Tuesday, November 30

• Baltic Dry Index - minus 46 to 2,099. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Rolls-Royce Pushes $990,000 Phantoms Amid Luxury Demand From China's Rich // China Slashes Roche, Bristol-Myers Drug Prices to Curb Health-Care Costs // China Stocks Cap First Monthly Drop Since June on Rates, Europe Concerns // Yen Rises to 11-Week High Versus Euro on China Tightening, Irish Contagion // India Economy Grows More Than 8% for Third Quarter, Stoking Inflation Risk // Euro May Decline to Lowest Since August Versus Dollar: Technical Analysis // Asian Stocks Drop as Europe, China Concerns Counter U.S. Data // EU Faces More Sovereign Bailouts as Irish Contagion Spreads: Euro Credit // EU Faces More Bailouts as Euro Contagion Spreads to Portugal: Euro Credit // German Unemployment Falls to Lowest in 18 Years // Most European Stocks Decline as Debt Crisis Intensifies; BNP Paribas Drops // Need for QE2 Seen in Electronics Manufacturing Services Pause // Banks See Margins Widen by Deposits Surging to Most Since 1990s // Banks Resisting Fannie, Freddie Demands to Buy Back Mortgages // Consumer Confidence Rose in November to a Five-Month High // U.S. State Tax Receipts Rose Third-Straight Quarter, Group Says // Chicago Purchasing Managers Index Increases More Than Estimated to 62.5 //
• The Euro is trading over 7/10 of 1% lower against the US Dollar. NYMEX crude is down nearly 7/10 of 1% and trading at $85.15/barrel. Gold is up over 1-1/2% and silver is over 4% higher. Base metals did the same as precious metals today, all ending higher. Indicator charts show nickel opened higher and for much of the morning, stalled. Then US markets opened with positive economic news and it was off to the races, with nickel leading the pack. Only after markets closed, did nickel calm down and lose some of its earlier gains. For the day, Dow Jones ended the day and month at $10.45/lb . Stockpiles of nickel stored worldwide in LME approved warehouses fell slightly yesterday, and now stand just over the 130,850 tonne level. Sucden's day old chart shows nickel trading thru yesterday (chart here). We show nickel rose to just shy of its 40 day moving average of $10.59/lb, but was able to break thru resistance. Sucden had resistance at $10.47 and MF Global at $10.43/lb. After breaking thru, nickel settled slightly under. The Baltic Dry Index fell 46 points to fall under the 2,100 level. For the most part, the economic news out of the US was positive today, but while the recovery appears to be strengthening, there still remains some cautionary aspects. The Reuters Metals Insider report below has a good story titled "China nickel demand falls on power cuts, re-exports up" that is worth a read.

  Reports

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

  Commodity/Economic Articles and Comments

• A Dozen Random Things I Am Thinking About . .  more
• Fed’s Bullard Concerned Over Consumer Agency Funding - more
• CBO - Up to 3.6 Million People Owe Their Jobs to the Recovery Act - more
• The Big Uneasy - more
• The Joy Of Stats - more
• Asked and Answered. Twice - more
• Hudson Riehle, senior vice president of the Research and Knowledge Group for the National Restaurant Association - "The National Restaurant Association’s Restaurant Performance Index in October reached 100.7. This is the highest level for the index in over three years, since September 2007, and reflects a strengthening environment of consumer spending at restaurants."

  ThyssenKrupp Targets Profits At Stainless Unit On Standalone Basis - ThyssenKrupp AG , Germany's largest steelmaker by output, said Tuesday it continues to pursue a standalone strategy for its stainless steel business, adding it plans to return the business to profitability. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.09/lb higher in bouncy trading, with all other London traded base metals trading higher as well. Metals trading are shrugging off the declining Euro. The Euro is currently trading over 9/10 of 1% lower against the US Dollar. NYMEX crude is down 3/4 of 1% and trading at $85.08/barrel. Gold is trading 1/3 of 1% higher, while silver is down 3/10 of 1%. In overnight trading, Asian markets ended lower, with China off 1-2/3% on concerns China will take more steps to cool inflation. European markets are slightly lower at the moment, and US futures show Wall Street may open lower as well. Nickel inventories dipped slightly yesterday.     
• Bloomberg morning base metal news - more
• LME Morning - Markets mostly range higher, ignore battered euro - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Commodity Monthly Market Overview/Outlook - pdf here
• Global Mining News - pdf here
• ICDA Industry News - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals gave back earlier gains on Monday to finish in the red although the declines were not uniform; copper lost only modest ground, but lead got hammered, losing about 4% on the day. Once again, markets sold off after further misgivings about the Irish rescue package set in, while a wobbly US equity market also hurt sentiment, as did a stronger dollar. However, we should note that a strong dollar does not always lead to lower commodity prices. We do see periods of disconnect set in, with today being a case in point-- metals are holding on to modest gains despite the dollar getting to $1.2980 at one point earlier in the day against the euro, and now trading at $1.3000. Oil prices are down, but they were sharply higher yesterday when the dollar continued to rise. Periods of disconnect might last anywhere from a day or two to a few weeks; its very hard to judge the length, but if we were to bet, we would always choose the stronger dollar to eventually prevail. At this stage, there is no indication that the greenback is going to weaken anytime soon; the euro zone's debt crisis deepened again today as risk premiums on Spanish and Italian bonds pushed to lifetime highs, while Portugal's central bank warned overnight that its country's banks faced an "intolerable risk" if the government in Lisbon failed to address public finances, while urging banks to reinforce their capital needs. Irish bank debt spreads, fresh from a rescue, continued to widen on Tuesday.  ... Nickel is at $22,626, up $201; taking out $23,000 resistance still remains significant. (read Ed Meir's complete morning base metals report here)
• (Yieh) Taiwan’s Yieh United Steel Corp. (Yusco) has announced the new prices for December. As market expectation, the prices of 300 and 400 series stainless steel have decreased by NT$1,000~NT%4,000/ton average; the export prices has been down by US$100~US$120/ton. Yusco indicated that the company decided to decline prices, considering to the current weak demand, raw material costs which remains at same level of that in last month and the impact brought by low-priced imports.
• (Yieh) China’s Taiyuan Iron & Steel Company (Tisco) has announced to remain the prices of its stainless steel products unchanged for week 49th.
• (Interfax) Vice Chairman Luo Bingsheng of the China Iron and Steel Association (CISA), which represents the country's major steel mills, expects China's total crude steel demand to increase between 40 million and 50 million tons in 2011 as a result of fixed asset investments, state media reported Nov. 29.
• (WSS) The Government Commission of Russia approved the reduction of import duty for stainless pipes. For protective measures in foreign trade of RF, the duty will change from the current 28.1% to 9.9%.
• (PR) Outokumpu has today sold its remaining 2 705 000 shares in the silicon wafers manufacturer Okmetic Oyj to institutional investors. The shares sold represent 15.65% of Okmetic's share capital. After the sale Outokumpu owns no shares in
• Okmetic.
• (MDM) The Chicago Fed Midwest Manufacturing Index (CFMMI) increased 0.7 percent in October, to a seasonally adjusted level of 80.9 (2007=100). The Chicago Fed Midwest Manufacturing Index (CFMMI) increased 0.7 percent in October, to a seasonally adjusted level of 80.9 (2007=100).
• (ATA) The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.8 percent in October after increasing a revised 1.8 percent in September. The latest gain put the SA index at 109.7 (2000=100) in October from 108.9 in September.

  ThyssenKrupp Avoids Nickel Cost Gains With Plant Move - ThyssenKrupp AG plans to reduce the effect of nickel prices on its stainless-steel unit by upgrading a German plant to produce a type of the alloy that doesn’t need nickel. - more

  Nickel mine provides hope northern Tas - A Sydney based mining company expects to be granted a licence for an open cut nickel mine in northern Tasmania by the end of the year. - more

  Western Stainless Sector Dependent on Asian Demand - The traditional fourth quarter slowdown in stainless steel ordering activity is upon us. Western companies all along the supply chain will endeavour to minimize their inventories at the end of the calendar year - which, for many, will coincide with the preparation of their annual accounts. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, November 29

• Baltic Dry Index - minus 25 to 2,145. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Defense of North Korean Ally Risks Alienating Top Trading Partners // Taiwan May Accelerate Steps to Improve China Ties After KMT's Election Win // China Stocks Fall on Tightening Concerns; Health, Consumer Shares Advance // Bank of Japan Law Revamp Can't Beat Deflation, Ruling Party Lawmaker Says // European Confidence Rises to Three-Year High as German Surge Aids Recovery // Ireland Wins $113 Billion Aid; Germany Drops Threat on Bonds // European Companies Cut Debt Most Since '03 as Earnings Jump 46% // Merkel's Party Faces Hamburg Election After Greens Withdraw From Coalition // EU's Irish Rescue Fails to Stem Contagion; Spain Bonds Drop // European Stocks Fall as Irish Bailout Fails to Calm Investors; Italy Sinks // Thanksgiving Weekend Sales Rise 6.4% as Shoppers Splurge // Wall Street Shrinks From Credit Default Swaps Before Rules Hit // Treasury 30-Year Returns as Bellwether as Fed Propels Trading // Obama Proposes Two-Year Federal Worker Pay Freeze //
• The Euro is now trading over 1% lower against the US Dollar, as the bailout to Ireland fails to calm nervous investors. NYMEX crude is up 1.7% as leaked government reports thru WikiLeaks shows serious disharmony in the Middle East. Gold is up nearly 1/4 of 1% on safe haven buying and silver is up over 1-1/2%. Base metals ended lower, as European sovereign debt concerns could not be shook, and the Euro took a pounding. Indicator charts show nickel had two gaining periods in an otherwise downtrend day, once during our morning update, and one after the market closed. For the day, Dow Jones reports three month nickel ended at $10.16/lb . Stockpiles of nickel stored in LME approved global warehouses slipped Friday, after 2 gaining days. Totals now show nickel inventory sitting just over the 130,900 tonne mark. Sucden's day old chart shows nickel trading thru Friday (chart here). After ending a long slide last week with three consecutive gaining days, the Baltic Day Index has now fallen the last three days, and shows a reading of 2,145. With the Korean peninsula tensions still high, and now the Top Secret US documents just hitting the wires, with some rather embarrassing revelations already, we expect some more external volatility to creep back into an already volatile metals market.  For those who do not normally read him, Robry's morning commentary posted below was rather bearish, from a guy who likes to be bullish. His report is based entirely off natural gas flows throughout the country, and worth a read.

  Reports

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

  Commodity/Economic Articles and Comments

• Lessons From the Recovery Stage of the 1930s - more
• Number of the Week: 492 Days From Default to Foreclosure - more
• Improving Holiday Sales Reflect Economic Recovery - more
• Still betting on economic doomsday — and still waiting - more
• Lies Across America - more

  China's net steel exports to jump to 27 mil mt in 2010: ministry - China's net steel exports will reach 27 million mt in 2010, up from 6.97 million mt in 2009, according to a report by China's ministry of commerce released last Friday. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.11/lb higher this morning, after closing last week at $10.23/lb. Other metals are trading slightly higher. The Euro is trading 6/10 of 1% lower against the US Dollar at the moment. NYMEX crude is up nearly 8/10 of 1% and trading at $84.41/barrel. Gold is down 1/3 of 1% and silver is up 1/4 of 1%. In overnight trading, Asian markets ended higher, with China down slightly. European markets are trading lower this morning and futures give no direction hints for Wall Street. Nickel inventories lost ground on Friday.  
• Bloomberg morning base metal news - more
• LME Morning - Metals gain after Irish bailout deal, settle back from highs as euro jumpy - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• Robry Weekly Economic Assessment - more
• SMM Nickel Price Forecast - more
• INSG Metals Dispatch - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices fell on Friday amid thin trading conditions, a stronger dollar, and continued Eurozone worries. A softer tone in the US equity market and lingering concern about potential Chinese tightening were also important factors. Zinc was the big loser on Friday, sinking about 4.6% to a session low of $2098 and weighed down mainly by high LME stock levels. Volume was very light, particularly in the US, as American markets observed abbreviated trading sessions that followed Thursday's Thanksgiving holiday. We are off to a slightly firmer note as we head into the new week, with market focus returning to Europe in the wake of Ireland completing negotiations for an EU-IMF loan for E89 billion over the weekend. The country will apparently take E10 billion immediately to boost capital reserves of its state-backed banks, whose loans were assumed by an already heavily indebted Irish government. Another E25 billion will remain in reserve, while the rest of the money will be used to cover Ireland's deficits for the next four years. EU negotiators also gave Ireland an extra year -- until 2015-- to reduce its deficit to 3% of GDP (the eurozone limit) from the whopping 32% level it now stands at. All this help does not come cheap-- in addition to a loan of about 6%, Ireland must deploy its previously off-limit pension cash towards the bailout, meaning that the country will contribute some E17.5 billion towards its own rescue. In the meantime, Portuguese lawmakers offered a tough 2011 budget to help the country cut its deficit to 4.6% of GDP next year from 9.3%. In Spain, the central bank demanded greater disclosure from local banks and announced plans for new stress tests to show that its financial institutions could indeed absorb a "problematic exposure" of some $240 billion in souring construction and real estate loans. Despite these efforts, the Euro is slightly weaker right now, trading at $1.3150, while the risk premium investors are asking to hold Irish, Spanish, and Portuguese bonds over German paper have fallen only slightly from Friday’s levels. This is not a particularly encouraging start, and we have to assume that the dollar will continue to strengthen from here, as investors are likely assuming the worst for Spain and Portugal in the weeks ahead. In addition, we suspect the greenback will remain well bid at least until the US/South Korean maneuvers in the Korean Sea are over on Wednesday. In this respect, the North Korean warned of unspecified "consequences" if the exercises continue. In the meantime, the Chinese, who also protested the maneuvers, are pressing for negotiations to address the crisis. With the dollar gaining ground here, and worries about another Chinese rate hike coming through-- likely by year-end-- we continue to remain cautious about the metals groups over the short-term term.  .....  (read Ed Meir's complete morning base metals report here)

  Posco to Reduce Nickel Use in Stainless Steel Because of Volatile Prices - Posco, the world’s second-biggest maker of stainless steel, is seeking ways to cut its use of nickel because of volatile prices, an executive said. - more

  POSCO to cut stainless steel prices for December - South Korea's POSCO, the world's No.3 steelmaker, said on Monday that it will cut prices of its major stainless products for the first time in five months because of sluggish local demand and price gaps with imported products. - more

  Nickel May Rise to $25,000 Before Stalling: Technical Analysis - Nickel may gain as much as 11 percent after halting declines at a trend line, before the rally stalls at $25,000 a metric ton, according to technical analysis by Commerzbank AG. - more

  Domestic Price Of Ni-Based Stainless Scrap Has Fallen Largely During Last Week To This Week = Reflecting Fallen Prices Of LME Nickel, Domestic Price Has Been Reduced To Level Of Yen 175,000 - 185,000 - The domestic price of nickel-based stainless steel scrap (new clippings) to be purchased by stainless steel companies of Japan is being reduced continuously from last week and this trend to reduce the scrap price is supposed to be maintained even in this week. New price of nickel-based stainless steel scrap to be paid by stainless steel mills as of the beginning of this week has fallen to a level of Yen 175,000 - 185,000 per metric ton delivered to mills. - more

  China crude steel output up slightly in mid Nov-CISA - China's daily crude steel production rose by 0.4 percent to 1.607 million tons in the middle 10 days of November, data from the China Iron & Steel Association (CISA) showed on Monday. - more

  Construction Of Koniambo Nickel Project Is In Progress - At the Nickel Conference held on the 18th of November in New Caledonia, the two companies of SMSP and Xstrata Nickel, both of which are the partners of the Koniambo nickel project as a joint venture in New Caledonia, announced their explanation of this nickel project being progressed. - more

  Canadian miner raises funds to finance Agata nickel project in Surigao del Norte - Canadian miner Mindoro Resources Ltd. has raised A$10 million from a prospectus offering in Australia, and a concurrent private placement to finance the development of the miner’s Agata nickel project in Surigao del Norte and other properties in the Philippines. - more

  Crude steel consumption to hit 596m tons - China's apparent consumption of crude steel is likely to reach 596 million tons this year, a year-on-year increase of 5.6 percent, according to a steel association official. - more

  MEPS Forecasts A Steel Price Recovery Despite Weak November Results - Despite December price hike announcements of $US30/40 per ton by a number of producers, US transaction figures for flat products continued their downward progress over the last four weeks. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, November 24

• Baltic Dry Index - plus 14 to 2,213. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Central Bank Pledges to Strengthen Liquidity Management // North Korean Attack on South Aimed at Restarting Nuclear Talks With U.S // China Stocks Rise From Six-Week Low; Commodity Producers Gain, ICBC Falls // South Korean Won, Stocks Fall After North's Artillery Attack; Bonds Steady // Bank of Thailand Monitoring Currency, May Impose More Controls as Needed // Contango on Mideast Oil Disappears on China Diesel Squeeze: Energy Markets // New Zealand Police Say 29 Miners Are Presumed Dead After Second Explosion // Ireland Rating Cut Two Steps by S&P as `Barbarians' Gather // ECB Pressure to Reverse Tough Stance on Funding May Weaken Euro, RBS Says  // Merkel Push For Tougher Bond Terms Adds to Europe's Turmoil // Business Confidence in Germany Unexpectedly Surges to Record in November // ECB May Be Forced to Delay Exit Again as Debt Crisis Escalates // Portuguese Strike as Debt Contagion Spreads to Lisbon Streets: Euro Credit // Ireland to Cut Spending 20%, Raise Taxes as Talks Climax // European Stocks Rebound From Six-Week Low; Porsche, Compass Lead Advance // Bernanke Employment Goal Elusive as Profits Bring No Jobs // Consumer, Business Spending Probably Climbed as U.S. Recovery Accelerated // Economy Shows Life as Spending Rises, Jobless Claims Drop // Stocks Rally on Improving Economy; Irish Bonds Slip
• The Euro is currently trading only slightly lower against the US Dollar. NYMEX crude is up over 2.8% and trading at $83.54/barrel. Gold is down 1/4 of 1% and silver is off slightly. Base metals ended the session higher, as the morning began with bargain hunting and positive US economic reports lit the fuse. Indicator charts show nickel opened higher but lagged early, then began to climb. After a momentary dip upon hitting $10/lb, nickle shot north and shorts were forced to cover. For the day, Dow jones reports three month nickel ended the day at $10.21/lb . Stockpiles of nickel stored in LME approved warehouses fell yesterday and now show totalling just shy of the 130,500 tonne level. Sucden's day old chart shows nickel trading thru yesterday (chart here). Reports from the US were mostly positive today. US economic reports by MarketWatch. (1) Orders for U.S.-made durable goods fell 3.3% in October — the largest decline since January of 2009 — as transportation orders declined, the Commerce Department reported Wednesday. (2) The Labor Department on Wednesday said 407,000 workers filed new applications for unemployment benefits last week, the lowest level in more than two years. (3) Year-over-year core inflation rose a record low of 0.9% in October, the Commerce Department reported Wednesday. (4) The Commerce Department also reported Wednesday that personal income rose 0.5% in October (5) Oct. inflation-adjusted consumer spending up 0.3% (6) Sales of new single-family homes fell 8.1% in October to a seasonally adjusted annual rate of 283,000, according to data released Wednesday by the Census Bureau and the Department of Housing and Urban Development.
• Happy Thanksgiving to all of our US readers!!!

  Reports

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

  Commodity/Economic Articles and Comments

• Effects of the Financial Crisis and Great Recession on American Households - more
• Economists React: Fed Failing on Both Sides of Mandate - more
• Healthy Profit Growth Will Lead to Jobs - more
• Unemployment in States Remains High - more
• Ireland bailout - who is paying? - more
• Dying with debt: A dirty little retirement secret - more
• The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 19, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 2.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.1 percent compared with the previous week. - more

  Thyssen to bring forward US stainless meltshop-sources - ThyssenKrupp, Germany's biggest steelmaker, plans to bring forward the construction of the meltshop at its new U.S. stainless plant in order to better compete against rivals, four people familiar with the matter told Reuters on Wednesday. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.17/lb higher, with other London traded base metals trading higher as well. The Euro is trading 1/10 of 1% lower against the Euro, but commodities are resisting this morning. NYMEX crude is up nearly 2/3 of 1% and trading at $81.75/barrel. Gold is up over 1/10 of 1% and silver is down slightly. In overnight trading, Asian markets ended slightly higher, with China up 2-1/4%, as tensions remained high in Korea but no further military action was taken by either side. European markets are trading higher this morning, and US futures show Wall Street may open in a better mood today. Nickel inventories fell yesterday.   
• Bloomberg morning base metal news - more
• LME Morning - Metals buffeted by dollar moves, prices cling to gains - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• US Imports of Stainless Steel Mill Products - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals ended sharply lower yesterday, with copper hitting one-week lows, tin sinking to a two-month low, while the broader Reuters-Jefferies CRB index fell to a one-month low. Geopolitical tensions in the Koreas boosted the dollar and continued to pressure most commodity complexes in the process. The dollar also received an extra push higher after German Chancellor Angela Merkel said Ireland's crisis was different to Greece's, but just as worrying, and that the euro was in an "exceptionally serious" situation. Interestingly, the dollar staged the most dramatic part of its advance yesterday during the US mid-session when it got to $1.3370 against the Euro, but as it strengthened, both energy and metals started to rally, with metals paring their losses by the US close. We suspect the "disconnect" between these two commodity groups and the dollar may be attributable to short-covering that took place, as several metals (and oil) approached key support levels. Further buying could have been generated by the revised US GDP report, where third quarter GDP was revised from 2.0% to 2.5%. More importantly, real final sales, which excludes inventory changes - were revised up from 0.6% to 1.2%; excluding the 2.1% increase in Q4 2009, this was the strongest sales growth level since Q4 of 2007. October existing home sales came out very in line with estimates, and did not offset the positive GDP revision, and we also had constructive reports coming out of the Labor Department, which reported that recent payrolls increased in 41 U.S. states in October, led by Texas and New York. The dollar is stronger again today (now at $1.3350 against the Euro), but again, we are seeing modest gains in both energy and metals sticking so far. However, we would not read too much into this divergence. For one thing, we do not see the dollar’s rally ending just yet, as it is too early to write off Tuesday's Korean skirmish given how wholly unpredictable the North Koreans can be. We are also not out of the woods with respect to European debt issues; although the Irish loan package now seems to be in its final stages, the markets will likely shift their sights on other countries like Portugal, which has an even worse public debt profile than Ireland does. Additionally, the post-rescue results we are seeing in the European debt markets do not look that reassuring; prices for Irish bonds dropped further this week (just as the government there seems to have collapsed) while the premium investors are now demanding to hold Spanish debt over German bunds jumped to a new record high. And finally, China is a potential short-term negative hovering over most markets, as we doubt the authorities are done tightening just yet, and would not be surprised to see the government push through another rate hike prior to year-end. For all these reasons, we are wary about buying the metal dips here, and expect further short-term dollar strengthening to eventually knock the sector back, the current divergence notwithstanding. .... Nickel is at $21,878, up $278, and still fairly quiet. (read Ed Meir's complete morning base metals report here)
• (JMB) Sumitomo Metal Mining/ To strengthen cost competitiveness in smelting
• (TET) Ispat Industries Ltd will raise steel production capacity to 4.2 million tonnes per annum by the end of fiscal 2012 from existing 3.3 million tonnes, Vinod Garg, executive director, commercial, told reporters on Wednesday.
• (AISI) Based on preliminary Census Bureau data, the American Iron and Steel Institute (AISI) reported today that the U.S. imported a total of 1,791,000 net tons (NT) of steel in October, including 1,489,000 NT of finished steel (down 14% and 6%, respectively, from September final data).
• (SSI) The process of considering charges related to the investigation of Outokumpu's export practices from Finland to Russia during 2004-2006 has been completed. Public prosecutor has stated that the suspicions raised by the Finnish Customs related to accounting offences and forgery are groundless. However, the case proceeds to court as the prosecutor has decided to press charges against Outokumpu and 5 Outokumpu employees related to alleged money laundering. Outokumpu states that neither the Group nor its personnel have committed such crimes. The suspicion related to money laundering is based on the company having done business with parties that apparently have conducted crimes when importing company's products into Russia.
• China, Russia quit dollar - more
• The Outlook for Commodities With the Coming Volatility - more
• `Shooting Star' Means Commodity Skid, United-ICAP Says: Technical Analysis - more
• La Niña persists in the Pacific - more

  Zorlu Group one step closer to constructing nickel refinery - Zorlu Group Chairman Ahmet Nazif Zorlu has said his company plans to establish Turkey’s first nickel refinery in Gördes, Manisa province. - more

  Steady growth in future demand for ferrochrome – Ferrochrome consumption this year is expected to record, but prices are still low, the output of producers under threat, struggling with high costs, the ability to meet demand by 2011 in doubt. - more

  New Caledonia Nickel Project To Launch By 2012 - Xstrata is on schedule to launch its Koniambo nickel plant in the north of New Caledonia in mid-2012, completing the project within budget. - more

  Minmetals sees improved 2010 results - China Minmetals Corp, China's largest steel and metals trader, expects an 80 percent increase in its fortunes this year, with increased profit, propelled by a rally in metal prices despite recent pullbacks and good returns from its overseas mining resources. - more

  US December ferrous scrap prices to be higher: sources - December US ferrous scrap prices appear set to rise from November levels on tight supplies, higher inbound buying prices and increased export demand and bids, sources said Monday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, November 23

• Baltic Dry Index - plus 20 to 2,199. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Inflation `Volcano' May Prove Too Hot for Controls After Cash Surge // China's Biggest Banks Said to Approach Full-Year Loan Quotas, Halt Growth // Money Market Rate Climbs to Seven-Week High on Interest Rate Speculation // China Stocks Fall to Six-Week Low on Concern Government to Tighten Policy // North Korea Attack on South Kills Two, Setting Homes Ablaze // Growth in Thailand, Malaysia Slows, Heralding Caution in Asian Rate Moves // China's Rare Earth Exports Dropped 77% in October After Export Quota Cut  // Cambodia Probes Stampede That Killed 378 People at Annual Water Festival // Asian Stocks Tumble to Lowest in Five-Weeks After North Korea Shells South // Irish Rescue Plan Shifts Focus to Portugal, Spain // ECB Shouldn't Act Until Irish Banks Restructured, Finland's Katainen Says // Ten People Detained in Anti-Terror Sweep in Germany, Netherlands, Belgium // European Stocks Drop for Third Day After North Korea Fires Shells at South // Ireland Said to Need 85 Billion Euros for Rescue // European November Services, Manufacturing Growth Unexpectedly Accelerates // Euro in `Exceptionally Serious' Situation Amid Irish Bailout, Merkel Says // Greece Will Need Extra Effort to Meet Its 2011 Deficit Target, EU-IMF Say // Irish Rescue Accord Turns Investors' Focus to Spain, Portugal: Euro Credit // European Stocks Fall to Six-Week Low on European Debt Crisis, Korean Clash // Economy in U.S. Grew 2.5% in Third Quarter, Revised From 2% // Sales of Existing Houses Fell More Than Forecast in October // Stocks Drop, Dollar Gains on Korea Clash, Europe Debt
• With contagion worries center stage in Europe again, and the additional nervousness surrounding the Korean artillery battle, the Euro took a pounding today, down nearly 1/8% at the moment. NYMEX crude is down nearly 2/10 of 1% and off earlier lows, trading at $81.61/barrel. Gold is up 9/10 of 1% and silver is 1% lower. Base metals ended the session mostly lower, except for nickel. Indicator charts show nickel opened lower and was struggling till early afternoon, when it bucked the trend and suddenly shot higher into positive territory, before losing most of the days gains late. Dow Jones reports three month nickel ended the day at $9.80/lb . Stockpiles of nickel stored in LME approved warehouses rose Monday, and now show totalling just over the 130,800 tonne level. Sucden's day old chart shows nickel trading thru yesterday (chart here). It would appear the $10/lb level is once again acting as a psychological barrier for nickel. The Baltic Dry Index rose for a second day, rising another 20 points, but without the kick we had hoped to see. The US GDP report today showed the gross domestic product rose higher than originally reported during the third quarter, but Wall Street is apparently too nervous about Korea and Europe to care. Dow has been down triple digits all morning, and the bulls have yet to make a run for the day.

  Reports

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

  Commodity/Economic Articles and Comments

• There Will Be Blood - more
• Confidence Affects the Business Cycle, Study Finds - more
• Fed’s Kocherlakota: Policy Makers Would Prefer to Cut Rates - more
• Unemployment Benefits Lead to Higher Taxes, Loans - more
• Forecasters See U.S. Economy Still Sluggish in 2011 - more

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

• Indicators at 7:20 am CST show 3 month nickel trading around  $.12/lb lower, but off session lows, with other London traded base metals also lower. Any news positive for the US Dollar these days, is negative for commodities and the  Korean conflict is boosting the Dollar. The Euro is trading nearly 9/10 of 1% lower against the US Dollar at the moment. NYMEX crude oil is down nearly 1-1/2% and trading at $80.55/barrel. Gold is lower by nearly 1/2 of 1% and silver is off by more than 2-1/2%. In overnight trading, Asian markets ended lower, with China off  2%. European markets are lower this morning, and US futures show Wall Street may open sharply lower. Nickel inventories gained yesterday.
• Bloomberg morning base metal news - more
• LME Morning - Metals fall heavily, pounded by strong dollar, Europe debt contagion fears - more
• Reuters - Commodities sag as Korea shelling fuels dollar - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Global Mining News - pdf here
• ABN AMRO Metals Monthly - pdf here
• Eurometal Economic Outlook - pdf here
• ThyssenKrupp Nirosta Stainless Steel Surcharge - pdf here
• Outokumpu Stainless Steel Surcharge - pdf here
• Ryerson News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals ended lower yesterday (except for aluminum) with the group influenced primarily by copper, which retreated under the weight of sharply lower October import levels reported by China. (See our summary table and charts at the end of our report). In addition, commodities in general were under pressure on account of a stronger dollar. Market participants seem to have shrugged off the imminent Irish loan accords, and now seemed to have set their sights on other “weak links” in the European debt chain, with Portugal now possibly coming under attack. Through it all, and as we have mentioned in recent commentary, Chinese macro policy remains an ongoing drag for metals, as the specter of further tightening in the weeks ahead cannot be ruled out. We also cautioned in yesterday's note that the US equity markets looked a bit wobbly to us on account of the federal investigation of insider trading, and could thus impede any buy-side momentum forming in commodities. Indeed, many of the banking and investment banking names led the market lower for much of the day on Monday before some late-date buying trimmed the losses. As a result of the probe, two Connecticut-based hedge funds, Level Global Investors and Diamondback Capital Management, were both searched by the FBI on Monday, and agents also executed a search warrant at Loch Capital Management located in Boston. The selling in metals is back again today, this time with more authority than was the case at this time yesterday. Copper sank to $8050 at one point in the day although it has since recovered slightly, and there are widespread losses in the rest of the group, with tin and lead particularly weak. Oil prices are off by about $.50/brl and US stocks are expected to open lower as well following sloppy sessions seen in both Asian and European equity markets. The dollar is stronger today and likely the source of today’s pressure on commodities, as it is rallying on account of unexpected and rather intense fighting that broke out on the Korean peninsula overnight. North Korea bombed a South Korean island with artillery shells near a disputed western border, setting buildings on fire and killing at least two soldiers. The North Koreans moved after warning the South to halt military drills in the disputed area. The South Koreans returned fire and scrambled fighter jets in response, and although the fighting seems to have stopped, things remain tense. We have been cautious on the metals for some time, as the recent run was too fast and too quick for our liking. We suspect that a bit more of the recent gains will get rolled back over the days ahead given that market variables seem to be lining up more strongly behind the bearish case, at least over the short-term.  .....  Nickel is at $21,340, down $260, and fairly quiet. (read Ed Meir's complete morning base metals report here)
• (Yieh) According to statistics, Japan’s consumption of nickel was 4,441 tons in September, increased by 14.3% compared to that of 3,884 tons in August.
• (Interfax) China's refined lead, zinc, tin and nickel imports all witnessed year-on-year decreases in the first ten months of 2010, according to Nov. 22 figures from the General Administration of Customs
• (Yieh) The EU commission announced earlier that it will withdraw the anti-dumping duties on stainless fasteners from Indonesia, Thailand, and Vietnam starting from November 20th, 2010, based on the fact that the European companies didn’t apply for re-investigation.
• (SO) According to major Chinese steelmaker Baosteel Group, in the first 10 months of 2010 its stainless steel output reached 218,600 mt, marking a new record high for the company.
• (JMB) e Scrap Price Surges, SUS304 Scrap Price Downs in Japan
• (SBB) EU stainless sheet market quiet, base prices under pressure
• (MB) Chinese stainless exports fall 9% in Oct
• Commodity prices are not all that they seem - more
• (ATA) The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index rose 0.8 percent in October after increasing a revised 1.8 percent in September. The latest gain put the SA index at 109.7 (2000=100) in October from 108.9 in September.

  Big 5: Stainless steel rebar still in demand - There is still high demand for stainless steel rebar in the region, according to Italian manufacturer Valbruna Gulf.- more

  China steel firm profits soar 21 pct in Oct -CISA - Gross profit at China's large-scale steel companies exceeded 7 billion yuan ($1.05 billion) in October, up 21 percent from the previous month, according to data issued by the China Iron and Steel Association (CISA) on Tuesday. - more

  Courtesy AISI - In the week ending November 20, 2010, domestic raw steel production was 1,699,000 net tons while the capability utilization rate was 70.3 percent. Production was 1,469,000 tons in the week ending November 20, 2009, while the capability utilization then was 61.4 percent. The current week production represents a 15.7 percent increase from the same period in the previous year. Production for the week ending November 20, 2010 is up 2.2 percent from the previous week ending November 13, 2010 when production was 1,662,000 tons and the rate of capability utilization was 68.7 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, November 22

  Reuters Metals Insider - pdf here

  Due to being on the road, our afternoon update will be delayed. The Baltic Dry Index finally rose, gaining 24 points to read 2,179. Nickel stockpiles in LME approved warehouses fell for their fourth consecutive drop, and now sit just over the 130,000 tonne level.  At 8:40 am CST, nickel was down $.11/lb.  

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

• Indicators at 7:20 am CST show 3 month nickel trading around $.08/lb lower and fading, with other London traded base metals mixed. The Euro is trading over 1/10 of 1% lower against the US Dollar. NYMEX crude is up over 1/4 of 1% and trading at $82.21/barrel. Gold is trading flat and silver is down slightly. In overnight trading, Asian markets ended higher, with China down slightly. European markets are trading lowe,r while futures have yet to decide where Wall Street might open. Nickel inventories fell slightly on Friday.  
• Bloomberg morning base metal news - more
• LME Morning - Metals stable, supported by steady euro; complex cautious still - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Morning Montra - pdf here
• Metals & Energy - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• October 2010 Crude Steel Production - more
• SMM Weekly Price Forecast - more
• Robry Weekly Economic Assessment - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices retreated on Friday, but did well to hold on as they did in light of yet another tightening move put through by the Chinese, this time when they raised bank reserve requirements by 50 basis points to a now significant 18%. (By contrast, reserve requirements in the US for most banks stand that 10%). Meanwhile, the Hong Kong government raised the stamp duty on residential property transactions in an attempt to make a dent in real estate prices there. The bearish impact of this move was offset somewhat by a weaker dollar, which lost some ground on Friday on account of Irish loan negotiations that continued to move foreword. In addition, last week was relatively strong in terms of US macro data, particularly on the labor front, and this also helped keep the price declines in check. Besides the welcome dip in the four-week initial claims readings, we also saw reports that job growth in a number of major US cites is picking up impressively. In places like New York City, for example, the rate of job expansion is apparently approaching multi-year highs. We are not sure what this week will bring us in terms of commodity price movements since there are a variety of crosscurrents in play. For one thing, the fact that the Irish have confirmed over the weekend that they are now going to formally ask for a bailout of approximately $100 billion Euros contributed to the slightly weaker tone in the dollar, and explained the firmer tone we saw in metals early on. However, the dollar’s losses have since been recouped, and metals are now mostly lower as a result. .... Also weighing on most markets are persistent questions about China’s monetary policy, with the authorities undoubtedly on a path of doling out a steady stream of tightening measures. At one point, one of these moves -- and we suspect it will be an interest rate hike-- could lead to a substantial correction in the metals space, but in the meantime, the anticipation of something happening should keep commodity rallies somewhat in check. In terms of when exactly something will be announced, we suspect that the flood of money now being funneled into the Chinese economy through strong foreign direct investment, ongoing trade surpluses, increasing bank loans, and the latest Fed-induced QEII injection, will likely prompt the Chinese authorities to move on rates by year-end, a view shared by a consensus poll taken recently by Bloomberg. .....  Nickel is at $21,723, down $126, with the short-term upchannel now giving way; prices will likely drift lower from here over the short-term. (read Ed Meir's complete morning base metals report here)
• (Yieh) Taiwanese Yieh Hsing’s earning is expected to rebound to above NT$1 billion (US$330 million), up by 60% from October since the typhoon disaster in September.
• (Interfax) All 77 members of the China Iron and Steel Association (CISA), which represents China's major steel mills, are expected to see profits remain high in the fourth quarter (Q4) of 2010, a CISA analyst said Nov. 19 at the 2010 World Iron Ore (China) summit in Beijing.
• (MB) Chinese nickel imports up by more than 20% in October
• (FA) Bloomberg reported Sinosteel Corp China's second largest iron ore trader may build a natural gas fired power plant to extend its ferrochrome capacity in South Africa beyond the current USD 450 million expansions.
• (Xinhua) China's nickel consumption to grow 4-5% in 2011, analyst
• (JMB) Japan Raw Steel Output Rises by 8% in October
• Australia headed for 'uneven' economy amid mining boom, Ken Henry tells Senate - more
• More miners will flock to London next year - more
• China Property market set to make soft landing: Report - more
• China rolls out measures to fight inflation - more

  Madagascan Coup Attempt Hasn't Affected Ambatovy Nickel Mine Development - Madagascar’s attempted coup is unlikely to have a major impact on plans to start production of nickel from the $4.65 billion Ambatovy mine in the first half of 2011, Korea Resources Corp. said. - more

  Miner Xstrata says South Pacific nickel project on course - Swiss miner Xstrata is on schedule to launch its Koniambo nickel plant in the French Pacific territory of New Caledonia in mid-2012, completing the project within budget, press reports said Monday. - more

  COMMENT: And lo, it will grow - MB’s Ferro-alloys conference is an event naturally dominated by sellers. In steel industry structural terms, anyway. - more (this was free to non subscribers when linked to)

  What is nickel? - Today, Nickel Asia Corp. is listing its shares in the Philippine Stock Exchange. The company is the largest nickel mining company in the country and ranks sixth in the world. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, November 19

• Baltic Dry Index - minus 9 to 2,155. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China to Raise Reserve Ratio by 50 Basis Points From Nov. 29 // Bernanke Steps Up Stimulus Defense, Turns Tables on China // Hong Kong Increases Tax on Property Resold Within Two Years to Cool Market // China Pledges Adequate Grain Supplies as Inflation Increases, Winter Looms // China Stocks Rise, Erasing Earlier Losses; Moutai, SAIC Motor Pace Gains // South Korea's Bond Tax May Spur More Emerging Markets to Raise Barricades // New Zealand Mine Blast Leaves 27 Missing, Two Emerge // Asian Stocks Climb for Second Day, Led by Computer-Related, Oil Companies // Irish Bailout May Unleash Market Vigilantes on Portugal // Cowen Scorned as Irish Mourn Loss of Sovereignty With Bailout // Euro Rises on Speculation Irish Aid Will Contain Debt Crisis; Dollar Falls // European Stocks Retreat, Declining for a Second Week on Irish Debt Concern // Climate Skepticism in U.S. Puzzles Other Nations, Stern Says // Plosser Says `Premature' to Assume Full $600 Billion of Fed Asset Buying // Stocks, Oil Fall on China Tightening Measures; Euro Strengthens
• The Euro is now trading only slightly higher against the US Dollar. NYMEX crude is lower by nearly 1% and trading at $81.07/barrel. Gold is up slightly and silver is up 1.1%. Base metals ended the day quietly, ending mostly slightly lower. Indicator charts show nickel opened higher, fell thru much of the session, before recovering somewhat in the afternoon, pulling off a $10/tonne increase. Dow Jones reports three month nickel ended the day and week at $9.91/lb , the same for the day, and $.98/lb lower for the week. It was a wild ride this week, seeing nickel trade as high as $10.82/lb, and as low as $9.28/lb. Stockpiles of nickel stored in LME approved warehouses slipped by a miniscule amount yesterday and remain at a level just over 130,100 tonnes.  Sucden's day old chart shows nickel and its past wild week (chart). The Baltic Dry Index fell 9 points, its loss appearing to slow.
• Have a safe and relaxing weekend!

  Reports

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

  Commodity/Economic Articles and Comments

• More federal workers' pay tops $150,000 - more
• America Is Just Going Through the Motions - more
• Bernanke Translated - more
• Fed’s Plosser: QE2 Benefits May Not Outweigh Costs - more
• Edward Wedbush's roof leaks, but his wallet doesn't - more
• Resource-Rich States Weathered 2009 Better - more
• Q&A: Unemployment Extension - more
• Warren Buffett's Humbug - more
• Axis of Depression - more

  Clive Palmer plays Santa Claus with $10m Christmas bonus for Queensland Nickel staff - Queensland's $6 billion man, Clive Palmer, has the touch of a modern-day Father Christmas. - more

  Global nickel market to be in 30,000-mt surplus in 2011: Eramet - The world nickel market should swing into a 30,000-mt surplus in 2011 from a deficit of 25,000 mt-30,000 mt in 2010, an official at Eramet, the French nickel producer, said Thursday. - more

  The Nickel Defense: Surviving the Metal's Oversupply Drag - Nickel has been one of the biggest sufferers in the global commodity price meltdown. But even though this high luster, silver-white metal was making a steady comeback fuelled by investment demand this year -- mainly driven by massive Chinese imports -- the nickel market is now faced with a potential oversupply threat as strong prices are encouraging higher output amid lackluster demand. - more

  EU May Renew Taxes on Stainless-Steel Screws From China, Taiwan - The European Union may renew tariffs as high as 27.4 percent on stainless-steel screws and bolts from China and Taiwan to curb competition for EU manufacturers. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.08/lb lower, with most London traded base metals trading lower. The Euro is trading over 2/10 of 1% higher against the US Dollar, but off earlier highs. NYMEX crude is down 3/10 of 1% and trading at $81.60/barrel. Gold is down 1/3 of 1% and silver is off 2/3 of 1%. In overnight trading, Asian markets ended slightly higher, with China up nearly 1%, even after China’s central bank hiked the reserve requirement ratio for banks by 50 basis points. European markets are trading lower this morning, and US futures show Wall Street may suffer a bull run hangover today. Nickel inventories fell slightly yesterday.     
• Bloomberg morning base metal news - more
• LME Morning - Chinese rate hike takes the shine off metals' recovery - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• SSINA Releases Market Data for August 2010 - pdf here
• Team Stainless Newsletter: November 2010 - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices soared by nearly 3% yesterday, retracing about half of a $1000/MT collapse that set in earlier this week, as receding concerns about Ireland and strong U.S. economic data provided the impetus for fresh buying. In addition to the advance seen in metals, there were good gains in oil, grains, and precious metals, while the Dow also soared by 173 points, undoubtedly helped by the successful debut of General Motors. Easing concerns about the Irish debt crisis was a key factor in setting the positive tone early on, especially after the country’s central bank governor said that his country will likely seek a bailout from the EU after all. Credit-default swaps on Ireland’s bonds sank 21.5 basis points to 502.5, and there was a 15 basis point dip on Irish yields. Interestingly, the crisis illustrated one of the “design flaws” in the EU’s $1 trillion stabilization fund, namely, how do you advance money to a country that is on the ropes, but which is reluctant to formally ask for it? The Irish were playing hard-to-get in this particular case, but we have to suspect the inordinate pressure from both the capital markets and the authorities finally persuaded them to come to come to the table. Of course, their reluctance to sign on to the package was partly understandable, as the government will now have to assume even more debt, so how all this ultimately plays out is still an open question. More importantly, we could see more European funding crises erupt in the year ahead, as other financially troubled countries experience similar attacks by “bond vigilantes” on their paper. As Ireland starts to recede from the day-to-day headlines, focus will intensify on China. Authorities today raised reserve ratio requirement for the nation’s banks by 50 basis points starting on Nov. 29, perhaps leading to the mild selloff we are seeing in metals right now from earlier highs. Of more interest, is whether anything further will be announced over the weekend with respect to interest rates. However, even if we do not see any new moves by the Chinese, the fact remains that with each successive round of eventual Chinese tightening, corrections could come our way more quickly and will exhibit much greater staying power. For what its worth, analysts at nine banks surveyed this week by Bloomberg News predict the People’s Bank of China will raise rates by the end of December, so January could turn out to be a very sloppy month in commodities, similar to what we saw last January.  .... Nickel is at $21,810, down $40, and very quiet. (read Ed Meir's complete morning base metals report here)
• (AP) China Jinchuan Lowers refined Nickel Price to US$26,000/Tonne
• (PT) Russian government hikes unalloyed nickel export duty to 10%
• (SBB) Asian stainless prices stay up despite nickel dip
• (Reuters) S.Korea buys 200 T of nickel for Jan
• (AFPA) According to the American Forest & Paper Association's October 2010 U.S. Paperboard Report released today, total boxboard production decreased by 1.6% compared to October 2009, 5.9% from last month. Year-to-date production was up 3.9% over 2009.
• (AAR) The Association of American Railroads (AAR) today reported that U.S. freight railroads continue to post weekly rail traffic gains over 2009 levels, originating 297,269 carloads for the week ending Nov. 13, 2010, up 5.8 percent compared with the same week last year. Intermodal traffic for the week totaled 232,888 trailers and containers, up 11.9 percent compared with the same week a year ago, with container volume up 12.8 percent and trailer volume up 7.5 percent.
• Chinese economy to see stable growth: OECD - more

  Madagascan Coup Attempt Hasn't Affected Ambatovy Nickel Mine Development - Madagascar’s attempted coup is unlikely to have a major impact on plans to start production of nickel from the $4.65 billion Ambatovy mine in the first half of 2011, Korea Resources Corp. said. - more

  Market Tendency On Imports Of Ferro-Alloys At 15th November 2010 = Tight Supply Of Ferro-Silicon Will Be Extended To Lunar New Year In China - The market tendency by item on imports of ferro-alloys into Japan at the 15th November of 2010 is as follows  - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, November 18

• Baltic Dry Index - minus 24 to 2,164. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Possible Chinese Inflation Curbs Offer `Buying Opportunity,' JF Asset Says // Odds for China Interest Rate-Increase Higher on Inflation Risk, Aviva Says // China Stocks Rise as Recent Plunge Makes Equities Cheapest in Five Weeks // Korea to Revive Tax on Foreigners' Bond Holdings to Slow Capital Inflows // Singapore Says Economy to Expand 4% to 6% in 2011 // Taiwan's Economy Grew 9.8%, Adding Rate Pressure // Lenihan Says Ireland May Ask for Bank Package as Bailout Nears // Greece Plans to Cut 2011 Deficit to 7.4%; Economy to Shrink 3% // British Taxpayers `Knee Deep' in Ireland Debt After Bailout of the Banks // European Stocks Gain on Ireland Bailout Talks; Air France, SABMiller Rally // GM Returns to NYSE After Raising $20 Billion in IPO // Texas Borrows $1.2 Billion to Repay U.S. for Jobless Benefits: Muni Credit // Economic Data Show U.S. Recovery Accelerating // Prime U.S. Mortgage Foreclosures Rise to Record // Philadelphia Factory Index Rises to Highest This Year //
• Stocks in U.S. Rally on Manufacturing Report, Prospects for Irish Bailout
• After stumbling earlier, the Euro is back to trading 2/3 of 1% higher against the US Dollar. NYMEX crude is up 2.2% and trading at $82.20/barrel. Gold is up 1.2% and silver is up 4.3%. Base metals also ended the session higher, thanks to strong economic data, and a stronger Euro on the heels of an Irish bank bailout that is nearly a certainty now. Indicator charts show nickel opened higher, stumbled with the Euro by nearly $600/tonne, before recovering most of the loss late. Dow Jones reports three month nickel ended the day at $9.91/lb . We will have to see if the $10/lb level puts up any kind of resistance, albeit psychological at best. Stockpiles of nickel stored in LME approved warehouses now stand just over the 130,100 tonne level after a single small shipment left a European port yesterday. Sucden's day old chart shows day one of nickel's bounce back (chart here). The Baltic Dry Index slipped yet again, losing another 24 points. After a dismal NY Fed factory report earlier this week, the the Federal Reserve Bank of Philadelphia reported manufacturing activity in the Philadelphia region rose to its highest level in nearly a year in November.  

  Reports

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

  Commodity/Economic Articles and Comments

• (Reuters) Eastern Europe will start to recover next year and economies to the west will continue to improve as demand picks up, steelmaker Voestalpine said, as it forecast a strong rise in its 2010/11 earnings. The Austrian maker of high-quality steel used in cars, railways and pipelines, which operates mainly in Europe, said on Thursday the steel industry should see a good 2011.
• Credibility Consumer Distress Index: Grip of Financial Distress Tightens Again in Third Quarter - more
• Bernanke Seeks to Reassure Senators - more
• Fixing The US Budget – Straightforward Or The Hardest Problem On Earth? - more
• The housing crisis in 1933, and today - more
• QE2  - more

  China tightening to weigh on commodities - Steps to curb inflation in China could further dampen a sharp rally in commodity prices this year. - more

  Two major China steelmakers cut December prices - Two leading Chinese steel mills announced cuts to steel prices for December bookings in response to falling prices after Baosteel kept prices unchanged for the month from November. - more

  A Recovery In Flat Product Steel Prices Expected Soon - Strip mill product prices have continued to deteriorate over the last four weeks but may well be nearing the bottom now. - more

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

• Indicators at 7:20 am CST show 3 month nickel trading around $.04/lb higher, with all base metals trading higher this morning. The Euro is trading nearly 1% higher against the US Dollar, giving a big boost to commodity trading. NYMEX crude is  up nearly 1-3/4% and trading at $81.83/barrel. Gold is up 1.4% and silver is  up 3-2/3%. In overnight trading, Asian markets ended higher, with China up 1.4%. European markets are trading higher this morning and US futures show Wall Street may open much higher. Nickel inventories fell slightly yesterday.  
• Bloomberg morning base metal news - more
• LME Morning - Metals stabilize, as sellers show signs of exhaustion - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• The Koniambo Project - Nickel Conference New Caledonia - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals finished mixed yesterday after the dizzying falls we saw earlier in the week. The performance in other markets was uneven as well, with oil prices falling for a fourth straight day, although US stocks ended mixed. The dollar held steady in a very narrow trading range. Its a far different story today, where we are seeing the inevitable post-selloff bounce set in with much more authority. Metals are higher across the board, as are oil prices, and the dollar has finally stopped rising against the Euro and is now at $1.3650, losing about $.02 in the span of just 24 hours. Credit for the Euro's recovery -- at least for now -- has to go to the Irish situation, which is heading towards some sort of “resolution”. The country’s central bank governor said he expects to ask for a bailout from the EU and the IMF worth “tens of billions” of Euros to rescue its battered banks, and in effect has thrown in the towel on going it alone, a stance that was becoming increasingly untenable as market conditions deteriorated. Ireland will probably pay an interest rate of close to 5% for the money it borrows, so the terms are rather steep considering how much the government is already on the hook for. Nevertheless, the impression of a solution is helping various markets heal somewhat today, with the improved tone setting up a strong start for the US equity markets, where Dow futures are showing a 93 point opening gain. As Ireland starts to recede from the headlines, focus will intensify on China, where rumors are circulating that an interest rate hike is imminent. In fact, there is talk of a move as soon as this weekend, since some Chinese central bank watchers note that the 20th of each month is typically when major policy announcements are rolled out. Whether we indeed get such a proclamation at this time remains to be seen, but the more indisputable point is that the government is on a clear tightening bias given the rising inflation rate, (which we suspect is well below the official estimate anyway). We would therefore be cautious about the long side at this stage, at least until we get weekend developments out of the way.  ...  Nickel is at $21,547, down $3, and very quiet; charts suggest that we seem to be on track to push towards $20,000. (read Ed Meir's complete morning base metals report here)
• (MB) Jinchuan cuts nickel prices after LME price falls
• Commodity bulls warned by Continuous Commodity Index - more
• China steel output rose 2% in early November: CISA - more
• (AFPA) The American Forest & Paper Association released the October 2010 U. S. Containerboard Statistics Report today. For the twelfth straight month, containerboard production rose over same month a year ago. Total production saw an increase of 94,800 tons or 3.4% when compared to October 2009.

  Russia reintroduces 10% export duty for copper and nickel - The Russian government subcommittee on customs-tariff policy, and First Deputy Prime Minister Viktor Zubkov, have approved a 10% export duty on nickel and copper - more

  10 nickel execs held in corruption probe, dissidents say; rumors of scandal are rife - A corruption scandal in a Cuban nickel processing plant has led to the detentions of at least 10 of its executives, according to dissidents in Cuba. - more

  Madagascar Army Vows to Avoid Bloodshed After Rebel Officers Attempt Coup - Madagascar’s army said it was looking to avoid bloodshed after a group of rebel officers attempted to overthrow the government of President Andry Rajoelina yesterday. - more

  SA's stainless production to reach record - Stainless steel production is expected to reach record levels in 2010, JSE-listed ferrochrome miner Merafe Resources said in a presentation on Tuesday. - more

  Price Of Molybdenum Oxide Has Rallied To Level Of US$16 Per Lb. Of Mo After Interval Of 6 Months = Reflecting A Steep Rise Of Its Domestic Price In China - The international price of molybdenum oxide has rallied to a level of US$16 per lb. of Mo after an interval of 6 months. Dealers offered on the end of last week molybdenum oxide at US$16.00 - 16.30 per lb. of Mo and ferro-molybdenum at US$40 - 41 per kg. of Mo. - more

  US raw steel output shows first gain in eight weeks: AISI - Steel mill output in the US increased by 47,000 st or 2.9% in the week ended November 13, the American Iron and Steel Institute in Washington reported Monday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, November 17

• Baltic Dry Index - minus 31 to 2,188. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China May Impose Price Controls, Crack Down on Speculation // ‘Dim Sum’ Debt Shows Yuan Opening Amid Crackdown // China Consumer Confidence Has First Drop in 6 Quarters on Price Concerns // China's Stocks Drop as Wen Comments Boost Rate, Price Control Speculation // Hong Kong Woman Catches Bird Flu, Possibly Visiting China Poultry Market // Asian Stocks, Commodities Drop as China Drafts Price Curbs; Won, Euro Fall // Spain Boosts Interest Payments as Irish Slump Infects Region: Euro Credit // Ireland Prepares to Open Books as EU Weighs Help for Banks // Euro Trades Near Seven-Week Low on Concern Ireland Debt Crisis May Spread // Berlusconi to Face Confidence Vote That May Lead to Early Italian Election // European Stocks Rebound From Biggest Drop in Four Months; Actelion Rallies // Bernanke's `Cheap Money' Spurs Investment Outside U.S. // Home Ownership Gets Tougher as Lenders Restrict FHA Mortgages // U.S. Consumer Prices Rose in October; Core Unchanged //
• The Euro is presently trading 1/3 of 1% higher against the US Dollar. NYMEX crude is down 1.9% and trading at $80.78/barrel. Gold is off 2/10 of 1% and silver is higher by over 1/2 of 1%. Base metals closed mostly higher, with only zinc ending lower. Indicator charts show nickel opened higher and climbed throughout the session. Nickel got hurt the worse yesterday and made the biggest rebound today. Dow Jones reports three month nickel ended the day at $9.78/lb . Stockpiles of nickel stored in LME approved warehouse took only their fourth hit for the month, and this one was larger than the other three combined. Nickel stockpiles now total just under the 130,150 tonne level. Sucden's day old chart show nickel's cliff dive yesterday (chart here). The Baltic Dry Index continues its slide - down another 31 points. Wall Street has done a whole lot of nothing today, except for a gaining Nasdaq.

  Reports

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

  Commodity/Economic Articles and Comments

• (PR) Vale is also working towards completing its $360 million investment in Totten Mine - the first new Vale mine in Sudbury in almost 40 years. The mine, located west of the city near Worthington, is expected to begin production in late 2011. It has an expected lifespan of approximately 20 years and will provide employment for roughly 130 people. The mine represents a major investment in developing new sources of ore to feed the company's Sudbury processing facilities.
• (MW) Construction of new U.S. homes sinks 11.7% to an annualized rate of 519,000 in October, the lowest level in 18 months, but permits rise slightly. Housing starts were last this low in April 2009.
• (MW) U.S. consumer inflation decelerated in October, the Labor Department said Wednesday. The consumer price index increased 0.2% in October, driven by a 2.6% gain in energy prices.
• (CR) The Refinance Index decreased 16.5 percent from the previous week and is at the lowest level observed since July of this year. The seasonally adjusted Purchase Index decreased 5.0 percent from one week earlier, the first decrease after three consecutive weekly increases.
• (CR) Reuters reports that the American Institute of Architects’ Architecture Billings Index decreased to 48.7 in October from 50.4 in September. Any reading below 50 indicates contraction.
• The horrible truth starts to dawn on Europe's leaders - more
• Fed’s Rosengren: Bond Buying Action Fully Consistent With Fed Mandate - more
• Corker Calls for Dropping Fed Mandate on Jobs - more
• GOP to jobless: Drop dead - more
• Members of US Congress Get Richer Despite Sour Economy - more
• Unemployment and happiness: A new take on an old problem - more
• Genpact CEO: Deficit, Trade Backlash Threaten U.S. Growth - more
• Economists React: Inflation Remains ‘No Show’ - more
• California Will Default On Its Debt, Says Chris Whalen - more
• How to Sell Fasteners and Remain DFARS Compliant - pdf here

  Vale to spend $10 billion in Canadian operations - Brazilian mining giant Vale SA said on Wednesday it plans to spend more than $10 billion over the next five years to expand its operations in Canada. - more

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

• Indicators at 7:20 am CST show 3 month nickel trading around $.27/lb higher, with other London traded base metals mixed, and not showing near the rebound nickel is this morning. The Euro is trading nearly 1/10 of 1% lower against the US Dollar. NYMEX crud eis down 1/3 of 1% and trading at $82.08/barrel. Gold is up slightly and silver is higher by nearly 1/3 of 1%. In overnight trading, Asian markets ended lower, with China off nearly 2.1%. European markets are trading slightly higher this morning, and  US futures are slightly higher as well. Nickel inventories finally took a hit yesterday.
• Bloomberg morning base metal news - more
• LME Morning - Base metals move off lows but eurozone fears remain - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• SA Mining - online magazine

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Commodity markets got hammered yesterday, as did the US stock market, with the Dow tumbling by almost 180 points. Base metals fared the worst, with 4-9% declines in evidence depending on the metal in question. Gold prices dipped by 2%, while oil prices fell by some 3% to a two-week low. The inability of investors to see any light at the end of the tunnel with regard to the weighty issues that have been hovering over the markets during the last week or two basically came to a head yesterday. In this regard, the Irish situation remains up in the air, not helped by the open dissension that is on display among EU policy makers. As of right now, European finance ministers are still on the fence, hoping the Irish government has the tools to deal with the crisis, (which it insists it does), but if it does not, plans are afoot to cobble together an aid package reported to be somewhere around $132 billion. In the meantime, Irish bonds slipped for a second day today, although the spread between Irish/German yields are still below peak levels reached last week. Britain also said today that is “stands ready to support Ireland”, presumably with some aid if necessary. This latest crisis arguably stems from a late October meeting when EU leaders agreed to consider Chancellor Angela Merkel’s demand for a crisis-resolution mechanism that forces bondholders to share the cost of future bailouts. That stance triggered 13 straight days of losses in a number of European debt markets before Merkel backtracked by saying that bonds now on the market would be except from any restructuring at least under 2013, where a more permanent structure would be in place. Unfortunately, for the Europeans, the cat is now out of the bag, illustrating the dangers of making policy on the fly and before reaching a broad consensus. Moreover, we suspect that investors are also looking past Ireland (which will likely get some sort of bailout) and shifting their gaze towards the rest of the "walking wounded" (i.e., Spain, Italy, Greece and Portugal), all of whom may need help down the road. EU president Van Rompuy grimly summarized the situation best, by saying that "we are in a survival crisis". This is not exactly the type of rhetoric that would endear the Euro to discriminating currency investors, and explained why the dollar has broken out to a seven-week high yesterday against a broader basket of currencies. Right now, the greenback is at $1.3467 against the Euro, and close to its highs for the day. This is leaving the metal markets still under some pressure, although prices are well off their earlier lows after a limit-down session in Shanghai. Aluminum and nickel are even up right now, but copper remains weak, and got to a low of $7920 at one point earlier. Incredibly, this week’s decline has erased $1000/ton off copper in the span of just five trading days, illustrating the dizzying volatility that these markets are capable of exhibiting.  The deteriorating situation in the Eurozone is dovetailing with an increasingly worrisome situation in China. Markets there are definitely picking up a “tightening scent” wafting through the economy, as the government is showing increasing concern about rising inflation-- now at a two-year high. Although overall inflation (at +4.4% annualized in October) is relatively restrained considering an economy that is booming along at a 10% growth rate, we suspect the actual number is quite a bit higher, which explains why it is creating such angst. In fact, the issue has now been bumped up to the top echelons of the government, with no less than Chinese Premier Wen Jiabao saying in a state television address yesterday that measures are being drafted to counter pricing pressures. Surprisingly, he did not elaborate on any of the details, leaving the still-jittery Chinese equity markets unclear as to what policy will be pursued. After steadying somewhat on Monday after Friday's 5% fall, Chinese stocks tumbled 4% on Tuesday and were down another 1.9% overnight. Asian stocks, excluding Japan, dropped to their lowest level in four weeks, while European bourses also are lower right now but off earlier lows. Wall Street is expected to open slightly higher, but we suspect that we could get somewhat more selling across the board before markets start to stabilize, presumably on some news out of Europe.  ..... Nickel is at $21,493, up $673, but charts suggest that we seem to be on track to push towards $20,000. (read Ed Meir's complete morning base metals report here)
• (Yieh) According to the statistics, Japan’s stainless steel output totaled 257,618 tons in September, up by 4.4% month on month. Among them, the output of nickel-based stainless steel has increased while that of the chrome-based stainless steel has decreased in this September.
• (Dow Jones) The global nickel market was in deficit by 41,000 metric tons between January and September, compared with a deficit about half that in the same period a year before, the World Bureau of Metal Statistics said Wednesday.
• (Interfax) China produced 664.28 million tons of steel products in the first 10 months of 2010, up 17.2 percent year-on-year, according to figures released by Shanghai-based Mysteel Information on Nov. 16.
• (AMM) Domestic stainless steel mills have been quietly discounting prices on their floor stock to spark product movement as they look to boost immediate business, according to material buyers.
• (SAM) Xstrata has approved the development of the second phase of its Lion Ferrochrome complex expansion in South Africa which includes a 360 000tpa capacity smelter
• (China Daily) China's power consumption in October rose 8.5 percent year-on-year to 340 billion kilowatt-hours (kWh), the China Electricity Council announced Tuesday.
• China targets liquidity to cool inflation - more
• Wen: Govt drafting measures to suppress price hikes - more

  Q+A-Nickel pig iron: key swing factor for nickel market - Growth in nickel pig iron output, which can be cheaper to produce than traditional nickel metal, is undermining primary nickel prices and threatens to tip the global nickel market into oversupply over the next few years. - more

  China's Nickel Pig Iron Production to Increase by 6.2% in 2011, CRU Says - China’s production of nickel pig iron will rise 6.2 percent to 155,000 metric tons next year, with Chinese stainless steel producers substituting about one- third of primary nickel with the cheaper alternative, CRU said. - more

  Xstrata Says Sinclair Restart Will Keep Capacity Steady - Xstrata Plc, the world’s fourth largest nickel producer, said restarting its Sinclair nickel mine in Australia will keep its total capacity in the nation steady as output tails off at another mine. - more

  Quantities Of Moly In Concentrates Produced By Major Mines / Western Countries In Jan. - Sep. / 10 = Moly Production In South America Is Unable To Expand, That In North America Increased By 20% - The quantities (on Mo content base) of molybdenum in molybdenum concentrates produced by major molybdenum mines in the western countries in the first nine months (January - September) of 2010 were compiled as per the table attached hereto. - more

  Steel, Aluminum Shipments Continue Healthy Growth Trend - Metals service center shipments in the U.S. and Canada for both steel and aluminum continued to increase at robust rates in October, the Metals Activity Report from the Metals Service Center Institute shows. Inventory-to-sales ratios remained stable for both steel and aluminum in both the U.S. and Canada." - more

  DJ Norilsk Nickel Vessel Completes First Northern Sea Route Trip - Russian miner OAO Norilsk Nickel has said that one of its vessels, loaded with metals, had completed its first commercial round trip to Shanghai via the Northern Sea route--the shortest way to South East Asia. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, November 16

• Baltic Dry Index - minus 42 to 2,219. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Leading Economic Index Rises for Fifth Month Amid Sustained Growth // China Wins First Orders for Plane, Breaking Airbus-Boeing Grip // Zhou Targets Liquidity Amid Speculation China Could Impose Price Controls // China's Stocks Tumble on Concern Inflation to Spur Higher Rates, Controls // South Korea Raises Interest Rate for Second Time in 2010 // Gap, Wal-Mart Clothing Costs Rise on `Terrifying' Cotton Prices // Ireland's Cowen to Weigh EU Steps to Shore Up Banking System // European October Inflation Accelerates on Surging Energy Costs // Sarkozy Under Pressure as France Feels Irish Heat: Euro Credit // German Bonds Fall as Ireland Signals Further Willingness to Accept EU Aid // European Stocks Drop Most in Four Months as EU Seeks to Tackle Irish Debt // Wal-Mart Third-Quarter Profit Rises 9% as Sales Abroad Climb // Berkshire Sells Home Depot Stake as Buffett Changes Stock Pickers // U.S. Factory Production Rises by Most in Three Months // Stocks, Commodities Drop on China, Ireland Concern
• What an ugly to day to be invested. The Euro is now trading nearly 8/10 of 1% lower against the US Dollar, as the sovereign debt trouble in Europe grows. NYMEX crud eis down nearly 3% and trading at $82.36/barrel. Gold is down 1-3/4% and silver is down 1%. Base metals got whacked hard for a second time in 3 days. Indicator charts show nickel opened lower but for much of the morning was holding its own. Then in the afternoon, the Euro fell and nickel crashed with it. Dow Jones reports three day nickel ended the day at $9.44/lb , after a stunning three day drop. Stockpiles of nickel stored worldwide in LME approved warehouses rose seventh straight session yesterday, and now sit just under the 130,700 tonne level. Of 12 reporting days so far this month, inventories have reported a decline in numbers only three times, with the remainder showing gains. Sucden's day old chart shows nickel's sudden slump (chart here) and how dependent the metal is on news from China and the Euro value. Speaking of China, that country is throwing a curve ball to the metals industry by announcing it will sell some of its stockpiled aluminum back to the world. It has already done the same for lead and zinc, and this move now has traders wondering what metal, if any, is next. It is somewhat confusing to those who have been lead to believe the mines of the world can not possibly keep up with Chinese demand, to see them sell these precious stockpiles back. Nickel traders even had to endure talk of 'oversupply' today from a nickel conference in New Caledonia. Now that's a new word for your 2010 nickel vocabulary - over supply? Add to this the worldwide nervousness about how China will take measures to slow down their economic growth and what measure they will take to get inflation under control, add a pinch of a Euro having serious trouble again, and you have had a steaming stew of negativity feeding metals traders the last few days. Nickel's collapse has shattered any resistance that stood in its way so where it will go now, is even 'technically', anyone's guess. The Baltic Dry Index fall for the 14th straight session today and fell another 42 points to 2,219. This is a drop from the OCt 27th reading of 2,784. There are those of us that this number concerns. But according to this reader, there is nothing to worry about (article here).

  Reports

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

  Commodity/Economic Articles and Comments

• (Reuters) Canadian junior nickel miner Crowflight Minerals Inc posted a wider quarterly loss, hurt by higher costs, and said it would not restart operations at its key Bucko Lake nickel mine before the end of the year.
• (Angry Bear) In December 1980, a month before Reagan took office, the debt was 2.354 trillion (Sept 2010 dollars). A month before he left office, in December 1988, that debt had increased to 4.866 trillion, which is an annualized growth rate of 9.50% a year. Starting with 4.866 trillion in December of 1988, and increasing at a rate of 9.50% a year would give you 35 trillion and change by September of 2010. A few things to note... the two Presidents who added to the debt at the quickest rate were GW in first place and Reagan in second. They were followed by Ford, and then Obama, with GHW Bush not far behind. Now, I've been pretty critical of Obama for continuing GW's policies (see Presimetrics, the book I wrote with Michael Kanell, and this) but all in all, as lousy as he's been, he's far, far from the worst perpetrator when it comes to fiscal irresponsibility. (And please, spare me the whole "the banks needed saving" when so did many businesses and households... which weren't saved. I'd be less inclined to carp if the money was spent on keeping Main Street afloat rather than seeing so much flow to Wall Street.) I wonder how the Tea Partiers would react to that information, and whether they are are angrier at GW and Reagan than they are at Obama. Somehow I doubt it.
• Europe Fears That Debt Crisis Is Ready to Spread - more
• 17.4 million U.S. families went hungry at some point in 2009, USDA says - more
• GAO: Unchecked Debt Could Prove ‘Disruptive and Destabilizing’ - more
• San Francisco Fed Official Says QE2 Is Working - more
• Philly Fed Survey of Economists Sees Unemployment Rate Still Near 8% in 2013 - more
• Wealth Effect Rumors Have Been Greatly Exaggerated - more
• New York Factory Activity Tumbles - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.08/lb lower, with other London traded base metals also trading lower. The Euro is trading 1/4 of 1% higher against the US Dollar at the moment. NYMEX crude is down 1-1/4% and trading at $83.78/barrel. Gold is down 3/10 of 1% and silver is lower by 1/2 of 1%. In overnight trading, Asian markets ended lower, with China down 4-1/3% as traders continue to speculate China will take measure to curb inflation in that country. European markets are trading lower this morning, and US futures show Wall Street shares the world concerns about China. Nickel inventories rose again yesterday.
• Bloomberg morning base metal news - more
• LME Morning - Metals head lower, fret over steady dollar and Chinese growth - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Global Mining News - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals worked their way back from earlier declines yesterday, but trading conditions were rather quiet and the recovery was uneven at best, with nickel and zinc hitting five-week and nine-week lows, respectively. Focus remains on Ireland, where the government is discussing measures to stabilize the country's banking system with European officials this morning. For most of the past week, the Irish government has been determined not to ask for a bailout, insisting that they had the situation under control, but Irish bonds rallied yesterday anyway, as investors bet that the government would ultimately make a formal request for assistance from a $1 trillion stabilization fund. This option looks more likely today, with Irish officials sounding more resigned to take help. The markets reaction has to been to sell the Euro, now at $1.3570 (a six-week low), and a factor behind the weaker tone we are seeing in metals right now. Currency markets are presumably looking past the Irish bailout and are seeing other countries that are in similarly dire straits. China is another source of concern for metals and although Chinese equity markets stabilized yesterday on relief that rates were not raised over the weekend (believe it or not, this was a minority-held view by some local traders), the selling has hit returned Tuesday. China's key stock index was off by 4% overnight on rumors of more aggressive action from Chinese authorities. In addition, China's National Development and Reform Commission was also said to be preparing a series of actions to rein in soaring food costs. Another market catching our eye is the US bond market, where we are seeing a steep deterioration in 10-year paper emanating from the Fed's recent QE2 announcement. The 10-year yield has now risen by around 0.30% point in the last two weeks alone, and is now just under the 3% mark. For the moment, this has not caused any issues for the US equity market, although higher yields will likely help stabilize the dollar, and therefore be another source of pressure for the commodity space going forward. We do not have much to add to what we wrote yesterday; we suspect that metals will continue to experience rather sloppy conditions until investors get more visibility out of both Ireland and China, both of which are weighing on the complex in different ways. ....  Nickel is at $22,110, down $240; a breach below $22,000 will look quite negative on the charts.  (read Ed Meir's complete morning base metals report here)
• (Yieh) China’s Taiyuan Iron & Steel Company (Tisco) has announced to raise the prices of 304 grade and 403 grade cold rolled stainless steel by RMB300/ton and RMB100/ton respectively for week 47th.
• (Interfax) The global mining industry must work together to ensure that countries can meet their mineral resource requirements, Chinese Vice Premier Li Keqiang said at the 12th Annual China Mining Congress & Expo on Nov. 16.
• (Reuters) The top listed steelmakers in China and Taiwan -- Baosteel and China Steel Corp -- are in talks about possible joint investment in foreign iron ore mines, China Steel's president Ou Chaur-hwa said on Tuesday.
• An Open Letter to Bernanke of Dubious Authorship - more

  Nickel Is Heading for Oversupply by 2013, Brook Hunt's Mitchell Forecasts - The nickel market is heading for oversupply by 2013 on current projections, prompting a decline in prices, said research firm Brook Hunt. - more

  New Caledonia nickel price to settle at US$25,000 - An international conference on nickel in New Caledonia has been told that the price for the metal is expected to settle in the 20,000 to 25,000 US dollar range per tonne for the next few years. - more

  Nickel expansions fan concerns of oversupply - Two major nickel producers, New Caledonia's Societe le Nickel and London-listed Xstrata, unveiled major new expansion plans on Tuesday, underlining concerns of a global supply glut. - more

  Xstrata to restart idled Australian nickel mine - Global miner Xstrata, the world's fourth largest nickel miner, will reactivate its Sinclair nickel mine in Australia after suspending operations due to the global financial crisis, a top official said. - more

  Antam to Start Produce Nickel in Pakal Island Next Year - State-owned mining company PT Aneka Tambang Tbk (ANTM), or Antam, targets to start producing nickel in Pakal island, North Maluku, in the first quarter of 2011, Investor Daily reported this morning. - more

  Turkey's Exports Of Chrome Ore In October 2010 Decreased = Exported 211,000 Tons, Exports In Jan. - Oct. 2010 Totaled To 1,976,000 Tons - According to the data from Turkey, this country exported 211,668 tons of chrome ore in October of 2010, having decreased by 22.5% compared with that (272,947 tons) in the previous month of September. Therefore, the total quantity of chrome ore exported by Turkey in January - October of 2010 came up to 1,976,000 tons, which had a considerable increase of 43.4% compared to that (1,378,000 tons) in the same period of 2009. - more

  ThyssenKrupp wants a German raw materials pool - ThyssenKrupp, Germany's biggest steelmaker, said the government and German companies should jointly set up a company to buy key raw materials needed by the industrial sector. - more

  Courtesy AISI - In the week ending November 13, 2010, domestic raw steel production was 1,662,000 net tons while the capability utilization rate was 68.7 percent. Production was 1,469,000 tons in the week ending November 13, 2009, while the capability utilization then was 61.4 percent. The current week production represents a 13.1 percent increase from the same period in the previous year. Production for the week ending November 13, 2010 is up 2.9 percent from the previous week ending November 6, 2010 when production was 1,615,000 tons and the rate of capability utilization was 66.8 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, November 15

• Baltic Dry Index - minus 52 to 2,261. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China May Surpass U.S. by 2020 in `Super Cycle,' Standard Chartered Says // China Tightens Ownership Curbs for Foreign Homebuyers to Rein In Prices // Vice President Xi Says Chinese Economy May Become Second Biggest This Year // China's Stocks Rebound From Biggest Drop in Year, Led by Drugmakers, Banks // Dollar, U.S. Index Futures Advance as Irish Bonds Rally, Copper Declines // ECB's Constancio Says Ireland Could Use Fund for Bank System // Constancio Says Greece May Need to Take More Measures to Meet 2011 Budget // Companies Safer Than Sovereigns as Crisis Cracks `Old Order': Euro Credit // Greece's Deficit Revised to Largest in EU as Debt Tops Italy's // European Stocks Climb Amid Increase in Takeover Activity; MAN, Axa Advance // Options Showing Quantitative Easing Working Before It Begins // Farm Economy Heading for Record Driving Surge in U.S. Cropland // Sales at Retailers Climb by Most in Seven Months // Inventories at U.S. Companies Increase 0.9%, More Than Forecast // Manufacturing Growth in New York Region Contracts in November
• The Euro is now trading nearly 6/10 of 1% lower against the US Dollar, but off earlier highs. NYMEX crude is up nearly 4/10 of 1% nd trading at $85.20/barrel. Gold is up over 1/10 of 1% and silver is higher by over 4/10 of 1%. Base metals ended lower, with only copper sneaking out a gain. Indicator charts show nickel opened lower and did little during the session. Dow Jones reports three month nickel ended the day at $10.14/lb . Stockpiles of nickel stored in LME approved warehouses rose slightly on Friday, and start this week reading just over the 130,400 tonne level. Sucden's day old chart shows Friday's severe sell off (chart here). After crossing the $11/lb threshold the week prior, nickel spent much of the week trading around that amount, even resisting a rising Dollar. That is, until Friday, when rumors soared worldwide that China would take measures to slow its inflation, and nickel was caught up in a worldwide sell off of commodities. RSI and SStoch numbers on the Sucden chart show nickel now well into oversold territory, but with China uncertainty remaining and a stronger Dollar, nickel stalled out today and backtracked slightly. It was interesting to note Ed Meir's note this morning,  where he stated that if nickel were to fall below the $10/lb level, nickel prices could be in serious trouble. Friday's close was the lowest nickel had traded in over 6 weeks. The Baltic Dry Index continues to slide, and for those of us who still watch it, the trend is becoming worrisome again.  

  Reports

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

  Commodity/Economic Articles and Comments

• (Reuters) Negotiations between mining companies and the Australian government over a new mining tax remain on track, with draft laws to be released for comment in early 2011, Resources Minister Martin Ferguson said on Monday.
• (SG) Government Commission for protective measures in foreign trade of RF approved reduction of import duty for stainless pipes from 28.1% to 9.9%. Simultaneously, it was approved specific import duty for tubes in amount not less than USD 1500 per tonne.
• Academic Economists Skeptical QE2 Will Work - more
• Sentiment Survey May Show Glimmers of Inflation - more
• Number of the Week: More Entrepreneurs, Fewer Jobs - more
• Open Letter to Ben Bernanke - more
• FDIC Bank Failures to date - graph here
• The World as He Finds It - more
• 5 Myths about the Fed - more

  Nickel recovery undermined by pig iron -N.Caledonia - Production of nickel pig iron has risen to 150,000 tonnes a year, about 10 percent of global production, and is threatening a recovery in world nickel prices, major producer New Caledonia said on Monday. - more

  Nickel ore cargoes pose risk to ships - trade body - Nickel ore shipments should be tested by independent surveyors before being loaded to avoid the risk that a vessel transporting the material could capsize, a trade association said on Friday. - more

• Nickel ore fears raised after calm-weather sinking - Liquefaction of nickel ore cargo may have been a factor in the sinking of a supramax carrier in non-threatening weather conditions. - more
• (2007 report on this topic) Passing the can test on nickel ore cargoes - pdf here

  Analysis: After big gains niche commodities fall hard - For most of this year, many commodity investors poured money -- largely borrowed -- into smaller niche markets that had been overlooked. This trend, which drove prices of commodities like cotton and silver to multi-year highs, may be ending with a vengeance. - more

  Bribery, fraud plague S.African mining - minister - South Africa's mining minster said bribery, deception and intimidation plague the mining sector, denting confidence in the economically vital industry. - more

  IFM Q3 ferrochrome sales down; upbeat on 2011 - International Ferro Metals posted a 21 percent fall in third-quarter sales, hurt by seasonally weak demand in its key markets, but forecast a revival in demand for ferrochrome with global stainless steel production expected to rise in 2011. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.06/lb lower, with all London traded base metals having opened lower and doing very little since. The Euro is trading 1/2 of 1% lower against the US Dollar. NYMEX crud eis up 1% and trading at $85.74/barrel. Gold is off 4/10 of 1% and silver is down over 1/10 of 1%. In overnight trading, Asian markets ended lower, with China rising 7/10 of 1%. European markets are trading higher this morning, and US futures show Wall Street may open higher. Nickel inventories rose slightly on Friday.    
• Bloomberg morning base metal news - more
• LME Morning - Metals decline further, pressured by steady dollar, Chinese worries - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• SMM Nickel Price Forecast  - more
• Robry Weekend Economic Assessment - more
• Weekly Scoreboard - pdf here
• U.S. Exports of Stainless Steel Mill Products - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals fell sharply on Friday amid a broad-based sell-off in commodities. In fact, the Reuters-Jeffries CRB index slid 3.6%, its largest daily decline in some 19 months, with both grains and sugar being particularly hard hit. On the equity side, following the sharply weaker session in Shanghai, the selling in stocks moved right through Europe and onto Wall Street, although the extent of the declines in the West were no where as pronounced as what we saw in China. Right now, metals are down sharply again, although well off earlier lows. The dollar is stronger and taking a toll on the complex, and is now at $1.3620 against the Euro. Oil prices are up slightly, and US stocks are called to open slightly higher, so metals are the only group of the three that seems to be floundering.  As we noted in Friday's note, the dramatic selloffs we saw that day were triggered by fears that the Chinese might possibly raise rates once again in light of very strong macro data and rising inflation rates, (likely understated by the government anyway), while out of Europe, investors were nervously watching developments in the debt markets. In this regard, the Irish government had to squelch rumors that it is in talks for emergency funding, while EU finance ministers had to also reassure existing bond holders that they will not be asked to share in the cost of any future bailouts, at least not until 2013. In addition, investors were told that there would no "haircuts" on their existing holdings in the event of a bailout. These reassurances helped revived the debt markets somewhat, while also helping boost the beleaguered Euro, which gained almost a penny and a half in late afternoon trading on Friday. However, despite the clarifications, the challenges facing Ireland remains stark, as the country's banks continue to hemorrhage cash. If there is going to be any emergency assistance coming to the country, the Irish apparently have to ask for it first. Over the weekend, the EU said it was not putting pressure on Ireland to do ask for aid, but the Financial Times reported that EU ministers deemed the situation serious enough to continue talks through the weekend. This morning, the pressure was stepped up again, with Ireland prodded by an ECB council member to make a “final decision” on any aid in order to calm the markets down. In the meantime, Greece expects "substantial pressure" from the EU and the IMF this week to adopt further austerity measures, a senior government official said Sunday, this amid reports that the country is missing its deficit targets. China is an equally problematical issue for the commodity bulls, as in our view, the country is now indisputably on a "tighter money" trajectory. For the past year, the government has been trying to micromanage the economy by tinkering with individual sectors in an attempt to moderate growth, but this policy has largely failed, and has now forced the authorities to take bolder steps, such as raising reserve requirements and hiking interest rates. We think the authorities will move even more aggressively in this direction in the weeks ahead in the wake of the Fed's QE2 decision. In fact, over the weekend, a deputy governor of the People's Bank of China said that China has to guard against "hot money" by mobilizing "an array of policies", such as making more frequent adjustments in reserve requirements, managing foreign exchange positions, and conducting aggressive open market operations. Of course, we have to wait and see how the authorities go about this without creating different sets of problems for the economy. For now, however, they are clearly concerned about the financial environment and China's role in it, which, as we saw in the aftermath of the G-20 summit, has not been exactly to everyone's liking.  ....  Nickel is at $22,520, down $160, and still mostly range-bound, but a breach below $22,000 will look serious.  (read Ed Meir's complete morning base metals report here)
• (Yieh) Market analyst predicted that Taiwan’s stainless steel price may keep flat this week in response to current slow demand and to fight with China’s underpriced steel imports even though nickel price has rallied to US$24,500/ton again.
• (Bloomberg) Eramet SA’s Doniambo nickel smelter in New Caledonia will raise output by about 7 percent to 60,000 metric tons by 2012, and to 65,000 tons in the medium term, Eramet Chief Executive Officer Patrick Buffet said at the New Caledonia nickel conference today.
• (Reuters) India's finished steel output in the first half of the current financial year was at 30.41 million tonnes, while imports were at 4.49 million tonnes, Junior Steel Minister A. Sai Prathap said on Monday.
• (AFR) Production of nickel pig iron has risen to 150,000 tonnes a year, about 10 per cent of global production, and is threatening a recovery in world nickel prices, major producer New Caledonia said on Monday.
• (LG) According to National Bureau of Statistics, China industrial value added output increased by 13.1%YoY in October. Mr Sheng Laiyun NBS spokesman said the growth rate for the first 10 months was 16.1%YoY down 0.2 percentage points from the January to September period. The industrial value added output of State owned and State holding companies grew 10.6 percent in October and that of collectively owned and joint stock enterprises expanded 7.9% and 14.3% respectively. Companies with overseas investment posted a rise of 11.2%.

  Nickel Outlook Strong on Stainless Demand, Projects Risky, Macquarie Says - The outlook for the nickel market is “strong” on the back of growing stainless steel consumption, currently limited supply and the risk attached to new projects, Macquarie Group Ltd. said. - more

   Goro Targeting Full Nickel Production by 2013, Vale's Poppinga Forecasts - Vale SA, the world’s second-largest nickel producer, will reach full production at its Goro nickel project in 2013, as it ramps up to capacity after cost overruns and delays. - more

• Vale to start nickel exports from N.Caledonia project - Brazil's Vale unveiled plans on Monday to start shipping nickel from its troubled $4.3 billion project in New Caledonia, two years behind original schedule and only in semi-finished form. - more

  Rusal says it won't sell nickel stake - Indebted Russian aluminium giant Rusal has insisted it will not sell its 25 per cent stake in domestic metals group Norilsk Nickel.- more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, November 12

• Baltic Dry Index - minus 53 to 2,313. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Faster Inflation Fuels Speculation Rate-Rise Near // Commodities Worldwide Slide on China Rate Rise Concern; Copper, Oil Drop // China Stocks Plunge Most Since August 2009 on Concern Over Rate Increases // India's Industrial Output Growth Unexpectedly Slows to Least in 16 Months // G-20 Backs Crisis Warning System as Ireland Concerns Grow // European Leaders Try to Stem Bond Rout as G-20 Leaders Discuss Irish Debt // Ireland Default Predicted by Majority in Global Investor Poll // Europe's Growth Slows as Deficit Cuts Dent Recovery // European Stocks Slide Amid China Inflation Concern; BHP Billiton, Rio Fall // Turkey Prices Hit Record Before Thanksgiving on Feed Costs // Homebuilder D.R. Horton Says Loss Narrowed on Lower Writedowns // Consumer Sentiment in U.S. Climbs to Five-Month High // Gary Shilling Sees `Significant' Stock Selloff Within 12 Months // Stocks, Copper Fall on China Rate Concern as Irish Bonds Rally
• What an ugly day to be in commodities. The Euro is currently trading only slightly higher than the US Dollar. NYMEX crude - down 3-1/2% and at $84.73/barrel. Gold - down 3.1%. Silver - down 6.3%. Base metals - all down, but none as bad as nickel. Indicator charts show nickel opened much lower and for a time, seemed to be on a slow and ever so slight recovery, but toward the end of the day, the plateau turned into a ski slope, as traders bailed. Dow Jones reports three moth nickel ended the day at $10.29/lb . That is $.60/lb lower than yesterday and $.80/lb lower than last week's close. Stockpiles of nickel stored in LME warehouse worldwide rose for a fifth straight day and now sit just over the 130,350 tonne level. Sucden's day old chart shows nickel leveling off with the Dollar's strength this week (chart here), and does not show today's rout. The Baltic Dry Index registered its twelfth consecutive drop, falling another 53 points to 2,313. There was only one headline today - the speculation that China will be forced to raise interest rates to slow down their surprising high inflation rate. Typically, we have been taught that high inflation is good for commodities. Apparently any action to slow that inflation is bad for commodities. The mere threat of that today sent commodities and metals, precious and base alike, tumbling. It remains to be seen whether China will raise its rates or not, although we have no reason to believe they won't, but it is interesting that the timing of this 'rumor' came as the G-20 leaders meet in South Korea. Is China sending the world a message? Whether they planned to or not, they surely did today.
• Have a safe and restful weekend!!

  Reports

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

  Commodity/Economic Articles and Comments

• Atlanta Fed’s Lockhart: Companies Remain Cautious on Hiring - more
• Inability to Cut Rates Fuels Joblessness - more
• Long-Term Unemployed Cut Job Hunt - more
• David Brooks' Apocalypse - more
• The Hijacked Commission - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.15/lb lower, and slowly recovering, with other base metals trading lower on a Chinese rate increase fear. The Euro is trading nearly 1/4 of 1% higher against the US Dollar this morning. NYMEX crude is down nearly 1.9% and trading at $86.15/barrel. Gold is down 1-2/3% and silver is off nearly 3%. In overnight trading, Asian markets fell hard with China off a whooping 6.2%. European markets are trading lower, while US futures show the Chinese rate increase fears will cross the Pacific as well. Nickel inventories rose again yesterday.
• Bloomberg morning base metal news - more
• LME Morning - Base metals pare some losses but remain in negative territory - more
• Reuters morning metals - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper prices hit a new record peak of $8966 yesterday, but the advance receded over the course of the day, and the complex finished with a much more modest gain. There were gains in the rest of the group as well, with buy-side sentiment setting in after the Chinese announced a strong set of economic figures recapped in yesterday’s commentary. This morning, things cannot look more different, as we are seeing a substantial sell-off set in. Shanghai markets finished limit down in both copper and zinc on growing concerns about higher Chinese interest rates down the road, something we have alluded to in previous commentary. In anticipation of this possibility, Chinese stocks suffered their biggest one-day fall since August 2009, with the Shanghai Composite losing 5.2% overnight. Financial services and resource sectors were hit particularly hard, while dozens of stocks fell by their 10% daily limit. As we noted in yesterday’s note, Chinese inflation in October reached its highest level in just over two years, forcing the Chinese to raise the reserve requirements for commercial banks earlier in the month. Some economists, notably those at Credit Suisse, are now suggesting that we could see a .5% rate hike "within weeks", and even within China, people like the chairman of China's Industrial and Commercial Bank of China said today the central bank will likely tighten further. Talk like this, should it indeed come to pass, will likely trigger a substantial selloff in most commodity complexes, and likely spill over into the US equity market as well. Whether we are in the throes of such a correction remains to be seen, as we have seen previous selloffs come and go without making much of a dent in the overall rally. That aside, the fact remains that the Chinese are on an indisputable path of having to tighten further, both because of the strength in the local economy, as well as the need to “wall off” money that could come in and stoke inflation in the wake of Fed QEII ease; this is not an enticing environment for the metals rally to flourish in, and today’s selloff should be viewed as a shot across the bow in this regard. On another note, we have been writing about the recent "disconnect" between metals and the dollar that has been in place over the past week, but over the last day or two, the greenback seems to reasserting its influence somewhat more on metals, while forcing other commodities, like crude oil and the grains to sell off. This may be because investors are attributing its strength not to benign short-covering rallies, but rather to legitimate "flight to safety" trades brought on by European default worries. In this regard, the situation in Ireland is what is worrying the markets most, with the country warning yesterday that a surge in its borrowing costs has become "very serious”. Speaking to reporters at the G-20 summit, EC President Jose Manuel Barroso said the EU was ready to move should Ireland need assistance, and judging from the still-rising Irish-German bond spreads, the markets may very well take him up on his offer.  .... Nickel is at $23,700, down $300, and still mostly range-bound. Nickel has largely sat out the recent advance. (read Ed Meir's complete morning base metals report here)
• (MF) According to statistics, Japan imported 15,576 tons of stainless steel scrap in September, up by 9.7% compared to that of 14,194 tons in August. Meanwhile, the average price has reached to 183,400 / ton CIF, rose by 4.6% month on month.
• (MF) Currently, chrome ore quotations show decrease at Chinese ports as well as transaction price. The overall transaction situation is plain with an orders not more than 1,000 tons.
• (CRU) * The upward trend in ferrochrome prices has faltered over the last month. Demand from all regions is subdued and there is ample supply to meet consumer purchases. In part this reflects higher levels of output in South Africa where production has increased following cutbacks in Q3.
• (AAR) The Association of American Railroads (AAR) today reported that weekly rail traffic continues to see modest year-over-year gains with U.S. railroads originating 288,056 carloads for the week ending Nov. 6, 2010, up 4.9 percent compared with the same week last year. Intermodal traffic for the week totaled 231,078 trailers and containers, up 11.7 percent compared with the same week a year ago, with container volume up 12.4 percent and trailer volume up 7.7 percent.
• Chinese shares plunge on fears of further tightening measures - more
• Commodity Prices Look Vulnerable - more

  Hunt for missing seamen after ship sinks off Japan - Rescuers were still hunting Friday for 20 missing seamen after a cargo ship sank off Japan's southern islands, leaving two people dead, Japan's coastguard said. - more

  First Quantum to spend more on Ravensthorpe - First Quantum Minerals has increased its bill to reopen the Ravensthorpe nickel project to nearly $200 million following a decision to expand a refurbishment of the treatment plant. - more

  Regulations For Total Quantity Of Moly Ore To Be Mined In China May Stimulate Its Sluggish Prices = Oversupply Of Moly In Western World Might Be Broken Down, Issue Of Excessive Moly Stocks In China - China has shared 37% of molybdenum production in the world but is scheduled to enforce from 2011 the regulations for total quantity of molybdenum ore to be mined in China. According to the data compiled and released by IMOA (International Molybdenum Industry Association), China shared 37% of molybdenum production in the world in 2009, which was distinguished on a global scale and had exceeded considerably 25% by the USA and 16% by Chile. - more

  China Nov metal output to rebound as power curbs end - China base metal output is seen rebounding in November after falling, with the exception of primary aluminium, in October as power supply is set to ramp up after cuts in key production zones. - more

  China Set To Control Moly Production - The molybdenum market may be affected by a decision by the Chinese to classify moly as 'national mining resource,' limiting the mining and export of the metal in the same fashion as rare earth elements. - more

  China steel product stockpiles fall this wk -Mysteel - Stockpiles of steel products in major Chinese cities fell again this week as the market prepares for an expected supply squeeze in last two months of the year, industry consultancy Mysteel said on Friday. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, November 11

• Baltic Dry Index - 88 to 2,366. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China's Inflation, Credit Upgrade Build Pressure on Yuan // China Said to Have Raised Reserve Ratio Twice for Some Banks // Baoshan Keeps Prices Unchanged as Commodities Rally, Inflation Quickens  // China Stock Index Rises as PetroChina, Sinopec Gains Overshadow Inflation // South Korean Stocks Plunge in Last Minute in Biggest Foreign-Investor Exit // Euro Drops on Bets Slowing Growth in Periphery to Derail Deficit Reduction // Australian Unemployment Rate Unexpectedly Jumps on More Workers // France Joins Germany Ganging Up on Bondholders to Share Pain // Irish Bank Default Swaps Rise to Distress as Loan Losses Lift Bailout Cost // Most European Stocks Fall as Debt Concern Persists; Bank of Ireland Drops // Fed Easing Seen Ineffective by 75% in Global Poll Favoring ECB // Home Prices Fall in Half of U.S. Cities, Realtors Say // U.S. Stock Futures Drop After Cisco Forecast; Aussie Weakens // U.S. Stocks Fall on Cisco Outlook; Euro Weakens, Copper Gains
• The Euro is now trading over 9/10 of 1% lower against the US Dollar, as sovereign debt worries in Europe overshadow Fed quantitative easing concerns. NYMEX crude is trading flat and at  $87.80/barrel. Gold is up slightly, while silver is higher by over 4/10 of 1%. Base metals ended mostly higher, but well off earlier gains that saw copper hit a record high. Indicator charts show nickel opened higher, lost some ground as the Euro fell, where it appeared to have stalled, until late in the session, the price fell hard. Dow Jones reports three month nickel ended the day at $10.89/lb . Even news of a Chinese cargo ship sinking with nickel ore on board was unable to offset the Dollar pressure. Inventories of nickel stockpiles in worldwide LME approved warehouses rose for a fourth straight time yesterday and now total over the 130,100 tonne level. This is the first time we have seen the 130.000 tonne level breached since June 17th of this year. Sucden's day old chart shows nickel trading thru yesterday, and considering the Dollar is trading over 4 weeks highs, nickel is holding up remarkably well (chart here).  We erroneously reported yesterday that the Baltic Dry Index gained 22 points, when it actually fell 13 points to 2,454, continuing its losing streak. We apologize for the error. And it lost another 88 points today. The cargo ship Nasco Diamond has reportedly sunk off the coast of Japan with 55,000 tonnes of nickel ore on board. If this was laterite ore, then the actual nickel loss would be more like 800 tonnes.

  Reports

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

  Commodity/Economic Articles and Comments

• Seventeen Metals: “The Middle East has oil, China has rare earth” - more
• Obama Challenged to Defend Fed Policy - more
• Stiglitz to Obama: You’re Mistaken on Quantitative Easing - more
• Deficit Commission’s $200 Billion in Proposed Spending Cuts - more
• Losses from Force-Placed Insurance Are Beginning to Rankle Investors - more
• Florida’s “Too Big for Fraud” Court System - more
• US homes lost to foreclosure drops 9 pct in Oct. - more

  One dead as cargo ship sinks off Japan - A cargo ship with 25 Chinese crew on board sank off Japan's southern islands, with only five crew accounted for including one fatality, Japanese and Taiwanese coastguards said Thursday. - more

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.05/lbhigher, and off earlier highs, with other base metals trading higher as well. The Euro is trading 7/10 of 1% lower against the US Dollar at the moment. NYMEX crude is up 3/10 of 1% and trading at $88.08/barrel.Gold is up 1/3 of 1% and silver is nearly 1% higher. In overnight trading, Asian markets ended lower, with China higher by 3/10 of 1%. European markets are trading lower this morning, and US futures show Wall Street could open lower. Nickel inventories rose yesterday.    
• Bloomberg morning base metal news - more
• LME Morning - Copper takes out pre-crisis record high on robust Asian data - more

  Reports

• Daily Market Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• US Imports of Steel Mill Products updated - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Base metals slipped on Wednesday on weak Chinese import data and on fears of more government tightening, while a steadier dollar also exerted some pressure, although its role as a trend-setter has definitely receded of late. However, several metals hit new highs before fading; tin retested its record high of $27,500, while lead hit a post-January 2010 high. Whatever bearish concerns seem to have surfaced yesterday have completely dissolved this morning, as we are sharply higher once again. Copper is setting the pace, taking out its 2008 high of $8940, as the Collahuasi strike drags into a seventh day. More importantly, there were good numbers out of China overnight showing that the economy was continuing to expand despite government efforts to rein in growth. Chinese data showed that industrial production grew by 13.1% in October, while retail sales increased by 18.6%. New loans also continued to expand and rose more than expected. However, the consumer inflation rate hit a 25-month high of 4.4% in October, and will likely prompt the government to move again on the rate front. On the debt side, China’s rating was raised by Moody’s, as the ratings agency cited $2.65 trillion in foreign-exchange reserves the country holds, as well as its good track record thus far in managing and controlling losses emanating from record lending. The dollar is higher right now, (trading at $1.3690), but is doing little to stem the advance in metals, or in energy for that matter, where crude is now at $89.00. A key variable that has been working in the dollar's favor of late--and going relatively unnoticed in the headlines dominated by QE2 concerns-- is the alarming deterioration we are seeing in the European debt markets. This week, for example, the spread between the Irish 10-year government bond and the German bond widened to a record level, while the Portuguese/German spread hit a 13-year high. Greek bonds are also losing value, but the situation in Ireland is garnering the most attention. The next week or two could prove critical; if the Irish crisis reaches a tipping point, we could see the Euro crack more sharply, setting off a long-overdue correction that could finally set in over most commodity markets. (Incidentally, there was a very good article in yesterday’s Wall Street Journal on just how bad the Irish government has handled the banking crisis, and in what desperate straits the banks are in; we could email the piece to interested readers upon request). While the Euro struggles, the Yuan rose slightly to 6.6257, its highest level since 1993. In other news, the G-20 is struggling to address currency and trade imbalances as it works on its final communiqué, with Canada's Prime Minister saying he is "not so sure" an agreement will be reached by the end of the group’s summit in Seoul tomorrow.  ...  Nickel is at $24,241, up $86, and not doing very much today. We see the recent high of $25,200 as still a reasonable short-term target. (read Ed Meir's complete morning base metals report here)
• (Yieh) Stainless steel imports to Taiwan increased sharply this year as a result of NTD appreciation and high domestic price. According to data of Taiwan’s Customs, the import volume of stainless steel including 300 series and 400 series products in the first nine months totaled 499,823 tons, increased by 17% compared to that of 428,960 tons in 2009.
• (Interfax) China plans to make fundamental changes to the structure of its economy under the Twelfth Five-Year Plan (2011-2015) in a bid to move up the technology ladder and reduce carbon emissions. At the Copenhagen Climate Conference in 2009, the government set the goal of reducing China's carbon emissions by 40 to 45 percent per unit of GDP on 2005 levels by 2020. These developments will have a significant impact on the nonferrous metal recycling sector.
• (TT) The Freight Transportation Services Index (TSI) rose 1.0 percent in September from its August level, rising after a one month decline, the U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported today.
• (Dow Jones) Billionaire Oleg Deripaska's UC Rusal Plc is seeking to put together a pool of investors to buy out billionaire Vladimir Potanin's approximately 25% stake in OAO Norilsk Nickel, Kommersant reports Thursday. Rusal may seek help from Asian funds and from investors in its 2010 Hong Kong initial public offering to buy the stake in Norilsk, in which Rusal also owns about 25%, the newspaper said, citing unnamed investment bankers and a person close to the companies.
• (Reuters) S.Korea says seeks 200 T of nickel for Jan
• Commodity Price Surge Is Luring Investors Back to Funds, Kenmar Group Says - more
• Hidden driver behind this commodity rally - more
• Rising food costs boost China's inflation rate to 25-month high - more

  China Specifies From 2011 Molybdenum As Objective Material To Regulate Total Quantity To Be Mined = China Strengthens Regulations For Illegal Mining, Causing Probability To Become Again Net Country To Import Mo - State Council (The Ministry of Land and Resources of China) has specified molybdenum ore to regulate its whole quantity to be mined, in order to preserve domestic deposits of molybdenum ore in China. This enforcement of the regulations for molybdenum ore in China will strictly control to mine, to refine, to process and to sell molybdenum ore from domestic sources of China through legislation of these terms. - more

  The New Nickel Mining - A B.C. company has found an innovative new way to mine for nickel, attracting the attention – and investment dollars – of one of the industry’s biggest players. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, November 10

• Baltic Dry Index -  plus 22 to 2,454. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Said to Order Some Banks to Raise Reserve Ratio by 50 Basis Points // China's Trade Surplus Jumps Ahead of G-20 Leaders' Summit // Hong Kong Sets First Minimum Hourly Wage in Bid to Close Record Wealth Gap // China's Stocks Drop Most in 2 Weeks on Inflation, Capital Control Concerns // China's Dagong Lowers U.S. Credit Rating on Fed Monetary Policy // Malaysian Production Quickened in September as Manufacturing, Mining Gain // Japan Weakness Invites Challenges by China, Russia as U.S. Backing Invoked // Asian Stocks Decline on Chinese Inflation Concern; Japanese Banks Advance // King Sees Equal Chance of 2% Inflation in `Vigorous' BOE Debate // G-20 Unity Born in Crisis Fractures as Leaders Pursue Own Ends // Cameron Says Chinese Surplus, Curbs on Currency Risk Harming World Economy // Dollar Rises to Four-Week High Versus Yen as U.S. Treasury Yields Climb // European Stocks Decline Most in Two Weeks on Concern Deficits Will Persist // Recovery to Speed Up as Fed Moves Build Confidence, Survey Says // Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire // Trade Deficit in U.S. Shrinks as Exports Climb to Two-Year High // US Stocks Fall on China Policy, Irish Debt; Treasuries Fluctuate
• The Euro is presently trading 4/10 of 1% lower against the US Dollar. NYMEX crude is up over 1% and trading at $87.61/barrel. Gold is up nearly 2/10 of 1% while silver is now down over 1/2 of 1%. Base metals ended the session lower, with a strengthening Dollar and lower Chinese imports the primary factor. Indicator charts show nickel opened lower, tried a recovery early that failed, and after a mid day of slight recovery, the US Dollar suddenly picked up steam on news the jobless claims in the US fell last week, and nickel fell below $11/lb. For the day, Dow Jones reports three month nickel ended at $10.95/lb . Stockpiles of nickel stored in LME approved warehouses rose for a third consecutive day Tuesday, and now sit just over the 129,800 tonne level. Sucden's day old chart shows nickel holding its own considering the US Dollar is trading at a four week high (chart here). Metals markets were tempered early this morning with news that China's imports of copper had fallen to their lowest level this year in October. This gave some metals traders the motivation early to bank some profits. Then with the additional pressure the Dollar strengthening added, nickel was pre-ordained to a losing day. The $11/lb mark appears to be taking on a psychological barrier for the time being. Much of what has and will happen, depends on the Dollar, which is presently trading at a four week high. And in the good news category, the Baltic Dry Index gained 22 points.

  Reports

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

  Commodity/Economic Articles and Comments

• (Dow Jones) U.S. nickel imports rose 0.2% in  September from last month, and was up 3.2% from the previous year, the Commerce Department reported Wednesday.
• (Dow Jones)  U.S. nickel exports fell 9.5% in September from the previous month, and was down 67.8% from the previous year, the Commerce Department reported Wednesday.
• China Could Surpass US In 2012– By One Economic Measure - more
• Zoellick: I’m No Goldbug - more
• Hires Rise, Still Five Unemployed Workers Per Job Opening - more
• Mortgage Applications Increase in Latest MBA Weekly Survey - more
• Kiss Your Assets Goodbye If Certainty Reigns: Barry Ritholtz - more
• (Xinhua) Consumer confidence of Chinese bank card holders fell in October amid continuing inflationary pressure and an interest rate hike by China's central bank, according to an index reading released Tuesday. The Bankcard Consumer Confidence Index (BCCI), compiled by Xinhua News Agency and China UnionPay, a Chinese association for banking card industry in China, dropped to 85.69 in October, down 0.63 points from September.
• Military Says Missile-Like Object Wasn't Missile - more

  Still plenty to be made from devil's metal - No one expects nickel to return to the heady heights of 2007. The Chinese will make sure of that by firing up their filthy nickel pig iron furnaces to effectively cap nickel prices at around the $US12 a pound level, assuming the greenies in Beijing allow them to do so. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.09/lb , with other London traded base metals lower as well.  The Euro is trading only slightly lower against the US Dollar at the moment.  NYMEX crude oil is down nearly 2/10 of 15 and trading at $86.58/barrel. Gold is up 1/3 of 1% and silver is up 2.6%. In overnight trading, Asian markets ended flat with China down by 7/10 of 1%.  Europena markets are trading lower this morning, while US futures show Wall Street may not shake off its funk. Nickel inventories climbed yesterday.  
• Bloomberg morning base metal news - more
• LME Morning - Metals take downside breather as dollar gains, Chinese imports disappoint - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• World Bank Commodity Markets Review - pdf here
• Steel's contribution to a low carbon future [Brochure and PDF: English, Chinese] 2010 - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Base metals continued to soar yesterday, buoyed mainly by copper, which remains quite strong. The advance was also impressive in light of the fact that the dollar strengthened again yesterday, and is now up by about five cents against the Euro in the span of three days. The dollar's rally yesterday did make a dent in some of the other commodity complexes such as crude oil and precious metals, but the fact that it failed to dislodge base metals (or grains) shows just how uneven its impact has been. Metals are generally lower as of this writing, once again ignoring the dollar, which is unchanged (now at $1.3760 against the Euro). Prices are retreating on news that China's central bank has ordered some banks to boost reserve requirements by 0.5%. The authorities are likely acting in light of fresh trade figures showing the country posting a larger-than-forecast $27.1 billion October trade surplus, as imports did not grow as much as expected. In fact, a number of imported commodities showed rather steep monthly declines, although it is probably not wise to read too much into one’s month data due to seasonal variables and the week-long holiday in early October. Nonetheless, oil imports in October were off some 30% from September, although September itself was a record, so the average number is still tracking well. Copper volumes, on the other hand, were at their lowest of the year, with imports off by some 26% from September, although they remain 4% higher than last year. The unfavorable arb is no doubt playing a part in discouraging imports. Iron ore imports showed a similar trend to copper, retracing 13% in October from a surprisingly strong September. .... Nickel is at $24,430, down $190, and has given up all of yesterday’s gains. However, the recent high of $25,200 is still a reasonable short-term target.  (read Ed Meir's complete morning base metals report here)
• (Yieh) Reportedly, Taiwan’s import volume of stainless steel in September was 53.54 thousand ton, rose slightly. Among them, the import volume of hot rolled coils was 34.16 thousand tons which was down by 956 tons. Meanwhile, the main supplier of hot rolled coil such as 300 and 400 series was South Korea.
• (SBB) Turkish chrome ore exports may hit historical high in 2010
• (MF) According to the statistics, Japan exported 99.59 thousand tons of stainless steel in this September, up by 11.3% compared to that in August; however, it was down by 4.5% compared to that of 104.33 thousand tons in last September.
• Talvivaara swings to profit on high metals prices - more
• Will China's Residential Construction Bubble Hit Copper, Zinc and Nickel Industrial Metals?  - more
• (Ceridian) The Ceridian-UCLA Pulse of Commerce Index™ (PCI) by UCLA Anderson School of Management, adjusted for season and for monthly workdays, fell 0.6% in October following a decline of 0.5% in September and a decline of 1.0% in August; which was the first three consecutive months of decline since January 2009, when the U.S. was still deep in recession. The October data beings the fourth quarter on a down note, alerting us that summer’s malaise is still very much with us. - more
• China mining group urges rare earths tie-ups -paper - more
• La Niña remains moderate to strong - more

  Norilsk Nickel reopens its Nkomati concentrator - OJSC MMC Norilsk Nickel announces the reopening of ore concentrator at the Company’s Nkomati mine in South Africa. - more

  Copper Ranks First as Morgan Stanley Forecasts Rally - Copper will lead a rally in base metals into 2011 as increased consumption cuts stockpiles and weaker currencies spur investment demand for commodities, according to Morgan Stanley. - more

  Ferrochrome demand expected to grow - Global stainless steel production is expected to hit record levels this year and ferrochrome prices are expected to recover because there is no new ferrochrome capacity coming on stream in SA, the world’s largest supplier of the alloy, in the next three years - more

  Japan Exported 99,590 Tons Of Stainless Steel Products In September 2010 As Recovered = Exports For China And USA Increased Considerably, Exports For Thailand Also Increased - Japan Iron and Steel Federation compiled the data on exports of stainless steel products from Japan in September of 2010 on the basis of the statistics released by the Ministry of Finance and the contents were as per the table attached hereto. - more

  Ravensthorpe up-beat about mining future - The Shire of Ravensthorpe says there is a positive mood in the town as a number of mining projects start ramping up. - more

  Keel of Norilsk Nickel tanker laid down - The German shipyard Nordic Yards has started construction of a new Arctic-class tanker for the Russian mining and metallurgy major Norilsk Nickel. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, November 9

• Baltic Dry Index - minus 15 to 2,476. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) Chinese Vice Finance Minister Zhu Guangyao
• China to Tighten Control on Inflows of Overseas Funds // China Trade Surplus May Jump in Sign Quick 'Fix' to Elude G-20 // Copper Rises for Fourth Day, Reaches 28-Month High on Chinese Car Sales // China Inflation May Breach Government's 2010 Ceiling, Planning Chief Says // Shanghai Stocks Drop From Seven-Month High on Policy Concern; Banks Fall // Yuan Climbs Most Since 2005 as China to Permit Quicker Gains Before G-20 // Asian Stocks Fall on Renewed Europe Concern; Strong Yen Drags Japan Stocks // Stocks in Europe Rise to Two-Year High; Barclays, Adecco, Hermes Pace Gain // Property Sales Get `Cash for Clunkers' Boost in Tax Uncertainty // Job Openings in U.S. Decreased 163,000 in September // U.S. Stocks Decline as Financial, Consumer Companies Slip
• The Euro is now trading nearly 1/2 of 1% lower against the US Dollar, a third consecutive day for a stronger Dollar. This is typically bad news for commodities. NYMEX crud eis up nearly 1/10 of 1% and trading at $87.14/barrel. Gold is up over 8/10 of 1% and silver is over 4.6% higher. Base metals ended the session higher with tin hitting a new record high, and copper coming very close to a new record itself. Indicator charts show nickel climbed early, then stagnated for much of the day, before a serious bounce near the end of the session. Dow jones reports three month nickel ended the day at $11.16/lb . Stockpiles of nickel stored in worldwide LME approved warehouses rose yesterday and now sit just under the 129,700 tonne level. This is the highest they have been since mid June. Sucden's day old chart shows the effect the last two days of the Euro falling has had on nickel prices (chart here). The Baltic Dry index continues to creep lower, down another 15 points today. Base metal traders, including those that trade nickel, showed in today's session, that the commodity rush has plenty of life left in it. After two days of setbacks caused by a unusually large drop in the Euro, a slight recovery in the Euro this morning caused metals to jump. This was also helped with news from China that auto sales were up. But as American markets opened, the Dollar rose and base metals showed little reaction. Nickel even had a late session spike that could not be attributed to the Euro. For those who may be hoping nickel is due for a strong correction, we suggest you not hold your breath. Merafe posted a powerpoint presentation by Heinz Pariser on their site this morning nd have since deleted their link from the main page. But as of this moment, the bookmark we made is still showing the report is active. You can find it here but I suspect the file won't be up much longer. If it is working, it's well worth a read.

  Reports

• Commodities Daily - pdf here
• Reuters Metals Insider - pdf here
• Damstahl Stainless Steel Report - pdf here

  Commodity/Economic Articles and Comments

• (Dow Jones) Eurofer, the association that represents European steelmakers, said Tuesday it plans to refile by the end of the first quarter 2011 an anti-dumping complaint with the European Commission against imports of cold-rolled stainless sheet into Europe.
• Small-Businesses Sentiment Improves - more
• Fed’s Warsh Skeptical Bond Purchases Can Boost Economy - more
• Should Economists Just Stick to Core Inflation? - more
• How hackers can help us defeat Wall Street - more
• Fed’s Bullard: Benefits of QE2 Outweigh Risks - more
• Guest Post: Money Is Not A Tangible “Thing”, It Is A Concept - more
• CR Index: Less money stress, but less interest in some holiday buys - more

  World nickel industry to meet in New Caledonia - Nearly 300 key players from the world's nickel industry will meet in New Caledonia next week to assess the state of the market, which relies heavily on Chinese demand. - more

  DCM DECOmetal boosts Albania ferrochrome output - Austrian miner and metals processor DCM DECOmetal Gmbh has reached a record monthly output of 3,000 tonnes of ferrochrome in Albania and aims to launch a second smelter there soon, its managing director said on Friday. - more

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

• Indicators at 7:20 am CST show 3 month nickel trading around $.10/lb higher, with other London traded base metals all higher this morning. The Euro is trading 2/10 of 1% higher against the Euro at the moment. NYMEX crude is up nearly 1/2 of 1% and trading at $87.45/barrel. Gold is up over 1/2 of 1% and at record levels, while silver is up over 3-3/4%. In overnight trading, Asian markets ended lower, with China off over 2/3 of 1%. European markets are trading higher this morning, and US futures show Wall Street could open in a better mood than yesterday. Nickel inventories rose yesterday.  
• Bloomberg morning base metal news - more
• LME Morning - Metals fire through the roof as risk aversion takes hold - more
• Reuters morning metals - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Global Mining News - pdf here
• ICDA Industry News - more here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Copper ended higher yesterday, but the rest of the metals ended lower to unchanged in what was a very split performance (and a very quiet day) in the metal markets. What struck us as being notable for a second day running, was the fact that the stronger dollar was not doing much to dent the metals advance, let alone reverse it, best evidenced by the general strength seen in the broader commodity index. Metals are sharply higher again right now, with copper coming in within a hair ($10/MT) of retesting its 2008 high of $8880. Energy and gold are both up as well, and the dollar is holding steady, trading at $1.3950 against the Euro on account of renewed worry over European debt. Additionally, we suspect that lingering misgivings about the Fed’s QEII move is also fueling the general aversion away from paper currencies and into hard assets. We know, for example, that although the Fed voted 11 to 1 in favor of the recent QEII move, many governors are less-than-enthusiastic above the decision in private, and the markets may be picking up on this unease. Sentiment among emerging market bankers, as we noted yesterday, is even more negative, this coming at a time when the G-20 meeting gets underway on Thursday where policy differences remain stark as ever. For the time being, it seems that there is little standing in the way of further gains in metals, save for the fact that at some point, prices will start impacting demand either from the physical side, or from the macro side, as emerging central banks raise their rates to fight off commodity-based inflation or ring-fence capital flows by imposing capital controls. On the rate front, the Chinese today increased the yield on bills at a central bank auction, and although this was upped by a modest 5 basis points, it does tell us that we could expect yet more tightening out of the Chinese, and likely sooner rather than later.  ..... Nickel is at $24,370, up $245; the recent high of $25,200 is now in play. (read Ed Meir's complete morning base metals report here)
• (Yieh) China’s Taiyuan Iron & Steel Company (Tisco) has announced to raise the prices of 304 grade cold rolled stainless steel by RMB300/ton (US$45/ton) while that of 430 grade cold rolled stainless steel has remained unchanged.
• (Interfax) China imported 5.37 million tons of metal scrap in the first three quarters of 2010, up 11.6 percent on an annual basis, Wang Gongmin, president of the China Nonferrous Metal Industry Association Recycling Metal Branch (CMRA) said at the 10th Secondary Metals International Forum in Ningbo on Nov. 8.
• (JMD) Aichi Steel/ To raise stainless steel product prices/ By below 10% for November contracts or later
• (WSS) Construction on the first phase of the Bahru Stainless plant in Malaysia is advancing according to schedule. The first stage of the project will reach a production capacity of 240,000mt/yr including 180,000mt produced by the cold rolling mill.
• (TRU) Chinese fastener industry will produce in 2010 more than 6 million tons. Such an outlook makes Chinese Manufacturers' Association of fasteners. 2009 9,1%, 2008 7,1%. According to the forecast, compared with 2009 growth of production fasteners in China will amount to 9,1%, as compared with 2008, 7.1%.
• (MDM) September U.S. manufacturing technology consumption was $399.76 million, according to the American Machine Tool Distributors’ Association and the Association For Manufacturing Technology. This total, as reported by companies participating in the USMTC program, was up 66.1 percent from August and up 156.8 percent when compared with the total of $155.69 million reported for September 2009. With a year-to-date total of $2,090.27 million, 2010 is up 74.1 percent compared with 2009.
• Hard Year Ends on a Soft Patch - more
• (MF) According to report, Vale, the world’s biggest iron ore maker, has agreed to explore nickel, copper and platinum mines jointly with Japan Oil, Gas and Metals National Corp. (Jogmec) in Mozambique.
• (CD) Auto sales in China grew 34.76 percent from a year earlier to 14.68 million units in the first 10 months of the year, exceeding the total number of vehicles sold last year.

  Merafe sees strong growth in stainless steel - South Africa's Merafe Resources said on Tuesday its medium- to long-term growth forecast for stainless steel output remained strong, with production expected to reach record levels this year. - more

  Ferrochrome Prices May Surge 42% in 2011 on Stainless - Ferrochrome contract prices may rise 42 percent to about $1.76 a pound next year from $1.24 this year as demand for the stainless-steel ingredient increases, said Heinz H. Pariser, head of Alloy Metals & Steel Market Research. - more

  Watchdog gets complaint on base metal ETFs - Britain's financial services regulator said it has received a complaint over plans for base metal exchange traded products (ETFs), reflecting fears they could tip a finely balanced copper market into deficit and distort prices. - more

  Exports Of Ferro-Nickel From Japan Have Toned Down = Exports For China In Jan. - Sep. 2010 Decreased To Half Of That In Same Period 2009 - The total quantity of ferro-nickel exported from 3 main shipping ports of Japan in January - September of 2010 is estimated to be 122,720 tons on material base or 24,071 tons on nickel content base, which had a considerable decrease from that in the same period of 2009, when Japan really enjoyed a boom of exporting ferro-nickel. - more

  Undeterred by the Downturn, Thyssen Tackles the U.S. Market - Conceived during the boom time, constructed during the recession, ThyssenKrupp’s new Alabama mill is in the process of bringing 4.3 million tons of additional carbon steel capacity to the market. - more

  China's steel market girds in wake of energy-saving policy - In September this year China's government launched an energy saving and emission reduction initiative which requires steel mills to suspend production and close down outdated capacities. - more

  Courtesy AISI - In the week ending November 6 2010, domestic raw steel production was 1,615,000 net tons while the capability utilization rate was 66.8 percent. Production was 1,472,000 tons in the week ending November 6, 2009, while the capability utilization then was 61.5 percent. The current week production represents a 9.7 percent increase from the same period in the previous year. Production for the week ending November 6, 2010 is down 0.4 percent from the previous week ending October 30, 2010 when production was 1,621,000 tons and the rate of capability utilization was 67.0 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, November 8

• Baltic Dry Index - minus 13 to 2,842. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Corn Crop Failing to Keep Up With Projected Demand, SGS Survey Shows  // China's Middle-Class and Affluent Consumers May Almost Triple in 10 Years // China Stocks Climb to Seven-Month High as Developers, Automakers Advance // Asian Stocks Fluctuate as Carmakers Climb While Banks Drop; Resona Plunges // G-20 Spat Risk Eases as U.S. Eschews Pushing Targets // German Industrial Production Unexpectedly Drops as Economy Loses Momentum // European Bond Tensions Underscored by Periphery Growth Divide: Euro Credit // Euro Slips on Irish Debt Concerns; Asian Stocks Hit 2-Year High // Most European Stocks Drop, Led by Commerzbank, Gartmore; Greek ASE Climbs // CEOs Most Optimistic on U.S. Profits in Bull Signal for S&P 500 // U.S. Household Debt Shrank 0.9% in Third Quarter, Fed Says // U.S. Stocks Retreat; Boeing, Home Depot Lead Declines in Dow
• European sovereign debt is back in the news today and the Euro is trading lower against the US Dollar by 7/10 of 1% because of it. NYMEX crude has gone positive, but just by a hair, and is trading at $86.88/barrel. Gold is up 8/10 of 1%, over $1400/ounce and setting a new record. Silver is up nearly 3%. Base metals did not fare as well, closing mostly lower. Indicator charts show nickel fell early but held its own thru the rest of the day. Dow Jones reports three month nickel ended the day at $10.93/lb ,  down $.18/lb off last Thursday's monthly high. Stockpiles of nickel stored in LME approved warehouses rose Friday, and now sit just over the 129,200 tonne level. Sucden's day old nickel chart shows nickel's strong showing in the face of a weak Euro on Friday (chart here). Interestingly, the SStoch and RSI show nickel remains technically under bought, which is giving it resilience against another weak Euro showing.  The drop in the Baltic Dry Index continues to slow, down only 13 points today. The morning tone was set by Carl Weinberg, a chief economist at High Frequency Economics , who in a note to clients this weekend stated "A new sovereign bond crisis is upon us ... “Defaults on sovereign debts of Greece and Ireland — and a potential failure of the banking sector in Ireland are widely expected. The consequence would likely be another financial crisis on the same scale as the Lehman Brothers failure." With that type of warning floating around, equity markets opened nervously this morning, with the Euro taking a second day of beating, and gold rising to a new record high. Base metals are holding up well considering the Euro, with copper and tin pulling off a rise for the day. Even crude oil is now trading higher. With the threat of inflation rising, commodities are seeing new money.

  Reports

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

  Commodity/Economic Articles and Comments

• (Dow Jones) ArcelorMittal Galati, the Romanian arm of the world's largest steelmaker ArcelorMittal (MT), said Monday it will idle one of its two blast furnaces still in operation from Nov. 19 for two months due to demand weakness.
• (CRU) China’s crude stainless steel output rose by 13.7% to 2.84mt in Q3, compared with the corresponding quarter last year
• U.S. Sept. consumer credit up unexpected $2.1 bln - more
• Number of the Week: $10.2 Trillion in Global Borrowing - more
• Domestic Consumption Prioritized In China’s Next Five-Year Plan - more
• Do the poor have a right to live in expensive areas? - more
• Dave’s Top 10 Reasons Why QE Won’t Help the Economy - more
• Affluent Americans Are More Confident Now Than 2009 - more
• Doing It Again - more
• FDIC Bank Closings - more
• Shortage of diesel hits mainland - more
• NIA Projects Future U.S. Food Prices - pdf here
• ‘QE2’ imperils emerging economies, China says - more
• Fed chairman: Increasing inflation not a goal - more

  Catherine Houska: Sustainable Design in Stainless Steel - On Tuesday, November 9, 2010, leading architectural metal consultant Catherine Houska will provide practical instruction on how to successfully plan, specify, and execute sustainable designs in stainless steel including those using innovative design concepts or finishes - more

  China steel demand to face headwinds in 2011 - China's steelmakers face falling prices in the next few months as property market curbs begin to bite, in a trend that could spread to upstream sectors such as spot iron ore, coking coal and seaborne shipping rates. - more

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

• Indicators at 7:20 am CST show 3 month nickel trading around $.09/lb lower, with most other London traded base metals trading lower as well. The Euro is trading nearly 8/10 of 1% lower against the US Dollar, adding heavy pressure on metals for a second consecutive session. NYMEX crude is down 1/2 of 1% and trading at $86.42/barrel. Gold is lower by nearly 1/4 of 1% while silver is 1/4 of 1% higher. In overnight trading, Asian markets ended slightly higher, with China up nearly 8/10 of 1%. European markets are starting the week slightly higher, and futures show US markets may open quiet and slightly lower. Nickel inventories rose on Friday.    
• Bloomberg morning base metal news - more
• LME Morning - Metals pause, traders warn FSA about "commodity price bubble" - more

  Reports

• Commodities Daily - pdf here
• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• Robry Weekly Economic Assessment -  more
• SMM Nickel Price Forecast - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices finished mostly higher on Friday, but came off their best levels of the day. A US government report showed non-farm payrolls pleasantly surprised to the upside, coming in at 151,000 and well ahead of the 60,000 jobs expected. Gains were revised in the prior months as well, although the unemployment rate stayed unchanged at a troublingly high 9.6%. What was perhaps more interesting about last Friday's trading session, was the fact that the metals complex did not sell off on account of the stronger dollar, suggesting that prices seem to be decoupling from the currency component. However, it seems Friday’ session was a "one-off", as the stronger dollar seems to have reasserted itself again today, (now at $1.3910 against the Euro), but this time we are seeing modest declines in both metals and energy. We suspect that the sloppier tone in most commodity markets will continue through today and possibly into tomorrow, since the dollar is quite oversold and may have more room to run. In addition, it seems investors are having second thoughts about the dollar's plight in view of the non-farm payroll data, perhaps sensing that the Fed could shorten or postpone the extent of its ease if future numbers come in on the stronger side. Of course, this is nothing that will happen imminently, as the central bank would likely want to see a few more months of data before altering its stance, so in the meantime, dollar bulls will only have a short-covering bounce to take advantage of before the bears take charge again. Copper’s cause should be helped by the fact that the Collhuasi strike now enters its fourth day.  .... Nickel is at $24,167, down $288, but we did get two closes above $24,000 resistance last week, justifying a slightly higher shift in the trading range, with the recent high of $25,200 being the next target.  (read Ed Meir's complete morning base metals report here)
• (Yieh) - According to the statistics, Japan exported 99.59 thousand tons of stainless steel in this September, up by 11.3% compared to that in August; however, it was down by 4.5% compared to that of 104.33 thousand tons in last September.
• (Interfax) China will produce 333,000 tons of primary nickel in 2010, an increase of 19.78 percent from last year and roughly 24 percent of the world's total, an industry analyst told Interfax Nov. 8.
• (Interfax) Despite strong domestic demand, China's steel industry will grow at slower rate in the coming years, industry experts said at a meeting in Beijing on November 6.
• (MB) Jinchuan raises nickel prices by $450
• (CEIS) China's nickel consumption to grow 4-5 pct in 2011, analyst
• (DJ) Russia Jan-Sep Nickel Exports -0.4% On Year At 173,900 Tons
• (MF) The EU has decided that nickel in stainless steel will not be subject to the hazardous substances under the new EU Eco label Regulation

  Japanese Stainless Export Deals Difficult In Strong Yen - Japan's stainless steel manufacturers find it difficult to settle on new export deals of nickel-based stainless CR sheets for shipments to Asian destinations, with an advanced appreciation of the yen at around 80 yen to the US dollar. - more

  China Oct daily steel output drops 2 pct -CISA - China's daily crude steel output fell 2 percent month on month in October to 1.586 million tonnes, data from the China Iron and Steel Association on Monday showed. - more

  Canada Intends to Tighten Law on Foreign Takeovers, FT Reports - The Canadian government plans to tighten its law on foreign investment, to compel more openness and accountability, after Industry Minister Tony Clement’s rejection of the bid for Potash Corp. of Saskatchewan by BHP Billiton Ltd., the Financial Times reported. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Friday, November 5

• Baltic Dry Index - minus 15 to 2,495. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Says Fed Must Explain Bond-Buying or Endanger Recovery // China Rejects `Naked Swimming' With Default Swaps // Taiwan Consumer Prices Rise a Second Month After Typhoon Pushed up Costs // BOJ Says to Use New Fund to Buy J-REITS Rated AA or Higher // Toyota Raises Full-Year Forecast, Predicts Second-Half Plunge // Asian Stocks Climb on Speculation Quantitative Easing Will Support Growth // German Manufacturing Orders Unexpectedly Declined in September // Euro Retreats From Nine-Month High Amid Peripheral Budget-Deficit Concern // ECB Rejects Request for Greek Swap Files, Citing `Acute' Risks // `Hell Week' Ends With Central Banks Split on Policies to Underpin Recovery // European Stocks Advance as U.S. Payrolls Beat Forecasts; Carphone Climbs // Gasoline Exports to U.S. Decline on 20-Month Low Margins: Energy Markets  // U.S. Economy: Payrolls Increase for First Time in Five Months // Pending Sales of U.S. Existing Homes Fell 1.8% in September // U.S. Stocks Fluctuate as Jobs Growth Offset by Kraft Sales
• The Euro is now trading over 1% lower against the US Dollar, which would typically add some serious stress to commodity traders. But not today. NYMEX crude is down slightly and trading at $86.45/barrel. Gold is trading flat, while silver is up 1.2%. Base metals ended mixed and after a late day sell off, mostly slightly lower. Indicator charts show nickel was fairly docile for nearly the entire session, when it attempted to make a bull run late, that was quickly followed by a larger dip. For the day and week, Dow Jones reports three month nickel closed at $11.09/lb . Considering the drop in the Euro today, nickel showed remarkable resilience and hints this week's uptrend still has legs. Stockpiles of nickel stored in LME approved warehouses dropped slightly yesterday and remain at a level just over the 129,100 tonne mark. Sucden's day old chart shows how the Fed decision, and the rumors prior, have turned nickel's quiet downtrend around (chart here). The Baltic Dry Index lost 15 points to 2,495, its lowest reading since October 5th.
• Have a safe and relaxing weekend!!

  Reports

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

  Commodity/Economic Articles and Comments

• (TBP) The belief that gains in the markets can improve the overall economy in a post-credit crisis environment is rather naive. The focus on equity prices is a corollary to the Wisdom of Crowds, and the data supporting it is inconsistent at best. There have been far too many instances in history of markets rallying 30%, 50%, even 125% — with economies failing to gain any traction.
• (WSJ) The National Association of Colleges and Employers’ index of college hiring climbed to 126.4 in October, compared with 86.8 at the same time last year. The index is based on surveys of employers.
• Fed’s Hoenig on QE2, Low Rates and Future Instability - more
• Can The GOP Really Wait Until Next Year To Shut Down The Government? - more
• In U.S., 14% Rely on Food Stamps - more
• The Strange Death of Fiscal Policy - more
• The Focus Hocus-Pocus - more
• Over 50 and Out of Work - more

  International Ferro Metals to Open Power Plant, Business Day Reports - International Ferro Metals Ltd. will in four weeks start up a co-generation plant that will use waste gases at its ferrochrome smelter in South Africa to generate 17 megawatts of power, Johannesburg’s Business Day reported, citing AAP Carbon, the project’s developer. - more

  Cuba says Hurricane Tomas won't stop nickel output - Hurricane Tomas is not expected to significantly impact Cuban nickel production as it passes near the heart of the industry in eastern Holguin province this afternoon, state-run media said on Friday. - more

  Mwana Africa struggles to re-capitalise BNC - London-listed Mwana Africa Plc has admitted that it is struggling to raise capital to finance the re-opening of its mothballed Zimbabwe-based Bindura Nickel Corporation (BNC). - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around even , with other base metals mixed and quiet. The Euro is trading lower against the US Dollar this morning, down over 6/10 of 1% as some of yesterday's knee jerk reaction to the Fed wears off. NYMEX crude is up slightly and trading at $86.56/barrel. Gold is down nearly 8/10 of 1% and silver is off nearly 3/4 of 1%. In overnight trading, Asian markets ended the week higher, with China up 1.1%. European markets are lower this morning on new German factory orders fell more than expected in September. US futures show Wall Street may have a hangover after yesterday's 200+ gain in the Dow. Nickel inventories ticked slightly lower yesterday. US October payroll numbers are due in a few minutes.     
• Bloomberg morning base metal news - more
• LME Morning - Metals recover on weak dollar, solid Chinese manufacturing - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals soared yesterday, with copper taking out its recent high and hitting a two-year peak in the process, as the combined impact of the Fed's QE2 decision and a weaker dollar continued to reverberate throughout the commodity space. In fact, the Reuters-Jefferies CRB index pushed to its highest level in more than a year. The US stock market was also on fire, with the Dow Jones closing up by almost 220 points, and taking out its April 2010 high. The dollar has gotten thrashed this week, selling off to a nine-month low of $1.4210 against the Euro yesterday, slipping to just over 80 against the yen earlier in the week, and slumping to a 28-year low against the Australian dollar. The weak initial claims data referred to in yesterday's note did not help its cause, and neither did productivity readings for the third quarter, which showed an increase of 1.9%. This was double the prevailing estimate and tells us that companies are still managing to extract gains from slimmed-down labor forces, and may therefore not be looking to hire anytime soon. We get the key nonfarm payroll report out later on Friday, with expectations that 60,000 private-sector jobs were created in October, but this is still well below optimum levels. Right now, the dollar is stronger, trading at $14120 against the Euro, and weighing on energy prices, which are a bit lower, but metals are up again today, presumably on account of Chile's Collahuasi mine strike, which started today. The union said on Thursday that the strike would be long, but the mine's operator said it expects to maintain output and suggests the stoppage will be short-lived. However, we think the more important reason metals are higher is the ongoing perception that commodities are to be bought as "hard-asset" hedge plays against the sinking dollar. That is all well and good, but little thought is being given to the inflationary consequences of this line of thinking, particularly in emerging markets, not to mention the extent of demand destruction that could also set in as a result.  ... Nickel is at $24,500, unchanged, and had a good run yesterday; another close above $24,000 today could warrant a shift in the trading range.  (read Ed Meir's complete morning base metals report here)
• (Interfax) It is unlikely that the use of long-term iron ore contracts will be re-introduced, a senior official with the China Iron and Steel Association (CISA), which represents China's major steel mills, told Interfax on Nov. 3.
• (MT) Mwana Africa is expecting to restart full operations at its Trojan Nickel Mine in Mashonaland, Zimbabwe, during September next year. The mine was closed two years ago following the global recession.
• (DJ) China Jinchuan Ups Refined Nickel Price 1.7% To CNY183,000/Ton
• (AAR) The Association of American Railroads (AAR) today reported that weekly rail traffic continues to gain over 2009 levels with U.S. railroads originating 292,884 carloads for the week ending Oct. 30, 2010, up 6.3 percent compared with the same week last year. AAR will no longer report 2010 weekly rail traffic with 2008 weekly comparison data since October 2008 marked the beginning of the recession-related downturn in rail traffic. - more
• Risk of Inflation, Potential 'Commodity Shock': Analysts - more
• Bearishness grows in latest AAII sentiment survey - more
• China - 'Firewall needed' to prevent cash surge - more
• US Food Stamp updated Data - more

  China Nickel Consumption Set To Rise In 2011 - China's nickel consumption is set to rise in 2011, fuelled by rising stainless steel capacity and higher demand from the automobile and electronics sectors, industry participants said Friday. - more

  Market Tendency On Imports Of Ferro-Alloys At 29th October 2010 = Price Of Chinese Ferro-Silicon Has Risen To A Further Extent, Reaching Highest Since Beginning Of This Year - The market tendency by item on imports of ferro-alloys into Japan at the 29th October of 2010 is as follows  - more

  China, developing world continue to lift steel industry - Industry watchers said just because the United States steel industry is sputtering along, it doesn't mean the same is true around the world. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Thursday, November 4

• Baltic Dry Index - minus 32 to 2,510. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Bears Squeezed as Traders Capitulate Fastest // Dollar Loans Premium at 2-Year High as Yuan Rises: China Credit // China Must `Normalize' to Cut Risk as U.S. Prints Cash, PBOC Official Says // Copper Rises 50% in `Red Gold' Rush on Belief China to Double Consumption // China Steel Plans to Buy Iron, Coal Mines to Reduce Reliance on Suppliers // China Stocks Rise to 7-Month High on Prospect Fed Plan Will Boost Economy // Indonesia Keeps Interest Rate at Record Low as Asia Fights Capital Inflows // BHP May Resort to Buybacks After Kloppers' Potash Bid Blocked // Asian Stocks Rise as Federal Reserve Expands Stimulus Measures; BHP Gains // Trichet's Exit Faces Fed Roadblock as Bernanke Clouds Outlook // Europe Services, Manufacturing Industries Expand at Faster Pace // Dollar Weakens, Euro Rises as Fed Purchases Boost Higher-Yielding Assets // European Stocks Climb to Six-Month High as BNP Paribas, BHP Billiton Rally // Bernanke Breathes New Life Into Junk Bond Rally With QE2: Credit Markets // Productivity in U.S. Rose More Than Forecast in Third Quarter // Initial Jobless Claims in the U.S. Climb More Than Forecast // Bernanke Experiments With Crisis Tools to Boost Economy // U.S. Stocks Rally on Fed Stimulus; S&P 500 at Two-Year High
• The Euro continues to trade higher against the US Dollar, up over 1/2 of 1% at the moment. NYMEX crude is up over 1.8% and trading at $86.23/barrel. Gold is up 2/5% and silver is higher by over 4-1/2%. Base metals fared well, all ending the session higher. Indicator charts show nickel jumped early, and then jumped again later in the afternoon. For the day, Dow Jones reports three month nickel closed at  $11.11/b . Stockpiles of nickel stored in LME approved warehouses rose yesterday and now sit just over the 129,100 tonne level. Sucden's day old chart shows nickel trading thru yesterday (chart here), and a possible end to last weeks downturn. The Baltic Dry Index dropped another 32 points to 2,510. We quoted a MarketWatch reporter this morning, and would like to do it again, just to make a point. MarketWatch's David Cottle wrote about the Fed's gamble announced yesterday "The hope is that the owners of those bonds and notes will put their new-found cash into riskier investments that will actually help the economy grow and stave off deflation. The danger is that the money will go into commodities or into foreign markets, or, god forbid. fuel inflation here at home.". Did you notice what the danger was? The danger is, if this experiment fails, commodity prices could go up. What will happen to commodity prices if Bernanke's experiment works and the economy picks back up? And do fundamentals of actual supply and demand of nickel really matter anymore or has this become merely a money game? If the above equations are true, it's very difficult seeing nickel dropping anytime soon.   

  Reports

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

  Commodity/Economic Articles and Comments

• Economists React: Chairman Bernanke’s Brave New World - more
• New Fed Treasury-Buying Program Is Defined by Uncertainty - more
• The Lone Dissenter: Thomas Hoenig Hits Seven - more
• What the Fed did and why: supporting the recovery and sustaining price stability - more
• Auto Sales Jump in October - more
• The indispensable economy? - more

  China steps up base metal concentrate imports in September - Macquarie's excellent report here - pdf

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

• Indicators at 7:10 am CST show 3 month nickel trading around $.14/lb higher, with all London traded base metals trading higher this morning. The Euro is trading 2/3 of 1% higher against the US Dollar, as the now announced Fed program continues to hammer the Dollar. NYMEX crude is up over 1-1/4% and trading at $85.76/barrel. Gold is up nearly 1.1% and silver is up nearly 2.1%. In overnight trading, Asian markets ended higher, with China up 1-2/3%. European markets are higher this morning, and while the Dow technically showed a hanging man indicator after yesterday's trading, Wall Street futures show the Dow should open bullishly. Nickel inventories rose yesterday.
• Interesting article below by MarketWatch's David Cottle in which he wrote about the Fed's buyback announced yesterday "The hope is that the owners of those bonds and notes will put their new-found cash into riskier investments that will actually help the economy grow and stave off deflation. The danger is that the money will go into commodities or into foreign markets, or, god forbid. fuel inflation here at home.".
• Bloomberg morning base metal news - more
• LME Morning - Base metals rise after traders find 600 billion reasons to buy - more
• Reuters - Fed gives copper bulls the upper hand - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - We finally got our Fed announcement yesterday. This was pretty much in line with expectations, with the central bank saying it would buy around $75 billion in Treasury bonds per month through mid-201, totaling $600 billion. This is in addition to an expected $250 billion to $300 billion in purchases the Fed will also undertake by reinvesting the proceeds of maturing securities. The initial reaction to the Fed move was mixed, with no consistent pattern emerging. The dollar weakened after the announcement, but not by much, while US stocks gave up earlier gains to close only slightly higher. Base metals never got going, closing lower on the day, as did gold, but energy prices pushed higher. Treasury prices rose, but the big exception was the 30-year bond, which was seen as not benefitting as much from the Fed's program; its price plunged by more than 2 full points. However, by late in the day yesterday, the dollar started to weaken more dramatically, leading to more convincing buying in the commodity markets. We are seeing this strength extend into today’s session, with good gains seen across the commodity board. Although our assessment of markets selling off slightly in the wake of the Fed announcement was incorrect, we have trouble seeing how much longer the current run can last. While the Fed is pushing on the pedal, comforted by the fact that excess capacity here in the US will absorb any future inflationary pressures, it cannot determine where this money will ultimately end up. We suspect it will find its way not to reluctant borrowers (and lenders) here in the US, but into emerging markets, leading to even higher inflation and interest rates in those countries. In fact, over the last few weeks, we have seen China, India, and Australia all pushing rates higher to tamp down local inflationary pressures. Authorities in Brazil and Thailand have also imposed taxes on capital flooding into their economies, while Japanese authorities have intervened in currency markets to prevent the yen from appreciating (to no avail). There is now talk that the Chinese may raise rates once again, and if they do so, the market reaction should be far more severe than what we saw last time around. For the moment, we would resist joining the post-Fed upside stampede, as everyone seems to be the same way around. Right now, the dollar is trading at $14250 against the Euro, while energy prices are up by a $1/barrel. Gold prices are higher as well, (note that India's jewelry buying season gets underway this week), while palladium has pushed up to a 10-year high. On the US macro side of things, we just got weekly initial claims readings, and these came in at 457,000, higher than the 445,000 reading expected, and leading to another round of dollar weakness. Later in the day, we will get Q3 productivity readings (expected at .9%).  .... Nickel is at $24,150, up $600, and prices are finally showing signs of breaking the short-term downchannel; we could push somewhat higher from here. (read Ed Meir's complete morning base metals report here)
• (Interfax) The Hebei provincial government has issued regulations regarding the restructuring of the steel industry which will see the number of steel mills in the province reduced to around ten firms, with primary focus shifting to three to five large-sized steel groups, state media reported Nov. 4.
• (MF) According to sources, chrome ore inquiries have been less and transactions have been plain at Chinese ports. Most dealers take a wait-and-see attitude and concentrates quotations appear to slump obviously: 42% South African concentrates: RMB52/mtu.
• (Yieh) Figures released by the International Molybdenum Association show an increase in the global production of molybdenum in the second quarter of 2010 with a total of 129.1 million lbs of molybdenum produced compared to 119.3 million lbs in the first quarter of the year. The biggest producer was China with 44 million lbs; North America had 41.1 million lbs, South America had 29.7 million lbs and the remaining producing countries accounted for 14.3 million lbs.
• More box ship idling seen - more
• In a surprise move, the Canadian Government has denied BHP Billiton’s bid for Potash Corp.
• Unprecedented action, limited impact - more

  Nickel Mines In New Caledonia May Be Blown By New Phase = Interested In Resumption To Develop Existing Closed Mines - It is wondered whether nickel mines in New Caledonia are blown by new phase or not. If new phase arises, the movements, including the resumption to develop nickel mines as closed at present, are questioned to appear. - more

  Miner may get $2-B funding for nickel site - Norway's Intex Resources ASA has received a $2-billion offer from a global private pension fund to finance its nickel project in Mindoro. - more

  Commodities to Surge on Demand, Dollar, Standard Chartered's Murthy Says - Commodity prices are set to surge, driven by a weaker dollar and increased demand, according to Standard Chartered Plc, which plans to boost hiring in metals, agriculture and coal by 10 percent next year as revenue climbs. - more

  Strategic reserves for rare metals mulled - Chinese authorities may establish strategic reserves of 10 rare metals to stabilize their supply and prices, a move analysts said reflects the country's growing concern over scarce resources. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

Wednesday, November 3

• Baltic Dry Index - minus 58 to 2,542. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) World Bank Says China Needs to Raise Rates Further, Boosts GDP Forecasts // China's Yuan Settlements Jump 160% as Nokia Shuns Dollars // China to Sell 50,000 Tons of Zinc From Reserves as Power Cuts Lift Prices // China Orders 50% Down Payment for Second-Home Funds to Stymie Speculation // China's Stocks Decline for a Second Day on Inflation Concern, Valuations // China Can Use More Copper Than World Has Now With Yang's Stove // Asian Stocks Gain as Goldman Upgrades Hang Seng Index Before Fed Statement // Saskatchewan to Sue Canada If BHP's Potash Bid Is Approved // Northern Ireland Loses Out as Job Cuts Ambush Prosperity Pledge // European Stocks Decline as Fed Weighs Stimulus; Statoil, AB InBev Retreat // Republicans Claim U.S. House Majority and Make Gains in Senate // Business Looks to Republicans to Block Rules, Taxes // Announced U.S. Job Cuts Fall 32% From Year Ago, Challenger Says // Bernanke Bond Buying May Risk Rise in Prices Similar to 2004 // U.S. Service Economy Expanded More Than Forecast in October // Stocks Slip, Oil Pares Gains, Treasuries Advance Before Fed Announcement
• The Euro is trading less than 1/10 of 1% lower against the US Dollar at the moment. NYMEX crude oil is up over 8/10 of 1% and trading at $84.59/barrel. Gold is down 1-1/4% and silver is off 2%. Base metals ended quietly lower fo the most part, as the market nervously awaits the word from the US Fed. Indicator chart show nickel opened higher, then spend most of the session in a gradual slump, but showing as the lone gainer for the day. Dow Jones reports three month nickel ended the day at $10.68lb  . Stockpiles of nickel stored in LME approved warehouses fell slightly yesterday and now stand over the 128,700 tonne level. Sucden's day old chart shows nickel trading thru yesterday (chart here). World markets and Wall Street have for the most part, been rather tepid this morning, with all on the Fed announcement scheduled to be made at 2:15 pm EST. This announcement could easily set the tone for equity and commodity markets for the remainder of 2010.

  Reports

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

  Commodity/Economic Articles and Comments

• (Bloomberg) China Securities Journal  .... on Oct. 29 cited an unidentified person as saying China would limit molybdenum mining from next year by classifying it as a national mining resource..... China has been controlling molybdenum exports and set next year’s export quota at 25,500 tons, unchanged from this year, the Ministry of Commerce said on Oct. 28.
• Remarks by Governor Ben S. Bernanke on Milton Friedman made October 24, 2003 - more
• Q&A on QE2: What a Fed Move Would Mean - more
• Economists React: Just How Good Is Gridlock? - more
• Personal Bankruptcies Continue to Rise - more
• Mortgage Purchase Applications Increase in Latest MBA Weekly Survey - more
• The Tragedy of the Obama Administration - more
• Pre-Mortem - more
• We've voted. What's next for the economy? - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.16/lb higher, with other base metals trading higher as well. The Euro is trading less than 1/10 of 1% higher against the US Dollar. NYMEX crude is up 1-1/4% and trading at $84.95/barrel. Gold is up over 4/10 of 1% and silver is up over 1/10 of 1%. In overnight trading, while US election reports came in, Asian markets ended higher, with China off 1-1/4%. European markets are trading slightly higher this morning, while US futures show Wall Street may open higher, although until the Fed makes its announcement this afternoon, not much activity is expected.Nickel inventories dropped slightly yesterday.    
• Bloomberg morning base metal news - more
• LME Morning - Metals trade sideways in tight ranges, on hold for Fed move - more

  Reports

• Daily Market Report - pdf here
• Commodities Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals rose once again yesterday, with the struggling dollar being a major source of support as it weakened to below the $1.40 mark against the Euro, while sinking to just above 80 against the Japanese yen. Also supportive of metals this week, has been the favorable purchasing data coming out from a number of countries, while out of the copper complex, the possibility of a strike still looms over the market. (More on that later). The first major event of the week, however, has come and gone, with little impact seen thus far. Incomplete returns are showing that the GOP picked up at least 60 House seats in last night’s US congressional elections — the biggest party turnover in more than 70 years — and are leading in four more, far in excess of what is needed for a majority. About two dozen races remain too close to call. The GOP also took back 10 governorships from the Democrats while giving back two, with one of those being in California. Some were suggesting that a solid Republican showing could be strong for the dollar, and although the Republicans did place well, the greenback is not doing much of anything right now, holding steady against both the Euro and the Yen. Right now in metals, the group is slightly higher, but trading conditions are very quiet. Energy markets are higher, while US stocks are called to open flat. We do not think we will see much until this afternoon when the Fed decision is finally announced. The conventional view is that the Fed will authorize $500 billion spread out over monthly installments, but some are projecting the extent of the ease to be as high as $2 trillion. We think the Fed will likely come in around the $500 billion number, which likely was “telegraphed” to the Wall Street Journal last week, and is mostly discounted by now. However, we suspect that the announcement could lead to a modest pullback heading into Thursday’s trading. ....  Nickel is at $23,800, up $325, but the short-term picture remains inconclusive. (read Ed Meir's complete morning base metals report here)
• (Yieh) China’s Taiyuan Iron & Steel Company (Tisco) has announced to remain the prices of stainless steel unchanged for week 45th.
• (MF) Technically “Nickel looks bullish for short term above 1052 with the price targets of 1080-1100 keeping stop loss of 1010. Intraday traders can buy Nickel if it sustains above 1052 for targets of 1065 and 1072,” said Bharti Navlani, Technical analyst with Commodity Online.
• (JMB) Nisshin Steel to Hike Ni Cold Rolled Stainless by 10,000 yen/T
• (JMB) NSSC Reduces Chrome Series Cold Rolled Stainless by 5,000 yen/t
• (IRIS) MCX Nickel may note some gains, however the upside remains capped. Prices continue to be under pressure amid rising stockpiles at LME warehouse. However Nickel stocks fell by 342 tons yesterday but are off yearly low. Also limiting upside is choppiness in equities and US dollar ahead of Fed's decision on further stimulus today.
• (SBB) Ferro-chrome market in Europe slow, but prices firm up
• (MP) Prices for high carbon ferro-chrome (HC FeCr) in the North American market are set to rise over the next six months, Cengiz Onal of Turkish ferro-chrome producer ETI KROM told delegates at the recent Ryan’s Notes ferroalloys meeting in Miami.
• (NB) The global nickel market will be in oversupply from 2012 as several large projects build up to capacity, but the lead market will have tightened considerably by that time, according to Brook Hunt.

  Q+A-Australia to reactivate some, not all nickel output - Australia is on the verge of restoring some nickel production idled or delayed during the global financial crisis as prices plummeted, though not all producers are prepared to restart. - more

  Analysts view: Commodities seen rising after Fed - Commodities seem certain to rise this week, analysts say, as the impact of a disappointing injection of cash from the Federal Reserve would be more than offset by increasingly upbeat fundamental factors. - more

  Hot Rolled Coil Steel Prices Decline Around The World - Some steelmaking facilities in the US are closed due to poor market conditions. - market

  Morning Nickel Inventory and Price Statistics & Figures

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

Tuesday, November 2

• Baltic Dry Index - minus 48 to 2,600. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China Said to Tell Banks to Seek Faster Payment of Local Government Debts // China's Dollar Borrowing Costs Tumble on Ratings Outlook // China Draws Taiwan Into Economic Embrace With Trade Pact  // China Rejects Clinton's Offer to Mediate With Japan Over Disputed Islands // China Stocks Decline on Tighter Policy Outlook; Coal, Bank Shares Fall // Australia, India Raise Rates to Slow Inflation Before Fed Move // Japan Recalls Envoy to Russia Over Islands Dispute // Indonesia's Tsunami Relief Efforts Hampered as Cyclone Hits Sumatra Coast // Ireland May Have One Month to Stave Off Bailout: Euro Credit // Merkel Offers Peripherals No Respite on Bailout-Fund Plan as Yields Soar // Russian Oil Output Hits Post-Soviet Record for a Second Month in October // European Stocks Advance; BP, BG Group, Danske Bank Climb as Grifols Slumps // Fed Will Probably Start $500 Billion of Bond Buys, Survey Shows // Mortgage Modification Failures Push Borrowers Into Foreclosure // U.S. Homeownership at Decade Low as Foreclosures Rise // Stocks, Treasuries Rise, Dollar Weakens Before Fed's Decision
• The Euro is now trading 1.05% higher against the US Dollar.  NYMEX crude is higher by over 1.5% and trading at $84.22/barrel. Gold is up over 1/10 of 1% and silver is higher by more than 1/2 of 1%. Base metals ended the session higher, but much like yesterday, off earlier highs. Indicator charts show nickel bounced early and while the Euro continued to climb, nickel staggered to the close, off earlier highs. Dow Jones reports three month nickel ended the day at $10.65/lb . Stores of nickel stockpiles in worldwide LME approved warehouses fell yesterday and now stands just over the 128,800 tonne level. Sucden did not update their day old nickel chart today. The Baltic Dry Index fell another 48 points today and now stands at 2,600. The North American major stainless steel producers announced December surcharges yesterday and 304 and 316 stainless went up. AK Steel reports the average price of nickel rose $.528/lb from September to October, with molybdenum rising $.726/lb, chrome rising $.042/lb and iron falling $55.00/GT.

  Reports

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

  Commodity/Economic Articles and Comments

• World-Wide Factory Activity, by Country - more
• (CV) China imported 457.60 million tons of iron ore during the first three quarters of 2010, down 11.53 million tons year-on-year, reports The Beijing Times, citing Luo Bingsheng, the vice president of the China Iron and Steel Association
• Q&A: Kohn Says QE2 Won’t ‘by Huge Amount’ Turn Economy Around - more
• CFO’s Big Cost Worry: Employee Benefits - more
• Back Office Blues - more
• The Race to the Bottom Continues - more
• 'Obama Failed to Connect the Dots' - more
• Sell bonds now, Fed’s QE2 is doomed to fail - more

  Nickel gives decent returns of 22%, to perk up - The strikes at Vale's Voisey's Bay and Sudbury nickel operations in Canada spanning H1 2009 and H1 2010, coupled with strong demand growth, supported the nickel price and saw LME nickel stocks decline from February 2010 onwards. - more

  RusAl demands Norilsk show copies of EGM voting papers - RusAl, the world's largest aluminum producer and owner of a 25 percent stake in the country's top nickel producer Norilsk Nickel, has asked Norilsk Nickel to present it with copies of voting papers from a recent extraordinary shareholders' meeting, RusAl said on Tuesday. - more

  Ban iron ore exports; conserve it like US, China: Steel Minister - Steel Minister Virbhadra Singh today called for a ban on iron ore exports saying that the country must take lessons from neighbouring China and the US for using finite natural resources judiciously. - more

  S.Africa official: Mining audit results disturbing - A senior South African official said the country's mining sector is rife with problems including illegal drilling, rights sold on without permission and companies having competing claims to the same plot. - more

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

• Indicators at 7:20 am CST show 3 month nickel trading around $.13/lb higher, with all London traded base metals higher on a lower Dollar. The Euro is trading over 2/3 of 1% higher against the US Dollar. NYMEX crude is up over 8/10 of 1% and trading at $83.65/barrel. Gold is higher by 3/10 of 1% and silver is up nearly 1/2 of 1%. In overnight trading, Asian markets ended slightly lower, with China off nearly 3/10 of 1%. European markets are trading higher this morning, while US futures show Wall Street may open higher. Nickel inventories fell yesterday.  
• Bloomberg morning base metal news - more
• LME Morning - Metals push higher as dollar slips, mark time for FOMC - more

  Reports

• Daily Market Report - pdf here
• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Market Drivers - pdf here
• Metals Insight - pdf here
• AK Steel December Stainless Steel Surcharges - pdf here
• Allegheny December Stainless Steel Surcharges -  here
• North American Stainless December Surcharges - more
• Global Mining News - pdf here
• ICDA Weekly Industry News - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metals rose sharply yesterday early on, but prices gave back some of their gains in late-day trading. Copper was up by more than 2% on account of a slew of constructive manufacturing reports, pulling the rest of the group along with it. Right now, we are higher once again in metals, with the current rally being fueled by a stronger Euro (now at $1.3970). The currency is up after London-based Markit Economics said today that a gauge of manufacturing in the 16-nation euro region rose to 54.6 from 53.7 in the previous month, up from a previous reading of 54.1. A surprise rate increase also pushed the Australian dollar to a new post-float high, and may have helped the Euro’s gains in this regard as well. In addition, India boosted its repo rates by a quarter-point, as rate increases continue to spread across Asian countries starting with the Chinese move announced last month. Elsewhere, the pound lost ground after the latest UK construction PMI for October came in much lower than expected, while the yen is slightly weaker, now at 80.77, although within striking distance of its all-time intraday high of 79.75 reached in 1995. It remains to be seen if the recent gains in metals will be sustained as we head into the Fed decision tomorrow. Right now, the consensus view is that the Fed will purchase at least $500 billion of long-term securities, but the timing, the type of securities to be purchased, and whether $500 billion will be the actual number, all remain to be revealed. US election results out later today could also be of consequence to the markets (via the dollar), although of the two events, the Fed decision is far more important. We reiterate our cautious view at this stage in practically all the markets, as we think many complexes could pull back once these two key events are out of the way. .... Nickel is at $23,530, up $285, but we continue to remain in a short-term down-trend. (read Ed Meir's complete morning base metals report here)
• (Interfax) Domestic steel supply and demand will be more balanced in the fourth quarter of 2010, while steel prices will likely remain unchanged from their current level, general manager at Shanghai Stock Exchange-listed Baoshan Iron and Steel Co. Ltd. (Baosteel), Ma Guoqiang, said Nov.1 at the company's third quarter (Q3) results conference.
• (SG) At the request of EUROFER, the European Union Ecolabel Board decided on October 21st 2010 that for the first product group regulated under the new EU Ecolabel Regulation, nickel in stainless steel will not be subject to the hazardous substances requirements of the regulation.
• (FA) According to sources, Fujian Wuhang Stainless Steel Productions Co., Ltd, has set Nov. purchasing price of HC ferrochrome at RMB9,000/bmt, tax included delivering price, which is acceptable in spot market. At present, mainstream quotation of HC ferrochrome is around RMB8,900/bmt and only some producers give higher price such as RMB9,200/bmt.
• (JMD) NSSC/ To raise store sales price of cold-rolled Ni steel sheet for December shipment
• (JMD) Nisshin Steel to Hike Ni Cold Rolled Stainless by 10,000 yen/T
• Steel Industry Outlook - Nov. 2010 - Industry Outlook - more
• How Stainless Steel is Made - more

  AK Steel Announces December 2010 Surcharges for Electrical and Stainless Steels - AK Steel has advised its customers that a $285 per ton surcharge will be added to invoices for electrical steel products shipped in December 2010. - more

  Forecast's Cloudy with a Chance of Gain - t’s official. The National Bureau of Economic Research has declared that the Great Recession, which began in December 2007, actually ended in June 2009. Sure doesn’t feel like it. A handful of top economists, speaking at the Metals Service Center Institute’s annual Economic Summit in Chicago Sept. 20-21, explained why. - more

   Courtesy AISI - In the week ending October 30 2010, domestic raw steel production was 1,621,000 net tons while the capability utilization rate was 67.0 percent. Production was 1,491,000 tons in the week ending October 30, 2009, while the capability utilization then was 62.3 percent. The current week production represents a 8.8 percent increase from the same period in the previous year. Production for the week ending October 30, 2010 is down 0.2 percent from the previous week ending October 23, 2010 when production was 1,624,000 tons and the rate of capability utilization was 67.2 percent.

  Morning Nickel Inventory and Price Statistics & Figures

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

Monday, November 1

• Baltic Dry Index -  minus 30 to 2,648. (chart)
• Dollar graph in lower right corner of this page - (chart of dollar index) (live java chart)
• Headlines & leaders - (Bloomberg) China’s October Manufacturing Grows at Faster Pace
• China Manufacturing Posts Biggest Gain in Six Months // China Molybdenum's Shares Advance on Report Mining of Metal to Be Limited // China Coal Prices Reach Nine-Month High on Demand for Forecast Cold Winter // China Says Japan's Video of Ship Collision Won't Change Territorial Facts // Chinese Economic Growth May Face `Big Drop,' CIC Chairman Lou Jiwei Says // China's Stocks Rise, Extending Monthly Rally, After Manufacturing Expands // China's Commerce Ministry Says Dollar Weakness May Worsen `Currency War' // Asia Stocks Extend Two-Month Rally on China Manufacturing; Hang Seng Rises // Fed Helping Spanish Debt Keeps ECB Mum on Dollar: Euro Credit // Most European Stocks Advance on U.S., China Manufacturing; Xstrata Climbs // Thirty-Three Hours May Induce ECB Surrender on Weak Dollar // ISM U.S. Factory Index Rises in October to Five-Month High // Fed Asset Purchases Could Spark 10% Rally in S&P 500, JPMorgan's Lee Says // U.S. Consumer Spending Rises Less Than Forecast, Prices Cool
• The Euro is now trading nearly 1/2 of 1% lower against the Euro. NYMEX crude is up over 2-1/4% and trading at $83.28/barrel. Gold is down nearly 6/10 of 1% and silver is off over that level. Base metals ended the day higher, holding onto earlier PMI generated gains as the falling Euro added pressure. Indicator charts show nickel leapt early, then spent the rest of the session in a slow and gradual decline. For the day, Dow Jones reports three month nickel ended at $10.54/lb . Stockpiles of nickel stored in LME approves warehouses rose sharply again on Friday and now sit just over the 129,100 tonne level. Sucden's day old chart shows nickel still trading within a trend (chart here). Chavez grabbed another steel company in Venezuela yesterday. The only surprising part of this to your editor, is that there was anything left in that country of value to grab. Anyone who wants to build a factory or oil well or mine in this country, should seriously have their head examined. And with election day tomorrow, 60 Minutes had a great piece on David Stockman, the budget director for the the Conservative Republican's idol, Ronald Reagan, and his problem with the Republican's of today (video here).  And we post a lot of articles and comments on this site that we don't necessarily agree with, but this one we totally agree with. This Week’s Puzzling Pieces and the National Gumbo - more The next few days will see the mid term election, and the Fed announcement on Wednesday here in the States.

  Reports

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

  Commodity/Economic Articles and Comments

• It’s Not Just the Economy - more
• Number of the Week: 107 Months to Clear Banks’ Housing Backlog - more
• One Date & Four Numbers on the Economy - more
• Mugged by the Moralizers - more
• U.S. Consumers' Spending Anemic in October - more
• (Last Decade) SNAP by State - more
• (Last Decade) Medicare by State - more
• (Last Decade) Unemployment by State - more
• The grim reaper is back - more
• This Week’s Puzzling Pieces and the National Gumbo - more

  Stainless Steel Prices And Demand Suffer From Nickel Price Volatility - Stainless steel production accounts for over 75 percent of all primary nickel consumption. As such, one would expect the demand for stainless, along with the availability of nickel, to be the main driver of the metal's market value. Yet, so often, it seems as though the reverse is true. - more

  Why molybdenum miners are soaring? - The race is on to control global molybdenum and uranium assets - more

  Venezuela's Chavez nationalizes local steel company - Venezuela's President Hugo Chavez ordered the nationalization of local steel company Sidetur on Sunday in the latest of a several recent government takeovers in South America's top oil producer. - more

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

• Indicators at 7:15 am CST show 3 month nickel trading around $.13/lb  higher, with all other London traded base metals higher as well. The Euro is trading over 1/10 of 1% lower against the US Dollar, but commodities are getting a boost from the Chinese PMI number. NYMEX crude is up nearly 3/4 of 1% and trading at $82.02/barrel. Gold is lower less than 1/10 of 1% and silver is higher by 4/10 of 1%. In overnight trading, Asian markets ended higher, with China up 2-3/4%. European markets are slightly lower this morning, and US futures show Wall Street should open higher. Nickel inventories rose Friday.
• Bloomberg morning base metal news - more
• LME Morning - Base metals rebound as Chinese show staying power - more

  Reports

• Commodities Daily - pdf here
• Morning Montra - pdf here
• Daily Overview - pdf here
• Metals Insight - pdf here
• Weekly Scoreboard - pdf here
• Monthly Scoreboard - pdf here
• Robry Weekly Economic Assessment - more
• SMM Nickel Price Forecast - more

  Commodity/Economic Comments

• Edward Meir of MF Global Morning Comments - Metal prices fell sharply on Friday, with copper leading the broad retreat, as it fell to a three-week low. Despite the loss, the complex was still up about 2% in October, its fourth consecutive monthly gain. US macro data released on Friday did not have much impact on the various markets; third-quarter US GDP expanded by 2%, very much in line with estimates. Personal consumption spending rose 2.6%, but there was a marked slowdown in business investment on machinery and computer equipment. Manufacturing activity in the Chicago area came in at a better-than-expected level of 60.6 for October, strengthening from September's 60.4, while the University of Michigan's final reading on October consumer sentiment came in at 67.7, in line with estimates. None of these figures will likely alter the Fed's thinking on proceeding with its quantitative easing program. The more relevant question will be the size and scope of the operation, and here, we reiterate our view that the markets will likely find the Fed's move slightly disappointing, leading to a short-term period of price weakness across most markets. Investors will also remain sidelined-- at least over the early part of the week-- ahead of US mid-term elections on Tuesday. Although Republican control of the House now seems assured, investors are uncertain about whether the Senate will also fall. Even if Republicans do not win a majority here, they will have far more than the 41 votes needed to sustain a filibuster and prevent passage of legislation they do not like. Metal markets are higher as of this writing, and have just about recouped Friday’s losses. The dollar is only slightly weaker today, now trading at $1.3960 against the Euro, but markets are teeing off reports out of both China and India showing sharp gains in manufacturing. In China’s case, October manufacturing expanded at its fastest pace in six months, with a purchasing managers’ index rising to 54.7 compared to 53.8 in the previous month. In India, the October HSBC PMI rose to 57.2 from 55.1. However, the pace of expansion in new orders remained somewhat subdued compared to early in 2010, while exports rose at their weakest pace since November 2009. The numbers were less upbeat out of Taiwan, where the HSBC PMI fell to 48.6 from 49.0, its third straight month of contraction, while South Korea's PMI fell to 46.75 from 48.81, off for a sixth-straight month.  ..... Nickel is at $23,275, up $285. The short-term down trend remains intact, and will be taken out with a breach of $24000. (read Ed Meir's complete morning base metals report here)
• (Interfax) The Chinese central government plans to introduce a formal and comprehensive system for the storage of nonferrous metals but has yet to finalize a timetable, domestic media reported Oct. 29.
• (Interfax) China produced 474.53 million tons of crude steel in the first three quarters of 2010, up 12.7 percent year-on-year, according to an Oct. 28 announcement from China's National Development and Reform Commission (NDRC).
• (MF) According to report of Russia’s Spetsstal Association, Russia imported around 20,063 tons of stainless steel products in September, up by 0.8% year on year.
• China Oct PMI hits 54.7% amid inflation concerns - more
• The NAM/IndustryWeek Manufacturing Index -- Sales Predicted to Grow 3.5% Over Next 12 Months - more

  BIR Stainless Steel & Special Alloys Committee: Global Stainless Steel Production keeps on Course - Despite a production slow-down in the third quarter and a trend towards “short-term” ordering by consumers, global stainless steel production remains on course to increase some 20% this year to around 30m tonnes, according to UK-based Michael Wright of ELG Haniel. - more

• Non-Ferrous Metals Division: Surprising rebound of prices - Demand for non-ferrous scrap has been resurgent in 2010 following the lows of late 2008 and the first half of 2009. “We again found ourselves as the fuel for the demand of the emerging economies of the world - as providers of ecologically-viable alternatives to primary metals to growing but mineral-deficient nations,” the BIR Non-Ferrous Metals Division’s President, Robert Stein of US-based Alter Trading, proclaimed at the world recycling body’s Autumn Convention in Brussels. - more

  Price Of High Carbon FeCr In Europe Still Remains Without Surge = Stainless Steel Mills, Intending To Purchase Spot Cargoes At Discounted Prices - The market price of high carbon ferro-chrome (charge chrome) in Europe has been still remaining on a sluggishness without surging. - more

  Global steel market may not revive before January - As global economic prospects remain weak, the steel industry has already started feeling the crunch of it. Steel prices are down. - more

  Morning Nickel Inventory and Price Statistics & Figures

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

October Archives

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All prices shown on this page are indications only. "A Guide To LME Trading"...pdf here "The ABCs of a Metals Exchange" ...pdf here (Molybdenum prices are for molybdenum oxide, an ingredient and major price factor in 316 stainless) (all ton listings are metric tons = 2204.622 pounds ) Updated daily before 8 am CST and before 1 pm CST weekdays - Disclaimer Candlestick Pattern Dictionary here / Intro to Candlesticks here Original content and opinions copyright www.estainlesssteel.com. Note - For real time and official LME prices, LME requires a user subscribe to be an authorized LME vendor.