trading 1/3 of 1% lower against the Euro, while NYMEX crude continues to trade lower by over 1%, and under $50/barrel. Gold and silver are both trading lower, by 1.4% and 3.1%. Base metals all ended the day in the red, with US markets turning green giving them some positive momentary momentum, but it did not last. Indicator charts show nickel fell hard in early trading, was able to crawl back some after US markets opened, but ended on the slump. Dow Jones reports three month nickel ended the day at $4.95/lb. LME nickel inventories gained overnight, and the Baltic Dry Index fell, with the Cape, Panamax, and Supramax indexes all in the red. US reports were mixed today, but the "Conference Board Consumer Confidence Index, which had posted a slight increase in March, improved considerably in April. The Index now stands at 39.2, up from 26.9 in March." "Home prices fell sharply in February, but at a slower pace than in January, according to the Case-Shiller home price index released Tuesday by Standard & Poor's." From the peak in mid 2006, the 10-City Composite is down 31.6% and the 20-City Composite is down 30.7%." "Store sales fell back steeply in the April 25 week according to ICSC-Goldman's same-store index that fell -0.7% for a -1.7 YOY rate - the worst rate in nearly three months." "Redbook reports a strong 0.7 percent year-on-year rate in the April 25 week, a contrast to a -1.7 percent rate for the ICSC-Goldman report." Manufacturing activity in U.S. Mid-Atlantic states continued to improve in April, according to a report from the Richmond Federal Reserve on Tuesday. The headline manufacturing index surged to a reading of -9 in April, beating expectations for a -17 reading. The index stood at -20 in March, and -51 in February." . On the back of all these reports, Wall Street is slightly higher, and while giving no clear directional momentum, the bears seem to have the upper hand for now. At present we are just a tad over 8000 for the Dow, and 850 for the S & P. We could use that line to describe the markets activity thru much of the month of April. Once again, we are being bombarded with phrases like "things are getting worse slower than before". We quoted some economists reactions to the consumer confidence numbers below, but liked the phrase "... the pace of worsening in economic conditions is beginning to slow." Nice to know our economic skydiver's parachute opened as promised, and slowed the rate of descent. Skydivers will tell you that a canvas opening properly is the most important part of the jump, and the failure to do so, gives the jump outcome a disastrous certainty. But they will also remind you that before they can jump in the plane and travel back up for another jump, they must first land properly, which happens to be the part of their adventure that causes more injuries than any other. But hey, having been a tandem passenger on a skydive from 2-1/2 miles up, your author can assure you that once the "rate of descent" has been slowed after a successful chute opening, your immediate future 'definitely' starts looking much better than it did when you were staring out of the back of the airplane!!

  Reports

• China Commodities Weekly - more

  Commodity/Economic Comments

• (Reuters) Global steel demand is expected to fall 14.9 % in 2009 to 1.019 billion tonnes, the steepest fall since World War Two, forecasts from the World Steel Association (WSA) industry body showed on Monday.
• (WSJ) Buried in this morning’s release of gross domestic product by industry in 2008 was this nugget: The goods-producing sector’s share of GDP last year fell to 18.9%, a new low since the government began tracking these statistics in 1947. (release)
• Nomura Global Economics - "Despite the welcome improvement, the composite index remains below the troughs of past recessions and continues to indicate subdued consumer confidence. We expect that households will be very slow to respond to the “green shoots” of recovery in the economy."
• Ian Shepherdson, High Frequency Economics - "This is the biggest headline increase in points since November 2005 after Katrina. We thought there was upside but this is still a pleasant surprise. But don’t get too excited: The Conference Board index tends to undershoot the Michigan at the bottom of the cycle so this simply represents the start of a catch up. The numbers are very weak still."
• Michelle Girard, RBS - "The rebound in the Conference Board index in April is consistent with the upturn registered in other measures of household attitudes and is yet another sign suggesting that (at least) the pace of worsening in economic conditions is beginning to slow. However, the level of confidence is still historically low and is likely to remain that way until the employment situation falls into line with other indicators showing a more modest pace of decline."

  Nickel Prices Won't Pickup Before Mid-2010-Talvivaara - Nickel prices won't recover significantly before the middle of 2010 due to weak demand, Finnish nickel miner Talvivaara Mining Co. PLC said Tuesday. - more

  Vale Inco steps in on union lists - Nickel giant Vale Inco has heard enough complaints about tight access to union memberships needed to work at its $2.2-billion nickel processing facility in Long Harbour that it has decided to take action. - more

  Courtesy AISI - In the week ending April 25, 2009, domestic raw steel production was 984,000 net tons while the capability utilization rate was 41.2 percent. Production was 2,154,000 tons in the week ending April 25, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 54.4 percent decrease from the same period in the previous year. Production for the week ending April 25, 2009 is down 1.5 percent from the previous week ending April 18, 2009 when production was 999,000 tons and the rate of capability utilization was 41.9 percent.

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

• Indicators at 7:45am CST show 3 month nickel trading around $.24/lb lower, with all base metals trading in the red this morning. The US Dollar is trading 1/4 of 1% higher against the Euro, and NYMEX crude is down 2% at $49/barrel. Gold is down over 2% and silver is down over 3-1/2%. In overnight trading, Asian markets ended lower, and in Europe, markets are trading lower this morning. US futures show Wall Street could open lower as well. The Financial Times headline told the story this morning "Commodity markets retreat on swine flu fears". US traders are not only concerned about the swine flu outbreak, but also reports that two major banks, Citigroup and Bank of America, have stated they will need to raise more cash. The "we're healthy, well, maybe we're not" switch back and forth by the banks has traders frustrated and wary. Far too many conspiracy theorists running around these days, looking under every rock for a new conspiracy. Yesterday we learned, thanks to Youtube, that US officials are accused of secretly transporting large containers of the swine flu virus around the country, and that long, empty trains are parked outside of major cities ready to transport the massive dead expected. We, of course, aren't too concerned by all this, because according to another popular conspiracy,  the world as we know it will come to an end on December 21, 2012 anyway. This could make for a really bummer Christmas in 2012, so you better enjoy the next three. In the mean time, we will continue to follow the much less controversial nickel and stainless steel markets, and try to keep you advised of current news affecting our industry.  That is, until one of the goof's gets lucky, ... and we're not.     
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Weekly Commodity Price Report - pdf here
• Global Mining News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Growing anxieties about a global outbreak of swine flu and its impact on economic growth drove metal prices sharply lower on Monday, with copper sinking to its lowest level in three weeks. Oil and equity markets were also down, although a gradual recovery in US stocks helped pare losses in commodities by the close.  ... Nickel is at $10,875, down $500, with the charts continuing to look weak, with a likely test of $10,600 support being imminent. LME stocks are pushing higher, and not helping matters much either."  (read Ed Meir's complete morning base metals report here)
• Mount Karangetang in North Sulawesi Province has been on alert status since mid-March. Sulawesi island is home to PT Inco's nickel operations, although this volcano is approximately 600 miles to the northeast. The Indonesian government has 11 volcanoes across the archipelago that have shown signs of increasing activity over the past few months.
• (Asia Pulse) Indonesian state mining company PT Aneka Tambang (Antam) said it is looking for strategic partners to develop nickel mine in Halmahera, North Maluku. Antam has completed the feasibility study of the project, which is estimated to cost US$1.8 billion, its Development Director Tato Miraza said
• (SBB) China’s stainless steel output shrinks 15% in Q1
• (JMB) US Stainless Scrap Export Increases by 14% in 2008

  China Called to Suspend Stockpiling Nonferrous Metals in H1, Association Official - China should suspend reserving nonferrous metals in the first half year since the earlier government stockpiling has already played positive effects on the market and the one-million-ton reserve plan in three years has been completed by almost 60 percent, said Wen Xianjun, vice chairman of China Nonferrous Metals Industry Association (CNMIA). - more

  Talvivaara says unlikely to meet 2009 nickel target - Finnish nickel and zinc producer Talvivaara said on Tuesday it is unlikely to meet its nickel output targets for 2009 because of lower crushing levels. - more

  Cuba to build ferronickel plant despite low prices - Cuba will proceed with plans to build a ferronickel plant with its ally Venezuela, even though a dramatic drop in international prices has drained the island's foreign income, a government official said on Monday. - more

  China's stockpile solution - Evidence has begun accumulating that China is stockpiling commodities. - more

  Albidon mine surrenders back land to local community - Management at the shut down Albidon Munali Nickel mine in Mazabuka has surrendered back to the local community 1,000 hectares of land out of the 2,200 hectares that the mine had secured for its operations. - more

  Steel industry to take joint venture route to growth - The Indian steel industry, cautious in the current economic scenario, will prefer joint ventures (JVs) to big ticket merger and acquisition (M&A) deals when getting into a tie up with partners overseas, say experts. - more

  Local miners mistrust iron ore contracts - A Chinese benchmark price for iron ore may not be set this year because local mining companies are worried Chinese mills cannot be trusted to honour their contracts, according to The Sydney Morning Herald newspaper - more

• Hebei Steel Seeks to Win 40% Iron Ore Price Discounts  - Hebei Iron & Steel Group, China’s second-largest steelmaker, is in talks to win price discounts of as much as 40 percent from iron ore producers because of oversupply created by slumping demand.  - more
• Vale's iron ore capacity to fall 25 pct in '09 - Brazilian mining giant Vale will cut its iron ore production capacity by 25 percent this year as it stops producing low-grade ores and shuts down high-cost units, the company's China president, Michael Zhu, told a conference in Beijing on Tuesday. - more
• China steelmakers, miners agree to cut iron ore prices - China's steel makers and global miners have agreed to cut term iron ore prices sharply, but are still locked in talks on the scope of the price cuts, an industry body said on Tuesday. - more

  Any closet cartoonists out there reading this blog? We occasionally come up with ideas for cartoons but couldn't draw one fit to print if our life depended on it. If you have the opposite problem, drop us an e-mail. We would like to talk to you.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, April  27

• Baltic Dry Index - minus 34 to 1,839. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan Cuts Economic Forecast to 3.3% Decline, Worst Contraction on Record // Asian Stocks Drop as Swine Flu Outbreak Fuels Growth Concern; ICBC Slumps // German Consumer Confidence Unexpectedly Steady for Third Month, GfK Says // European Stocks Rise as Swine Flu Outbreak Boosts Glaxo; Air France Slumps // U.S. Stocks Fluctuate as Health-Care Companies, General Motors Shares Gain
• The US Dollar continues to trade higher against the Euro, by nearly 1%, while NYMEX crude is trading nearly 2% lower, and over the $50/barrel level. Gold is trading lower, by 1/3 of 1%, and silver is trading higher by nearly a full percent. Base metals all ended lower. Indicator charts show nickel took its cue from fears of a flu epidemic early, but once US markets began to move higher, European markets followed, and this helped nickel prices recover much of the morning's losses. Dow Jones reports three month nickel ended the day at $5.16/lb , and yet slumped in after hours trading. LME stored inventories of nickel took a big whack overnight, and cancelled warrants continue to flirt with the 5% level. Sucden's day old chart shows trading thru Friday (here). Over 1000 tonnes of nickel was removed from LME warehouses Friday, although the actual overall drop was less, thanks to an inbound shipment also arriving. Like the markets in general, we aren't seeing much of a net change in inventory levels this month, and as of today, actually stand at a level slightly less than we ended March with. The Baltic Dry Index fell 34 points, after 2 of the 3 indexes that make up the BDI, went red. Fears of a flu outbreak unnerved traders early, with the Dow and S & P falling, and the volatility index jumping 2-1/2% over Friday's close. But Wall Street shrugged off the news fairly quickly and went green, although it has since floundered for footing. Airline stocks are getting hit fairly hard today, after the Europe Union's health commissioner cautioned travelers to "postpone non-essential travel to the United States or Mexico due to swine flu.", while many other nations warned against travel to Mexico. One thing is for sure. If you have recently returned from a trip to Mexico and feel the urge to sneeze, do everyone a favor, and have a doctor check to make sure you have no flu bugs lurking inside you. Nothing like getting the crap beat out of you by little old frightened women, after sneezing from dust in an elevator. Busy week ahead for U.S. economic reports. On Tuesday, we will get Consumer Confidence numbers, expected to be at 30. On Wednesday, we get the 1st quarter GDP numbers, forecast by economists to read -5.0%. Later that day, the FOMC will announce any changes to be made to the Federal Funds rate, which is expected to be left alone at 0-.25%. Thursday brings us personal income and consumer spending, employment cost index, jobless claims, and the Chicago PMI business barometer. On Friday, we will see sales numbers of domestic motor vehicles in March, consumer sentiment, the Institute for Supply Management's manufacturing index, and factory orders. For a rundown on world reports this week, we suggest this site here. And finally, we caught this written by one of our readers on a forum today that made us chuckle. "If the market doesn't drop on catastrophe's unfolding in plain sight in front of them, then I can't see why a low probability catastrophe like swine flu should have an impact. If the market hasn't gone up its 7% this year, then everything up to and including planet killing meteors must already be priced in. We're DUE our 7%. Its in the mutual fund brochures."  

  Industrial metals fall as flu fears hit markets - Copper fell more than 4 percent before paring losses on Monday, as fears a deadly flu outbreak could reach pandemic proportions served a new blow to commodity markets battling economic turmoil. - more

  Reports

• Commodities Daily - pdf here
• The Commodity Tracker - pdf here
• Weekly Forecast by SMM Specialist - here
• BMO CM Basic Points April 2009 - here
• IMF World Economic Outlook - here
• Swine flu updates - here / CDC update page here / Google is mapping cases here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - (delayed) "As we start the new week, all the “feel-good” factors evident from Friday’s session have dissipated rather dramatically. Metals are off sharply on account of nervousness about this week’s batch of earnings from Wall Street, more macro numbers, and jitters caused by the potential pandemic out of Mexico, resurrecting fears of the chilling impact the SARS epidemic had on economic growth, particularly in Asia.  ... Nickel is at $11,050, down $500, with the charts showing a sharp retrenchment back into the trading range. At this stage, we seem to be setting up a test of $10,600 support (red line)." (read Ed Meir's complete morning base metals report here)
• (Dow Jones) LME nickel prices may find support from the presence of one market player holding a large share of nickel warrants, says Standard Bank. ...  The bank notes one market player holds between 40%-49% of all nickel warrants. If market participants are forced to buy nickel or cover short positions, this demand could squeeze prices on nearby contracts. "This may lend additional to support nearby prices, particularly if the warrant holdings start to increase over the coming days."
• Lars Christensen, chief analyst, Danske Bank - "Over the coming weeks swine flu is likely to either fade away as a market theme or escalate into an all-consuming market driver depending on whether or not it develops into a pandemic in the U.S. and/or other industrialized countries ... At this stage, it is near impossible to assess the global macro-economic impact of swine flu, but our main scenario is that the impact will be relatively limited, as was the case with SARS in 2003."
• Fuzhou News - Fujian Desheng Nickel Industry Co Ltd has reported it has finished the first phase of its nickel project in Luoyuan, Fujian.
• (Alpha Trends) Historical perspective of bear market rallies. - chart here
• Geithner, as Member and Overseer, Forged Ties to Finance Club - more
• Anatomy Of Economic Rumors: Swine Flu Unlikely To Have Impact On Economy - more

  Worldsteel Short Range Outlook - The World Steel Association (worldsteel) forecasts that worldwide apparent steel use is expected to decline by -14.9% to 1,018.6 million metric tons (mmt) in 2009 after declining by -1.4% (1,197 mmt) in 2008. However, steel demand is expected to stabilise in the latter part of 2009 leading to a mild recovery in 2010. - more

  Macroeconomic forecasts impact commodity metals - Nonferrous is muddled, as well - The International Monetary Fund (IMF) released its World Economic Outlook this week.  - more

  Stainless steel producers expect market recovery -  Leading stainless producers in Taiwan on Sunday reported substantially improved sales in April, kindling hopes that the market has at least touched the bottom, if not yet started to rebound. - more

  Indonesia mining rules may deter investors-officials - Indonesia's rules on foreign divestment of mining projects must be revised to address issues such as finding buyers if Southeast Asia's biggest economy is to attract new investment in the sector, industry officials said. - more

  Protests greet entry of mining firms in Cantilan  - Hundreds of farmers, environmentalists, local government officials and religious groups from the southern towns of Madrid, Carrascal and Cantilan will stage a four-kilometer march from the National Irrigation Administration in Barangay Calagdaan to the municipal plaza of Cantilan to dramatize their opposition to the entry of two mining firms in the area. - more

  Macmahon cuts profit forecast, sheds another 360 jobs - Macmahon Holdings Ltd has cut its profit forecast for the 2009 financial year and axed another 360 jobs, predicting a further slowdown in its mining services business following a sharp deterioration in market conditions. - more

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

• Indicators at 7:30 am CST show 3 month nickel trading around $.23/lb , with all London traded base metals suffering from a touch of the flu this morning. The US Dollar is rebounding sharply from last weeks losses, up nearly a full percentage point against the Euro. NYMEX crude futures show oil is nearly 5% lower and below $50/barrel once again. Gold is down 1/3 of 1% while silver is higher by 2/3 of 1%. In overnight trading, Asian markets ended noticeably lower, and European markets are following suit this morning. US futures show Wall Street will open in an equally foul mood. They all have caught the flu - or should we say - the threat of the flu. We are speaking of course, of the swine flu threat that seems to be spreading from Mexico City into neighboring countries. Markets are taking this threat seriously, as epidemic's in the past have had serious economic consequences, most recently in China, and the mere mention of a pandemic possibility, sends shutters throughout the world. Markets will likely act as nervous and confused as the rest of us, as government's attempt to determine the potential threat to their population.     
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals & Mining Weekly - pdf here
• Weekly Scoreboard - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - (pending receipt - will post when received)
• ArcelorMittal May Permanently Cut Steel Output by 10%, FT Says - more
• (Yieh) Posco Research Institute (Posri) predicted that Korea’s steel industry will touch the bottom in the coming third quarter before turning better in the fourth quarter and fully recover in the first quarter of 2010.
• Bank failures in the US now stand at 29 compared to 25 for all of last year, after the FDIC seized 4 more banks on Friday.
• Jamie Whyte, columnist for The Times - Those who favour “stimulating” the economy often employ a medical metaphor. The economy is a dying patient. Questions about the long-term effects of its treatment are irrelevant. All that matters now is keeping it alive. ... The serious question about stimulus packages concerns not the short-term accountancy, not the details of jobs today and debt tomorrow, but the structural effects on economies. Are stimulus packages really like borrowing to get a medical degree or are they more like taking brain-damaging drugs to eliminate an acute headache?
• Dan Greenhaus, an analyst with the equity strategy group, Miller Tabak & Co. ... ""As we close out the second week of heavy earnings reports, I cannot help but continue to be amazed at the positive reaction to earnings reports that, while they may be better than expectations in some cases, continue to show contraction on one of the most important of metrics - revenue .... Some companies are seeing signs of stabilization, an important first step in any recovery process. However, many companies, even those seeing stabilization, are extremely cautious about the rest of the year and I believe, in contrast to many traders, this is the right way of looking at things."
• Chinese steel mills turn to more imported iron ore - more
• Recession, Far From Over, Already Setting Records - more
• Insider Selling Jumps to Highest Level Since 2007 - more
• When Did Your County's Jobs Disappear? - more
• Energy Myths and Realities - more
• Interesting timetable of the Great Depression - here (note #20)

  Sales increase for local producers of stainless steel - Leading stainless steel producers in Taiwan yesterday reported substantially improved sales this month, kindling hopes that the market has at least touched bottom, if not yet started to rebound. - more

  Jinchuan Group cuts ex-works nickel price by $3,663 per ton - Jinchuan Group Ltd., China's largest nickel producer, cut its ex-works nickel price on April 27 by RMB 25,000 ($3,662.84) per ton to RMB 103,000 ($15,090.91) per ton, according to Jinchuan Group's Web site. - more

• Ni-Based Stainless Steel Prices Surge In Asia; Inquiries Border On Peak Levels Transaction prices of nickel-based stainless CR sheets are surging in Asia, mainly in China. - more

  INSG sees 2009 nickel market in 80,000 T surplus - The global nickel market will be in an 80,000 tonnes surplus in 2009, as falling demand continues to outpace cutbacks made by producers, the International Nickel Study Group (INSG) said. - more

  Metals Insider -LME Spreads...Here Be Monsters! - Things are now getting worse at a slower pace than a few months ago, or, to borrow from G7 meeting speak, "the pace of decline in our economies has slowed and some signs of stabilisation are emerging". - more

  Liberty Mines deal on hold - Officials with Liberty Mines are anxiously awaiting the result of a deal for financing to keep the company afloat - more

  Steelmakers Anxious Over Chinese Iron Ore - Russian steelmakers are nervously looking east, waiting to see what effect a series of deals hammered out in China will have on their own fortunes. - more

  China Baosteel keeps June prices unchanged - Baoshan Iron and Steel Co Ltd, the listed unit of China's largest steel maker, has kept June prices for major steel products unchanged from May, industry website Mysteel said on Monday. - more

  (not metals) Quarterly Report to Congress pursuant to section 104(g) of the Emergency Economic Stabilization Act of 2008 - pdf here (excerpt) "The Oversight Board believes that the actions taken by Treasury under the EESA have provided critical support to the financial system during this period of market turbulence and weakening economic conditions and, together with other government actions, may have helped prevent the current financial crisis from triggering a 1930s-style global financial and economic meltdown."

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, April  24

• Baltic Dry Index - minus 24 to 1,873. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Most Asian Stocks Fall Amid Earnings Concerns; KDDI Declines, Mizuho Rises // U.K. Economy Contracts 1.9%, the Most Since Thatcher Came to Power in 1979 // European Stocks Gain, Trimming Weekly Drop; Barclays, Eni, Volkswagen Rise // New-Home Sales Are Higher Than Forecast in Sign Market May Be Stabilizing  // American Express Cut by Moody's as Unemployment Seen Hurting Card Business // Oil Rises Fourth Day as Stocks, Dollar Outweigh Demand Concern  // Banks May Struggle to Raise Money After Stress Tests as Bad Assets Triple // U.S. Stocks Gain on Earnings as Ford Motor, Microsoft Rally
• The Euro is trading over 1% higher against the Dollar, on news Germany's main business confidence index rose to 83.7, higher than forecast and its highest reading since November. Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut, described today's actions in NYMEX oil stating “The oil market is tagging along with the old reliables, the stock market is up and the dollar is down. This move has nothing to do with the fundamentals of the oil market.” (this could easily apply to metals trading today also) NYMEX crude is trading over 3-1/2% higher and nearing $52/barrel. Gold got a mild jolt from news that Chinese gold reserves had grown by 76% since 2003, making them the 5th largest holder of gold in the world, and is currently trading higher by nearly 1%. Silver is trading higher by 3/4 of 1%. Base metals ended mostly in the green, except for lead, supported by the falling Dollar and rising equity markets. Indicator charts show nickel spent the day stair stepping upwards, after an early morning collapse. Dow Jones reports three month nickel ended the day at $5.24/lb , up for the day and month, but down for the week. Nickel inventories took a big hit overnight, slipping back below the 107,000 tonne level, and cancelled warrants remain around 4-1/2%. The Baltic Dry Index slipped for the first time in the last ten sessions, down 24 points. Depending on which media outlet you chose to follow, the news today could be confusing. For instance, Bloomberg reported "Sales of US New Homes in March Exceeded Forecast" Sounds good? Washington Post titled the same story as "New Home Sales Fell 0.6 Percent in March". Confused? Reuters titled its coverage as "Drop in US home sales offer hope". And the one we couldn't find - "New House Sales Drop 30.6% From Same Time Last Year". Ok here is the scoop. Sales fell, but less than economists estimated, thus its all good news, even though sales are dismal compared to last year. China reported its gold reserves had risen over the last five years. Interesting, but unlike the gold bugs, we don't read that much into it. Metals news was a little on the shy side today, so we wish you all a safe and restful weekend, and invite you back for the final week of April.   

  Commodity/Economic Comments

• (FOi) The London Metal Exchange will delay its planned launch of cobalt and molybdenum futures due to changes in a clearing system at LCH.Clearnet.
• Reuters - "There are signs that the U.S. economy has hit the bottom and that Europe's will also reach its lowest point this year, European Central Bank Governing Council member Ewald Nowotny was quoted as saying on Friday. 'This will be a very difficult year, but on the other hand there are signs that the economy is reaching the lowest point, so that for 2010 we can expect better results,' Nowotny was quoted as saying by news agency Market News."
• Citywire - "Miners were given a lift today after analysts at Cazenove upgraded the entire sector on expectations that commodities including copper would see prices rise this year..... Although it slashed forecasts on some other metal prices, including Nickel, Ferrochrome, and aluminium which it said would fall sharply by 23% this year, comments on economic stabilisation and a resilient China also convinced the group that prices paid by importers - like China - had reached a nadir."

  An Introduction to Ferrochrome by ENRC Feb 2008 - pdf here

  London Metal Exchange Fails to Grab Steel Market in First Year - The world’s biggest steelmakers have yet to adopt the London Metal Exchange’s year-old futures contracts for the alloy, preferring to set prices through negotiations with distributors and consumers. - more

  (in response to the article a reader sent us about corrugated box orders this morning, we received these from another reader.)

• Exclusive Census Report 2009: Board Converters Are Worried Sick - This year's Paperboard Packaging Exclusive Census Report offers profound insight into the sad landscape of depression. - more  
• Corrugated packaging and building products maker Temple-Inland posted quarterly earnings that easily beat expectations, helped by higher prices and lower costs, sending its shares up more than 30 percent. It also said shipments in the current quarter were rising. - more
• We don't see many signs of life in the March corrugated box statistics recently released by the Fibre Box Association (FBA) and American Forest and Paper Association (AF&PA). - more
• (worthy topic over what some believe is a good economic gauge of overall industrial and distribution activity)

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

• Indicators at 7:40 am CST show 3 month nickel trading around  $.05/lb lower but rebounding off earlier lows, with all other base metals mixed and mostly higher. The US Dollar is trading 3/4 of 1% lower against the Euro, while NYMEX crude futures are over 1-1/2% higher and over $50/barrel. Gold is 1/2 of 1% higher and silver is 1/5 of 1% higher. In overnight trading, Asian markets ended slightly lower, while European markets are trading higher this morning. At the moment, US futures show a slightly higher opening for Wall Street.  In government report this morning, it was reported that U.S. March durable-goods orders fell 0.8%, while February's numbers were revised down to 2.1% from an earlier reported 3.5%. Marketwatch reports futures are higher on news that Microsoft profits "only" fell 32% in the first quarter and that Ford "only" lost $1.8 billion during the same period. Later we get new home sales numbers, which economists forecast to come in at 330,000, lower than last month. US markets are still hovering around the 8000 level for the Dow, and 850 for the S & P.    
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• The March 2009 Casteel Reporter - pdf here
• Piping & Equipment Market Condition & Activity Bulletin - pdf here
• TED Commodity Watch - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals ended mostly lower yesterday, with copper losing the largest amount of ground. The session was noteworthy in that Thursday’s selling was confined mainly to metals, as energy finished slightly higher for a second day running, while US equities eked out a decent gain by the close as well. The weaker dollar should have also been another constructive factor for metals, as it was on the defensive for practically the whole day after the better-than expected European manufacturing survey came out. But in the end, none of these variables seemed to matter. Instead, it seemed that metal participants may have concluded that prices have done too much too quickly, and were due for a pullback despite what was happening in other markets -- perhaps an early kickoff to the “sell in May and go away” theory. More importantly, the pendulum may also be starting to shift away from the China-induced buying euphoria towards a realization that the rest of the world -including many of the country’s trading partners -- are still mired in recession. .... Setting aside the SRB selling reports for the moment, if copper fails to reverse its recent losses in light of what has been a fairly rather nurturing backdrop, we could be setting the stage for potentially more weakness for metals going into next week. ...  Nickel is at $11,200, down $150, and looking uninspiring on the charts, as the short-term up channel has been broken for some time now." (read Ed Meir's complete morning base metals report here)
• According to Chinese media, many closed pig nickel producers in China are watching the price of nickel closely, in hopes it will rise enough they can resume production. At present, those that remain operational, are complaining of  the lack of buying by stainless steel producers.
• Following Chinese metals news services reports about ferrochrome in that country can be a menagerie of conflicting reports. Most seem to report domestic ferrochrome prices are stabile and demand remains poor, although one report says a Shandong producer was slammed with orders and ran out of ore this week. Most report quoting interest has increased, but actual orders remain subdued. One reports South African ore has increased in price a tad this week, while another says Turkey is refusing to quote, with prices so low. Most all agree local producers are upset with India for flooding the market with imported ore, but one reports India exporters are trying to raise their price. Another reports a ferrochrome producer in Hunan Province is getting ready to resume production.
• Recycling International - In response to a lack of demand, stainless steel scrap prices have declined over the past month. Rotterdam prices for the 304 quality have fallen to US$ 980-1030 per tonne while the 316 grade is now attracting between US$ 1350 and US$ 1400. Prices of ferritic 430 scrap (17% chromium) have dipped to US$ 280-300 per tonne while 409 material (13% chromium) has been yielding just US$ 150-180.
• Institute of International Finance - “There are an increasing number of early, tentative signs that the global economy is about to turn the corner ... These greens shoots do not come cheap, however. The direct cost - in terms of higher budget deficits and public debt - is already substantial, and raises concerns about medium-term sustainability.”
• A glimmer of hope? The worst thing for the world economy would be to assume the worst is over - more
• Thyssenkrupp cancels labour agreement-sources - more
• It’s Time to Face the Facts - more

  Xstrata suspends operations at Montcalm mine - Unplanned ground movement or a premature collapse of the mine workings at Montcalm Mine has forced the company to suspend operations for an undetermined amount of time. - more

  FeCr Price May See Opportunity to Rebound For Case Of Antidumping Duties In Europe = Sales Of Indian Product At Discounted Prices Made Round, Glaring On 60 - 65 US-Cents - In view of the current movements, the international price of high carbon ferro-chrome (including charge chrome) has continued to fall from autumn of 2008 but is now supposed to see an opportunity to rebound. - more

  The following speakers made presentations at the last Meetings of the INSG, which was held in Lisbon, Portugal in 23-24 April 2009

• Mr. Stephen Barnett , President of the Nickel Institute on “Regulatory Developments affecting Nickel including Read Across and REACH”
• Mr. Patrick Chevalier , Natural Resources Canada, gave a presentation on “UNCSD18 – An Opportunity to Showcase the Contribution of Mining, Minerals and Metals to Sustainable Development”.
• Mr. Paul Anciaux , European Commission Directorate-General for Enterprise and Industry, spoke on “The EU Raw Materials Strategy”.
• Mr. Heinz Pariser of Pariser Allay Metals & Steel Research - Nickel Price Volatility
• All pdf presentations linked here

  Nearly half of steel mills in the red in March - Nearly half of major Chinese steel mills were mired in the red in March, official newspapers quoted a senior industry executive as saying on Thursday, as oversupply in the country weighed on product prices. - more

• China's steelmaking to decline further - China's depressed steel market is expected to worsen following a dismal April in which all the Asian superpower's steel mills posted a loss, AnSteel says. - more
• China to map out new revitalization plan for steel industry - China's central government has plans to release revised regulations for the newly approved revitalization plan for the steel industry, including those for further industry consolidation, according to Jia Yinsong, a senior official of the Ministry of Industry and Information Technology. Jia was speaking at a press conference held by MIIT Thursday. - more

  Exchange commods expose weak demand prospects - Investors betting on a demand recovery in China have pushed exchange traded metals to multi-month highs, but the rally may be on shaky ground as off-exchange commodities point out a different reality. - more

  (a reader who read on our site that some buyers watch fasteners and corrugated sales for trends sent us this) Corrugated Box Shipments (A Leading Economic Indicator) Up in April - On its conference call Tuesday, the Chairman and CEO of Packaging Corp stated that orders for corrugated boxes have risen substantially thus far in April. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, April  23

• Baltic Dry Index - plus 28 to 1,897. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Minmetals Gains Australian Approval for Revised OZ Minerals Offer // Toyota's Sales Fall for a Third Quarter as Recession Curbs Vehicle Demand // Asian Stocks Rise as Kirin Bids for Lion Nathan, Goldman Recommends Toyota // Porsche, Piech Families Plan to Sell Main Automobile Assets to Volkswagen // U.K. Bank Bailout Rises to $2 Trillion, May Increase on Building Societie // Russia Cuts Main Rates for First Time Since 2007 to Spur Stumbling Economy // European Stocks Snap Two-Day Advance as Akzo Nobel, Logitech, ABB Decline // Existing Home Sales in U.S. Hover Near Four-Month Average; Prices Increase // U.S. Initial Jobless Claims Rise to 640,000; Benefit Rolls Reach a Record // Treasury Said to Ask Chrysler's Banks to Write Down Debt to $1.5 Billion // U.S. Stocks Fall as Decline in Drug Company Shares Overshadows Bank Gains
• The US Dollar is trading nearly 1/2 of 1% lower against the Euro, while NYMEX crude has faded and is only barely higher, hovering around the $49/barrel level. Gold took a jump a few hours ago and is trading nearly 2% higher, around $907/ounce, while silver is higher by nearly 4%. Base metals ended mostly lower in the 1% to 3% range. Indicator charts show nickel opened higher, but spend most of the day on the slump, before surrendering its days gains late. Dow Jones reports three month nickel ended the day at $5.13/lb . The Baltic Dry Index gained 28 points overnight, slower than recent days, with the Panamax part of the equation, slipping into the negative. Nickel inventories stored in LME authorized warehouses gained overnight, and cancelled warrants are nearly 5%. India has imposed anti-dumping duties on stainless steel from numerous countries including China, Japan, South Korea, the European Union, South Africa, Taiwan of China, Thailand and the United States. The world's second-largest stainless steel maker, Finnish metals group Outokumpu Oyj, reported sales fell by more than 1/2 during the first quarter and reported "Visibility concerning the stainless steel market continues to be short. Both distributors and end-users of stainless steel are still running down their inventories.". They also announced a further reduction of production capacity by some 200,000 tons with 160 lay-off's at their Sheffield plant in England. In other market news, Marketwatch reported "Sales of existing homes and condos fell 3% in March to a seasonally adjusted annual rate of 4.57 million units, with distressed sales now accounting for half of all sales, a trade group reported Thursday." Nearly all the analysts were disappointed with the numbers, but most seemed to agree the post Lehman plunge was over. Bloomberg reported "The number of Americans filing first-time applications for unemployment insurance rose last week to 640,000 as forecast, while total benefit rolls reached a record, indicating the labor market continues to deteriorate." Apple beating market expectations had given Wall Street a positive start early, but the news above helped drag the Dow into the red. At present it is nearly dead even. One of the big stories of the day, as told by Dow Jones "Then-U.S. Treasury Secretary Henry Paulson threatened to remove Bank of America Corp. Chief Executive Kenneth Lewis and the bank's board of directors if the bank backed out of its merger with Merrill Lynch & Co. last year, New York Attorney General Andrew Cuomo said." We expect to hear a whole lot more about this in the coming days. In the mean time, we will just join all the analysts and jump for joy every time a government report comes out and proves that things are still getting worse - just not as fast as before. And please don't ask us to explain the logic behind that. To our readers on the other side of the globe - have a good weekend!

  Reports

• EU Steel Market: Economic & Steel Market Outlook 2009-2010 - pdf here

  Commodity/Economic Comments

• Jim Rogers: Diversification a Scam - more

  Nickel player sweats on Chinese cash - African-focused nickel miner Albidon has appointed administrators to allow it to keep operating while it completes a financing deal with China's Jinchuan Group. - more

• What really went down at Albidon and the Munali nickel mine? - Unlike a number of stricken nickel miners and developers, Albidon has been unable to convince a Chinese partner of a recapitalized future. - more

  The reasons for the boom-bust of the stainless steel price - Under the influence of the increasing nickel price, increasing settlement quotation of steel works and the rebound of futures price, domestic stainless steel price rose sharply in the short term. - more

  Vale Inco, union seek to keep some facilities going during May - United Steelworkers' Local 6500 and Vale Inco Ltd. are working together to mitigate the cost of an eight-week production shutdown to about 5,000 employees at the nickel giant's Ontario operations. - more

  Outokumpu to axe 110 more jobs - Stainless steel giant Outokumpu is to axe another 110 jobs at its melting shop in Sheffield. - more

 Why buying from reliable and reputable sources is so important and the lowest price might come with an unknown catch. - On November 8, 2004 China Business News carried the headline "Tisco stops producing 200 series stainless steel, citing problems with sales fraud." In May of 2008, Metal Bulletin noted the following "South Korea’s Posco has stopped producing 200-series stainless steel, a company spokeswoman told MB. "We found that some traders were selling our 200-series stainless as 300-series stainless, which is much more expensive. This is dangerous for our reputation, so we decided to stop the production," she said." From an ASSDA Technical Bulletin dated October2006  (pdf here) - "Because the 200-series grades are austenitic, they are not magnetic and therefore very difficult to distinguish from the widely used 300-series grades, such as grade 304, which are also non-magnetic. This has led to confusion in the marketplace, including cases of incorrect labeling, etc, with 200-series material being sold as grade 304. Most growth in 200-series use over recent years has been in low-nickel and therefore low-chromium versions which have less  corrosion resistance than grade 304. The end result has been corrosion failures in some applications and dissatisfied customers. In addition, there are concerns that this 200-series material may contaminate the existing stainless steel recycling circuit which is based on grade 304."

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

• Indicators at 7:35 am CST show 3 month nickel trading around $.01/lb lower, with other base metals mixed and quiet, except tin, which is much higher. The US Dollar is trading nearly 1/2 of 1% lower against the Euro, and NYMEX crude futures are 2% higher - and nearing $50/barrel again. Gold is 1/3 of 1% higher, while silver is over 1% higher. Asian markets ended higher overnight, while European markets are trading slightly higher this morning. US futures imply a higher opening, based off a stronger quarterly performance by Apple than expected. Jobless claims for last week were just released, coming in as expected at 640,000 newly unemployed. Ongoing claims have now topped 6.14 million people.    
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "As we have written in previous commentary, equity markets are becoming increasingly apprehensive about the Fed’s “stress tests” on various banks, and this was apparent again yesterday when stocks turned an 80-point gain into an 85-point loss in the last hour of trading. The jittery nerves were caused, in part, by reports suggesting that the Obama administration may direct banks judged to be short of capital to disclose how they are going to raise additional funds. Treasury Secretary Timothy Geithner outlined several choices for them recently, including converting government investments from preferred to common stock, getting money from private sources, or tapping the $700 billion financial rescue program. Sometime tomorrow, banks will begin to get the preliminary results from government reviews of their balance sheets, while later in the day, the Federal Reserve will also release the methodology on how it has conducted the bank exams.  ... Nickel is at $11,625, up $100, and looking rather uneventful on the charts. However, we suspect the bias is lower as the short-term up channel has been broken. (read Ed Meir's complete morning base metals report here)
• (Russia) According to expert evaluation of "Spetsstal, the volume of Russian imports of main products of stainless steel in the first quarter of 2009, as compared to the same period last year, declined by 37.1% and amounted to 22,988 tons.
• (Yieh) The European Commission (EC) has terminated the anti-dumping proceedings concerning imports of stainless steel cold rolled flat products from China, Korea and Taiwan
• (AMM) While AK Steel Corp.’s top executive is “optimistic” about an uptick in stainless orders as nickel prices start to rise, others in the industry are less than convinced.
• (Asia Pulse) PT International Nickel Indonesia Tbk decided at a shareholders' meeting here on Friday not to pay cash dividends for the 2008 fiscal year on declines in corporate performance and the nickel price.
• (SBB) European stainless surcharges still falling, some heavily
• (JMB) Japan Stainless Export Price Rebounds to Asia
• End of economic gloom? Nouriel Roubini (nicknamed Doctor Doom) - more
• Wells Fargo Made Billions On Mark-To-Market Change - more
• The Missed Opportunity - more
• Morgan Stanley ups 2009 China GDP forecast to 7% - more
• Russian Oligarchs To Become Government Employees To Avoid Bankruptcy - more

  Guest column: What is behind China's recent nickel price surge? - In the latest Interfax metals guest column, Fan Runze, an analyst with Beijing Antaike Information, discusses surging nickel prices on the domestic market and the fundamentals of China's nickel market. - more

  India imposes duties on stainless steel imports - The Indian government said on Thursday it was imposing a series of anti-dumping duties for six months on cold-rolled flat stainless steel products to support the local industry. - more

  Outokumpu 1Q net loss of euro187 mln as sales plummet - Finnish metals group Outokumpu Oyj reported Thursday a first-quarter net loss of euro187 million ($242 million), down from a profit of euro63 million last year, as sales were more than halved because of the global economic recession. - more

  China group says $800 million Myanmar mine on track - A Chinese mining giant has said it is committed to an $800 million ferro-nickel mine in northern Myanmar, which officials said will eventually lift the impoverished southeast Asian nation's GDP by over 2 percent. - more

  The unions and management of Nickel became aware yesterday of the audit requested by the committee, after the announcement of austerity measures. For the representatives of employees, the unemployment is not the solution. - translated article here  (original French here)

  Indonesian Antam to advance ferronickel optimization plans to May - Indonesian ferronickel major Aneka Tambang, or Antam, will bring forward optimization plans for its third ferronickel smelter, to mid-May instead of July as previously planned, the company said late Tuesday. - more

  BHP Billiton's Q1 2009 nickel production rises 10% year on year - Resources giant BHP Billiton produced 47,500 mt of nickel in the first quarter of 2009, up 10% year on year, the company said Wednesday. - more

  LCH.Clearnet Group announces LME margin rate change effective 4/29. Rates on nickel will drop from $2400/tonne or $14,400 per lot, to $2100/tonne or $12,600/lot. Margin calls are funds placed in a bank account with LCH.Clearnet by each LME member firm. The deposit is to cover any potential losses on a trade and mitigates against the risk borne by the clearing house, which operates as counterparty to both sides of a trade. Margins are typically increased during market volatility to discourage speculative buys.

  EU Steel Prices Still Under Pressure But Nearing Bottom - A great number of market players are strongly critical of the size of the current EU mill production cuts. - more

  China steel makers report losses as output rises - Chinese large and medium-sized steel makers lost 3.31 billion yuan ($485 million) in the first quarter as overall steel output increased, China Iron and Steel Association (CISA) announced Wednesday. - more

• Iron ore price talks stalled, China's Ansteel says - Annual iron ore price negotiations between steelmakers and miners were at an impasse, with China's entire steel industry running at a loss this month, said Anshan Iron and Steel, China's No. 2 steel maker. - more
• China steel makers, iron ore suppliers avoid price talks - This year's negotiations between China's steel companies and iron ore miners on a benchmark price for the material could last until mid-year, which would be a record, analysts have told Xinhua. - more
• China 2009 steel oversupply 100 mln tonnes -report - China may have oversupply of more than 100 million tonnes of crude steel this year, the Xinhua news agency quoted Zhu Hongren, an official from the Ministry of Industry and Information Technology, as saying on Thursday. - more
• China Was Net Crude-Steel Importer in March, Government Says - China, the world’s biggest steel producer, became a net crude-steel importer for the first time in three years in March after overseas sales plunged. - more

  Vale CEO Sees Strong Demand For Products Despite US Slowdown - Mining heavyweight Compania Vale do Rio Doce (RIO) expects continuing strong demand for its products thanks to solid growth in emerging countries, which it hopes will help it weather the slowdown in the U.S. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, April  22

• Baltic Dry Index - plus 72 to 1,869. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan's Export Slump Slows, Indicating Recession May be Starting to Ease // China's Economy May Expand Faster Than Expected on Stimulus, Goldman Says // Most Asian Stocks Fall Amid Earnings Concerns; Technology Shares Advance // Darling Plans Record Budget Deficit, Higher Taxes on Motorists, Smokers // Gilts Fall; U.K. Looks to Raise $319 Billion to Pull Economy Out of Slump // European Stocks Advance, Paced by Electrolux; British Land, Barclays Climb // Morgan Stanley Posts Wider-Than-Forecast $177 Million Loss, Cuts Dividend // U.S. Home Prices Rise 0.7% in First Back-to-Back Monthly Gain in Two Years // Soaring U.S. Deficit Means Billions in Bond Sales as Tax Receipts Collapse // Stocks in U.S. Advance as AT&T Leads Telephone Rally; GE, M/I Homes Climb
• The Euro is trading higher against the US Dollar, by over 1/3 of 1%, while NYMEX crude is trading 2% higher around $48/barrel. Gold is trading around 2/3 of 1% higher, while silver is up by nearly 2% . Base metals traded in London had a snooze day, ending mixed and little changed. Indicator charts show nickel fell early, the climbed out of the hole into the green for a time, and then settled back to where it started. Dow Jones report three month nickel ended the day a penny higher than yesterday $5.23/lb , with the sentiment turning lower in after market trading. Nickel inventories stored in LME authorized warehouses grew handily overnight, and cancelled warrants rose to over 4%. Goldman Sachs advised nickel could fall back to $4.63/lb in the near future, and raised its forecast for 2010 to the same, $4.63/lb. The Baltic Dry INdex continues to gain, up another 72 points. Reuters announced the news that would turn the market positive today "Prices of U.S. single-family homes rose by a seasonally adjusted 0.7 percent in February from January but were down 6.5% from a year earlier, the Federal Housing Finance Agency said on Wednesday.... The index is 9.5% below its April 2007 peak. " You can see how housing prices are doing in your state here. While reports issued by the government have come under increased scrutiny of late, the Architecture Billings Index reading, a monthly survey of architectural firms by the American Institute of Architects, rose to 43.7 in March, up from 35.3 in February. While still indicating an overall decline in demand for design services, the first reading above 40 since September, is positive. On the flip side, while the weekly MBA survey reported mortgage application's were up 5.3% last week, this was due to refinancing applications, which accounted for nearly 80%, as actual applications to purchase a home were down 4.2% compared to the week before. Many ultra bears and conspiracy theorists are burning up the blogs in reference to an comment we noted early last week. While we don't buy into any conspiracy, we do wonder what effect it might have on the overall real estate market's ability to recover quickly. The statement that has caught so much attention was by Rick Sharga, vice president of RealtyTrac, who stated "We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market." more Wall Street has yet to establish a trend today, having started early, gone bullish, and now trading in the red again - but just barely. Looking at market interval numbers (here), the day could easily end as a yawner. There is little doubt that there are, as President Obama called them, "glimmers of hope" out there. Whether these "green sprouts", as Chairman Bernanke called them, turn out to be a beautiful pasture where market bulls can roam, or a forest of frustration where the bears rule, remains to be seen. Right now, the seeds of recovery are bing sown, and market speculators are betting on rain. And the analysts? Bearish or bullish, they are always around to provide the fertilizer.

  Commodity/Economic Comments

• (Dow Jones) The global refined nickel market was in a surplus of 39,000 metric tons in January and February, the World Bureau of Metal Statistics said Wednesday. Global production during the two months declined 6% on the year to 213,100 tons, mostly due to cutbacks in Japan. 
• Treasury Secretary Timothy Geithner in speech this morning - “Only 17 of the 182 economies followed by the IMF are expected to grow faster this year than they did last year. Some 71--including 30 of the world's 34 advanced economies--are expected to shrink. The collapse of world trade is will likely be the worst since the end of World War II.” (source)
• IMF - Global Economy Contracts, With Slow Recovery Next Year - more
• Is China Trying to Back Its Currency with Metal? - more
• The Reeducation of Tim Geithner - more
• Soaring U.S. Budget Deficit Will Mean Billions in Bond Sales - more

  BHP Billiton's Q1 2009 nickel production rises 10% year on year - Resources giant BHP Billiton produced 47,500 mt of nickel in the first quarter of 2009, up 10% year on year, the company said Wednesday. - more

• BHP's base metals output falls amid global slump - BHP Billiton, the world's largest miner, expects market conditions to remain uncertain as its base metals output falls. - more

  Excerpts from AK Steel Conference Call 4/21

• Jim Wainscott, AK Steel Chairman, President, and CEO - (statement)  "Similarly, stainless steel inventories and service centers are at their lowest levels since 1995. Service centers continue to hold relatively low levels of stainless inventory, with current stocks representing about 3.1 months of supply on hand. Just yesterday, we announced the stainless steel base price increase effective May 3rd for all flat-rolled stainless steel products that we manufacture. Depending on the grade and product form, the price increases range from 6% to 9%"
• (response to question) "As you probably saw, we in the stainless arena are looking for a bounce off the bottom there as well. I think we’re very close to the bottom in all stainless categories, and as a result just yesterday we increased stainless prices between 6%and 9%. Part of that driver as well is what’s been happening to nickel. Nickel’s been on the move upward. And I think that was causing a number of people to sit on the sidelines before they came back into the market. But I think that’s changing. So I think in each case there’s a reason for optimism."

  Worse to come as BHP output declines - BHP Billiton has flagged further production cuts after being forced to sell more than a quarter of its iron ore on to spot markets because of deferrals, and failing to meet production expectations. - more

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

• Indicators at 7:45 am CST show 3 month nickel trading around $.03/lb lower, with all base metals trading in the 1-2% lower range, except for tin. The US Dollar and Euro are trading nearly dead even, with current sympathy leaning toward the Euro. NYMEX crude is also trading nearly unchanged, with the current sympathy to the positive. Gold and siler are trading slightly higher, with gold up nearly 1/2 of 1%, and silver up nearly 1%. Asian markets fell on profit trading overnight, and European markets are trading lower this morning.  US futures imply a lower opening on Wall Street. LME nickel inventories took another big jump overnight, and with inbound shipments picking up again, it makes us wonder what was happening to cause the shipments to fall off so strongly for the first two weeks. Over 1700 tonnes have arrived in LME warehouses over the last three working days, but totals still have not returned to the 107,688 tonnes the warehouses reported on April 2nd. Media is reporting the CFO of Freddie Mac took his own life this morning, and this news could unsettle the market early. Treasury Secretary Timothy Geithner is scheduled to make a speech this morning, and after giving the market such a boost yesterday with his Congressional testimony, what he says today will be watched closely.  
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• World Crude Steel Production as of February 2009 - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "Metals clawed back earlier losses over the course of the day yesterday, as a recovering US equity market, a slightly weaker dollar, and a rebound in oil prices, all combined to help the complex finished mixed.  ... This morning, we seem to have flipped back to the negative side, as a lower call on US equity futures is weighing on the markets. Otherwise, there is not much in terms of metals new that warrants the declines we are seeing. ... There will not be much out of the US today in terms of macro news, but out of China, a government minister said that the Chinese “industrial situation remains serious”, as the country struggles with overcapacity and cash flow strains, despite signs of an economic recovery. The minister said that overcapacity, particularly in the steel and auto sectors, was intensifying because of weak domestic and global demand, and that smaller companies were facing credit issues because of rising inventories. ... Nickel is at $11,380, down $125, and still looking fairly weak technically, as charts have broken their short-term up channel. We are looking for a gradual drift to $10,800 support."  (read Ed Meir's complete morning base metals report here)
• David Wilson, metals analyst at Société Générale in London - "This current base metals price rally looks to have little in the way of fundamental support ... The bulls have bolted too early."
• (Yieh) Bloomberg reported that European Union ended a threat of tariffs on stainless steel from China, Taiwan and South Korea after the recession prompted EU producers to withdraw a complaint alleging price undercutting.
• (MB) China imported 474,732 tonnes of chrome ore in March, up 137% from February, but 12% lower year-on-year, according to the figures from Chinese customs.
• Johan Bergtheil, Citigroup analyst - "Inventories have yet to show signs of a persistent downtrend and demand in the developed world is extremely poor."
• (Dow Jones) Nickel imports rose 29% on year to 12,620 metric tons in March, fueling speculation that China's State Reserve Bureau has stepped into the market amid improving stainless steel prices.
• (Interfax) China's imports of refined lead, zinc and tin rose on an annual basis in the first three months of the year, while the country's exports of refined lead, zinc, nickel and tin tumbled, according to figures released by the General Administration of Customs on April 22.
• (MB) China imports more moly in March than in all of 2008
• Grim outlook for South East Asian steel sector - pdf here
• SE Asian steel - Mismatch in demand-supply to continue - pdf here
• (JMB) NSSC/ Ferrochromium price for April-June/ Agreed with South African company to decrease by 12%
• Tough to be a blogger in China - here is a well written blog about stainless steel (translated version here) - note the warning at top  "Systems: an urgent notice to rectify trade blog" (here is the translated 'official' warning here)
• Jack Bauer can't stop 'The Goldman Conspiracy' - more
• The Trend May Not Be Your Friend - more
• China's power consumption in April likely to weaken - CEC - more
• Jim Rogers Isn't Buying a U.S. Stock Recovery - more

  China 2009 March nickel, lead, zinc, tin trade - more

  Following FeCr Import, China May Turn To Country To Import Molybdenum = Owing To High Domestic Cost, China Is Concentrating To Purchase Overseas Moly At Lower Prices - As far as the international price of molybdenum oxide has continued to maintain a lower level than US$10 per lb. of Mo, China will supposedly keep to be steering for imports of molybdenum from overseas sources, following their imports of ferro-chrome. - more

  Indonesia's Antam Q1 ferronickel, gold output falls - Indonesian state-owned miner, PT Aneka Tambang Tbk, said on Wednesday its first-quarter ferronickel output fell by 24 percent from a year ago on slowing demand because of the global financial crisis. - more

  Steel Industry Down But Not Out - Recovery Forecast for 2010 - According to a new report from MEPS (International) Ltd entitled, Global Iron and Steel Production to 2013, world crude steel production in 2009 is forecast to be approximately 1200 million tonnes. - more

  Judge reconsiders ruling on mine near Marquette - A judge has agreed to take another look at her decision to allow the lease of 120 acres of state land for a nickel and copper mine in the Upper Peninsula. - more

  Based on reported/estimated production, here are our top ten producers of nickel for2008

• #1 Norilsk Nickel (16.5% of world production)
• #2 Vale Inco  (14.7%)
• #3 BHP Billiton (11.55%)
• #4 Xstrata Nickel (7.64%)
• #5 Jinchuan Nickel, China (7.43%)
• #6 Chinese pig nickel (nickel pig iron) (4.26%)
• #7 Matsuzaka Refinery, Japan (3.91%)
• #8 Eramet (3.63%)
• #9 Niihama Refinery, Japan (2.48%)
• #10 Sherritt (2.3%)

  Japan’s Steel Demand Recovery May Take 3 to 5 Years - Demand for steel produced by Japanese mills, the world’s second-largest producer, may take three to five years to recover to levels before this recession, Japan Iron & Steel Federation Chairman Shoji Muneoka said. - more

  Tidbits from China media

• Overall exports have declined by 19.7% YOY. Overall imports have fallen 30.9% YOY. Of export groups, only oil, coal, and footwear sectors showed growth over the same period in 2008. Of import sectors, only billets and crude forgings, fertilizers, pesticides and fresh, dried fruits and nuts showed growth over 2008. Author said signs of recovery became evident in China in mid-March
• January to March nation industry electricity consumption is 550,780,000,000 kilowatt-hours, an 8.38% decline compared to the same period last year
• China's exports of steel in March fell 59.76% compared to last year. For 3 month period of January - March, exports fell 54.8% YOY.
• China has already  imported 130.4 million tons of iron ore in 2009 thru the end of March
• Due to heavy imports of laterite nickel ore from Indonesia and Philippines, the Rizhao Port became China's largest port for imports of nickel ore early in 2007.

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, April  21

• Baltic Dry Index - plus 60 to 1,797. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) India Cuts Interest Rates to Record Low, Forecasts Economic Growth to Slow // Australia's Economy Is Well Placed to Rebound From Recession, Stevens Says // Asian Stocks Slump as Bank of America Renews Profit Concern; BHP Declines // German Investor Confidence Tops Forecast, Jumps to Highest Level Since '07 // European Stocks Stage Late Rally; Tesco Gains, Deutsche Telekom Declines // IMF Says Global Losses From Credit Crisis May Reach $4.1 Trillion by 2011 // Geithner Says `Vast Majority' of U.S. Banks Have More Capital Than Needed // Stocks in U.S. Advance After Geithner Says Most Banks Have Adequate Funds
• Big shift in the market since this morning's briefing. The Euro continues to trade higher against the US Dollar, by a little under 1/3 of 1%. NYMEX crude has moved slightly higher, up 3/4 of 1% and nearing $46/barrel. Gold and silver are both now trading about where they started the day. Base metals took a turn when US equity markets made their turnaround. While all were soundly in the red this morning, most ended higher. But not nickel. After the trading price fell around $500/tonne through much of the morning, it bounced off the days bottom in early afternoon trading and rose noticeably in late kerb trading, making up about half of its earlier losses. Dow Jones reports three month nickel ended the day at $5.48/lb , down another 3% for the day. Nickel inventories stored in LME warehouses rose again overnight, and have gained over 1000 tonnes in the last two days. Sucden's day old chart shows the beginning of the correction  in nickel trading (here). The Baltic Dry Index continues to rise, by another 60 points. US markets took a bounce after Treasury Secretary Timothy Geithner stated the “vast majority” of U.S. banks have more capital than needed in testimony to a congressional oversight panel on the government’s financial-rescue program. This change in course helped European equity markets turn around from earlier losses, which in turn helped most base metals around. The market shift also helped boost oil's traded price, and pull gold and silver back from earlier gains. Na Liu, from Scotia, makes some interesting comments in his China Update (link below) about nickel investment and what is driving the recent hike in prices. The volatility index, which spent the last part of last week, in a slow gradual decline, jumped yesterday from Friday's high 33 reading, to over 40 early this morning. It has since retreated to 37.

  Reports

• Commodities Daily - pdf here
• China Commodities Weekly - more (very interesting read about nickel - quote - “We sold an average of 100 tonnes of refined nickel a day in the past two weeks, compared to the normal 30 to 40 tonnes level,” a nickel sales manager at a trading house in Shanghai said. “About 90% of the sales were to people whose businesses are not nickel.” It is rumored that investors such as rich businessmen in coastal Zhejiang and Jiangsu provinces were interested in stocking up on nickel as part of their investment portfolio.")

  Commodity/Economic Comments

• (DJ) Russia's nickel ore output fell by 21.5%, nickel output fell fell in January-March by 12.6% compared with the corresponding period last year
• (China) Market watchers are starting to fear molybdenum prices could fall to 2004 lows of $5-$6/lb due to lack of Chinese buyers.
• Total Housing Starts (courtesy Chart Store & The Big Picture) - here
• Housing Bubble Smackdown: Bigger Crash Ahead - Huge "shadow inventory" - more
• 60 Minutes - Retirement Dreams Disappear With 401(k)s - story and video here

  AK Steel loss smaller than expected, stock rises - AK Steel Holding Corp posted a second consecutive quarterly loss on Tuesday, with revenue down almost 50 percent, as demand for steel slumped during the global economic downturn. - more

• AK Steel CEO says 2009 iron ore price could halve - The price of iron ore, a key raw material for steel production, could be cut by more than half this year because of low demand caused by the global economic downturn, the chief executive of a major U.S. steelmaker said on Tuesday. - more

  An article dated 4/8 in Chinese media states that since the beginning of December 2008, thru the end of February 2009, exports from India of high carbon ferrochrome have surged into China by an astounding 604.9%. During this period, India was the lead source of imports of HC ferrochrome into China, knocking Kazakhstan (which saw an increase of 71.4%) and South Africa (which saw an increase of 93.4%) out of the top spot. India has attracted attention from Chinese ferrochrome producers, as India exporters keep cutting their prices to below domestic production costs. Presently, according to the article, domestic high carbon ferrochrome is being offered for 5900 yuan/ton, while Indian exporters have lowered their price to maintain a 400/ton yuan cushion - to 5500 yuan/ton. (note - prices in China since this article was written have remained fairly stabile)

  PT Antam Advances Nickel Smelter Repairs On Higher Prices - Indonesian nickel producer PT Aneka Tambang is advancing repairs on one of its nickel smelters in expectation of higher prices, Antam said in a press statement Tuesday. - more

  How to handle the post-stainless market "mini surge"? -  (comment - translated from Chinese and very difficult to read but it appears many market watchers in China believe the Chinese stainless steel market will stay depressed thru second half of 2009) - translated version here

  LME payout plan no threat to independence - Plans to pay dividends to members of the London Metal Exchange (LME) have fuelled expectations of a float or sale, but it is unlikely one of the world’s last independent exchanges is about to give up its freedom any time soon. - more

  China stainless steel index

  CRU Stainless Steel Index

  Global steel output tumbles but worst could be over - World crude steel production tumbled in the first quarter as recession knocked down steel demand and although no quick-fix is on the cards, analysts predict the worst is about to be over. - more

  SA steel production fell 23.9% y/y in March - South African steel production fell 23.9% year-on-year in March, the World Steel Association reported. - more

  Mining giants to combine power - Australia's big miners are pushing for a merger of 11 industry bodies in a bid to cut costs and centralise lobbying power under the Minerals Council of Australia. - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.26/lb lower, and down over 4% already this morning. All London traded base metals are trading in the red this morning. The Euro is trading 1/10 of 1% higher against the US Dollar as German investor confidence hits its highest since 2007. NYMEX crude futures are even and sitting at $46/barrel. Gold and silver are both trading about 1% higher this morning. In overnight trading, Asian markets ended lower, and this morning European markets are following. US futures show Wall Street will open the same, after an apparent change in market sympathy happened over the weekend.  All of the major US stainless steel producers have now announced price increases beginning in May, in the 6-9% range. This is besides the surcharges that are determined on a monthly basis. This might lead one to believe business is getting better, but according to figures released by the AISI, there are no signs of any such recovery. LME nickel inventories rose again overnight, with over 1000 tonnes added over the last two days. Cancelled warrants took a jump overnight, to nearly 3-1/2%. And we haven't posted an updated chart to the price of Shanghai construction steel in a week, but they are rising. We have also added a few links to the MEPS 304 stainless steel price index. This will hopefully offer readers who might be searching for such info, month old pricing for North America, Europe, Asia, and average world prices on 304 stainless steel. This is information MEPS has only made available to subscribers in the past.
• Bloomberg morning base metal news - more

  Nickel Shows ‘Signs of Life’ After Plunging, Macquarie Says - Nickel is showing “signs of life” after plunging last year, Macquarie Bank Ltd. said, citing indications of a revival by the stainless-steel industry, the main consumer of the metal. - more

  Reports

• March 2009 Crude Steel Production - more (figures in pdf here)
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Nickel Daily Chart - pdf here
• Global Mining News - pdf here
• Weekly Commodity Price Report - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "LME metals were pounded yesterday, ... Lead and nickel each lost about 6% on the session, and there were sharp declines in ali and zinc as well, although tin held up better than the rest. ... LME markets are getting hammered once again today, following limit-down moves in Shanghai. However, despite the steep plunge of the past 24 hours, our charts show that apart from nickel, all the other metals are within their up channels, and have not yet broken down technically. Of course, another day of a heavy selling could change that, but for now, the channels seem to be holding, as our charts illustrate.  ... Nickel is at $11,450, down $625, and looking the weakest in the group technically, as charts seem to have broken their modest up channel. Another close below $12,100 (likely) could set up a test to $10,800 support."  (read Ed Meir's complete morning base metals report here)
• (Reuters) Industrial metals prices tumbled on Monday, as renewed concerns about the global economy scuttled rallies in metals and equities and boosted assets perceived as safer, such as the dollar and gold.... LME nickel for three months delivery closed at $12,075 a tonne, having dropped more than 6 percent to a day's low of $12,025 from $12,850 a tonne on Friday ..."
• (Macquarie) Stainless orders on the rise: after collapsing for the past 6-9 months, reports are filtering through in Europe and in parts of Asia (especially Taiwan) of a rise in orders for stainless steel. There are also reports of a small rise in stainless steel base prices in some markets for the first time in a while. The order rise could reflect speculative orders on the back of nickel price rises, given that a part of the stainless steel price is an alloy surcharge based on the previous month’s nickel prices.
• (SG) The duties on exports of ferroalloys from China have risen since January of 2008 from 20% to 25%. On the other hand, the duty to impose a duty on imports of ferroalloys into China is currently only 2%. Consequently, Indian high carbon ferrochrome exporters has aggressively marketed in China since the fall of 2008. From the beginning of 2009, Chinese high carbon ferrochrome has become far less competitive with imports into China, with Indian high carbon ferrochrome being offered at $.58/per lb CIF China. The cost to produce high carbon ferrochrome in China is estimated to be higher than $.65/per lb.
• (Asia Pulse) Asia's top nickel producer Jinchuan Group again raised its ex-factory price of nickel by 9,000 yuan (US$1,317) ton to 128,000 yuan/ton Monday, the sixth time it has raised prices since April. A Jinchuan insider revealed that starting from the end of March, the nickel demand from downstream has been buoying despite the rising price. The company has adjusted up its ex-factory price of nickel by up to 48.84 per cent in a month from 86,000 yuan/ton to 128,000 yuan/ton.
• (JMB) Distributors' inventory of cold-rolled stainless steel/ March - Ni stainless steel, 6% month-on-month decrease
• (Asia Pulse) Indonesian state mining company PT Aneka Tambang said it was optimistic to reach its production targets for ferronickel and gold in the first quarter of this year.
• (JMB) Japanese raw steel output decreased by 13.2% to 105.5 million tonnes in fiscal 2008 ended March 2009 from fiscal 2007, announced by Japan Iron and Steel Federation on Monday.
• (LGMI) According to China Iron & Steel Association released data showed, by end March, the composite steel price index was 97.5 down by 44.72 or 31.42%; this has fallen below the benchmark of 100 points the association took in 1994.
• (Reuters) German Steel Federation says: sees decline of over 25 pct in German crude steel production this year
• Andrei Laptev, head of strategic planning, Severstal - In 2009, domestic demand for steel in Russia will decrease by 25%.
• (DJ) Global March Crude Steel Output Dn 23.5% On Yr - Worldsteel
• (Quamnet) China raised the value-added tax rebates for cold rolled stainless steel exports to a flat 13% effective April 1st.
• Prime Tass reports steel production in Russia down 33% during the first quarter of 2009 YOY
• 2008 "Worst Year" In Fortune 500 History - more
• A Crash this way Cometh - more
• China to launch more stimulus investment in second quarter - more
• Global crisis wipes out 1.5t yuan in Chinese investor wealth - more
• Commodities to return: Rogers - more

  Producer Sees Chrome Market Reviving - Russia's largest chrome producer expects output of the metal to recover from the summer after a drop in demand led to an abrupt halt to production last year. - more

  Vale to Tell Canada Nickel Cut in Sudbury Needed  - Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, will tell the Canadian government that market forces left the company with no choice but to slow output at its operations in Ontario. - more

• Vale says closing complies with promises - A Brazilian mining giant says plans for a two-month shutdown of its Sudbury, Ont., nickel mining operations do not violate commitments the company made to the Canadian government to win approval for its $19-billion takeover of Inco. - more

  AK Steel Announces Stainless Steel Price Increase - AK Steel said today that it will increase base prices for all 200, 300 and 400 series flat rolled stainless steel products by 6% to 9%, depending upon the grade and product form, effective with shipments on May 3, 2009. -  more

• Talley Metals Raises Prices on Stainless Bar Grades -  Talley Metals, a subsidiary of Carpenter Technology Corporation has announced that it will increase base prices approximately 5% on all stainless bar products to help offset rising manufacturing costs. - more
• Universal Stainless Announces Base Price Increase - Universal Stainless & Alloy Products, Inc. today announced a base price increase of $0.05 per pound on all air-melted stainless bar products manufactured at its Dunkirk facility. - more

 The regrets of Vale Inco - Following the leak of sulfuric acid in the Bay of Prony, Tito Martins, Vale Inco CEO and Executive Director in charge of non-ferrous industries and energy group Vale, has spent an express on Caillou to conduct a site visit and conduct meetings.  - translated version here (original French here)

  Market Tendency On Imports Of Ferro-Alloys At 15th April 2009 = Offensive For Sales Of Ferro-Alloys Taken By India Has Shaken China - Chinese producers of ferro-alloys have become very sensitive to the offensive for sales of ferro-alloys in overseas markets (particularly, in Asia) taken by Indian producers. - more

  Indonesia to allow underground mining in forests - Indonesia plans to issue a presidential decree to allow miners to carry out underground mining in its protected forest, a government official said on Tuesday, alarming green groups. - more

  Courtesy AISI - In the week ending April 18, 2009, domestic raw steel production was 999,000 net tons while the capability utilization rate was 41.9 percent. Production was 2,154,000 tons in the week ending April 18, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 53.7 percent decrease from the same period in the previous year. Production for the week ending April 18, 2009 is down 3.3 percent from the previous week ending April 11, 2009 when production was 1,033,000 tons and the rate of capability utilization was 43.3 percent.

  Courtesy Macquarie Research

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, April  20

• Baltic Dry Index - plus 55 to 1,737. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) GM, Shutting U.S. Plants, Says It May Add Factory in China as Sales Grow // Pakistan Central Bank Cuts Rate for First Time Since 2002 to Boost Growth // Most Asian Stocks Rise, Led by China Shares on Wen Comments; KDDI Declines // Darling Said to Agree on Guarantees for Asset-Backed Bonds to Spur Lending // European Stocks Decline; Anglo American, BHP, Peter Hambro, Hammerson Fall // Leading U.S. Economic Indicators Index Declines 0.3%, More Than Estimated // Hasbro Profit Tumbles 47% as Consumers Slash Toy Purchases Amid Recession // Stocks Fall on Concern Credit Losses Are Worsening; Bank of America Drops
• The US Dollar is trading nearly a full percentage point higher against the Euro, while NYMEX crude is getting hammered, down 8% and in the $46/barrel range. Gold and silver are both trading higher, in the 2% range. Base metals took a beating today, but taken in the context of recent gains, didn't do as badly as they could have. All base metals traded in the red, with nickel leading the fall, down over %5 for the day. Indicator charts show a slow gradual decline throughout the trading day, with some stability finally showing in kerb trading. Dow Jones reports three month nickel ended the day at $5.48/lb . The Baltic Dry Index gained 55 points and LME stored nickel inventories rose by a decent amount. Sucden's day old chart shows nickel trading thru Friday (here). Besides the rising dollar, metals traders appeared to be watching equity markets for cues, which fell in European and Western markets. The US Conference Board's index of leading economic indicators fell 0.3 percent in March and offered little evidence of improvement for the economy. Asian markets ended mostly higher following a comment by China’s Premier Wen Jiabao that a stimulus plan was producing “better-than-expected” results. While the Dow is presently down 200 from Friday's close, the market is still hovering around the 8000 level, where it has spent the month of April. 100 above last Thursday, 100 below today (so far). Financial stocks are getting hit especially hard today after media reports that the Obama administration was considering converting government loans to the banks into equity weighed on the banking sector. This move could potentially dilute existing shareholders. Two more banks failed and were seized by the FDIC Friday, bringing the total for the first 3-1/2 months of 2009 to 25 banks, the total for all of 2008. The volatility index is up 15% this morning, but still under a 40 reading. The bears are in control of the tug of war today, but the bulls don't appear ready to give up on their last 6 weeks of gains. It's already shaping up to be an interesting week.   

  Reports

• Commodities Daily - pdf here
• IMF World Economic Outlook - here
• Weekly Forecast by SMM Specialist - more
• Commodity Tracker - pdf here
• Weekly Scoreboard - pdf here
• Dry Bulk Shipping - Market Commentary - here
• 2008 Stainless and Heat Resisting Steel Crude Steel Production - pdf here
• Canada Data on primary iron and steel are now available for February - here

  Commodity/Economic Comments

• Societe Generale - "Whilst we are broadly bullish towards base metals over the medium term, this current base metals price rally looks to have little in the way of fundamental support and thus short term sustainability."
• (SMM) Jinchuan Group Limited, which is the largest nickel producer in China, announced to raise their ex-factory price of nickel to 128,000 CNY/t from 119,000 CNY/t on April 20, 2009. Trading price of Jinchuan nickel in Shanghai is 135,000-136,000 CNY/t today.
• (CM) China March steel output rose 12 percent month on month, which may indicate the country's economic stimulus package starts playing positive effects but also triggers overstock worries if the economy fails to keep growth momentum, some analysts say
• (FT) The recent surge in China’s commodity imports reflects strategic government purchases and rising demand from domestic traders and producers, says Jing Ulrich, chairman of China equities at JPMorgan. Purchases by China’s State Reserve Bureau (SRB) of aluminium, copper, nickel, tin and zinc have been made to increase stockpiles and support domestic industry
• (Omar Nokta’s Marine Transport Weekly) Steel markets in China have firmed modestly, supporting dry bulk rates. Last week rebar prices gained $10/ton, rising near $500/ton, to the highest level in a month. Steel inventories have reversed the builds seen throughout 1Q, with rebar stockpiles in Shanghai and Beijing down 6% and 11% month-to-date respectively. Although CISA officials continue to publicly voice concern over steel demand, the modest de-stocking has led to a more stable market. The rise in steel prices has been immediately visible in dry bulk rates, with average Capesize rates approaching $20,000/day despite steady fixture volumes. Iron ore transport costs from Brazil and Australia are up approximately $2/ton and $0.80/ton respectively from the lows seen in early April on modestly higher steel margins.
• Fed Luminaries Spar Over U.S. Inflation Target - more
• Wealth-Less Effect: Earning Well, Feeling Otherwise - more
• Zimbabwe admits raiding private bank accounts - more
• Feds to Release 'Stress Test' Parameters April 24 - more

  Nickel Shows ‘Signs of Life’ After Plunging, Macquarie Says - Nickel is showing “signs of life” after plunging last year, Macquarie Bank Ltd. said, citing indications of a revival by the stainless-steel industry, the main consumer of the metal. - more

  Cuba says all nickel plants remain open - Cuba's three nickel processing plants remain open despite low international prices, state-run radio said during the weekend in a report that urged workers to improve efficiency. - more

  Stainless steel importers want open discussion on anti-dumping - Stainless steel importers today asked the government to hold open discussions with them before taking a final call on levying anti-dumping duty on the alloy. - more

  FNX may suspend operations during Vale Inco shutdown - FNX Mining Company is "considering alternatives for its Sudbury mining operations" in response to the Vale Inco extended shutdown announcement. - more

• Shutdown will reduce nickel stockpile: Vale Inco - Rumours of an extended Vale Inco shutdown this summer, which had been swirling through the community for months, have now come true. - more

  Allegheny Ludlum raises stainless steel prices - pdf here

  How Green Is My Bottle? - (excerpt) Consider, for example, this paragon of eco-virtue: the stainless steel water bottle that lets us hydrate without discarding endless plastic bottles. - more

• (a cynic comments) Stainless vs. Plastic Water Bottles: The Debate Begins - The word is in: An article in yesterday’s New York Times declares that stainless steel is better than plastic bottles for the environment – if one stainless bottle takes the place of at least 50 plastic bottles. - more (comment - someone needs to remind this guy that 20 years ago, they would have laughed you out of the room for suggesting bottling small amounts of water in disposable plastic and selling it in vending machines. There are reasons why this idea may not be practical, but he doesn't mention any of them. Maybe he shouldn't dismiss ideas so quickly. )

  Vale discounts iron ore for China clients - report - Brazilian mining giant Vale is selling iron ore to clients in China at 20 percent below the benchmark price it fixes with large steel mills annually, a Brazilian newspaper reported Monday. - more

  Export support for US steel scrap prices may not last: Observers - Strong export activity has helped prop up domestic US ferrous scrap pricing, but sector players and observers are now speculating as to if or how long the support will last. - more

  (week old but makes a good point) That touching tendency to mistake dross for gold has been much in evidence in this spirited stock-market rally, five weeks running and still kicking. And it has by no means been restricted to analysts; it has infected market strategists and portfolio managers, to say nothing of economists (which is about all one can say about them without resorting to invective). Even the most unfavorable news, from the relentless shrinkage in corporate earnings to the inexorable rise in unemployment, is all too often blithely shrugged off with the observation that "it wasn't as bad as expected," while neglecting to identify by whom. Nor does it seem even passing strange to the growing ranks of wishful bulls that banks that went begging to Uncle Sam for bailouts and were rewarded with billions have magically discovered, come the earnings reporting season, that, by gum, they're suddenly remarkably solvent (or should we say, seemingly solvent; just disregard several trillion dollars' worth of ugly stuff on their collective balance sheet, please). - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.22/lb lower, with tin the only base metals escaping this morning's corrective swing. The US Dollar is 1/2 of 1% higher against the Euro this morning, while NYMEX crude futures are down nearly 5% and under $48/barrel. Gold is presently trading a little over 1% higher, with silver up 2%. In overnight trading Asian markets ended slightly higher, with European markets trading sharply lower this morning. US futures, at this point, imply a much weaker opening on Wall Street. We get US leading indicators released in about an hour, and then things are quiet on the report front until Thursday. Lot of earnings out this week, with Bank of America announcing it made more in the first quarter than all of last year.    
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals & Mining Weekly - pdf here
• SSINA Releases Market Data for January 2009 - pdf here
• Fortis Bank Metals Monthly - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - "LME metals ended higher on Friday, boosted by a late-day rally on Wall Street, and apparently shrugging off the bearish influence of a stronger dollar, which rose to one-month highs against the Euro. There were solid gains seen in zinc, as well as in nickel and tin, both of which have been relative laggards of late. The recent price advance in metals comes despite a set of offsetting variables operating in the background. On the one hand, Chinese buying, emanating chiefly from government-related support schemes, are helping boost prices, with the sizable declines in metal inventories that these purchases have generated, (particularly in copper), also constructive. On the bearish side, and somewhat lost in the recent buying shuffle, are the latest US macro readings, which have come in somewhat worse than expected in recent days ... We are sharply lower as of this writing in most metals, as the stronger dollar (up to 1.2960 against the Euro) seems to be having more of a bearish influence this time around. ... Nickel is at $12,330, down $495; we could be coming back down to retest $12,100, which was the former resistance, and now considered support. " (read Ed Meir's complete morning base metals report here)
• (Dow Jones)  LME nickel up 30% since end-March but Macquarie says it may be too early to turn outright bullish. Says reasons for rally include short covering (due to copper-led base metals rally), signs that stainless steel orders are recovering, less secondary supply from stainless steel scrap, and potential for supply disruption at Vale Inco's Canadian nickel operations, where new labor contracts are due for renewal at the end of May.
• (Dow Jones) The global nickel market will be in a deficit for the full year 2009, says Raymond Goldie, analyst at Salman Partners. Says he expects global nickel supply in 2009 to be about 1.145 million tons and demand to be 1.275 million tons.
• (MW) Xstrata's JV partner Merafe Resources believes that the ferrochrome price will not fall below its current level of USD 0.69 per pound and could possibly rise towards the end of 2009. Mr Steve Phiri CEO of Merafe said that it expects the ferrochrome price to increase either in the third or fourth quarter. However, the price would stay steady in the third quarter if it did not show improvement. He added that "We are holding thumbs."
• (JMB) Materials for stainless steel/ International prices show signs of bottoming out/ Nickel up 30 percent/ Chromium rebounds for China
• (Interfax) China's Q1 crude steel output edges up 1.4 pct year-on-year
• (India) Demand surge in steel not sustainable - more
• China's Stimulus Effect: Bounce or Recovery? - more
• Does This Market Rally Have Legs? - more

  Nickel up on production cuts, investment buying - Price of nickel, which is used in stainless steel, moved up by 16% this week against the previous week due to production cuts and investment buying. - more

  Universal Stainless Announces Base Price Increase - Universal Stainless & Alloy Products, Inc. today announced a base price increase of $0.05 per pound on all air-melted stainless bar products manufactured at its Dunkirk facility.  - more

  Metals Insider: Recession ? What recession ? - You might be forgiven for thinking the world is still in the throes of the worst recession since the 1930s. - more

  Base metals future bright, analyst - The medium to long term outlook of base metals is incredibly positive, Fat Prophets head of mining and resources research Gavin Wendt told Mining Daily. - more

  DJ Indonesia Inco: Won't Pay 08 Div Due To "Mkt Conditions" - PT International Nickel Indonesia, or PT Inco, Monday said it won't pay a dividend for 2008 due to current market conditions.  - more

  Clement to probe Vale shutdown of Ontario operations - Federal Industry Minister Tony Clement say he is considering legal action after Vale Inco said it is shutting down its operations in Ontario for eight weeks. - more

  EC calls off stainless steel dumping probe, will monitor imports - The European Commission has terminated its antidumping investigation into imports of stainless steel cold-rolled flat products originating in China, the Republic of Korea, and Taiwan without imposing antidumping duties after the original complainant, European steelmakers' association Eurofer, withdrew its complaint, the EC said Friday. - more

  Russian tycoon Potanin cuts Norilsk stake - Russian tycoon Vladimir Potanin has cut his stake in metals giant Norilsk Nickel by 4.8 percent to 25 percent plus one share, retaining blocking rights in the firm, the U.S. stock market regulator said. - more

  Japan steel output almost halves from year ago - Japan's crude steel output almost halved in March from a year earlier as global demand for cars and electronics crumbled, while a strong yen made Japanese steel exports less competitive overseas. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, April  17

• Baltic Dry Index - plus 78 to 1,682. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Growth May Rebound in Second Quarter as Stimulus Boosts Investment // Asian Stocks Climb as JPMorgan Profit Fuels Growth Optimism; Toshiba Rises // Euro Drops for Fourth Day as Trichet Fails to Allay Concern ECB Is Split // Trichet Faces Biggest Split as ECB President Over Use of New Policy Tools // Stocks Gain in Europe After Citigroup, GE Beat Estimates; Barclays Climbs // U.S. Consumer Sentiment Rises More Than Forecast on Signs Recession Easing // Stocks Fluctuate as Citigroup Cites Headwinds, Consumer Confidence Grows
• The US Dollar is now trading nearly 1.2% higher against the Euro, while NYMEX crude is up less than a percent. Gold is down nearly a percent, and silver is in jeopardy of a 3% drop. Base metals ended the week higher, with tin seeing a 3%+ gain, and nickel and zinc up over 2%. Indicator charts show nickel spent the morning in a climb, a stabilization period in early afternoon, and another climb late. Dow Jones reports three month nickel ended the day and four day trading week at $5.81/lb , a 14% increase from its close last week. The Baltic Dry Index grew by 78 points overnight, and LME stored nickel inventories grew slightly. In the US market, the volatility index is running in the 34 range, last seen in late September last year, implying traders nerves are calming. The Reuters/University of Michigan Surveys of Consumers said its preliminary April reading of consumer sentiment rose to a level of 61.9, up from 57.3 in March and was the highest since 70.3 recorded in September.
• Have a safe and pleasant weekend!!

  Commodity/Economic Comments

• Reuters - ""We believe the weakness of non-exchange traded commodities points to a lack of underlying industrial demand and that investor demand and speculation are driving exchange traded prices up," analyst Rebecca O'Dwyer said in a note. "We see a risk that a shift in investor sentiment could lead to a commodity and mining equity sell off."
• Citigroup - "Base metal prices are rebounding strongly, up 40% from the February lows. ... In the light of this resurgent optimism it's instructive to review the latest demand indicators. Early indicators still bearish. It's still too early for comprehensive data on demand this year but our micro-indicators are all still strongly negative, even the second derivative is still negative.... Speculative buying, both short covering and new buying is adding to the upward price momentum."
• Insteel Industries Reports Second-Quarter Financial Results - "The Company's overall capacity utilization level for the quarter was 35%."
• (Small Cap) African Eagle Resources signed a letter of intent for an option and joint venture with SAFINA of the Czech Republic in connection with the Ngasamo licence, which is adjacent to African’s Dutwa nickel laterite project in Tanzania. The deal has the potential to increase the Dutwa resource by more than 50% to 50 million tones.
• (Times) Mikhail Prokhorov, 43, is now Russia’s richest man with a fortune of $9.5 billion. But even the nickel magnate is cutting back on his expenditure and this year cancelled a deal to buy the world's most expensive property, a mansion on the French Riviera, for £392 million.
• Stiglitz Says White House Ties to Wall Street Doom Bank Rescue - more
• Green Shoots and Glimmers - more
• A 'Copper Standard' for the world's currency system? - more

  Metals Shipment Declines Ease Slightly in U.S., Canada – Shipments of steel and aluminum products from metals service centers in the United States and Canada continued their decline in March, but the rate of decline was not as great as during the first two months of the year, the Metals Activity Report from the Metals Service Center Institute shows. - more

  (thanks to a reader) This morning we posted an online notice of a price increase on stainless steel by Allegheny Ludlum. Another reader sent us a similar increase, dated the 16th, from North American Stainless advising customers of a 6%-9% increase on cold and hot roll flat products. Surcharges at both facilities stay the same.

  FNX mulls options following Vale Sudbury shutdown - FNX Mining is considering suspending base metal production in Sudbury, Ontario, due to Vale Inco's decision to temporarily shut down its operations in the Canadian metals hub. - more

  Chemtrade to maintain acid and sulphur dioxide supplies to customers - Chemtrade Logistics Income Fund says it will maintain supplies of sulphuric acid and liquid sulphur dioxide to customers even though its largest acid supplier, Vale Inco, plans to shut down its nickel mining and processing operations in Sudbury for eight weeks this summer. - more

  For global mining stocks the bear is dead? - The world's 100 hottest mining stocks have bounced by 345% from lows seen around five months ago, completely outpacing any other global equities subsector. - more

  World metals/mining labour contracts update Apr 17 - Reuters has updated its long-term diary on worldwide metals/mining labour contracts. - more

  Courtesy AISI - In the week ending April 11, 2009, domestic raw steel production was 1,033,000 net tons while the capability utilization rate was 43.3 percent. Production was 2,154,000 tons in the week ending April 11, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 52.1 percent decrease from the same period in the previous year. Production for the week ending April 11, 2009 is up 7.1 percent from the previous week ending April 4, 2009 when production was 965,000 tons and the rate of capability utilization was 40.4 percent.

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.07/lb higher, with all base metals trading higher. The US Dollar is trading higher against the Euro, by nearly a full percentage. NYMEX crude is slightly lower but hovering around the $50/barrel level. Gold is down 1/3 of 1% and silver is down nearly 2%. In overnight trading Asian markets ended mixed and slightly lower overall. Europena markets are trading higher this morning and US futures show a slightly higher opening at the moment. Big news out of Vale overnight, with the extended suspension of start up at its new mega mine Onca Puma, and the announcement of a scheduled eight week shut down of operations in mighty Sudbury. Their Voisey's Bay operation is already scheduled for a month long shut down in July, and their start up mega mine in New Caledonia is facing repercussions from a acid spill, that will likely delay a planned summer opening. This is very big news.
• Bloomberg morning base metal news - more

  Reports

• BMO Monthly - The Goods - pdf here
• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• What Nickel adds to Stainless Steel - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metal prices fell yesterday, although a late-day rally in the US stock market helped the complex pare its losses. The Dow tacked on another 95 points in the last two hours of trading, as participants did not seem to get too rattled by the various macro numbers which, on balance, we thought were biased mostly to the negative side.  ... Metal prices are slightly higher as of this writing, but not by much.  ... Nickel is at $12,475, up $25; two days of closes above $12,100 suggests that we could push higher from here, with our new upside resistance target now at $13,500." (read Ed Meir's complete morning base metals report here)
• (MiningMX) Approximately 72% of world ferrochrome production had been suspended as at end-January 2009.
• (Yieh) Following Yieh United Steel Co’s price-up announcement on April. 15, Tang Eng, Taiwan's second largest stainless steelmaker also decided yesterday to lift up monthly price in the middle of a month for the first time since establishment. TE’s price for austenitic stainless steel will be increased by NT$3,000/ton from the second half of April.
• (Asia Pulse) Australian midsize mining firm Metallica Minerals announced Thursday that the parent of Shanghai-listed Ji En Nickel Industry, Jilin Horoc Nonferrous Metals Group, has acquired 14 million of its shares via an Over-The-Counter transaction and formally became its largest shareholder.
• (Dow Jones) China's crude-steel output in March declined 0.3% from a year earlier to 45.1 million metric tons, the National Bureau of Statistics said Friday.
• (BNA) Latin America's crude steel production in the first quarter fell 40% year-on-year to 10.1Mt, the Latin American Iron and Steel Institute (Ilafa) reported.
• (IRIS) India - Government is considering charging up to 15% safeguard duty on steel items to discourage cheap imports from countries like China and the US as it is injuring to the domestic sector.
• China's March crude steel output stays high - more
• Force U.S. Steel to reopen Canadian mills: union - more
• Fiat warning to Chrysler unions - more
• China's metal riddle - boom not dead - more

  EC calls off stainless steel dumping probe, will monitor imports - The European Commission has terminated its antidumping investigation into imports of stainless steel cold-rolled flat products originating in China, the Republic of Korea, and Taiwan without imposing antidumping duties after the original complainant, European steelmakers' association Eurofer, withdrew its complaint, the EC said Friday. - more

  (thanks to a reader for advising us on this) ATI Allegheny Ludlum Announces Sheet Price Increase - pdf here

  Brazil's Vale says to trim global nickel output - brazilian miner Vale , the world's largest iron ore producer, said on Thursday it would cut its global nickel output to adjust to flagging demand for the metal due to the slowing world economy. - more

• Vale to Postpone Start-Up of Onca Puma on Slow Demand  - Cia. Vale do Rio Doce, the world’s biggest iron-ore producer, is postponing for the second time the start-up of a northern Brazil nickel project, and will further cut nickel output in Canada because of slowing global demand. - more

  Vale halts Sudbury mining - Major nickel mining operations in Sudbury, Ont., will come to a standstill for the first time in more than a century this summer after Brazil's Vale Inco announced plans to shutter its Sudbury mines and smelters for two months. - more

• Vale Inco summer shutdown a blow for Sudbury - Vale Inco Ltd. is shutting down all of its nickel operations in the Sudbury Basin for two months this summer, a huge blow to a community that has already been devastated by the global recession and the crash in commodity prices. - more

  UBS ups copper, zinc, nickel 2009 price estimates - UBS has upgraded its price estimates on LME copper, nickel and zinc, on growing confidence of a demand recovery in China, and downgraded its aluminium price estimates due to an over-supplied market. - more

  JFE Steel Says Demand Recovery May Take 3-5 Years - JFE Steel Corp. President Hajime Bada said a recovery in steel demand may take at least three to five years as a global recession slashes industry sales.  - more

  Switch from base metals to precious metals - In a dramatic shift from the fall, the base metals have greatly outperformed the precious metals in recent weeks. - more

  Steelmaker Voestalpine sees mkt trough in summer - Austrian steelmaker Voestalpine expects a trough in the steel market this summer, with a difficult 12 to 18 months ahead, its chief executive said on Thursday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, April  16

• Baltic Dry Index - plus 70 to 1,604. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg)  China's Economy Expands 6.1% in First Quarter, Slowest in Almost a Decade // Thailand's Credit Rating Downgraded to BBB by Fitch Amid Political Turmoil // Philippines Cuts Key Interest Rate to 17-Year Low as Exports, Growth Slump // Most Asian Stocks Rise as Growth Optimism Offsets India, Thailand Concerns // Turkish Central Bank Cuts Interest Rate More Than Forecast to Record 9.75% // European Industrial Production Plunges 18.4% in Biggest Decline on Record // Stocks in Europe Advance; Deutsche Bank, Nokia, Credit Suisse Group Climb // U.S. Regulators Plan to Release Stress-Test Results on 19 Top Banks May 4 // Jobless Claims in U.S. Drop, Housing Starts Stabilize in Sign Slump Easing // Stocks Fluctuate as General Growth's Bankruptcy Tempers JPMorgan's Profit
• The US Dollar continues to trade higher against the Euro, but less than 1/4 of 1% as we update. NYMEX crude is up 1/2 of 1% and just barely under the magical $50/barrel level. Gold has surrendered the $890/ounce level, at least for the moment, and is down nearly 1-1/2% at $878. Silver is down over 4%. Base metals ended lower for the most part, but the losers were down slightly, as were the few winners. Indicator charts show nickel started teh trading session lower, and spent the day climbing. While Dow Jones reports three month nickel ended the day at $5.65/lb , the market was moving higher into late trading.  Nickel inventories grew a little overnight, while the Baltic Dry Index grew a respectable 70 points, to 1,604. Sucden's day old chart shows nickel trading thru yesterday (chart), with traders apparently disregarding the SStoch and RSI readings of heavily overbought. In US reports today, the Philly Fed reading rose to negative 24.4 from negative 35 last month. Bloomberg reported "Housing starts fell 10.8% in March to a seasonally adjusted annual rate of 510,000 from 572,000 in February. It's the second-lowest rate since the 1940s" (argh! - there they go again with the 40's!!). And as stated this morning, new jobless claims reportedly fell to 610,000 last week. While some are cautioning not to read too much into the jobless numbers considering the Easter holiday, this is the second week in the row where these numbers did not continue to grow, and has to be seen by a positive sign by those who still lucky enough to have jobs. Over 6 million people were collecting unemployment checks last week. Some of those who lost their jobs this week in the metals/mining industry are found in the following headlines. (Reuters) Hungarian Steel Maker Dunaferr Lays Off 400 Due To 1Q Loss (Forbes) Toledo Mining reduces capex; Cuts 600 jobs at Berong mine (AP) ArcelorMittal to lay off 400 workers in Indiana (AP) Cliffs to cut output, lay off 355 workers (AMM) Evraz Steel idling Canadian mill, layoffs planned for 250 (SBB) Essar Steel Algoma lays off 95 more, bringing total to 600 (AMM) Bristol Metals lays off 13% of work force. Wall Street has spent much of the morning in the red, but is trading in the green at the moment. While wasting our time reading numerous analysts thoughts and pontifications on the recent rally, we seem to be getting a general feeling that while most feel the market is overdue for a correction, the bulls seem to fear that once the correction gets started, they may not be able to keep the bears under control. This could explain the apparent stagnation of the market over the last week or so, with the Dow's 8000 and S & P 850 being treated as the fortress that can't be defeated by either side. Watch the market during the last hour. There is speculation on why its been happening, but there have been some noticeable market moves made during this period of trading, on some days.  

  Commodity/Economic Comments

• According to a quarterly report, the Bureau of International Recycling estimates a reduction of 20-30% in scrap availability in 2009, compared to a 2008 figure of approximately 7.5 million tonnes. They also stated in the report that they expected a reduction of 15-20% in stainless steel production in 2009, "giving a global production figure of between 21 and 22 million tonnes" after a 8% reduction in 2008. They also forecast based on the fundamentals, the only chance of a substantial increase in nickel prices, would be by investment fund speculation.
• (Sinocast) Chinese steelmaker Maanshan Iron & Steel Co., Ltd. gained net profit of CNY 710 million in 2008, diving 71.31% from a year earlier, in accordance with the Chinese accounting standards.
• (Sinocast) Inner Mongolian Baotou Steel Union Co., Ltd.reaped net profit of over CNY 920.34 million in 2008, diving 47.30% from a year earlier, citing its financial report.
• (Reuters) The latest encouraging sign came in the form of a report that electricity consumption by steel and semiconductor companies rose last month for the first time in five months, an early sign of a pickup in activity in two key sectors of South Korea's industry.
• (Canadian Press) The number of bankruptcies across Canada swelled 22.1 per cent in February compared with a year earlier and was 13.1 per cent higher than in January.
• Foreclosure Filings in U.S. Climbed to Record in First Quarter - more
• Wall Street's disconnect from Main Street - more
• As copper surges, Wall St. wonders: What's the message? - more
• Ian Shepherdson, an economist with High Frequency Economics - "A clear down-turn in  (jobless) claims would be a strong signal of a turn in the broad economy, but we think that is still a few months off.”
• Steven C Wieting, Citigroup Global Markets - “We’ve become sea sick from observers expecting a depression one day and a ‘v-shaped recovery’ the next. However, these signs of contraction moderating should be seen as the positive and necessary first steps that they are.”
• (WSJ 4/9) Economists in the latest Wall Street Journal forecasting survey expect the recession to end in September, though most say it won't be until the second half of 2010 that the economy recovers enough to bring down unemployment.

  Yildirim to apply for ferrochrome anti-dumping case - Turkey's Yildirim Group will apply to the European Commission to open an anti-dumping case against ferrochrome imports from India, Russia, Kazakhstan and South Africa, the company's chief executive said on Thursday. - more

  Steel production, consumption to be higher in FY10: Steel Secy - The production and consumption of steel would surpass 2008-09 levels in the current fiscal, Steel Secretary P K Rastogi said here today. - more

  Steelmakers want China to end steel subsidies - Steelmakers from Europe and North and South America have called on China to stop subsidizing its steel industry and end other government measures which they said give them an unfair advantage over competitors. - more

  Highlands Pacific Annual Report today offers updated info on Ramu Nickel Project - pdf here

  Production Cuts Not Enough To Trigger Metal Prices Recovery  - Observers have said recovery of base metal prices is a long way off and it will take more than production cuts to see a rise in commodity prices. - more

  Scrap Iron Prices Nearly Double from 2008-end - The prices of scrap iron are drawing a steep uptrend. - more

  ArcelorMittal asks Poland to stop Russian steel import - Steel giant ArcelorMittal, which controls 70 per cent of steel production in Poland, has asked the Polish government to stop importing Russian steel, which is making a big dent on the profitability of the Lakshmi Mittal-headed steel behemoth. - more

  Union warns 'worst crisis ever' in steel - The Australian Workers' Union says the nation's steel industry faces its "worst crisis ever" and needs urgent action to save 12,000 jobs in the Illawarra. - more

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

• Indicators at 7:45 am CST show 3 month nickel trading around $.05/lb lower but rebounding from an earlier drop, and the other base metals except tin slightly lower.  The US Dollar is trading 1/4 of 1% higher against the Euro this morning, while NYMEX crude futures are slightly higher and hovering near the magical $50/barrel. Gold is 1/5 of 1% higher while silver is 2/3 of 1% lower. In overnight trading Asian markets ended mixed but overall, slightly higher. European markets are solidly higher this morning, and futures have yet to determine a directional opening for Wall Street. The Fed just announced housing starts were lower than expected in March, but they also announced initial jobless claims fell 53,000 to 610,000. For the week ending April 4th, 6.02 million people were collecting state unemployment benefits, 172,000 more than the previous week.  
• Bloomberg morning base metal news - more

  While Beijing covets copper, investors chase nickel - Like copper, China’s nickel imports probably jumped to a record high last month; also like copper, that surge is a misleading indicator of a market where end-user demand appears as anemic as it was late last year. - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Commodity Watch - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals instead latched on to a late-day reversal in the US equity markets, where the Dow Jones Industrial average tacked on 110 points after the Fed “Beige Book” readings came out. In its survey of economic conditions, the Fed noted that the rate of contraction in the US economy last month seems to be slowing across several regions. In fact, five of the twelve Fed district banks “noted a moderation in the pace of decline,” with retail sales even showing a “slight improvement” in some areas ... As of this writing, metal prices are slightly lower in quiet trading. The key macro data of note so far today comes from China, where the authorities report that the economy grew by 6.1% in Q1, its slowest pace in 10 years. However, markets are taking this number in stride, as it was widely expected.  ... Nickel is at $12,375, down $125, but the complex did manage to close above $12,100 resistance yesterday; another close above this level today could set up a test of $13,500, which is the top end of the trading band." (read Ed Meir's complete morning base metals report here)
• (MNP) Junior explorer Nickel ore will offload its Bardoc gold prospects in Western Australia to Kalgoorlie Mining Associates for $A1.5 million in cash.
• (Asia in Focus) China's second-largest nickel producer, Jilin HOROC Nonferrous Metal Group, has become Metallica Minerals’ largest shareholder after ramping up its interest in the diversified resource company to just over 15%.
• (AMM) Moll - The North American stainless flat-rolled market, while fairly consolidated, could use more contraction, particularly with a new mill being built in Alabama, according to one industry analyst.
• (Interfax) Spot nickel prices in China are likely to tumble to RMB 90,000 ($13,176.97) per ton in May due to rising market supply and weak demand from the downstream stainless steel making industry, an analyst told Interfax on April 16.
• (China Daily headlines today) # China's industrial output up 5.1% in Q1 // China's March CPI falls 1.2% // China fixed asset investment rises 28.8% in Q1 // China's producer price index down 4.6% in Q1 // China's retail sales up 15% in Q1
• China growth slowest on record, but upturn in sight - more
• China's industrial output up 5.1% in Q1 - more
• Scotia calls commodity bottom - more
• Why commodities caught fire - more
• Helping Employees Who Are Let Go - more
• China keeps hold on commodities reins - more
• Australia - Growth Cut Forecasts to "Substantially" Worsen: Swan - more

  Metals service center shakeout may have begun - Buyers need to check steel distributors, copper distributors and other metals distributors and metals service centers and verify reported shutdowns - more

  Japanese Export Price Recovery In Prospect For Ni-Based Stainless CR Sheets - Japan's stainless steel manufacturers expect to get an early recovery to a price level of US$2,000/ton FOB in their export deals of nickel-based CR sheets if LME nickel prices continue to trend upward from this week onward - more

  RI needs 3,000 heavy-duty equipment mechanics this year - Indonesia needs around 3,000 mechanics for heavy-duty equipment this year, PT United Tractor Sorowako spokesman Wahyudi said at PT Inco`s nickel mining area here on Wednesday. - more

  Angang Steel Says Market to Worsen Before Improving  - Angang Steel Co., China’s second- largest listed steelmaker, said prices will drop further in the second quarter before demand improves from June because of China’s stimulus spending. - more

• Asia Iron Ore-Indian prices tick down, China demand steady - India's iron ore prices were flat to lower compared with a week earlier, in the absence of long-awaited international benchmark rates, but China's demand for exports from the world's No.3 supplier of the commodity remained steady. - more

  Jindal Stainless warns of first annual loss in FY'09 news  - Jindal Stainless Ltd, country's largest stainless steel producer, has warned that the company may register a loss in the current fiscal due to high raw material cost and waning demand of the alloy due to cheap imports. - more

• Steel firms forecast stable price regime - Steel producers are seeing a revival of demand, though this is not significant enough to influence prices for now. - more

  Top steelmaker ArcelorMittal halts US plant - ArcelorMittal, the world's biggest steel producer, said on Wednesday it would halt production at a plant near Chicago and would cut jobs there because of the slump in the global metals sector. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, April  15

• Baltic Dry Index - plus 42 to 1,534. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Foreign Direct Investment Falls for Sixth Month on Global Recession // Asian Stocks Drop on U.S. Growth Concern, Yen; Li & Fung, Nomura Retreat // UBS to Eliminate Another 7,500 Jobs as Loss Widens on Flood of Withdrawals // Frontline's Jensen Sees `Massive' Tanker Cancellations as Rentals Plummet // Weber Opposes ECB Interest Rate Below 1%, Suggesting Policy Makers Split // European Stocks Fall, Led by UBS, Rio Tinto; Glaxo, Syngenta Shares Climb // U.S. Industrial Production Declines 1.5% as Stockpiles Pared in Recession // Global Confidence Climbs as Central-Bank Debt Purchases Push Rates Lower // International Demand for U.S. Assets Rises as Japan, China Add to Holdings // U.S. Consumer Prices, Industrial Output Fall, Deferring Inflation Concern // Most U.S. Stocks Gain, Led by Consumer, Industrial Companies; CSX Advances
• The US Dollar is now trading higher against the Euro, by about 1/4 of 1%. NYMEX crude is 2/3 of 1% lower, and under $50/barrel. Gold and silver are up only slightly. Base metals all ended solidly in the green, with nickel having another big day. Indicator charts show nickel shot up during the morning hours, up over $800/tonne at one point, then settled back a little in late afternoon. Dow Jones reports three month nickel ended the day at $5.67/lb , a 13% increase in the last week alone. A large drop in LME stored inventories overnight helped motivate nickel traders who, at least for the moment, appear to be betting the bottom is in. Sucden's day old chart shows the upward momentum we are witnessing in nickel (here). The Baltic Dry Index rose for a third day, up 42 points to 1,534. Markets today reflected the tenacity of the bulls on the back of bad news. With little more than speculation that things in China may be ready to pick back up, nickel traders are playing catch-up in the base metals rally. After a huge gain in US crude oil inventories was announced earlier today, NYMEX crude backed off a little, but is refusing to surrender the $50/barrel level for any length of time. Gold, even with PPI and CPI reports hinting that inflationary risks have been greatly reduced in the US, refuses to surrender $890/ounce. US markets were hit with more bad news today, but hereto, the bulls refuse to be denied. U.S. industrial production in March dropped sharply and significantly more than expected. Overall industrial production fell 1.5 percent, matching a decline in February. As Marketwatch reported "Industrial production is down 13.3% since the recession began in December 2007, the largest percentage decline since the end of World War II, when production of equipment used in the war effort ground to a halt. In the past year, industrial production has fallen 12.8%." Even with this news, Wall Street is higher, with traders treating the 8,000 level on the Dow as a rally point they refuse to surrender. As for us? Besides being very confused, we just wonder when these governmental numbers will stop being published that reporters refer to as the "worst since the 1930's or 40's.  

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Business Insider) Over the holidays, and while policymakers came up with mortgage-modification plans, there was a general lull in foreclosures. But they're coming back in a big way. All the major banks, like JPMorgan, Wells Fargo and the GSEs say they've been ramping up foreclosures in recent weeks, according to WSJ.
• (The Australian)  According to Metal Bulletin, spot iron ore prices in China fell to $US63.50 a tonne last week, equalling lows hit in October, when Chinese mills stopped buying iron ore to work through stockpiles. Separately, US iron ore minnow Cotton and Western said it accepted a a 40 to 45 per cent cut in Chinese contracted iron ore prices. The ore will be sold at $US45 a tonne at the export port at Ensada, Baja California, Mexico. The drop is at the bottom end of expectations for iron ore prices being negotiated by the big three miners, BHP, Rio and Vale, but it is not seen as an indicating where prices could settle.
• (CM) China Securities Journal citing Mr Liang Shuhe the vice chairman of the Ministry of Commerce's Foreign Trade Department as saying that "For misidentification of the steel market, Chinese steelmakers and traders have imported a lot of iron ore and made the shipments in March a new high." Mr Liang said the steel production and rising prices at the start of the year led to faked demand boom, driving the steelmakers and traders to order much iron ore in February.
• Wal-Mart CEO Mike Duke on Today show this morning - "There's still a lot of stress...It's not a 'V' recession, where we're just going to bounce out and come back."
• (ABC) Former Treasury Secretary Paul O'Neill noted that at the start of the TARP program, the heads of the major U.S. banks were summoned to Washington and told they were required to take the money so that those who needed it would not be stigmatized. "So they all took the money. Stop and think about that. What was the purpose of this policy? To deceive the people so that the public would not know which banks were in danger of failing? Why didn't any of the CEO's, claiming not to need the money, have the courage to refuse?" O'Neill said in an e-mail to ABC News. "If banks now claim they want to return the money because they don't need it, why do they have to raise new capital to replace the money from we the people in order to repay the government?" - source
• Ted Weisberg, floor trader Seaport Securities in New York - "When you look at the gains you've seen over the last five weeks in some individual stocks, these were once-in-a-lifetime moves on a percentage basis. For people to expect that to continue is not realistic. We had to lose some steam."
• Richard Boggs, founder and chief executive of Los Angeles-based Nationwide Tax Relief - "We've seen a huge rise in what we call the rookie delinquent taxpayer. They are incredibly scared, and they have no idea what's going to happen to them because, God bless them, they've never owed before.....If we are seeing a nearly threefold increase in people who have tax problems who have never had tax issues, it shows that things are worse than people think right now."
• David Greenlaw & Ted Wieseman, Morgan Stanley - "Even with energy prices having flattened out of late, the deflation risk confronting the US economy is real. Moreover, unless there is a powerful V-shaped recovery – which we deem highly unlikely – it is going to be several years before inflation risk resurfaces."
• Omair Sharif, RBS - "While the pricing environment clearly remains soft, we continue to believe that deflation will not happen unless downward price pressures widen out beyond the Fearsome Five [new vehicles, used vehicles, airfares, apparel, hotel rates], a development that the data do not currently support."
• Mark Vitner, Wachovia Economics Group - "The decline in the headline CPI will almost certainly get tongues wagging about deflation again. As we frequently noted in the past, we expect the CPI to decline in 2009 but do not expect a problematic deflation to take hold in the economy. Core inflation is expected to moderate to around a 1.0 percent pace later this year, which is still solidly in positive territory."
• The worst of the downturn behind us - more

  Nickel joins the rally in base metals - Nickel, the laggard in last one month’s base metal rally, seems to have joined the lead of copper and lead with a gain of 17% in last ten days. - more (this was written before today's trading, nickel's % gain listed was thru yesterday, and is higher now)

  JSL sees first annual loss in FY09, defers projects - India's top stainless steel maker, JSL Ltd, will post its first ever annual loss in 2008/09, hit by volatile raw material prices and longer-than-expected shutdowns, an official said on Wednesday. - more

  Vale Inco Voisey's Bay labor talks drag on - Unionized workers at Vale Inco'sVoisey's Bay nickel mine in eastern Canada are into their seventh week of working without a new contract as the company negotiates with the United Steelworkers union, a company spokesman said on Wednesday. - more

  Comment - Someone is going to have to explain these so-called "Tea Parties" to us. They stemmed from a comment that we posted on this site in February, by CNBC personality Rick Santelli, who was frustrated about "subsidizing loser's mortgages". From that statement, we now have people holding tea parties, following the example of our fore-fathers, and protesting increased taxes on the wealthy (according to numerous media reports). If we remember history correctly, the Boston Tea Party was a protest by colonists of increased taxes on tea by the British, and involved dumping this taxed tea overboard. Not exactly sure what this has to do with mortgage subsides, but if we are to copy our fore fathers example, and these current day Patriots are protesting taxes being increased on the wealthiest of American's, shouldn't these protesters be throwing rich people off boats?

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.25/lb higher, with aluminum the only base metal faltering in early trading. Nickel is getting a boost from 3 corners this morning... inventories fell hard overnight, the Dollar is lower, and resistance has been shattered from a technical aspect. The US Dollar continues to trade lower against the Euro, down 6/10 of 1%. NYMEX crude are up 1% and back at the $50/barrel level. Gold is up 1/4 of 1% and silver is up 3/4 of 1%. In overnight trading, Asian markets ended mixed, with the S & P Asia 50 Index ending slightly lower. European markets are slightly lower but choppy, and US futures show a lower opening, but they too, are choppy. U.S. consumer prices fell a seasonally adjusted 0.1% in March, and UBS announced a $1.8 billion loss and 9,000 job cuts today. The Empire State manufacturing index fell 3-1/2 points in March to minus 38.2. New orders were even weaker at minus 44.8, down nearly 15 points. The rate of decline was less than in prior months.    
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• China Commodities Weekly - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "Metals did well to hang on their gains yesterday, (with ali being the notable exception), as most markets did not fare as well. Equities were under pressure all day on account of a disappointing reception to Goldman Sachs's latest rights issue, coupled with the more important release of a poor US March retail sales number. ... Out of China, it was reported that foreign direct investment into the country fell for a sixth month in a row, with investment dropping 9.5% to $8.4 billion in March.  ... Nickel is at $12,205, up $355, and has pushed beyond $12,100 resistance; should we take that level out on a two-day closing basis, we could set up a test of $13,500, which is the top end of the trading band." (read Ed Meir's complete morning base metals report here)
• (Yieh) China’s Taiyuan Iron & Steel Co., Ltd (Tisco) has announced new ex-work price for the sixth week (April 14 – 20) of this year. The company has increased price of 304/2B stainless steel cold rolled coils and sheets by RMB500/ton, and that for 304/No.1 stainless steel hot rolled coils and plates will increase by RMB700/ton.
• (Interfax) Chinese steelmakers considering index-based iron ore trading to hedge against risks
• (JMB) Cr Series Stainless Sheet Price Drops to 240,000 Yen/t, Osaka
• (Xinhua) Jinchuan's 2009 Profit to Drop 50%
• (China) Power consumption down 4% in first quarter - more
• Fund Managers Optimistic About Economic Outlook - more
• China's economy likely to show bottoming - more

  Assmang Shuts Another Furnace As Steel Demand Falls - (excerpt) Assmang will also close all four charge chrome furnaces at the Machadodorp ferrochrome works from the end of May and scale back chrome ore production commensurately at the Dwarsrivier mine. - more

  China Is Supposed To Produce Ferro-Alloys On Scale Of 15 Million Tons In 2009 = Ferro-Alloys Producers Association, Asking Government For Measures To Support In Both Of Exports And Imports - more

  JSL to post first ever annual loss in FY09 - official - JSL Ltd will post its first ever annual loss in 2008-09 on high raw material prices and longer-than-expected plant shutdowns, a senior official said on Wednesday. - more

  The Unemployed Worker's Anti-Crisis Plan - Two stories came out in the media at the same time in late March. The first reported that First Deputy Prime Minister Igor Sechin had initiated a review of Norilsk Nickel deals. - more

  Steel demand to fall dramatically as UAE construction work is put on hold - Demand for steel in the United Arab Emirates will fall around 40 percent this year from 2008 as construction work slows, the chief executive of state-owned Emirates Steel Industries said on Monday. - more

  South Korea's crude steel capacity to rise 6.7% in 2009: survey - South Korea's crude steel production capacity is expected to increase 6.7% to a record high 64.17 million mt in 2009 due to facility expansion, the country's industry association said Tuesday. - more

  Taiwan’s China Steel in tie-up talks with China firms - China Steel, Taiwan’s top steel maker, is talking with three of its top China peers to jointly invest in overseas miners to take advantage of low prices and secure future supplies, its chairman said on Wednesday. - more

  ArcelorMittal may delay India plan by 2 years - aide - ArcelorMittal, the world's biggest steel group, may delay its planned $20 billion to $25 billion investment in India by at least two years from an earlier schedule, the head of its India unit said. - more

  Surplus Metric stainless Steel Fasteners. If interested contact the author

• 380,000  6 X 25 HHCS A2
• 140,000 8 X 40 HHCS A2
• 46,000   8 X 90 HHCS A2
• 75,000   12 X 40 HHCS A2

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, April  14

• Baltic Dry Index - plus 14 to 1,492. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Singapore's Economy May Shrink Most Since Independence as Trade Collapses // Asian Stocks Gain for Fourth Day as Goldman Sachs Earnings Beat Estimates // Orphanides Signals Deflation Risks May Require ECB Easing After Next Month // Poland to Ask IMF for $20.5 Billion Credit Line to Protect Economy, Zloty // Libor Falling Fastest Since January as Konstam, Jersey See Markets Healing // European Stocks Advance, Led by Barclays, UBS; Rio Tinto, Xstrata Climb // U.S. Retail Sales, Producer Prices Fall, Tempering Optimism About Recovery // Bernanke Says There Are Signs Pace of Economy's Decline `May Be Slowing' // Stocks in U.S. Retreat on Retail Sales, Price Reports; Goldman Sachs Falls
• Busy day, so let's give you a rundown where we are at at the moment. The US Dollar continues to trade lower against the Euro, by around 2/3 of 1%. NYMEX crude continues to trade right at the $50/barrel level, down just a tad. Gold and silver are split, gold slightly down, while silver is slightly up. Base metals ended mostly in the green after the four day London break, with nickel having another big day, up over 6%. One London trader described base metals trading to the Dow Jones Newswire "It's amazingly strong ... I think we've kind of lost touch with fundamentals but you can't stand in the way at the moment." We would agree completely with this statement. Indicator charts show nickel opened the session strong, waffled but maintained for much of the day, then took another jump in late afternoon trading. Dow Jones reports three month nickel ended the day at $5.35/lb . Looking at Sucden's day old nickel chart, today's trading would have seen nickel trading leap off the page (chart), and break thru any lines of resistance. The Baltic Dry Index rose slightly, and inventory of nickel storied in LME warehouses fell again, with three outbound shipments and no inbound recorded. Of the last 5 business days, LME warehouses received no nickel shipments on 4 of them. Cancelled warrants remain under 2%, so while the lack of inbound shipments does help enforce the theory that supply might have fallen to a more equal footing with world demand, it does not imply that demand has picked up. Inventories remain above the 106,000 tonne level. While Asian and European equity markets ended higher today, Wall Street has so far shown no signs of joining them. Fed Chairman Ben Bernanke, in prepared remarks to be made at Morehouse College in Atlanta, noted there were "tentative signs that the sharp decline in economic activity may be slowing" and stated, "I am fundamentally optimistic about our economy." With that equity futures leaped. A few minutes later, the Census Bureau reported retail sales fell in March (graph by Econompic). And on that note, equity futures dove. Wall Street opened lower, and for a second day, traders are fighting to hold onto the 8000 level on the Dow, and 850 on the S & P. Not really sure why the market got so excited by Bernanke's remark that "tentative signs that the sharp decline in economic activity may be slowing" was initially taken so positively by the market, but we don't fully understand a lot of what has been going on lately. When one of the most powerful men in Washington, the doctor with his thumb on the pulse of the economic patient, makes statements using words like "tentative signs", and the patient is getting worse but "may be" not as fast as before, is not really what we, as Main Street laymen, would call completely reassuring. We monitor the industrial supply business closely, as corrugated and fastener pricing and sales are good gauges where the market is heading. And while every distributor will tell their own version of the truth, they are salespeople after all, there are a few that trade on the stock market, and have to be more transparent. Fastenal is one of the largest industrial distributors in the US. In their quarterly report released today (here), they advise "The impact of the economy, over time, is best reflected in the growth performance of our stores opened greater than five years.." They reported those stores had seen a decline in sales of 12.4% in January, 14.3% in February, and 21.5% in March. An even larger distributor, W.W. Grainger, in its quarterly statement (here) issued today, quoted President and Chief Executive Officer Jim Ryan "We do not believe that we've seen the bottom to the sales decline and expect increased pricing pressure throughout the remainder of the year." They also reported "Daily sales for the company decreased 9 percent in January, 10 percent in February and 12 percent in March." Sorry, but these numbers do not reflect a market getting worse slower. You can choice your own "business barometer's" but these guys, and many others like them, supply America's manufacturers the industrial supplies they need to build product. The drop in prices the market has witnessed is reflected in the large loss in profits both also reported in their quarterly reports, but sales are very indicative of demand. Retail sales may have fallen by 1.1%, but industrial sales are in much worse condition. Those betting on a quick recovery should remain very cautious going forward.  

  Reports

• Commodities Daily - pdf here
• Commodity Tracker - pdf here

  Commodity/Economic Comments

• (Dow Jones) Philippine metal output value in 2008 declined 22% to PHP63.71 billion ($1.32 billion) due mostly to a dip in world nickel prices, the Mines and Geosciences Bureau said Tuesday. "The drawback was prompted primarily by the sharp fall in the (average global) nickel price of $16.85 a pound to a one-digit mark of $9.58/lb in 2008," the agency said in a report.
• WSJ Blog - Deutsche Bank economists today pinpoint five recent developments that (they say) have led investors to think the worst may be over: The Treasury Department rolled out its plan to buy back troubled assets. The Federal Reserve announced plans to buy up more mortgage debt and Treasury securities. Mark-to-market accounting rules have been loosened. Some economic data showed signs of stabilizing. And the stock market came well off its cycle low. But they’re also quick to say the recession won’t officially end until monthly payroll figures turn positive, and that “could still be some time away.” What to worry about in the interim? The Deutsche Bank team cites four concerns: 1) Stress tests of banks. 2) Chrysler, which needs a restructuring plan by the end of April. 3) Implementation of Treasury’s Public Private Investment Program. 4) Politics, which could hurt investor risk-taking.
• Payback by saving - Stop helping bailout banks more than you already have - more
• End of Recessions and Unemployment Claims - more

  Metals Insider: Is copper losing its "bellwether" status? - Something very strange is happening in the industrial metals complex. Price performance between component metals is becoming increasingly divergent, generating wildly different signals about the state of the global economy. - more

  China’s steel mills threaten to unite to lower iron ore prices - The China Iron & Steel Association's boss, Shan Shanghua, had inserted his personal representative into the annual iron ore price talks for the first time. - more

  Sinclair processing plant development wasted for now as Xstrata’s production plans dive - Xstrata has decided to postpone planned production at its Sinclair open pit and processing plant in Western Australia which it has spent $150 million developing. - more

  Mines and plants hit by low prices, high costs - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.15/lb higher this morning, with other metals mixed. Dow Jones is reporting that Standard Bank is blaming short covering for nickel's rise this morning. The US Dollar continues to trade lower against the Euro, down nearly a full percent. NYMEX crude futures are up 1% this morning, and once again over $50/barrel. Gold and silver are both lower, around 1/2 of 1%. In overnight trading, Asian markets ended higher, while European markets have begun their week trading higher. Wall Street futures have recently gone green on Bernanke's remarks that there are signs the pace of the economic fall is slowing. March core PPI came in unchanged for March, and are down 3.5% over the last 12 months, the most since 1950. Retail sales fell 1.1% in March, which analysts had forecast would show a .2% gain. This will probably drive futures back into the red for a morning opening. Earnings reports, another speech by Bernanke, and a speech by President Obama on the economy could make for an interesting day. Please note MF GLobal's Ed Meir has posted his first daily report in over a week, linked below. And we posted a graph showing the slight upturn in stainless steel prices in China.
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Weekly Forecast by SMM Specialist - more
• Weekly Commodity Price Report - pdf here
• Global Mining News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments -  "The recent gains we have been seeing in metals over the past several weeks is attributable to several factors, but three stand out most prominently. The first is the advancing notion that the deterioration in economic activity-- at least in the US and China -- seems to have moderated, with a number of key macro indicators in both countries now no longer showing the rapid, month-over-month declines evident earlier in the year. Secondly, the sharp rally seen in the US equity markets--where the S&P 500 has gained a stunning 26% since hitting its low on March 9th--has managed to pull a variety of commodities higher in its wake. Finally, there has been a resumption in the decline of LME inventories in recent weeks, (particularly in copper) as metal heads out of warehouses and makes its way to China.  ... Summing up our outlook, we seem to be transitioning from a period of economic freefall to a phase that can be best described as “bumping along the bottom”. This is not necessarily a bad thing, as it will allow commodity markets to transition from a bear market to sideways moving markets with a higher bias, as signs of recovery become more evident. In the case of the LME metals, we believe that we have likely seen the lows for the year, especially if we do not see any extraordinary macro developments hit us. This does not include the likely bankruptcy of GM, which we believe the markets have seemed to have amply discounted by now. ... After being in the doldrums for most of March, nickel prices seems to be perking up, albeit slowly. We are currently at $11,385, up $310, and pushing towards $12,100, where there is formidable resistance." (read Ed Meir's complete morning base metals report here)
• (MB) Jinchuan lifts nickel price by $585/T
• (JMB) NSSC/ To reduce price of cold rolled Ni sheet by 5 thousand yen, NSSC Downs Ni Stainless Steel Price, Ups Cr Series in April
• (SBB) February US stainless sheet shipments up month-on-month
• Bernanke Bet on Keynes Has Meltzer Seeing 1970s-Style Inflation - more
• Thoughts on the Market Rebound - by Tom Au, William Hester - more
• A Critique Of The Quantity Theory Of Money - more (quote- "Not only does more debt add nothing to the GDP, in fact, it necessarily causes economic contraction, including greater unemployment. Immediate action is absolutely necessary to avoid collision that would make the ‘unsinkable’ economy sink." .... The year 2006 was the watershed. Late in that year the marginal productivity of debt dropped below zero for the first time ever, switching on the red alert sign to warn of an imminent economic catastrophe. Indeed, in February, 2007, the risk of debt default as measured by the skyrocketing cost of CDS (credit default swaps) exploded and, as the saying goes, the rest is history.)

  New Caledonia govt plans laying charges against Vale Inco over acid leak - The New Caledonian government is planning to lay charges against the Vale Inco nickel company and the southern province following a massive acid spill. - more

• WWF New Caledonia wants halt to Vale Inco operations - The organisation, the World Wildlife Fund, in New Caledonia is calling for all activity at the Vale Inco nickel plant to be stopped following an acid spill. - more
• The flight of Vale Inco was it predictable? -The leak acid slips on the political arena. Yesterday the Prime Minister announced that he sued the company not only for the damage committed in the public domain, but also the South Province. - translated version here  (original French here)

  Toledo Mining reduces capex; cuts jobs at Berong mine - Philippines-focused nickel miner Toledo Mining Corp Plc said on Tuesday it stopped all capital expenditure beyond necessary maintenance during the quarter ended March 31 and cut more than 600 jobs at its Berong nickel mine. - more

• DJ Toledo Mining No Progress At Berong, Bujtor Resigns As CEO  - Toledo Mining Corporation announced Tuesday that in its Berong Nickel Mine project, no laterite nickel ore was mined or hauled during the quarter ended March 31 and the operation remained on 'Care and Maintenance.' - more

  Vale Inco begins work to build nickel processing plant in Long Harbour, N.L. - Mining giant Vale Inco has started the work necessary to build a nickel processing facility in Long Harbour, N.L., despite the downturn in the world economy. - more

  China Has Reversed To Country To Import More Ferro-Alloys From That To Export Them = Imports In Jan. - Feb. / 09 Exceeded Exports In Same Period - According to the customs-statistics released in China, the quantities of ferro-alloys imported and exported by China in January - February of 2009 broken down by items were as per the table attached hereto - more

  Steel makers find raw material costs too high - JSL, the largest ferro alloy producer in India, has decided not to lift any ore from the Orissa Mining Corporation (OMC) this quarter, as it finds the prices too high. - more

  China's runaway steel train - Yu Jianshui fidgets in his big leather chair as he chain-smokes his way through an interview. Times are tough at the Tangshan Fengrun Zhengda Iron and Steel Co. Ltd. - more

• China industry to back steel mills if US starts dumping probe - China's steel associations will take up cudgels on behalf of producers if the US government launches a probe into whether Chinese mills are dumping steel pipes in the US market, China Daily reported last Friday, quoting a senior industry official. - more

  US, China key to global steel industry revival - Steel is on edge and the global industry is cutting back hard, hanging on for either a budget blast from China, new credit for vast Middle Eastern building schemes or resurrection of the US auto industry. - more

  Courtesy AISI - In the week ending April 11, 2009, domestic raw steel production was 1,033,000 net tons while the capability utilization rate was 43.3 percent. Production was 2,154,000 tons in the week ending April 11, 2008, while the capability utilization then was 90.3 percent. The current week production represents a 52.1 percent decrease from the same period in the previous year. Production for the week ending April 11, 2009 is up 7.1 percent from the previous week ending April 4, 2009 when production was 965,000 tons and the rate of capability utilization was 40.4 percent.

  China Stainless Steel Prices courtesy HME

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, April  13 (LME is closed today for holiday)

• Baltic Dry Index - not reported today - holiday   (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Economic Growth May Cool to Slowest in Almost 10 Years on Exports // Japan's Wholesale Prices Fall at Fastest Pace Since 2002 as Slump Deepens // Asian Stocks Climb on Japan Stimulus, China Money Supply; Mazda Advances // Crude Oil Falls as Energy Agency Says Demand to Decline to Five-Year Low // German Government May Allow Companies to `Park' Workers, Die Welt Reports // Faber Says S&P 500 Index May Rise to 1,000 as U.S. Aid Boosts Bank Profits // U.S. Stocks Fall After Chevron, Boeing Forecast Lower Earnings; GM Slumps
• With LME markets closed today, there is no closing nickel price. The US Dollar is currently slumping against the Euro, down by 1-1/3%, as the Dollar's safe haven appeal wanes in light of an improved appetite for market risk. NYMEx crude has slipped under $50/barrel and is trading nearly 5% lower on a report from the International Energy Agency report that stated that 2009 demand may slump to the lowest level in five years. Gold is up over 1-1/2% but still well under the $900/ounce level.  Silver is trading 3-1/3% higher. Citigroup in a weekly Metals & Mining report noted that "Stainless steel sheet 304 prices are averaging $2,040/ton in 2Q vs. $2,098/ton in 1Q09. Average pricing for stainless steel sheets hit a recent peak of $6,058/ton in July '07. .... Nickel prices have increased slightly in 2Q QTD, averaging $5.03/lb, from $4.77/lb in 1Q09."  The Dow is fighting to hold onto the 8000 level on Wall Street today, while the S & P is trying to re-gain the 850 level. Federal regulators on Friday seized their 22nd and 23rd banks for 2009, and are now only two banks shy of the total seized during 2008 (chart here). Big week for government reports ahead, with PPI, retail sales and business inventories out tomorrow. CPI, NY Mfg Survey, and industrial production on Wednesday, followed by housing starts, weekly jobless claims, and the Philadelphia Fed survey on Thursday, and consumer sentiment on Friday. Along with 20 S & P companies reporting 1st quarter earnings, this week could give us a better idea if the economy is getting better, or getting worse at a slower pace, as many believe.  

  Commodity/Economic Comments

• (Reuters) South Korea's POSCO, the world's No.4 steelmaker, said on Friday it was seeking a 50 percent cut in contract iron ore prices for the year started on April 1.
• Charles E. Wilson then president of the General Motors Corporation, 1953, to Senate Armed Services Committee when questioned whether as secretary of defense, he could make a decision adverse to the interests of General Motors - ""because for years I thought what was good for the country was good for General Motors and vice versa"" (comment - now that GM is said to be filing for bankruptcy, let us hope this no longer applies)
• Investment guru fears inflation - more
• China Slows Purchases of U.S. and Other Bonds - more
• What is behind different PMI statistics? - more
• More States Look to Raise Taxes - more
• Guest Post: The Fake Recovery - more
• Restore Order and Win a Financial War - more
• (Theodore Roosevelt, 1906) "I quote from the Progressive platform: "Behind the ostensible Government sits enthroned an invisible Government, owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day. . . . This country belongs to the people. Its resources, its business, its laws, its institutions, should be utilized, maintained, or altered in whatever manner will best promote the general interest."

  Automotive exhaust makers against import curbs on steel - Suppliers of automotive exhaust products to leading car makers such as Suzuki, Tata, BMW, Ford and Mercedes, have opposed the government's move to levy an anti-dumping duty on stainless steel, saying the alloy of high grade they need is not available locally. - more

  Tianjin plans 23m-ton steel group - China's northern city of Tianjin plans to merge its four State-owned steel mills into a group with annual capacity of about 23 million tons, the China Business News said on Monday, citing a company official. - more

  Brazil's Vale sees firming Chinese demand - CFO - Brazilian iron ore miner Vale has registered a rise in Chinese demand for ore and other metals, despite the global economic crisis, the company's financial officer, Fabio Barbosa, said Monday. - more

  UAE says steel dumping hurting local prices - The United Arab Emirates is concerned about steel dumping and the impact this is having on local prices, the UAE's economy minister said on Monday. - more

  Experts unravel great mystery of Earth - It was one of the most important changes to have happened to the Earth's atmosphere and it was the reason why today we can breathe life-giving oxygen. And yet the Great Oxidation Event has remained a mystery - until now. - more

  Our two cents on the recession/depression debate. We've all seen the photo's from the early 20th century so called 'Great Depression'. Photo's of long soup lines, men in suits begging for work, and the sad faced woman sitting in a dusty tent with hungry children by her side. Pretty gloomy, and since most of us did not live during that period, one must take these photo's as an example of what America was like at the time. It was in fact, a black and white situation - saved for all time in black and white photograph's. So it's kind of hard to swallow when some believe we are in a "depression" today. How can this possibly be? Millions of people driving around in gas guzzling cars, malls full of shoppers, movie theatres packed, and all in living color. And no - we do not have the answer. But we can not help but see many differences that could be masking any possible comparisons between then and now. Probably most importantly is the fact most unemployed Americans today, immediately qualify for unemployment benefits. While few would claim they could live comfortably on unemployment pay, this check can keep a family feed and cover some expenses. Another change is the massive increase in two income families. When one spouse loses their job, the family may have difficulties meeting their financial obligations, but they still have at least one source of income. Or possibly two, with unemployment benefits. Another very important benefit we have today that our forefathers did not, is the FDIC guaranteeing our bank deposits. This nearly eliminated the chances of a bank run, a key factor in expediting the economic collapse of the 20's. These are just a few of the changes that must be considered when comparing the two time periods. So, while we are in a severe recession, are we in a depression? In retrospect, our contribution to this argument may be that comparing what we are going thru today, to back then, is like trying to compare an apple to an orange.

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

• Indicators at 7:45 am CST show 3 month nickel not trading as markets in London are closed today for Easter break. The US Dollar is trading 1/3 of 1% weaker against the Euro, while gold is up 1-1/2%, and silver is up 1-3/4%. NYMEX crude futures are down 2%. In overnight trading, Asian markets ended higher, with Chinese markets ending at a 8 month high. European markets are not trading today, and US futures show a lower opening. The S & P has had its steepest 23-day advance since 1933 in recent days, according to Bloomberg. In weekend news, GM is reportedly planning to file for bankruptcy before June 1st. And in New Caledonia, the environmentalist are protesting Vale's Goro project after an acid leak a few weeks back, killed numerous fish. And an official with the Chinese government blamed stockpiling, and not increased demand, for the record breaking imports of iron ore into that country in March.

  Reports

• Reports thin today as many are still on holiday break
• Metals & Mining Weekly - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Weekly Scoreboard - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - we should see Ed's daily reports return tomorrow after LME trading resumes
• (Yieh) China’s steel exports totaled 1.67 million tons in March, which is 120,000 tons more than last month but declined by 59.76 percent than the same month of last year.
• (Alibaba) Iron ore imports in March was 52.08mln tons, with the highest record, inclined 5.34mln tons compared with Feb and rose 46.2% in comparison with the same period last year. The monthly total imports was 131.47mln tons, increased 18.8% yoy.
• (Interfax) Shanghai Stock Exchange-listed Jilin Jien Nickel Industry Co. Ltd. announced on April 11 that it recently inked an agreement with Liberty Mines Inc. to acquire a 51 percent stake in the Canadian nickel miner for CAD 30 million ($24.49 million).
• Chinese economy improves; deflation haunts Japan - more
• China Mulls New Stimulus to Boost Consumption, Bolster Recovery - more
• Global steel industry on edge - more
• The Imminent Disinformation Schism - more
• Twitter Worm Attack Continues: Here’s How to Keep Safe - more

  Vale Inco to update plans for nickel processing plant in Long Harbour, N.L. - Officials of Vale Inco will update their nickel processing project plans Monday for Long Harbour, N.L. - more

  China Stainless Steel Demand May Rise 8 Percent  - China's demand for stainless steel may rise as much as 8 percent this year as government stimulus spending spurs consumption in the world's largest metals consumer, said an economist with Taiyuan Iron & Steel Group. - more

  Zimbabwe mineral giant resumes production - Zimbabwe's ferrochrome giant Zimasco restarted production Saturday as a major step to implement the new government's emergency economic recovery program, an official said Sunday. - more

  A good anger acid - "Mutiny" by the leak of sulfuric acid over 300 activists, trade unionists and ordinary citizens have expressed their anger in the Bay of Prony on the site of Vale Inco New Caledonia, 80% of plants are suspended by an order provincial. - translated here original French here

  China iron ore import surge caused by 'fake demand' - China's iron ore imports surged in February and March because of "fake demand" brought about by stockpiling and they are likely to fall off over the rest of the year, a government official said on Monday. - more

  When it comes to steel, April is ''the cruelest month'' - The London Metal Exchange is closed today. Yesterday's LME ended on a strong note with all base metals above Wednesday's late close. - more

  China's iron ore confusion is good news for Australia - Logic suggests that the dynamics of an iron ore supply glut, a steel industry collapse and a new Team China approach to this year's iron ore benchmark price negotiations would lead China to overturn five years of national humiliation and bring Vale, Rio Tinto and BHP Billiton to their knees. - more

  (not nickel) 11 police, 4 rebels killed after Indian mine siege - Dozens of heavily armed Maoist rebels stormed a bauxite mine in eastern India and held roughly 100 mine employees hostage before police regained control of the facility early Monday morning, authorities said. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, April  10 (LME is closed Friday and Monday for holiday)

• There are no indicators this morning as the London Metal Exchange, as well as many world equity markets are closed for Good Friday. The US Dollar is 1/4 of 1% higher against the Euro today (article here) on speculation the worst is behind us. In overnight trading, Asian markets ended higher, with the Shanghai Composite having its highest finish since August.  European markets are closed, as are American. Bloomberg reports the Fed has told the banks to keep their mouths shut about stress test findings (article here).  MarketWatch discusses why its so difficult to find a reliable gauge for commodities (article here).  

  Reports

• No daily reports published for holiday
• Global Mine Bulletin April 2009 - pdf here
• World Bank Commodity Markets Review - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - MF Global advises Ed is traveling this week and will not be publishing his morning report
• (Bloomberg) Vale, the world’s second-biggest nickel producer, jumped 5 percent to 29.70 reais. Demand for nickel in China, the world’s biggest user, may climb 14 percent this year as low prices encourage stainless-steel producers to use more, according to Eramet SA.
• (CM) Though the official statistic figure hasn't been released yet, industry insiders predict that China sees net import of steel products in March, which would be the first time since 2006.
• (Interfax) China's stainless steel sector is expected to boost production this year and increase its demand for nickel by up to 11 percent compared with that of 2008, an industry expert said at a conference on April 10.
• (Reuters) Deals signed by small Chinese steel makers with overseas suppliers are behind the surge in the country's iron ore imports, the Securities Times newspaper said on Friday.
• (Reuters) South Korea's POSCO, the world's No.4 steelmaker, said on Friday it was seeking a 50 percent cut in contract iron ore prices for the year started on April 1.
• (JMB) NSSC to Expand Cr Stainless Rebar Sales to 1,000t/y
• China’s Exports Fall for Fifth Month on Global Slump - more
• Consequences of the Oil Shock of 2007-08 - more   (and)  Driven to the Brink (May 2008) - pdf here
• How health care costs contribute to income disparity in the United States - more

  China Stainless Steel Demand May Rise 8 Percent  - China’s demand for stainless steel may rise as much as 8 percent this year as government stimulus spending spurs consumption in the world’s largest metals consumer, said an economist with Taiyuan Iron & Steel Group. - more

• Spot steel prices edge down on slow demand recovery  - Chinese spot steel prices edged down after trading firm for the past two weeks, as sentiment remained fragile over demand recovery despite a strong pick-up in manufacturing activity and reports of auto sales. - more

  Vale Inco plant near paralysis - The decision was made public yesterday: a new provincial decree suspends 80% of the industrial site of Vale Inco for a period of six to eight weeks. Quite the timing of the commissioning of the plant that will have to be reviewed. - translated version here (original French here)

  Posco Profit Drops by Most in Eight Years on Output - Posco, Asia’s third-biggest steelmaker, posted its largest profit drop in eight years after the global recession reduced demand from automakers, builders and electronics companies. - more

  Nano, Railways to drive stainless steel demand - Driven by a revival in demand from the auto and railway sectors, the country’s per capita stainless steel consumption is likely to double in two-three years. - more

  Six Reasons to Love Stainless Steel - Glistening metal discreetly mounted beneath acres of gleaming granite - clearly, this is not the utilitarian stainless steel sink your grandmother washed dishes in decades ago. - more

  Flood Warning from Switzerland! - Russian Steel Surge Threatens the World - A report issued this week warns that Russian steelmills may try to export their way of the current global economic crisis, exploiting their low-cost power and raw material advantages, and creating a potential glut in global steel supplies for another twelve months or longer. Steel analysts from the Swiss bank UBS produced the report on April 8. - more

  Steelmakers not keeping up with payments to suppliers - More and more cash-strapped steelmakers are struggling to pay for services and equipment, with some resorting to last-minute cancellations or renegotiations, suppliers to the steel industry reported. - more

• Report: China denies alleged steel pipe dumping - China's steelmakers are abiding by international trade rules and reject charges of dumping, government and industry officials said in comments published Friday, amid brewing tensions over surging U.S. imports of Chinese steel. - more

  Nickel "Famine" Led to Oxygen-Breathing Life? - Life as we know it may have evolved because Earth's early oceans ran low on nickel, a new study suggests. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, April 9 (LME will be closed Friday and Monday for holiday)

• Baltic Dry Index - plus 15 to 1,478. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Sumitomo Mitsui `Reality Check' Hints at Cracks in Japanese Banks' Capital // Aso to Announce $154 Billion Stimulus Plan to Revive Ailing Japan Economy // Japan Machine Orders Unexpectedly Rise in Latest Sign Recession is Easing // Posco Says First-Quarter Operating Earnings May Miss Analyst Estimates // Asian Stocks Rise as Japan Government Signals Increased Economic Spending // Bank of England Maintains Key Rate at 0.5%, Sticks to Bond-Purchase Plan  // German Industrial Output Falls for a Sixth Month as Recession Saps Demand // European Stocks Rise on Government Economic Measures; BHP Billiton Climbs // Wells Fargo Quarterly Profit Tops Estimates, Spurring Rally in Bank Shares // Trade Gap in U.S. Unexpectedly Plunges to a Nine-Year Low as Demand Slumps // Stocks Gain Worldwide, Oil Climbs as Treasuries Fall; JPMorgan Shares Jump // Emerging-Market Stocks Extend Biggest Rally in Year; Bonds Gain // U.S. Initial Jobless Claims Fell to 654,000 Last Week
• The US Dollar continues to trade higher against the Euro, by nearly a full percent. NYMEX crude is up over 3-1/2% and over $51/barrel. Gold is up a smidge, and silver is up nearly 1%. Base metals have a green day, and not the kind where people kiss trees and pet snakes. Buoyed by copper hitting a new high for 2009, all base metals ended solidly in the green - or black, whichever you prefer. Indicator charts show nickel struggled around mid-day, slipping into the red, but this was followed by a $300+/tonne spike, which shrank before the end of the session. With LME markets closed for the next two business days, Dow Jones reports three month nickel ended the day - and its trading week - at $5.01/lb , closing above $5/lb for the first time since early February. Nickel inventories fell again overnight. From a yearly high of 107,688 tonnes on the second of this month, inventories have fallen back by a little over 1%. The Baltic Dry Index went green, with a small gain of 15. US markets are having a very bullish day, after Wells Fargo announced its profits would exceed expectations. Keep in mind that it was Citi-group, one week a Wall Street joke after becoming a penny stock, who silenced the comedian's the next, by stating that it intended to make money last quarter. This was the pivot point that started the recent rally, and while other economic news may not be as encouraging, the health, or the lack thereof, of the financial system seems to be where the market is placing its hopes for recovery. In other news today, first time unemployment claims came in 20,000 lower than expected, at 654,000. Pretty sad when 654,000 people losing their jobs is taken as a hopeful sign that things aren't getting "worse". Take that number as good news, if you will, because the rest of the report stunk. It was the tenth straight week over 600,000 people became unemployed, and the number of people staying on benefit rolls rose to a record 5.84 million. The U.S. trade gap fell to $26 billion, the lowest this century, after imports dried up, down 29% in the past year, and exports expanded by 1.6%. German industrial production fell 2.9% in February, while Italian industrial production fell 3.5%. The Japan Machine Tool Builders Association reported machine tool orders were down 84.5%, and some of the media reported this as a positive sign!?  
• Depending on who you talk to, the economy is still in intensive care, but has been upgraded to serious condition from critical. Others will tell you our patient is still in grave condition. To find out who is right, one must find the patient's doctor. And while there is a physician with their own prognosis of the patient's condition in every closet, the attending physician has apparently left the building. The bears have gone from defiance, to ridicule, to downright irritation as the market continues to rebound. They are as convinced of their negative forecasts, as the bulls were that the market couldn't get any worse last spring. Even some of the bulls came into this week nervous about earnings reports starting. It appears the week will end with those nerves settling, as the VIX has fallen from the 40's range. US markets are closed tomorrow, so far all of those beginning their weekend, we wish you a safe, relaxing, and enjoyable holiday. For the rest, we will post as usual tomorrow.       

  Reports

• Commodities Daily - pdf here

  Commodity/Economic Comments

• (Dow Jones) U.S. nickel imports rose 36.1% in February from last month, and was up 10.8% from the previous year, the Commerce Department reported Thursday.
• (Dow Jones) U.S. nickel exports fell 59.6% in February from the previous month, and was down 48.8% from the previous year, the Commerce Department reported Thursday.
• Jack Ablin, chief investment officer, Harris Private Bank - "The market's main gauge of risk, the VIX, broke down a couple of days ago suggesting that the brutal market downdraft we suffered in the fourth quarter of last year was simply a one-time massive margin call and not an economic omen."

  Cuba admits nickel prices barely cover costs - Cuban Vice President Jose Machado Ventura warned international nickel prices were on the verge of making the island's most important export industry unprofitable, state-run radio reported Thursday. - more

  Xstrata Nickel to defer underground mine at Sinclair - Xstrata Nickel Australasia has this week informed its employees and relevant stakeholders of its plans to defer the development of the underground mine at the Sinclair operation due to current market conditions. - more

  China March daily steel output falls vs Feb -media - China's daily crude steel output in March fell more than 4 percent from February, as Chinese steel mills cut production due to declining exports and lower prices, Chinese newspapers reported on Thursday. - more

  Decline in nickel kick-started evolution - Life as we know it may owe its existence to the decline in metal on the early earth. - more

  The pitch that has come back to haunt Fortescue - The consummate salesman was about to ink the first real deal on his road to redemption. - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.02/lb lower, and bucking the trend of most other base metals that are trading higher. The US Dollar is trading slightly lower against the Euro, and NYMEX crude futures are up nearly 3%. Gold and silver are also down slightly. In overnight trading, Asian markets rebounded strongly the S & P Ais a 50 Index up over 3-3/4%. The Bloomberg European 500 shows Europe is trading higher today, while US futures show a strongly positive opening on Wall Street after Wells Fargo reported it beat estimate earnings. US markets, as well as the London Metal Exchange are closed tomorrow. The LME is aso closed Monday, and will resume trading on Tuesday. Xstrata warned it may shut down their Australian based Sinclair mine if nickel prices fail to recover by August. The Baltic Dry Index finally put in a positive reading today, and LME stored nickel inventories slip again overnight.
• Bloomberg morning base metal news - (more)

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Fortis Metals Monthly - pdf here
• FOMC March meeting minutes - pdf here
• Commodity Watch - pdf here
• Steel Statistics Monthly Commentary - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - MF Global advises Ed is traveling this week and will not be publishing his morning report
• (Dow Jones) Nickel prices should rise to $15,000 a metric ton by the year end, says Commerzbank. "We are positive for nickel given the sharply falling mine production."
• (Asia Pulse) Asian top nickel producer Jinchuan Group announced Wednesday that it will raise its ex-factory price of electrolytic nickel from 89,000 yuan/ton to 92,000 yuan/ton, the third time for its price hike in a month. The daily average price of nickel on Shanghai spot market arrived at 91,750 yuan/ton Wednesday, up 1,250 yuan over the previous day.
• (SG) It is reported that Taigang Stainless Steel has exported 5,110 tonnes stainless steel during January to February period 2009, down by 91.2% YoY. Data shows that the monthly stainless steel exports averaged at 30,000 tons during that time. However, due to the financial turmoil and the worsening export environment, the company's total exports have to eye a sharp fall.
• (SG) It is reported that owing to weak domestic demand and the impact of importing ferrochrome, domestic ferrochrome market is rather weak now, and some ferrochrome enterprises express that they have been thinking of suspending production.
• (CRU) Molybdenum - With first quarter net imports of around 4,000t Mo, mainly in oxide and concentrate, China has provided the only support in a market suffering chronic neglect by Western consumers.
• (Interfax) The European Commission has initiated an anti-dumping investigation into molybdenum wire imported from China between April 1, 2008 and March 31, 2009, the European government announced on April 8.
• Japanese Machinery Orders Unexpectedly Rebound  - more
• South Africa Mining Output Falls by Most in a Decade - more
• China sees smaller decline in business climate index in Q1 - more
• Advisors remain bullish on equities and commodities: survey - more

  Xstrata to Shutter Australian Nickel Mine in August  - Xstrata Plc, the world’s fourth- biggest nickel producer, plans to shutter the Sinclair mine in Western Australia in August because of plunging prices. - more

  Vale Inco in the hot seat - It is in a trial that was held yesterday, the first meeting of the Observatory on the environment. One week after the leak of sulfuric acid at the site of Vale Inco, harsh words have been dropped by the President of the South Province. On the outside, demonstrators demanded the suspension of the plant. - translated version here (original French here)

  Metal magic: Nickel kick-started evolution, suggests study - Life as we know it may owe its existence to fluctuating levels of a humble metal in the primordial sea, according to a study published Wednesday. - more

  Steel pipe makers file trade case against China - U.S. producers of steel pipe used in oil and gas drilling have filed complaints with U.S. trade officials over alleged unfair competition from Chinese imports they say have flooded the domestic market. - more

  Asia Steel-China prices down on slow demand recovery - Chinese spot steel prices edged down after trading firm for the past two weeks, as sentiment remained fragile over demand recovery despite a strong pick-up in manufacturing activity and reports of auto sales. - more

  Courtesy AISI - In the week ending April 4, 2009, domestic raw steel production was 965,000 net tons while the capability utilization rate was 40.4 percent. Production was 2,148,000 tons in the week ending April 4, 2008, while the capability utilization then was 90.0 percent. The current week production represents a 55.1 percent decrease from the same period in the previous year. Production for the week ending April 4, 2009 is down 4.1 percent from the previous week ending March 28, 2009 when production was 1,006,000 tons and the rate of capability utilization was 42.1 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, April 8

• Baltic Dry Index - minus 3 to 1,463. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Japan Corporate Bankruptcies Soar to Six-Year High at Fiscal Year-End // Sharp Reports First Loss Since 1956, Missing Estimates as Sales Decline // Asian Stocks Fall for Second Day on Renewed Profit Concern; Alumina Drops // British Economy Shrinks 1.5% as Recession Resembles 1979, Institute Says // European Stocks Advance as Daimler, BMW Climb; Bank of Ireland Declines // U.S. Wholesale Inventories Fall Twice as Much as Forecast; Sales Rise 0.6% // Pulte Agrees to Acquire U.S. Homebuilder Centex for $1.3 Billion in Stock // SEC Approves Five Short-Sale Curbs for Comment Amid Pressure From Congress // Stocks in U.S. Advance on Pulte's Centex Acquisition; Life Insurers Climb
• The Dollar and Euro flip flopped during the trading day, and now the Euro si trading 1/5 of 1% higher against the Dollar. NYMEX crude also changed coarse after US crude inventories rose less than expected, and is now trading over $51/barrel, up more than 4%. Gold is trading nearly 1% higher, while silver is up nearly 1-1/2%. Base metals, except for tin, ended higher. Nickel got a boost from the shift in the Dollar, a technical uptrend, and a report that one of Europe's largest nickel producers was cutting production by at least 50% this year. Indicator charts show the price opened in the basement, but spent the entire day stair-stepping higher. Dow Jones reports three month nickel ended the day at $4.98/lb . Nickel is making another run at closing above $5/lb, a feat it last pulled off on February 9th. The news out of Greece that Larco was making a serious cut in ferronickel production gave the market a boost, especially when you consider inventories of nickel stored in LME warehouses have fallen by 1,188 tonnes during the last 5 business days. In the 5 business days preceding those, inventories grew by 3,654 tonnes. While the shift may not last, it would appear it could be argued that cut-back's in nickel production are starting to catch up with cut-back's in stainless production. The market is approving of the decline, as the price of nickel has moved higher as the numbers have fallen, as can be seen by Sucden's day old chart (here). The Baltic Dry Index fell 3 points, but it is worth noting that two of the three readings the BDI averages, were green yesterday. The Commerce Department reported inventories at U.S. wholesalers fell 1.5% in February, more than expected, while sales increased 0.6%. Inventories of durable goods, those long-lasting items such as metals and furniture, dropped a record 2.4%. The inventories-to-sales ratio, stood at 1.31 months, still very high. The market has shrugged off Alcoa's worse than expected earnings last evening, instead focusing its attention on the merger of two giant home builders, the news that life insurance companies may be getting some of the government's bailout money, and probably most importantly, Washington's attempts to put restrictions on the much disliked, yet generally misunderstood, short seller. Blaming short selling for sinking the market is kind of like blaming a treasure hunter for sinking your ship. You may hate that he made money off your misfortune, but inevitably, he didn't send the wave that capesized you. US markets are all trading in the green as we update, but the market seems to be quiet today. Still an incredible amount of skepticism about the long term outlook for this rally, with even the most bullish of forecasters predicting some potentially serious downturn's in the near future. But every day the up trend holds, is another day the bottom callers can tout their call. And finally, we leave you with a quote from an article posted below by the Carnegie Institute. "The nickel connection was not something anyone had considered before," says Papineau. "It's just a trace element in seawater, but our study indicates that it may have had a huge impact on the Earth's environment and on the history of life." Hey. We may have to re-title this site. "Nickel - it holds the key to life!!"

  Video

• Sprott Asset Management - A Night with the Bears - For the first time, these four notorious Bears will come together on stage. Nouriel Roubini, Eric Sprott, Meredith Whitney and Ian Gordon will discuss the past and the present, and what it all means for the future of the global economy. - video of excerpts here  
• Associated Press reports in comments made before the speech "Roubini said the latest surge is just another bear market rally following the pattern of other rallies after the government intervened. He expects the market will test the previous low because of worse than expected macroeconomic news, disappointing earnings and because banks will fail after the stress tests come out." Reuters summary here Globe & Mail posted the keynote speaker Roubini's complete speech here  

  Commodity/Economic Comments

• 140 Years Of Bull And Bear Markets - more
• Congressional Panel Suggests Firing Managers, Liquidating Banks - more
• Upward Surge From Uptick Rule's Return? - more
• Ten principles for a Black Swan-proof world - more

  Greek metal producer Larco to reduce output - Greece's Larco, one of the world's top five producers of ferronickel, an alloy used in the steel industry, will cut production by about half this year due to the global economic slowdown, a senior official said. - more

  ArcelorMittal hardens steel output cuts in Europe - ArcelorMittal steel announced on Wednesday that it would continue to suspend production in Europe, and a union official said this meant the group would slash the output by more than half. - more

   A new link between nickel, methane gas and the evolution of complex life forms on Earth - A University of Alberta researcher is lead author on a paper that reaches back billions of years to establish a new link between nickel, methane gas and the evolution of complex life forms on Earth. - more

• Did a nickel famine trigger the 'Great Oxidation Event'? - The Earth's original atmosphere held very little oxygen. This began to change around 2.4 billion years ago when oxygen levels increased dramatically during what scientists call the "Great Oxidation Event." - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around  $.04/lb lower but rebounding off earlier lows. All other base metals are presently trading in the red, but most, just barely. The US Dollar is trading 1/5 of 1% higher against the Euro, while NYMEX crude futures are down over 2% and at $48/barrel. Gold is up 1/5 of 1%, while silver is down by much less. In overnight trading, Asian markets got hammered, the S & P Asia 50 index down 3-3/4%. European markets are trading slightly higher this morning, and US futures are off earlier lows on news that Pulte will buy Centex to create the country's largest homebuilder, and appear they may open either way. Coming off back to back losses, Wall Street bulls will be looking for any news to drive the market higher. The Wall Street Journal has reported that the Treasury Department has decided to extend bailout funds to the life insurance industry. And the Securities and Exchange Commission will votes on rules to "reinstate some version of the uptick rule that previously forced short-sellers to wait for a stock to rise before initiating a trade".  In world news, German factory orders were lower than expected, while Canadian housing starts came in better than expected. US wholesale inventories will be reported later this morning. 
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• China Commodities Weekly - here
• Commodity Trends - Is this the start of a true upswing in prices, or a false start? - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - MF Global advises there will be no morning report this week
• (Dow Jones) Base metal prices should stabilize above the lows hit in 2008, says JP Morgan analyst Michael Jansen.
• (JMB) Japanese electric furnace steel makers' raw steel production is estimated to decrease to less than 24 million tonnes in fiscal 2008 ended March 2009 for the first time since fiscal 1978 due to sharp demand drop under worldwide recession since late 2008.
• (SBB) Taiyuan raises weekly 304 stainless prices by RMB 200-300/t
• Why numbers no longer win arguments - more
• Commodities May Gain 20% by October, U.S. Global Says - more

  130 temporary layoffs at the Montcalm Mine - The Timmins Times has learned that roughly 130 layoffs are occurring at the Xstrata Nickel Montcalm Mine in Timmins as the result of what the company says is “an unplanned ground fall.” - more

  Dumping duty mooted on cold rolled flat stainless steel imports - The Commerce Ministry has recommended imposition of preliminary anti-dumping duty on cold rolled flat products of stainless steel (SS) from a clutch of countries that exports such products inexpensively to India. - more

  Minara Nickel Output Is Steady, Market ‘Volatile’  - Minara Resources Ltd., Australia’s second-largest nickel producer, reported first-quarter production was little changed and said the market remains “volatile.” - more

  Security nickel? - Lungs of the territory's economic activity, the nickel industry is now observed in terms of security after the accident occurred at the site of Vale Inco New Caledonia. The Mining Code, adopted a few weeks ago by Congress has changed the regulatory framework. And then? - translated version (here) original French (here)

  Company agrees to ship ore to Xstrata Nickel -URSA Major Minerals Incorporated says it will ship about 10,000 tonnes of Shakespeare nickel copper ore for processing to Xstrata Nickel's Sudbury operations. - more

  ArcelorMittal meets unions over production cuts - ArcelorMittal, the world's largest steelmaker, was meeting unions on Wednesday to discuss temporary production cuts at its plants across Europe. - more

  Prosperity to Focus on Indonesian Metal Projects - Prosperity Resources Ltd has announced it will focus on metals projects in Indonesia, mainly gold, silver, copper and nickel. - more

  China’s Iron Ore Imports Rise to Record in March  - China’s iron ore imports climbed to a record 51 million metric tons in March, the Ministry of Transport said on its Web site. - more

  Protest staged in US town over India-made steel - Organizers of a protest in this southern Illinois city where 2,000 steelworkers have been laid off say thousands of tons of foreign-made steel being brought into the area are a slap in the face. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, April 7

• Baltic Dry Index - minus 20 to 1,466. (chart) (article - Dry bulk market remains subdued - more)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Australia Cuts Benchmark Interest Rate to 49-Year Low as Recession Looms // Bank of Japan Will Accept Wider Range of Collateral to Encourage Lending // Yosano Says Finding Cash for Japan Stimulus is 'Major Task' as Debt Swells // Faber Says Stocks May Drop as Much as 10% in 'Correction' Before Rallying // Most Asian Stocks Fall on Commodities, Bank Loss Concern; Rio Tinto Drops // Provopoulos Indicates ECB Might Reduce Rate Below 1%, Buy Corporate Debt // RBS Will Eliminate as Many as 9,000 Jobs Worldwide to Save $3.66 Billion // Europe's Recession Deepens More Than Estimated on Investment, Consumption // Stocks Drop in Europe; Barclays, Lloyds, Saint-Gobain, BNP Paribas Decline // Stocks in U.S. Retreat as Soros Says Rally Won't Last; Citigroup Declines
• The Dollar continues to trade higher against the Euro, in the 1% range. NYMEX crude finally fell thru the $50/barrel line, but not by much, down 2-1/2%. Gold is up 1-1/3% thanks to a technical bounce, and silver is trading 1% higher. Base metals ended mixed, with nickel ending in the green. Technical charts show nickel fell thru much of the morning and early afternoon, but took a $400/tonne bounce in late afternoon, and while slumping at the close, was able to hold onto most of the gains. Dow Jones reports three month nickel ended the day at $4.95/lb . Sucden's day old chart shows nickel's recent rise, with yesterday's correction (here). The Baltic Dry Index fell again by 20 points today, but one of the three categories the BDI averages, the Cape Index, went green. Inventories of nickel stored in LME warehouses only slightly rose overnight, after outflows from Singapore took nearly half of Rotterdam gains. Cancelled warrants are approaching the 2% level again, implying some renewed buying interest, whether that be by customer or trading houses. With the stainless steel industry operating on a hand to mouth basis when it comes to inventory these days, nickel inventory numbers are being watched closely. US equity markets are following Asian and European markets, which both fell on renewed concern about the economy. The bears were all over the drop in US equities yesterday, and while they are trying to keep a downward momentum going today, the bulls are giving them quite the battle. Markets are down over 2% as we pen this update, but the volatility index has retreated since this morning. For those non-traders who monitor the daily Dow numbers to get a feel for how the economy is doing, the argument could be made it has little to do with anything more than sentiment, whether that be a hope or a prayer, or discouragement or panic. Look at this chart posted by the WSJ today. Notice when the housing bubble popped, then the banking bubble popped, the two primary causes of this most recent recession, and how long it took the Dow to realize the market was in trouble (chart here). It is interesting to see how tight the correlation between the overall Dow and the BKX banking index was until the two completely disconnected in late 2007, when, according to Federal officials, the recession officially began. We posted a two page report from the Business Roundtable below. The survey taken of CEO's of some of America's leading companies, was not very encouraging. Earnings season starts this afternoon on Wall Street, with Alcoa, the first up, and expected to report a big loss. Word around the street isn't how bad can earnings reports be the next few weeks, but how bad will they be. One thing is worth noting. If the economy continues to slump thru May, it will be the longest recession this country has witnessed since the Great Depression. And yes, that's next month, not next year. Now instead of giving your grandfather a blank stare when he starts to tells stories of the Great Depression, you can just glare back at him, and ask him if he is enjoying the pension you will never see.    

  Reports

• Business Roundtable - CEO Economic Survey Outlook - pdf here

  Commodity/Economic Comments

• (Dow Jones) Russia exported 35,100 metric tons of nickel in January and February, 11.8% less than in the first two months of 2008, the federal customs service reported Tuesday.
• (Asia Pulse) Tata Steel, a leading steel maker of the country, today said its production surged by nearly 14 per cent to 6.25 million tonnes in 2008-09 fiscal on the back of robust demand from sectors like auto and construction.
• Why the base metal rally won't last - more
• Econompic chart shows Europe GDP in 4th quarter by nation - chart here
• From Bubble to Depression? - (excerpt) "What we've offered in our discussion of this crisis is the back story to Mr. Bernanke's analysis of the Depression. Why does one crash cause minimal damage to the financial system, so that the economy can pick itself up quickly, while another crash leaves a devastated financial sector in the wreckage? The hypothesis we propose is that a financial crisis that originates in consumer debt, especially consumer debt concentrated at the low end of the wealth and income distribution, can be transmitted quickly and forcefully into the financial system. It appears that we're witnessing the second great consumer debt crash, the end of a massive consumption binge."  more
• Long-term recession exit strategies carry high risk - The good news is that even some of the world’s most enthusiastic economic pessimists, such as Nouriel Roubini of New York University, are beginning to discuss “exit strategies” from the worst global recession in generations. The bad news is that many of these exit strategies appear as toxic as a bunch of subprime mortgage assets. - more
• Gearing up for a V8 recovery? - more
• A Tale of Two Depressions - more
• Recession Outlasts Even Extended Jobless Benefits - more

  China 2009 nickel consumption to fall 6% to 300 kt on weak demand - China's nickel consumption is expected to fall 6.25% this year to 300,000 mt from 320,000 mt in 2008 due to weak domestic demand, state-owned nonferrous metals information provider Beijing Antaike Development said Tuesday. - more

  Ferrochrome outlook still bleak -  Ferrochrome contract prices were settled 13% lower in the second quarter of this year than in the first and this was likely to prolong the industry-wide suspension of capacity, analysts said yesterday. - more

   US steel mills operating at only 40% of production capacity - Raw steel production in the US decreased by 41,000 st or 4.1% for the week ended April 4, the Washington, D.C.-based American Iron and Steel Institute reported Tuesday. Last week's production was 965,000 st, compared with about 1 million st the previous week. - more

  Laid-off workers are fired up over Asian steel - Even before trainloads of Asian steel started rolling into the Metro East, the "Buy American" provisions in the stimulus package offered hope for hollowed-out steel towns like Granite City. - more

  Fairfax sees metals prices recover by end ’09 – Some metals prices recovery would start occurring towards the end of this year, investment bank Fairfax forecast on Tuesday, with analysts John Meyer and Marc Elliott saying many miners were poised for a recovery in market conditions. - more

  Mining boom will return after a 'few quiet years' - Western Australia's peak mining body is predicting rapid growth will follow the current downturn, and is advising companies to prepare for another boom period after a few quiet years. - more

  Shanghai Construction Steel Prices

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

• Indicators at 7:30 am CST show 3 month nickel trading around  $.01/lb lower but looking like it could make a run into the green, with copper the only base metal trading higher this morning. The US Dollar is trading 1.2% higher this morning against the Euro, and NYMEX crude continues to hover just above the $50/barrel line, down slightly in morning futures. Gold is slightly higher, less than 1%, while silver is unchanged. In overnight trading, Asian markets ended lower, on renewed concern that loan losses will swell at financial companies. European markets are trading lower after a report showed the EU GDP was lower than expected during the fourth quarter. Futures trading shows Wall Street will open in a sour mood, the Dow and S & P down sharply. The Congressional Budget Office released its 1/2 fiscal year ending March 31st report showing the US  deficit for the 6 month period was $953 billion. While the nearly $1 trillion dollar 6 month deficit was expected, what came as a surprise to some analysts was the drop in receipts to the Treasury, which fell $160 billion from the same period a year ago. Alcoa kicks off the earnings season after the close of trading today. The Reserve Bank of Australia cut its key lending rate by a quarter point to 3% overnight. George Soros told Bloomberg Television yesterday that "It’s a bear-market rally because we have not yet turned the economy around ... This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime."
• Bloomberg morning base metal news - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• The Commodity Tracker - pdf here
• Global Mining News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - MF Global advises there will be no morning report this week
• (AP) German steel production dropped by half in the year to March, the sharpest decline since the country's reunification nearly two decades ago, according to government figures released Tuesday.
• (Yieh) According to statistics, Japan exported 27,961 tons of stainless steel scrap in February, increased by 78 percent compared with January's 15,710 tons.
• Deutsche Bank forecasts global steel consumption will shrink by 17% in 2009.
• (China cement) Anhui Conch Says Sales Jump 15% in First Quarter - more
• Paul Nolte, director of investments, Hinsdale Associates - "We have been looking for things to get 'less bad' -- however, our reading of the recent data does not yet support that view, although stock investors have taken it to heart that the bottom is now in and the only decision left is not to buy, but how much. The markets will get another test this week, as expectedly poor earnings will be reported. Maybe they'll be 'less bad', too."
• Frederick Dickson, chief market strategist at D.A. Davidson and Co. - "Earnings expectations for most companies have been dramatically lowered over the last 90 days, a fact recognized in the drop in stock prices over the same period. The question is whether analysts have lowered expectations enough and whether companies meet or top the lowered performance bar."
• It may not be the most uplifting night of the year, but all 1,500 seat will be full on Tuesday's Night With The Bears in Toronto, a speaker's series organized by Sprott Asset Management. Guests include Eric Sprott, Meredith Whitney of Meredith Whitney Advisory Group, Nouriel Roubini of New York University and Ian Gordon, author of The Long Wave Analyst newsletters. - more
• Taiwan energy use falls for 8th straight month on recession - more
• Europe’s Recession Deepens as Investment Declines - more

  Police in New Caledonia investigate massive acid leak - The police in New Caledonia are investigating a massive acid leak at the Vale Inco nickel plant that killed thousands of fish and other species. - more

• Large Acid Leak at New Caledonia Mine - Local associations and the Southern province of New Caledonia were in uproar at the weekend after it transpired last week that thousands of liters of sulfuric acid have accidentally been spilled into the environment, killing thousands of fauna and flora species. - more
• More than 3 000 fish dead Goro -  (translated article here) (original French here)

  SA Steel Targeted by Russian Mill Facing Default - South Africa’s Columbus Stainless Pty Ltd, the country’s only producer of stainless steel, has been targeted for anti-dumping action by a Russian steelmaker, who is himself under pressure of a foreign bank default, and takeover interest from the state. - more

  BNC not likely to open soon - The country’s biggest nickel producer, Bindura Nickel Corporation, is likely to remain under care and maintenance for a while as international nickel prices have remained subdued. - more

  African Eagle flies into Tanzania - African Eagle Resources, the AltX-listed mineral resources company, on Tuesday announced that it has secured a joint venture with Safina of the Czech Republic and its subsidiary Tanzania Precious Metals Refinery over the Ngasamo licence, adjacent to the Dutwa nickel laterite project in Tanzania. - more

  Defense National Stockpile Center Announces Ferrochromium BOA Sales for March 2009 - pdf here

  Rio Said to Offer 20% Price Cut to Asian Steel Mills  - Rio Tinto Group, the world’s second- largest iron ore producer, offered a temporary 20 percent price cut to Asian steelmakers after annual contract negotiations stalled, said four executives with knowledge of the deal. - more

• Fortescue launches Chinese attack in defence - Fortescue Metals Group has launched an extraordinary attack on the three Chinese companies it once hoped would bring its Pilbara iron ore project to fruition, accusing them of sparking the investigation that could lead to founder Andrew "Twiggy" Forrest being barred from the company. - more

  Something Old, Something New - The Lloyd's Building has become a classic example of the "Structural Expressionist" style. One of the key elements of this style is to "reveal their structure on the outside as well as the inside". The Lloyd's Building certainly achieves this. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, April 6

• Baltic Dry Index - minus 20 to 1,486. (chart) (article - Baltic Dry Index Falls to 2-Month Low as China Ore Demand Wanes - here)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Aso Orders Stimulus Spending to Exceed 10 Trillion Yen as Slump Deepens // Asian Stocks Extend Four-Week Rally as Bernanke Says Policies Are Working // Producer Prices in Europe Decline the Most in 10 Years; Retail Sales Drop // European Stocks Fall for Second Day; Rio Tinto, Credit Suisse, BNP Decline // Brazil Stocks Fall Most in a Week as Economists Predict Slump; Bolsa Drops // S&P 500 Can't See Enough Money-Making in Final Quarter to Keep Rally Alive // Bernanke's `Green Shoots' May Be False Spring as Job Losses Keep Mounting // Stocks in U.S. Decline on Banking Concern; U.S. Bancorp, Suntrust Retreat // Emerging-Market Stocks Climb, Heading for Record Advance in 25-Day Period
• The US Dollar is presently trading 3/4 of 1% higher against the Euro, as European and American equity markets declined. And while analysts credit this to safe haven buying, this did not leak over into gold, which is down 2-1/2% and $872/ounce. Silver is down as well, by nearly 5%. NYMEX crude is maintaining the $50/barrel line, but just barely, prices down over 4%. Except for lead, which managed to scratch out a small gain, all other base metals traded lower, on profit taking against the higher dollar, and a calming of the "recession is nearly over" attitude that has permeated the market the last few weeks. Indicator charts show nickel was in a slide thru most of the day, and while it made an attempt in late afternoon kerb trading to make a comeback, it fell short. Dow Jones reports three month nickel ended the day at $4.88/lb .  The Baltic Dry Index started the week with a slip again, and LME nickel inventories fell below 107,000 tonnes, with no inbound shipments into any of its authorized warehouses since last Thursday. Ferrochrome contracts for the second quarter have been settled at $.69/lb, a dime less than the first quarter. Posted a few new updated nickel forecasts on our forecast page (here). Volatility index is back up into the low 40's this morning. Between 1990 and October 2008, the VIX has averaged a reading of 19.04. An interesting article we found over the weekend, "Loan modifications rise; many don't pare payments" (here). The crux of the article is that fewer than 1/2 of loan modifications made at the end of last year actually reduced monthly payments by more than 10%, and 25% - 1 in 4, actually saw their monthly payments increase!! Of those loans that were modified by more than 10%, 26% later fell into default. More than 1/2 of those that were left alone later defaulted. This is interesting since the housing crisis brought on the banking crisis, two heads of a snake that many believe must both get figured out before the economy can prosper again. Speaking of banks, Mike Mayo, an analyst at CLSA, issued a warning this morning that banks may suffer loan losses greater than those seen during the Great Depression. And thanks to the FDIC, we are protected from one of the pivotal actions that started the Great Depression - a massive run on the banks. But even it may need some relief soon (here). Fed Governor Governor Kevin Warsh made a speech today (here) and here is a quote - "And the deterioration in employment conditions in the current episode already ranks comparably to the recession of 1981-82. The unemployment rate is 8.5 percent and likely, in my view, to increase steadily through the balance of the year. Economic output, as measured by gross domestic product, contracted at a rate of about 6-1/4 percent in the fourth quarter of 2008 and is on track to contract sharply again in the first quarter, which would put the current contraction among the most severe post-World War II recessions. Though the pace of decline is likely to abate, I am decidedly uncomfortable forecasting a sharp and determined resumption of growth in the coming quarters. The panic conditions that have marked this period may also have long-run implications."  Nothing further out of New Caledonia on the acid spill there, and no comment made by Vale yet that we can find. This is the last thing that Vale needs right now, with this hugely expensive mine just getting ready to come on line, and the environmental risks having been a major stumbling block to its getting its original license. The environmentalists will howl "we told you so", but with the economy in the toilet, we seriously doubt the government will take much more action than what is "politically prudent". It could however cause them renewed problems with the indigenous population, who have a history of violent action against this mine. For our regular readers, MF Global  has advised there will be no metals report issued this week, as Ed Meir is traveling. In closing, our hearts go out to the people of Italy, after that country was rocked by a killer earthquake.

  Reports

• Commodities Daily - pdf here
• Weekly Scoreboard - pdf here
• Weekly Commodity Price Report - pdf here

  Commodity/Economic Comments

• Deputy Chief Executive Officer Oleg Pivovarchuk to  Dow Jones Newswires - ""The market is starting to find a balance. But it's highly possible that nickel will decrease again." Pivovarchuk also stated that stainless steel production is down 36% which accounts for 70% of nickel demand. Worldwide demand for nickel would be 250,000 tonnes less in 2009, to 1.15 million tonnes, and that Norilsk would produce no more than 300,000 tonnes in 2009; 299,721 tonnes having been produced by Norilsk in 2008.
• Merafe Resources CEO Steven Phiri to Mining Weekly - “We believe that the ferrochrome price has bottomed.”
• Richard Russell, editor of Dow Theory Letters - "I lived through the Great Depression. I remember people standing in bread lines. It was hard to get a job, any job, back then. But now, you see the restaurants are still full. People are still spending money. They may be worried and they may be beginning to save, but there’s no sense of urgency. And there’s a rally on Wall Street. You know, every bear market produces a rally. You can expect the market to retrace its steps by one- to two-thirds.... And every bear market has a surprise. I think the surprise is that this is going to be a lot worse than people expect."
• Howard Ruff, Editor of Ruff Times - "The stock market has made a dead-cat bounce, even though the returns are spectacular for short-term investors, which I am not. The long-term problem with the stock market is two-fold: 1) its earnings will decline as business sags deeper and deeper into this recession which will depress stock-market prices; and 2) the price/earnings ratio (PE) is still way above the typical PE at the bottom of bear markets. The stock market will have its ups and downs and literally suck Wall Street investors into short-term rallies as they try to pick 'the bottom. ... What's left of Wall Street believes the stock market will sooner or later get well. They believe you will eventually make a lot of money in the stock market. Perhaps you can make some short-term profits, but I don't trust such short-term calls; I don't make them, and you can't depend on them. I'm in for the long haul, and the long haul says down, down, down, regardless of short-term rallies.... The stock market is toxic and will be for several years."
• How the Nation’s Only State-Owned Bank Became the Envy of Wall Street - more
• A WARN Act Refresher Course - more
• Foreclosure in your future? - watch this

  Ferrochrome Quarterly Price Dropped 13%, Merafe Says  - Benchmark prices for ferrochrome fell for a third consecutive quarter on lower demand from stainless steel producers for the raw material. - more

  Companies protest against proposed anti-dumping duty on steel - The end user industry of high grade stainless steel in the country, including pesticides and chemicals, refinery, auto components, utensil manufacturers, plant and machinery manufacturers and kitchen equipment makers presently importing stainless steel for their respective industries, has strongly protested against the proposed levying of anti-dumping duty on import of stainless steel. - more

• Iron ore exports seen down 15-20% in 09/10 - India's iron ore exports in the just-ended 2008/09 year may have fallen 8 per cent and could fall a further 15-20 per cent in 2009/10, a senior official at Essel Mining & Industries Ltd said on Monday. - more

  Nickel miners face long-term battle despite rally - The strong rally in Australia's mid-cap nickel miners since last week is a case of investors returning to less liquid and oversold stocks and not a reaction to the recent rise in the nickel prices -- where fundamentals are still poor -- analysts say. - more

• Although nickel prices dwell in the cellar, long term story more upbeat--BMO - BMO has cut its nickel price forecast 20% to $4.50/lb this year, advising that the price needed to balance supply with demand over the long term won't occur until 2013. - more

  ‘Base Metals will attain great gains’ - Leonard Melman, prodigious writer (The Melman Report) and leading authority in the metals and mining arenas, sees opportunity for some "really good moves" and "fabulous returns" on the horizon, citing vibrant charts on random juniors whose values have multiplied during the last six months. - more

  (no additional details) Acid leak kills thousands of fish in world heritage status lagoon in New Caledonia - There has been a major acid leak at New Caledonia’s new Vale-Inco nickel plant into waterways while tests were being conducted at the new plant. - more

  Iron ore spot price back to 2005 levels - The negotiating position of Australian iron ore producers seeking to settle a benchmark price with Asian steel makers has weakened as the spot price plunged to its lowest level since July 2005 and exports are at the lowest level since November. - more

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

• Indicators at 7:30 am CST show 3 month nickel trading around $.06/lb lower, with copper the only gainer at present among the other base metals. The US Dollar is only slightly stronger against the Euro, while NYMEX crude futures are about 1/2 of 1% lower, but still maintaining $52/barrel. Gold is down 1.7% and under $880/ounce, while silver is down 3%, as safe haven investors bail. In overnight activity, Asian markets with Chinese markets closed, still showed a healthy gain, the S & P Asia 50 Index up 2 %. European markets are quiet this morning, and for the most part unchanged, waiting to see what direction the Yanks might be heading. And futures show the Wall Street Yanks may start lower when markets open. Earnings season begins this week, and we could begin to find out if the markets recent spurt is in a bear market bounce, or a bull market beginning.Your news to watch this week, is the reported acid spill in New Caledonia. We do not see where any other metals sites are mentioning it, but this is one of those bone head moves that will cost the not yet producing Vale's Goro operation dearly, particularly in bad press. See the regional and local news we could find on it below.   
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals & Mining Weekly - pdf here
• Quarterly Commodity Price Report - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - has not sent today's update - will post when received (read Ed Meir's complete morning base metals report here)
• Standard Bank's Leon Westgate - "The rally over the past few days appears to be due to recent strength - on the back of improved investor sentiment and risk appetite, a weaker dollar and stronger equity markets - triggering large scale systematic short-covering."
• (SBB) Much reduced stainless steel output this year will result in another fall in annual nickel, ferro-chromium and stainless scrap consumption
• (Yieh) In February, Taiwan’s export of screws dropped by 38.89 percent, plunging to 50,000 tons. Exports to the US (the biggest export destination), dropped by 40.37 percent.
• Global action helping commodity prices - more
• Citi ringing a bell for the bottom of commodities market - more
• Tide may be turning for commodities; metals vulnerable - more
• Commodity prices may lag base metal shares - more
• Loan modifications rise; many don't pare payments - more
• Hedge Fund Paid Summers $5.2 Million in Past Year - more
• China's turnaround not clear cut - more

  Second quarter ferrochrome price announcement - Shareholders of the Company are advised that the European benchmark ferrochrome price has been settled at $0.69 per pound for the second quarter of 2009, 13% down from $0.79 per pound in the first quarter of 2009. - more

  Grab new opportunities, steel group urged - British Stainless Steel Association chairman Mark Perrins has urged association members to take advantage of new opportunities that are opening up in the power generation and construction fields. - more

  Acid leak kills thousands of fish in world heritage status lagoon in New Caledonia - There has been a major acid leak at New Caledonia’s new Vale-Inco nickel plant into waterways while tests were being conducted at the new plan - more

• Rumors around pollution acid at Vale Inco - Several environmental groups calling for the withdrawal of the decree granted ICPE Vale Inco to switch on the plant in the South. -  translated article here  original French here

  Metals Insider: G20 spin sends bears reeling - They came, they talked, they issued a statement that had already been largely leaked to the media.- more

  Market Tendency On Imports Of Ferro-Alloys At 31st March 2009 = Reflecting Difficulties To Expand Domestic Demand In China, Market Prices Have Weakened, Imports Increased - m ore

• Cutback Of Nickel Production Is Expected To Become Effective From 2nd Half 2009 = JOGMEC, Nickel Demand In China Is Thought To Keep Firmness On Basic Tone - m ore

  Toledo chief executive resigns - Toledo Mining’s chief executive George Bujtor has resigned from the Philippines-focused nickel miner. - more

• Miner set to start exploration in Nueva Vizcaya - British miner Metals Exploration PLC expects to finish studies on its gold and molybdenum property in northern Luzon to finally start site development, company officials said late last week. - more

  Lowly lead leads metals price recovery - Earlier this year, I asked readers to predict which of several metal prices would gain the most during the first quarter of 2009. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, April 3

• Baltic Dry Index - minus 32 to 1,506. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Toyota `Shocked' by Credit Markets, Borrows From Japan to Fund U.S. Sales  // Indonesia Cuts Benchmark Rate for Fifth Month to Sustain Consumer Demand // Asian Stocks Extend Global Rally as G-20 Widens Efforts to End Recession // European Stocks Decline, Led by Credit Suisse, Deutsche Bank, Novo Nordisk // Unemployment in U.S. Reaches 25-Year High as Service Industries Contract  // Fed Struggling to Win Over Investors Wary of `Sharks' in TALF Aid Program // Most U.S. Stocks Rise as Bernanke Says Central Bank Programs Are Working //
• The US Dollar continues to trade higher against the Euro, up by 2/10th's of 1%. NYMEX crude is trading about even, while gold has slipped under $900/ounce, and down nearly 1%. Silver is down 1-1/2%. Base metals bucked the trend and all ended higher. Traders told Dow Jones that "the rally in metals this week was mostly due to a recovery in confidence, as better U.S. economic data and a pledge by G20 countries to stimulate the global economy raised hopes the recession is nearing an end." Indicator charts show nickel was quiet early on, slipping into the red, before an afternoon jump took it well into the green. Dow Jones reports three month nickel ended the day at $4.96/lb , up 11% for the week. Sucden's day old chart shows nickel's upward trend over the past few days (here). The RSI and SStoch show the market heavily overbought, but with fund money looking for a home, the technicals were overlooked today. The Baltic Dry Index should be going up with all this enthusiasm in the market, and while analysts report more shipping activity than a few weeks ago, it continued its decline, down 32 points to 1,506. LME inventories of nickel slipped overnight, but remain about the 107,000 mark. Wall Street has so far today traded confused, as the employment numbers came out with some distasteful numbers, and the March ISM services index came in lower than expected. The bulls like their winning streak, and while the markets could easily afford a minor correction, the bears would look to take any turn as a momentum buster. Thus the tug of war is on today. The volatility index will not let go of the 40 range, so anxiety abounds on Wall Street, although safe haven gold slumped under $900/ounce today as traders flock back into the equity markets. The G-20 meeting did nothing to quell the optimism world markets have been experiencing over the past few weeks, and it was truly refreshing, in our humble opinion, to see the President from the United States, work cordially and respectfully with other world leaders. Will the bull continue to dominate next week? Stay tuned. In the mean time, have a safe and enjoyable weekend!! 

  Reports

• (Read Ed Meir's complete morning base metals report here)

  Commodity/Economic Comments

• (WSJ in reference to today's employment report) But the Labor Department’s most comprehensive gauge of unemployment surpassed even its early 1980s levels. The government’s broader measure, known as the “U-6? for its data classification, hit 15.6% in March — a big leap from 14.8% in February. The comprehensive measure of labor underutilization accounts for people who have stopped looking for work or who can’t find full-time jobs. The March figure is the highest since the Labor Department started this particular data series in 1994. It’s also above a discontinued and even broader measure that hit 15% in late 1982, when the official unemployment rate was 10.8%. (That data series goes back to the 1970s.)
• U.S. Employment Situation (March 2009) - "Temporary Help Services Employment was 1,816,800, or down 3.8 percent, from the previous month. Year-to-year loss was nearly 27 percent. Since December 2006, Temporary Help Services has lost more than 850,000 jobs, or 32 percent." - more
• Graph courtesy Econompic - here
• Stephen Stanley, RBS - "The labor market is not a leading indicator, so employment will not be the canary in the coalmine for a recovery (technically, payrolls are a coincident indicator and the unemployment rate is lagging). That being said, it will difficult to sustain any moderation in the contraction for very long while jobs are hemorrhaging. In any case, at a minimum, this report will put a damper on the “green shoots” talk for a time."
• David Greenlaw, Morgan Stanley - "The only notable surprise relative to consensus forecast was a slight dip in the average workweek to 33.2 hours. This was consistent with our own estimate but is the lowest on record (the data stretches back to 1964). The average work week is considered to be a leading indicator of labor demand. So, the ongoing weakness does not auger well for a turnaround in employment growth anytime soon."
• Nomura Global Economics - "Arguably the most striking feature of the employment report is the drop in hours worked. The aggregate hours index fell 1%. Manufacturers cut an average of 12 minutes from the workweek, which fell to the lowest level since 1983. The declines in employment, hours and overtime point to another large decline in industrial production."
• Nigel Gault, IHS Global Insight - "We do expect the economy’s rate of decline to soften in the second quarter, and for it to hit bottom in the second half of the year. But we don’t expect the turnaround to be rapid enough to prevent the unemployment rate hitting 10% before it peaks."

  Analyst: Stainless steel output to shrink 16% - Stainless-steel production will shrink 16% this year, forecasts veteran researcher Heinz H. Pariser Alloy Metals & Steel. Global stainless output will retreat for the third consecutive year to 22 million metric tons, extending last year’s 7.7% decline to 26.2 million tons. - more

  Ferrochrome sector likely to stabilise by third quarter - analyst  - South Africa’s ferrochrome industry – heralded for producing about three- quarters of the world’s supply of the anticorrosive alloy – hit a slump in 2008, which spurred an unprecedented shutdown of operations in the country. - more

  Morgan Stanley: World steel prices will drop 41% - World steel sheet prices this year will drop by 41% to an average $502/metric ton in 2009 from last year’s $854 average, forecasts Morgan Stanley in a new report. - more

  World steel output plunges 22% - World steel output fell 22% in February from the same month last year but China defied the trend and reported a 4.9% increase, the World Steel Association said on Friday. - more

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

• Indicators at 7:30 am CST show 3 month nickel trading around $.06/lb lower, with the rest of the base metals complex mixed. The unemployment report for the US had world markets on edge this morning, and has just been released, so markets have yet to have time to fully react. The US Dollar is up 1/10th of 1% against the Euro, while NYMEX oil futures are down nearly 1% but still over $52/barrel. Gold is down 1/2 of 1% after the G-20 supported  a plan by the IMF to sell some of its gold reserves. Silver is down nearly 1-1/2%. Asian markets ended slightly higher overnight, while European markets have moved higher since the US unemployment numbers came in as expected. On the back of the report, US futures also show a slightly higher opening. The aforementioned report, which worldwide markets were on pause awaiting its issue, came in as expected with a loss of 663,000 non farm jobs lost, and a rise in overall unemployment to 8.5%.  In about an hour we will get the ISM Non-Manufacturing PMI, which is forecast to read 41.9. The numbers were bad today, but as they came in as expected, the news will not be enough to castrate the bull. It is interesting to note that while most economists will tell you unemployment lags an economic recovery, there are a few signs inside the report that tell you if the economy is picking up or not. Take hours worked for instance. If factories are working more, they may not be hiring people back yet, but the employees they do have will be working longer hours. In January the average hours worked for manufacturing employees was 39.8 hours. In February that number fell to 39.5. In March the number fell to 39.3. Another section to watch is temporary help. These should be climbing if the economy is picking up. Instead 72,000 temporary jobs were lost in March, and 767,000 have ben lost since Dec 2007. If the market is recovering, it is not being seen in US manufacturing yet.
• Bloomberg morning base metal news - more

  Reports

• Nickel: Technical Snap Shot - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• Metals Watch - pdf here
• Commodity Outlook - pdf here
• Metals Intelligence - pdf here

  Stainless Steel Output May Shrink 16% in 2009, Pariser Predicts - Stainless-steel production will shrink 16 percent this year, contributing to an 11 percent drop in nickel consumption, researcher Heinz H. Pariser Alloy Metals & Steel forecast. - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - pending release, no issue was published yesterday as Ed is traveling
• (JMB) Japanese steel makers started fiscal 2009 ending March 2010 under severe business condition. The raw steel production is expected to be less than 100 million tonnes for the year for the first time in 10 years.
• (Interfax) Chinese steel mills could secure a 40 percent decrease in 2009/2010 contract iron ore prices from the world's three largest miners as they are already currently purchasing iron ore at such price levels, according to Chinese analysts.
• (SG) It is reported that Chinese steel traders are now being caught in dilemma by the present steel market. As on the one hand, there is little transaction for their export steel products and on the other hand, they dare not to import any resource, citing the downward steel price.
• (MB) Jinchuan ups nickel price to above $13,000/T on tight supply
• METALS INSIDER: Copper lurching from one crisis to the next? - more
• Deal delay leads broker to suggest dumping Rio shares - more
• Interfax - China to close markets for national holiday on April 6
• US Steel suspends $1B coke plant project - more
• (China) Vice Premier warns of 'grave' employment prospects - more
• Commodity Prices Rising, But No Spike - more
• Commodity Mutual Funds Favored Over Hedge Funds on Regulation - more
• Dry bulk market's weakness more persistent than estimated - more
• A big bear: Markets 'way too optimistic' - more

  CRU/CESCO-LME CEO says storage capacity sufficient - The London Metal Exchange is well equipped to handle rising inventories in its warehouses and is even adding capacity globally as the international financial crisis pummels demand for industrial metals. - more

  China's top steel maker cuts May prices as demand remains weak - China's top steel maker, Baoshan Iron & Steel Co. Ltd. (Baosteel), said it would cut prices for a second straight month in May as there was no end in sight to a deepening demand decline in the world's No. 1 consumer.  - more

  Residents accused of misplaced nickel concerns - The Member for Kalgoorlie, John Bowler, has accused a group of Esperance residents of scaremongering over concerns about nickel dust emissions. - more

• BHP faces probe for sacking 1,800 staff - The federal government is investigating the sudden sacking of 1,800 workers at BHP Billiton's Ravensthorpe nickel mine in Western Australia. - more

  Yes, I think ferrochrome will definitely stabilise by third quarter – Cadiz’ Peter Major - South Africa’s ferrochrome industry – heralded for producing about three- quarters of the world’s supply of the anticorrosive alloy – hit a slump in 2008, which spurred an unprecedented shutdown of operations in the country. - more

• Steel price down on low demand - Only a recovery in fundamental industrial demand would stimulate the steel market, said Shoaib Vayej, a portfolio manager for Sanlam Investment Management (SIM). - more
• Vehicle, mining industries face "enormous difficulties" - Pretoria - South African Finance Minister Trevor Manuel said on Friday the mining and automobile sectors would face "enormous difficulties" but this was not unique to local industries. - more

  S Korea's ferroalloy trade picks up on higher steel export demand - Spot trade of some ferroalloys imported into South Korea picked up in March due to increases in Korean steel exports thanks to the weaker Korean currency, market sources said Thursday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, April 2

• Baltic Dry Index - minus 36 to 1,538. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Manufacturing Production Expands for the First Time in Six Months // Asian Stocks Surge as U.S. Automobile Sales, Geithner Fuel Growth Optimism // Global Economic Slide May Be Subsiding as G-20 Leaders Gather for Summit // Trichet Says ECB Can Lower Benchmark Interest Rate After Quarter-Point Cut // G-20 Agrees to Executive-Pay Limits, Pledges $1 Trillion for World Economy // European Stocks Rise; BHP Billiton, Rio Tinto, K+S, Daimler Shares Advance // Initial Jobless Claims in U.S. Climb to 27-Year High; Factory Orders Gain // U.S. Stocks Gain, Pushing Dow Above 8,000; Oil Rises as Bonds, Dollar Fall // Emerging-Market Stocks, Bonds, Currencies Surge on New IMF Lending Program
• Well we are back to publishing our two daily updates on time and the news about stainless and nickel decided to dry up for the afternoon. Here is today's roundup. The Euro continues to gain on the US Dollar, not trading higher by nearly 2%. NYMEX crude is up over 8% and over $52/barrel once again. Gold is down nearly 2-1/2% and is coming alarmingly close to slipping under $900/ounce as safe haven seekers evaporate. Silver is down 1-1/25. Base metals ended the day higher, with all showing solid gains on recovery hopes. Indicator charts show nickel started up this morning and spent much of the day in the same direction. Dow Jones reports three month nickel ended the day at $4.80/lb . Nickel inventories showed again not worth recording overnight, while the Baltic Dry Index will not give up its slow fall. In US reports today, unemployment rose more than expected. Initial claims stood at 652,000, while for the 10th straight week, the number of laid-off workers claiming benefits for more than a week rose 161,000 to  a record 5.73 million. On a positive note, the Commerce Department reported orders for manufactured goods rose 1.8% in February, ending a streak of six monthly declines. (graph here) And in China, the manufacturing PMI finally broke the 50 barrier, with a reading of 52.4, signifying expansion in that country's manufacturing. Add in a general feel good atmosphere surrounding the G-20 meeting, and a bull market run already entrenched, and you can see why today's equity markets are having a good day. So the market feels better, how about you? Have things gotten better at your job? That is for those of you who still have one. Has a buyer once told me years ago, if he wanted to know how things were going or where prices were headed, he would talk to his fastener salesman, and the guy he bought boxes from. Everything shipped has to have a box, and nearly all manufactured items in the country, need a fastener. Can't advise you about the corrugated industry, but most of what we are hearing, and seeing in the fastener industry, is discouraging. Customers are spooked, living hand to mouth, and many are on reduced hours, or suffering from lay-off's. Few of the customers and competitors we have spoken to can remember it being as bad as it presently is. But when you drive around town, it seems parking lots to retail stores are full, movie theatres are packed, and the roads appear to be as crowded as they were when this mess started. Only when gas got to $4/gallon did we notice a serious change in traffic. So what gives? If things are so bad, why is the market seeing such a bounce? Bull, or bear, there are as many reasons why the market should be rebounding, as there are why it shouldn't. Be careful using the stock market as a barometer for anything but risk and greed. Traders play it because they want to make money, pure and simple. Most of them may care deeply about what is happening outside Wall Street, but like any professional, to be successful, they must put aside these personal thoughts and play the direction of the market. For those of us who do not play, and have seen our retirement savings brutalized over the past 14 months, the gains are a welcome break. But from what we are seeing no Main Street, Wall Street has once again separated itself from reality. We hope we are wrong and that the bottom has been hit .... but out here in the real world, we just aren't seeing any real evidence of a recovery yet.  

  Commodity/Economic Comments

• (Old article but good refresher) Engineering News:The Stainless Steel Market and the Seven Year Cycle - The seven year cycle of the “stainless steel” market is more evident now than in days gone by. In 2001, nickel prices rocketed, demand from the Far East, China in particular, reached new heights, oil prices began to creep up…and so began the journey towards the boom years in the stainless industry.- more

  BMWU loses Tati Nickel case with costs - The Industrial Court has dismissed an urgent application by Botswana Mine Workers Union against Tati Nickel Mining Company with costs saying it was frivolous and vexatious. - more

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

• Indicators at 7:40 am CST show 3 month nickel trading around $.10/lb higher, with all base metals trading comfortably in the green this morning. The Euro is trading 1-1/4% higher against the US Dollar, and NYMEX crude is showing over $50/barrel again, and up nearly 5%. GOld and silver are both off in the 1-1/2% region. In overnight trading, Asian markets ended way up, the S&P Asia 50 Index ending 5.61% higher. In Europe markets are up soundly, and US futures show another big day is possible for Wall Street. Couple of business reports out today and we already know that initial jobless claims rise to highest level since 1982 and ongoing jobless claims rose 161,000 to a new record 5.73 million. The factory orders report will be issued in a little over an hour.  The market is on a run, and for the bears that don't understand it all, you better move aside and let the bulls make their run. The business news hasn't been good lately, but the market doesn't seem to care. And for the bulls. Enjoy the good times, but keep near the back door. Noise is getting a little too loud and this party could get busted at anytime.  
• Bloomberg morning base metal news - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Daily Resource Plus - here
• Metals Fundamental Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Metals Insight - pdf here
• China Commodities Weekly for the Week of March 23-27, 2009 - more
• Fortis Bank metals monthly - pdf here
• Fortis Bank Asian metals monthly - pdf here
• Commodity Watch - pdf here
• Cotzias Market Economic Outlook - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - pending
• (CK) Baoshan Iron and Steel (Baosteel), the leading steel producer in China, plans to establish a stainless steel division to react more efficiently to the stainless steel market, said Fu Zhongzhe, General Manager of Baosteel, yesterday at Baosteel's 2008 results conference, sources reported.
• (Yieh) Taiwan’s Yieh Hsing has announced to cut its stainless steel wire rod prices by NT$3,000/ton for April.
• Nunavik nickel shutdown pushes Canadian Royalties' annual loss to $181 million - more
• (Canadian Press) Puget Ventures Inc, a junior Vancouver resources company, says it has struck a deal with Harper Capital Inc. on an option to buy the Norpax copper-nickel property in northwestern Ontario.
• (Interfax) Jinduicheng Molybdenum net profit down 11 pct year-on-year in 2008
• Commodity Prices Set To Rise? - more
• How the recession is good for commodities - more
• Commodities: Rapid Rise, Hasty Fall, What Next? - more
• Columbus steel plant shutting down - more
• Survive The Squall of 2008? Get Ready for the Coming Storm - more

  Interview - Nickel needs infrastructure action not words - Battered nickel producers need the big stimulus projects mooted by the G20 leaders to become reality in order to ignite a recovery, the Nickel Institute head told Reuters on Wednesday. - more

  Metals Insider: After mixed Q1, what will Q2 bring? - Copper has grabbed the headlines for its stellar first-quarter performance, LME three-month metal surging by 31.6 percent to $4,040 per tonne as of Tuesday's end-of-day evaluations. - more

  Sumitomo Metal to Cut Nickel Output 23% to September  - Sumitomo Metal Mining Co., Japan’s top nickel producer and second-largest copper smelter, will cut refined nickel output by 23 percent in April to September compared with a year earlier on slumping demand from steelmakers.  - more

• Cutback Of Nickel Production Is Expected To Become Effective From 2nd Half 2009 = JOGMEC, Nickel Demand In China Is Thought To Keep Firmness On Basic Tone - JOGMEC (Japan Oil, Gas and Metals National Corporation) held on the 26th of March a meeting to report about the present situation and an outlook concerning minerals and metals, and this meeting was well attended by the parties concerned. In the course of this reporting, Mr. Takashi Ueki, Chief of Investigation Section of Metals Resources Development Division in the Corporation, delivered his speech titled as " Supply and Demand of Nickel " and the contents are summarized as follows - more here

  Anti-dumping duty on stainless steel favoured - The Union Commerce Ministry has recommended levying of anti-dumping duty on import of stainless steel from China, the European Union, the U.S., Japan, South Korea, Taiwan, South Africa and Thailand. - more

  World Production Of Stainless Steel In 2009 Is Anticipated To Decrease Within Scope Of 10% = A View By Bureau Of International Recycling, Advantage Of Stainless Steel Scrap Enlarges - According to a forecast by BIR (Bureau of International Recycling) based in Brussels of Belgium, an outlook for the world production of crude stainless steel in the calendar year of 2009 is thought to decrease within a scope of 10% in comparison with that in the preceding year of 2008, because two to three bright factors are coming up. - more

  AK Steel levies $55/ton surcharge on May shipments - AK Steel Holding Co. said Wednesday it told customers that it was levying a $55 per ton surcharge for electrical steel products shipped next month. - more

• Is this the time to abandon alloy surcharges for stainless steel - Why do the US and EU stainless steelmakers need an alloy surcharge mechanism to set market prices? - more

  Review proves Esperance nickel shipments 'safe' - The West Australian Health Minister has received independent advice that the transport of nickel through the port of Esperance is safe. - more

  China's top steel maker cuts May prices as demand remains weak  - China's top steel maker, Baoshan Iron & Steel Co. Ltd. (Baosteel), said it would cut prices for a second straight month in May as there was no end in sight to a deepening demand decline in the world's No. 1 consumer. - more

• China´s top steel maker cuts May prices as demand remains weak - China's top steel maker, Baoshan Iron & Steel Co. Ltd. (Baosteel), said it would cut prices for a second straight month in May as there was no end in sight to a deepening demand decline in the world's No. 1 consumer. - more
• Asia Steel-China prices flat as inventory falls further - Chinese spot steel prices showed signs of stabilising after steady falls in February and March, with inventory levels edging down for the third consecutive week as traders resumed buying. - more
• Baosteel cuts ex-works steel product prices for May -   Baoshan Iron and Steel Co. Ltd. (Baosteel), a subsidiary of China's top steelmaker Baosteel Group, has slashed the May ex-works prices of its steel products by between RMB 200 ($29.26) per ton and RMB 500 ($73.15) per ton when compared to its prices in April, according to an industry information provider on April 1. - more

  Morgan Stanley Cuts 2009 Steel-Price Estimate by 19% on Demand - Steel prices this year will be 19 percent lower than its prior estimate because of falling demand from construction companies and carmakers, Morgan Stanley said. - more

• World Average Carbon Steel Prices - from MEPS - There is little sign of demand improving within the flat products sector, with steel values now expected to slip further in the short term. - more

  International metals trade hit by downturn - The worldwide economic slowdown is hurting the international trade of scrap metal. As demand for scrap drops, exports and imports are slowing to a crawl. - more

• Steel: It’s been green for years - With the Obama administration hoping to implement a cap and trade system to help the nation reduce its emissions of green house gases (GHG), the United States steel industry is poised to benefit from a desire by companies to purchase environmentally-friendly steel products. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

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